Opinion
2:22-cv-00122-MKD
05-05-2023
GLEN MORGAN, individually and on behalf of all others similarly situated, Plaintiff, v. TWITTER, INC., Defendant.
ORDER DENYING PLAINTIFF'S MOTION TO REMAND
ECF NO. 8
MARY K. DIMKE, UNITED STATES DISTRICT JUDGE
Before the Court is Plaintiff's Motion to Remand, ECF No. 8. Plaintiff is represented by Joel B. Ard and David K. DeWolf. Defendant is represented by Aravind Swaminathan and Thomas K. Fu. The Court has reviewed the motion and related filings, considered the parties' arguments, and is fully informed. For the reasons discussed below, the Court denies Plaintiff's Motion to Remand, ECF No. 8.
BACKGROUND
A. Procedural Posture
Plaintiff filed suit on May 3, 2022, in Spokane County Superior Court. ECF No. 1 at 38-51. Defendant removed the action to federal court on May 19, 2022. ECF No. 1. On May 26, 2022, Plaintiff moved the Court to remand the matter back to state court. ECF No. 8. Plaintiff made a single argument: Defendant's Notice of Removal was untimely. See ECF No. 8. Defendant opposed Plaintiff's Motion to Remand and responded to the untimeliness argument. See ECF No. 18. In reply, Plaintiff asserted for the first time that this Court is unable to exercise its limited jurisdiction because he “seek[s] a statutory damages remedy.” ECF No. 20 at 5. Plaintiff asserts that the Complaint does not confer Article III standing and thereby requires remand to state court. ECF No. 20 at 5-8.
In the Motion to Remand, Plaintiff advised why he filed this action, which is nearly identical to Gray v. Twitter, Inc., No. 20-cv-01389 (W.D. Wash.), in the wake of the Supreme Court's decision in TransUnion LLC v. Ramirez, 141 S.Ct. 2190 (2021). ECF No. 8 at 5-7. While Plaintiff explained the Supreme Court's holding in TransUnion in this section of the original motion explained, Plaintiff did not argue that Article III standing's requirements were lacking in this matter. See ECF No. 8 at 5-7. However, in reply and at the August 24 hearing, Plaintiff primarily argued remand is appropriate because Article III standing is not satisfied. See ECF No. 20. Defendant requested leave to respond to Plaintiff's new argument.
Plaintiff's counsel filed the Gray case in the Western District of Washington on September 21, 2020. On August 30, 2022, Plaintiff provided notice that Darlin Gray, the plaintiff in Gray v. Twitter, Inc., voluntarily dismissed that action. ECF No. 27; Gray v. Twitter, Inc., No. 20-cv-01389, ECF No. 36. The matter was dismissed without prejudice.
On September 9, 2022, the Court directed the parties to provide supplemental briefing on whether Article III standing exists. ECF No. 29. Defendant filed a supplemental brief on September 23, 2022. ECF No. 30. Plaintiff responded on September 30, 2022. ECF No. 31. The Court granted Defendant leave to file a surreply, which was filed on October 14, 2022. ECF Nos. 32, 33. On January 25, 2023, Plaintiff filed Notice of Supplemental Authority. ECF No. 34. On February 21, 2023, Plaintiff filed a first amended complaint. ECF No. 35. On May 2, 2023, the Court held a status hearing in the abovecaptioned matter. See ECF Nos. 36, 38. At that hearing, Defendant did not object to Plaintiff's filing of an amended complaint.
The First Amended Complaint expands upon the original by providing additional facts and numerous newly attached exhibits. These include pleadings in multiple cases like Twitter, Inc. v. Elon R. Musk, X Holdings I, Inc., and X Holdings II, Inc., No. 2022-0613-KSJM (Del. Ct. Ch) and United States v. Twitter, Inc., No. 3:22-CV-3070 TSH, 2022 WL 1768852 (N.D. Cal. May 26, 2022); newly reviewed SEC filings; and disclosures made and testimony given by a whistle blower. Of import, the First Amended Complaint does not substitute or assert an additional legal basis upon which Plaintiff believes relief is warranted. See ECF No. 35.
B. Summary of Allegations
Plaintiff alleges Defendant violated his right to privacy. See, e.g., ECF No. 1 at 38, 39 (“Privacy is a 21st century civil rights issue;” “powerful companies disregard their promises to users about privacy;” “same companies . . . profit from refusing to honor the privacy choices exercised by users;” “as with other civil rights violations, [Washington has] established statutory violations . . . to protect the civil right in privacy of users' phone numbers and other records”). Plaintiff brings this civil action pursuant to the Criminal Profiteering Act, RCW 9A.82.010, 9A.82.100. ECF No. 1 at 39. Specifically, Plaintiff alleges that Defendant unlawfully obtained his and other users' cell phone numbers which he and other users register with a Twitter account and then sold that information to third-party advertisers from which Defendant illegally profited. See ECF No. 1 at 43-44.
The Washington Supreme Court has held that suits brought under the Criminal Profiteering Act, RCW 9A.82.100, are civil actions. Winchester v. Stein, 959 P.2d 1077, 1085 (Wash. 1998).
“A person who sustains injury to his or her person, business, or property by an act of criminal profiteering that is part of a pattern of criminal profiteering activity . . . may file an action in superior court for the recovery of damages[.]” RCW 9A.82.100(1)(a). “Criminal profiteering” is defined as “any act, including any anticipatory or completed offense, committed for financial gain, that is chargeable or indictable under the laws of the state in which the act occurred and . . . punishable as a felony and by imprisonment for more than one year, regardless of whether the act is charged or indicted.” RCW 9A.82.010(4). This includes the unauthorized sale or procurement of telephone records in violation of RCW 9.26A.140. RCW 9A.82.010(4)(nn).
ARTICLE III STANDING
Defendant argues that Plaintiff has alleged sufficient facts that, when accepted as true, satisfy the elements of Article III standing. Specifically, Defendant asserts Plaintiff has pled that (1) he has suffered an intangible concrete harm, which is an injury in fact, even following the Supreme Court's decision in TransUnion, (2) the alleged injury was caused by Defendant, and (3) the alleged harm is redressable under RCW 9.26A.140. ECF No. 30 at 10-14.
A. Legal Standard
“Article III [of the Constitution] confines the federal judicial power to the resolution of ‘Cases' and ‘Controversies.'” TransUnion, 141 S.Ct. at 2203. A case or controversy under Article III requires a plaintiff to “have a ‘personal stake' in the case-in other words, standing.” Id. (quoting Raines v. Byrd, 521 U.S. 811, 819 (1997)). Article III standing requires a showing “(i) that [the plaintiff] suffered an injury in fact that is concrete, particularized, and actual or imminent; (ii) that the injury was likely caused by the defendant; and (iii) that the injury would likely be redressed by judicial relief.” Id.
1. TransUnion LLC v. Ramirez
In TransUnion, the Supreme Court reiterated its holding in Spokeo, Inc. v. Robins, 578 U.S. 330 (2016) (“SpokeoII”): a plaintiff's injury in fact must be concrete. 141 S.Ct. at 2204. A plaintiff's injury must be “real, and not abstract.” Spokeo II, 578 U.S. at 340. “[C]ertain harms readily qualify as concrete injuries under Article III.” TransUnion, 141 S.Ct. at 2204. These include “traditional tangible harms, such as physical harms and monetary harms.” Id. Intangible harms may also be concrete. Id. However, to be concrete, intangible injuries must be shown to have “a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” Id. The Supreme Court outlined examples of federally recognized intangible concrete harms. Id. They include reputational harms, disclosure of private information, and intrusion upon seclusion. Id. (citing Meese v. Keene, 481 U.S. 465, 473 (1987) (reputational harms); Davis v. Fed. Election Comm n, 554 U.S. 724, 733 (2008) (disclosure of private information); Gadelhak v. AT&T Servs., Inc., 950 F.3d 458, 462 (7th Cir. 2020) (intrusion upon seclusion)). Importantly, an intangible harm must have caused a plaintiff an injury in fact, not solely an injury in law. Id. at 2205-06. Justice Kavanaugh posed the following hypothetical to demonstrate the difference between an injury in fact and an injury in law:
Suppose first that a Maine citizen's land is polluted by a nearby factory. She sues the company, alleging that it violated a federal environmental law and damaged her property. Suppose also that a second plaintiff in Hawaii files a federal lawsuit alleging that the same company in Maine violated that same environmental law by polluting land in Maine. The violation did not personally harm the plaintiff in Hawaii.Id. at 2205. The hypothetical statute provides a cause of action for both plaintiffs, yet only the Maine citizen has Article III standing because she suffered an injury in fact, i.e., her polluted land. Id. at 2206.
2. Burden of Proof
“‘The party invoking federal jurisdiction bears the burden of establishing' the elements of standing.” Meland v. Weber, 2 F.4th 838, 843 (9th Cir. 2021) (quoting Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992)). All three elements of standing “must be supported . . . with the manner and degree of evidence required at the successive stages of the litigation.” Defs. of Wildlife, 504 U.S. at 561. “At the pleading stage, [the party asserting federal jurisdiction] is not required to prove the[] elements [of standing].” Pinkert v. Schwab Charitable Fund, 48 F.4th 1051, 1054 (9th Cir. 2022). The proponent of Article III standing must only establish that the plaintiff has “allege[d] facts that, when accepted as true, show that [the elements] are satisfied. Id.
When analyzing a plaintiff's argument for remand to state court, the Court “must accept as true all material allegations of the complaint and must construe the complaint in favor of the complaining party.” Warth v. Seldin, 422 U.S. 490, 501 (1975). Thus, “[a]t the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice” as the Court must “‘presum[e] that general allegations embrace those specific facts that are necessary to support the claim.'” Defs. of Wildlife, 504 U.S. at 561 (alteration in original) (quoting Lujan v. Nat'l Wildlife Fed'n, 497 U.S. 871, 889 (1990)); cf. Lucas v. S.C. Coastal Council, 505 U.S. 1003, 1014 n.3 (1992) (cautioning that although the court “require[s] specific facts to be adduced by sworn testimony” at the summary judgment stage, a “challenge to a generalized allegation of injury in fact made at the pleading state . . . would have been unsuccessful”). However, the proponent of Article III standing cannot “rely on a bare legal conclusion to assert injury-in-fact.” Maya v. Centex Corp., 658 F.3d 1060, 1068 (9th Cir. 2011); see Chapman v. Pier 1 Imps. (U.S.) Inc., 631 F.3d 939, 954-55 (9th Cir. 2011) (en banc) (holding plaintiff who did not allege which barriers existed at a store and how they impacted his disability could not establish injury in fact simply by claiming that the store deprived him of “full and equal enjoyment” in violation of the ADA).
Here, as the removing party, it is Defendant's burden to establish Article III standing. Tailford v. Experian Info. Sols., Inc., 26 F.4th 1092, 1099 (9th Cir. 2022); Morgan v. Bank of Am., N.A., No. 20-CV-00157, 2020 WL 3979660, at *2 (E.D. Wash. July 14, 2020) (not reported) (finding Defendant did not establish Article III standing given it conceded Plaintiff alleged no concrete injury). Thus, Defendant is required to establish that Plaintiff has “allege[d] facts that, when accepted as true, show that [the elements of standing] are satisfied.” Pinkert, 48 F.4th at 1054.
B. Discussion
1. Injury in Fact
Plaintiff does not allege physical or monetary harm, so Plaintiff has not suffered a readily qualified concrete injury in fact. See TransUnion, 141 S.Ct. at 2204. Instead, Plaintiff alleges Defendant violated his right to privacy, see, e.g., ECF No. 1 at 38-39, which is an intangible harm. Defendant asserts that Plaintiff's alleged intangible harm is concrete because it is analogous to the common law torts of disclosure of private information and intrusion upon seclusion. ECF No. 30 at 11-14. Thus, Defendant argues that Plaintiff's allegation has “a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts.” TransUnion, 141 S.Ct. at 2204 (citing Davis, 554 U.S. at 733). “This inquiry asks whether plaintiffs have identified a close historical or common-law analogue for their asserted injury. Spokeo [II] does not require an exact duplicate in American history and tradition.” Id.
a. Analysis of RCW 9.26A. 140
Plaintiff's allegation that Defendant procured or sold his telephone records without authorization falls under RCW 9.26A. 140. RCW 9.26A.140 does not provide a cause of action for a tort; it is an anti-pretexting law. House Bill Report, S.B. 6776, 2006 Leg., 59th Sess. (Wash. 2006); Francoise Gilbert, How Does TRPPA Affect Businesses?, Prac. Law at 49, 52 (December 2007). The Washington statute is similar to the Telephone Records and Privacy Protection Act of 2006 (“TRPPA”). Gilbert, Prac. Law at 49; compare 120 Stat 3568 with RCW 9.26A.140. Defendant argues that the cause of action Plaintiff has brought under RCW 9.26A.140 by virtue of the Criminal Profiteering Act is “closely analogous” to the common law torts of disclosure of private information and intrusion upon seclusion. ECF No. 20 at 12-13.
Pretexting, MERRIAM-WEBSTER.COM, https://www.merriam-webster.com/dictionary/pretexting (last visited May 5, 2023) (“the practice of presenting oneself as someone else in order to obtain private information”).
Congress enacted TRPPA based on its findings that “(1) telephone records can be of great use to criminals because the information contained in call logs may include a wealth of personal data; (2) call logs may reveal the names of telephone users' doctors, public and private relationships, business associates, and more; (3) call logs are typically maintained for the exclusive use of phone companies, their authorized agents, and authorized consumers.” PL 109-476, Jan. 12, 2007, 120 Stat 3568. Congress found that there was a privacy interest in telephone records of consumers, and it wished to protect that interest. See id. Washington's legislature found the same, which was its reason for passing RCW 9.26A.140. See House Bill Report, S.B. 6776, 2006 Leg., 59th Sess. (Wash. 2006) (reporting the purpose of enacting RCW 9.26A.140 was to protect Customer Proprietary Network Information from being disclosed due to pretexting). Both the Washington statute and the federal statute were both enacted shortly after the Hewlett-Packard pretexting scandal, which involved the unauthorized utilization of telephone records. See Hewlett-Packard Pretexting Scandal: Hearing Before the Subcomm. on Oversight and Investigations of the H. Comm. on Energy and Com., 109th Cong. (2006).
As an initial matter, the Court does not find RCW 9.26.140 is closely analogous to the common-law tort of intrusion upon seclusion. “The common law has long recognized actions at law against defendants who invaded the private solitude of another by committing the tort of ‘intrusion upon seclusion.'” Gadelhak, 950 F.3d at 462 (citing RESTATEMENT (SECOND) OF TORTS § 652B (AM. LAW INST. 1977)). The Ninth Circuit discussed the tort of intrusion upon seclusion in Van Patten v. Vertical Fitness Grp., LLC, 847 F.3d 1037 (9th Cir. 2017). The question before the appellate court was whether a violation of the Telephone Consumer Protection Act of 1991's prohibition of unrestricted telemarketing was sufficient to establish Article III standing. Id. at 1043. It held that such an alleged violation was a “concrete injury in fact sufficient to confer Article III standing.” Id. There are no facts plead that would demonstrate an alleged invasion of Plaintiff's private solitude. Plaintiff does not allege that Twitter made unsolicited contact with him which could be analogous to telemarketing. Thus, the Court finds Defendant's argument that a violation of RCW 9.26.140 is closely analogous to the common law tort of intrusion upon seclusion is without merit.
The Court turns next to Defendant's argument that a violation of RCW 9.26.140 is closely analogous to the common law tort of disclosure of private information. As discussed above, Plaintiff alleges that Defendant disseminated the private information associated with his and other Twitter users' cell phone numbers, which include the numbers themselves and metadata contained within to third-party advertisers.
Plaintiff's allegation is similar to the plaintiff's allegation in Tailford. There, the plaintiff alleged Experian violated certain provisions of the Fair Credit Reporting Act (“FCRA”), which had been “established to protect concrete interests of privacy and accuracy in the reporting of consumer credit information [.]” Tailford, 26 F.4th 1099. The Ninth Circuit held that the plaintiff had alleged a sufficient injury in fact because the provisions alleged to have been violated were substantive and “not merely procedural rights.” Id.; cf. Robins v. Spokeo, Inc., 867 F.3d 1108, 1114 (9th Cir. 2017) (“Spokeo III”) (holding plaintiff's alleged procedural violations were sufficient to establish standing because of a sufficient risk of losing employment). The Court explained that “[t]he interest in consumer privacy ‘resemble[s] other reputational and privacy interests that have long been protected in the law.'” Tailford, 26 F.4th at 1100 (quoting Spokeo III, 867 F.3d at 1114). Thus, the court found the plaintiff had alleged a sufficient injury in fact to establish the first prong of Article III standing. Id.
Plaintiff's claim is also similar to the claim presented in Eichenberger v. ESPN, Inc., 876 F.3d 979 (9th Cir. 2017). There, the plaintiff alleged ESPN violated 18 U.S.C. § 2710(b)(1), a section of the Video Privacy Protection Act (“VPPA”), for knowingly disclosing personally identifiable information concerning the plaintiff. Id. at 983. This provision of the VPPA “codifies a context-specific extension of the substantive right to privacy.” Id. Accordingly, the Ninth Circuit noted “every disclosure of an individual's personally identifiable information and video-viewing history offends the interests that [Section 2710(b)(1)] protects.” Id. Given the plaintiff alleged ESPN had violated a “substantive provision protecting consumers' concrete interest in their privacy,” the Ninth Circuit again held that the plaintiff had established a sufficient injury in fact to establish the first prong of Article III standing. Id. at 984.
The TRPPA is similar to the FRCA and the VPPA in that it was enacted to protect consumers' privacy. See generally 120 Stat 3568. The TRPPA was specifically enacted to protect consumers' telephone records. See id. The TRPPA's state-law equivalents, like RCW 9.26A.140, were enacted for similar reasons. See House Bill Report, S.B. 6776, 2006 Leg, 59th Sess. (Wash. 2006). Both the TRPPA and RCW 9.26A.140 codify the substantive privacy interests in context-specific situations regarding the unauthorized dissemination or sale of telephone records. Because RCW 9.26A.140 codifies a substantive right involving privacy in certain telephone records, the Court finds that the cause of action available under RCW 9.26A.140 is analogous to the federally recognized injury of disclosure of private information and it has a close relationship to harms traditionally recognized as providing a basis for lawsuits in American courts as required by TransUnion. See Nayab v. Capital One Bank, 942 F.3d 480, 492 (9th Cir. 2019) (holding that being “deprived of the right to keep private the sensitive information about [one's] person” is historically considered a harm protected by common law); see also Sanchez v. Los Angeles Dep t of Transportation, 39 F.4th 548, 553 (9th Cir. 2022) (holding city's collection of real-time location data on scooters amounted to injury-in-fact sufficient to confer Article III standing).
b. Plaintiffs Alleged Harm
The next question is whether Defendant has shown that Plaintiff has plead sufficient facts to show that Plaintiff suffered an injury in fact. This inquiry can be reduced to the question, “What's it to you?” TransUnion, 141 S.Ct. at 2203 (quoting Scalia, The Doctrine of Standing as an Essential Element of the Separation of Powers, 17 Suffolk U. L. Rev. 881, 882 (1983)). With this principle in mind, the Court considers whether Plaintiff has alleged that he suffered an injury in fact rather than solely an injury in law.
Plaintiff alleges that Defendant unlawfully obtained the cell phone number that he registered with a Twitter account and then sold that phone number and other related information to third-party advertisers from which Defendant illegally profited. See ECF No. 1 at 39, 41-44. Plaintiff alleges he was harmed by Defendant's alleged unlawful procurement or sale of his cell phone number and related information to third-party advertisers who “target users based on telephone numbers.” See ECF No. 1 at 39, 41-44. Plaintiff's alleged injury is “real, and not abstract.” Spokeo II, 578 U.S. at 340. These allegations, which must be accepted as true at this stage, are sufficient to establish an injury in fact. Because Defendant has successfully demonstrated that Plaintiff has alleged an injury in fact-an intangible concrete harm that is closely analogous to the common law tort of disclosure of private information, the Court finds that the first prong of Article III standing is satisfied.
The Court's finding is not a determinative of whether Plaintiff's allegations are sufficient to survive the subsequent stages of litigation.
2. Cause of Injury
Plaintiff alleges that Defendant violated his right to privacy. ECF No. 1 at 38-39, 41-44. Thus, Plaintiff alleges Defendant is the cause of his injury. Defendant's acknowledgment of Plaintiff's allegation, ECF No. 30 at 8, n. 1, is sufficient to establish causation for standing purposes. Defs. of Wildlife, 504 U.S. at 651 (“At the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice . . .”); Pinkert, 48 F.4th at 1054.
3. Redressability
RCW 9.26A.140 provides for at least $5,000 liquidated damages for each successfully proven violation. The Complaint contains this remedy. ECF No. 1 at 44; ECF No. 35 at 23; see also ECF No. 8 at 4 n.1, 5 n.2, 11. Defendant acknowledges that a successfully proven violation of this statute provides such a remedy, and that Plaintiff has accurately plead this fact. ECF No. 30 at 8 n.1 (quoting ECF No. 1 at 65) (“And [Plaintiff] seeks redress from Twitter for that injury-in the form of ‘statutory damages of $5,000 for each violation.'”). Yet, Plaintiff asserts that Defendant “declined to even attempt to” demonstrate whether Plaintiff's harm is redressable. See ECF No. 31 at 13.
Defendant has the burden in establishing Article III standing. However, Defendant is not required to independently plead that Plaintiff's complaint provides the possibility of redress. Rather Defendant must only establish that Plaintiff has “allege[d] facts that, when accepted as true, show” redressability is satisfied. Pinkert, 48 F.4th at 1054. Defendant has done so. Thus, Defendant has established Plaintiff's claim is redressable.
4. Conclusion
Defendant has demonstrated that Plaintiff alleged an intangible concrete harm that is closely analogous to the common law tort of disclosure of private information. Defendant has also demonstrated that Plaintiff alleged he suffered an injury in fact, not solely an injury in law. Finally, Defendant has acknowledged that Plaintiff asserts Defendant is the cause of Plaintiff's harm and Plaintiff has correctly identified that RCW 9.26A.140 provides redress for a successfully proven violation. For these reasons, the Court finds the elements of Article III standing are satisfied.
FEDERAL JURISDICTION
A. Legal Standard
“Federal courts are courts of limited jurisdiction. They possess only that power authorized by Constitution and statute[.]” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377 (1994). A cause of action is presumed to lie outside the federal court's limited jurisdiction. Id. The party asserting jurisdiction has “the burden of establishing the contrary.” Id.
1. Removal Generally
“A defendant may remove to federal district court an action first brought in state court when the district court would have original jurisdiction.” Rodriguez v. AT & T Mobility Servs. LLC, 728 F.3d 975, 977 (9th Cir. 2013); 28 U.S.C. § 1441(a). The Class Action Fairness Act (“CAFA”) provides federal district courts with “original subject matter jurisdiction over class actions in which a member of the plaintiff class is a citizen of a state different from any defendant and the aggregate amount of the class members' claims exceeds $5 million.” Rodriguez, 728 F.3d at 978; 28 U.S.C. § 1332(d)(2). A defendant seeking removal “bears the burden of establishing that the statutory requirements of federal jurisdiction have been met.” Lewis v. Verizon Commc'ns, Inc., 627 F.3d 395, 399 (9th Cir. 2010).
2. Timeliness of Removal
“Procedures for removal are set forth in 28 U.S.C. § 1446.” Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1124 (9th Cir. 2013). A defendant seeking to remove an action to federal must file a notice in the district court “within thirty days of receipt from the plaintiff of an initial pleading or other document from which it is ascertainable that the case is removable.” Id. (citing 28 U.S.C. § 1446(a), (b)(1), (b)(3)). Section 1446 reads in pertinent part:
b) Requirements; generally.-(1) The notice of removal of a civil action or proceeding shall be filed within 30 days after the receipt by the defendant, through service or otherwise, of a copy of the initial pleading setting forth the claim for relief upon which such action or proceeding is based, or within 30 days after the service of summons upon the defendant if such initial pleading has then been filed in court and is not required to be served on the defendant, whichever period is shorter. ...
(3) Except as provided in subsection (c), if the case stated by the initial pleading is not removable, a notice of removal may be filed within 30 days after receipt by the defendant, through service or otherwise, of a copy of an amended pleading, motion, order or other paper from which it may first be ascertained that the case is one which is or has become removable.28 U.S.C. § 1446(b)(1)-(3). “To summarize, [the statute] identifies two thirty-day periods for removing a case.” Carvalho v. Equifax Info. Servs., LLC, 629 F.3d 876, 885 (9th Cir. 2010). If the initial pleading is removable on its face, the first thirty-day removal period is triggered when the defendant receives that pleading. Id. “[I]f the initial pleading does not indicate that the case is removable,” the second thirty-day removal period is only triggered when “the defendant receives ‘a copy of an amended pleading, motion, order or other paper' from which removability may first be ascertained.” Id. (quoting § 1446(b)).
The Ninth Circuit has stated, “every complaint is either capable of being removed or not[.]” Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1139 (9th Cir. 2013). However, the Ninth Circuit has also recognized that “removable” is not defined in § 1446, see Durham v. Lockheed Martin Corp., 445 F.3d 1247, 1252 (9th Cir. 2006), so “some pleadings are ‘indeterminate' in the sense that the face of the complaint does not make clear whether the required jurisdictional elements are present.” Kuxhausen, 707 F.3d at 1139 (quoting Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 693 (9th Cir. 2005)). Accordingly, the Ninth Circuit does “not treat [assessing timeliness] as a strict dichotomy.” Id. Rather, the first thirty-day clock under § 1446(b) begins only if “the ground for removal [is] revealed affirmatively in the initial pleading[.]” Harris, 425 F.3d at 695. This prevents a defendant from being “saddl[ed] . . . with the burden of investigating jurisdictional facts.” Kuxhausen, 707 F.3d at 1139. “Removals invoking CAFA jurisdiction are equally subject to [the timeliness] rule[s].” Id. (citing Carvalho, 629 F.3d at 886).
a. Interplay between Wash. Super. Ct. Civ. R. 3 (“CR 3”) and 28 U.S.C. § 1446
A case cannot be removed to federal court until an action has commenced in state court. Bush v. Cheaptickets, Inc., 425 F.3d 683, 686 (9th Cir. 2005). To determine whether a cognizable action has commenced in state court, the Court must defer to state law and rules. Id. (citing Herb v. Pitcaim, 324 U.S. 117, 120 (1945)). This District has acknowledged that a cognizable civil action commences in Washington state court prior to a plaintiff's filing so long as CR 3 is complied with. Rose v. ReconTrust Co., No. 10-cv-394, 2013 WL 1703335, at *2 (E.D. Wash. Apr. 18, 2013).
CR 3 states in pertinent part that a state action commences “by service of a copy of a summons together with a copy of a complaint, as provided in rule 4 or by filing a complaint.” Wash. Super. Ct. Civ. R. 3 (emphasis added). However, the commencement of an action only remains nonvoid so long as a defendant does not provide a plaintiff with a written demand that “the plaintiff instituting the action shall pay the filing fee and file the summons and complaint within 14 days after service of the demand,” CR 3, and the plaintiff then fails to do so. Ass n of Ethical Matchmakers v. Together Racketeering Enter., No. 97-35228, 1997 WL 702987, at * 1 n.2 (9th Cir. 1997). If a plaintiff fails to file the action after a defendant provides a written demand, service of the summons and complaint is void, rendering removal improper. Id.; Wash. Super. Ct. Civ. R. 3. This interpretation of the interplay between CR 3 and 28 U.S.C. § 1446 has been followed in the Western District. See Alderson v. Delta Air Lines, Inc., 2018 WL 5240811, at *2 (W.D. Wash. Oct. 22, 2018) (listing cases). Thus, the 30-day period to file a notice of removal can be triggered by service upon a defendant a copy of the summons and complaint. See id.; Bush, 425 F.3d at 686; Rose, 2013 WL 1703335, at *2.
B. Discussion
1. Statutory Requirements
The parties do not dispute this Court's removal jurisdiction under CAFA.ECF No. 8 at 7-9, 11-14; ECF No. 1 at 3-6. To establish removal jurisdiction under CAFA, the removing party is required to demonstrate:
Plaintiff alleges this action was removable on its face under 28 U.S.C. § 1332(a) as well. ECF No. 8 at 15-16. It was not. The Supreme Court has repeatedly held that § 1332(a) requires complete diversity. Abrego v. The Dow Chem. Co., 443 F.3d 676, 679 (9th Cir. 2006) (citing Exxon Mobil Corp. v. Allapattah Servs., Inc., 545 U.S. 546 (2005); Owen Equip. & Erection Co. v. Kroger, 437 U.S. 365, 375 (1978)). A district court does not have original diversity jurisdiction “[i]n a case with multiple plaintiffs and multiple defendants, [and] the presence in the action of a single plaintiff from the same State as a single defendant.” Id. Plaintiff provides only the class representative's domicile. Plaintiff did not provide the domiciles of each proposed class member, or inversely, plead that no proposed class member does not now reside in California or Delaware. Without such information, Defendant could not be on notice that complete diversity could have existed. Thus, the Complaint was not removable under § 1332(a) on its face.
(1) any member of the plaintiff class is a citizen of a state different from any defendant (a.k.a. minimal diversity);
(2) the aggregate amount in controversy exceeds $5 million;
(3) the defendant is not a State, State official or other governmental entity; and
(4) and the class will be comprised of more than 100 members.28 U.S.C. § 1332(d)(2), (5). Defendant has done so.
Defendant has established minimal diversity. Defendant pleads that it is incorporated in Delaware, and its principal place of business is in California. ECF No. 1 at 4, ECF No. 2 at 1. Defendant relies on Plaintiff's statement that Glen Morgan, the class representative, “was at all times relevant to this Complaint a resident of Washington state.” ECF No. 1 at 4. Accordingly, the minimal diversity requirement is met. Defendant establishes in its notice that Twitter is not a government entity. ECF No. 1 at 4, ECF No. 2 at 1. Defendant acknowledges that the class represented by Morgan encompasses at least 10,000 members. ECF No. 1 at 5, ECF No. 2 at 2. Finally, Defendant acknowledges that Plaintiff alleges the aggregate amount in controversy exceeds $5 million as each successful violation of the state statute is redressed by $5,000 in liquidated damages under RCW 9.21A.140. ECF No. 1 at 5. Because Defendant has established that § 1332(d)'s requirements are met, it has met its burden in demonstrating the statutory requirements under CAFA.
2. Timeliness
Plaintiff argues that Defendant's Notice of Removal, ECF No. 1, was untimely. ECF No. 8 at 9-10. Plaintiff asserts that the thirty-day window provided under 28 U.S.C. § 1446(a) began on April 1, 2022, the day Defendant was served the Summons and Complaint pursuant to CR 3. ECF No. 8 at 4-5, 9; ECF No. 18 at 7. Defendant challenges Plaintiff's assertion that being served pursuant to CR 3 would have started the removability clock because Plaintiff did not file his complaint in state court until May 3, 2022. ECF No. at 18 at 7; see ECF 9-1 at 11. Defendant's position regarding interplay between CR 3 and 28 U.S.C. § 1446 has been rejected by the federal district courts in Washington. See, e.g., Rose, 2013 WL 1703335, at *2, Alderson, 2018 WL 5240811, at *2.
A cognizable civil action commences in Washington state court prior to a Plaintiff's filing so long as CR 3 is complied with. Rose, 2013 WL 1703335, at *2.
Accordingly, the 30-day period to file a notice of removal is triggered by proper service under CR 3. Id. Defendant's registered agent was served in California on April 1, 2022. ECF No. 18 at 7. Defendant has not alleged that it made the requisite written demand to Plaintiff. Thus, Plaintiff's service of his Summons and Complaint commenced a cognizable state court action in Washington under CR 3 on April 1, 2022. Generally, the first 30-day clock for removal would have begun on that day. However, the first 30-day clock begins only if the facts plead in the Complaint were such that Defendant could ascertain the case's removability. Harris v. Bankers Life & Cas. Co., 425 F.3d 689, 694-95 (9th Cir. 2005).
In 2005, the Ninth Circuit joined the Second, Eighth, Tenth, Fifth, and Third Circuits in holding “the ground for removal must be revealed affirmatively in the initial pleading in order for the first thirty-day clock under § 1446(b) to begin.” Id. at 695. The defendant has no duty to investigate an “indeterminate” pleading:
[T]he first thirty-day requirement is triggered by defendant's receipt of an “initial pleading” that reveals a basis for removal. If no ground for removal is evident in that pleading, the case is “not removable” at that stage.Id. at 694. The question of whether the ground for removal was revealed affirmatively in the pleading in Harris was straightforward. There, the plaintiff plead to the state citizenship of most of the other parties. Id. at 691-92, 695-96. However, the plaintiff only stated what state one particular party resided in 1972 and did not include that party's state citizenship at the time of filing in 2003. Id. Later, the plaintiff abandoned his claim against that particular party (rendering each of the other parties' state citizenship known). Id. at 691, 695-96. Presumably, the plaintiff had already plead the $75,000 statutory amount in controversy, so the action became removable on its face when the claim against that particular party was abandoned, putting that defendant on notice of complete diversity. Id. at 696. When the defendant was put on notice of complete diversity, the 30-day window began. Id.
3. Removability Upon Service
Defendant disputes that the Complaint provided facts sufficient to determine removability on April 1, 2022. ECF No. at 18 at 11-16. Specifically, Twitter asserts that the Complaint was “silent” as to the number of proposed class members and the amount in controversy. ECF No. 18 at 9. The Complaint states that Plaintiff is bringing this class action on behalf of “[a]ll Washington persons who provided a telephone number to Twitter associated with a Twitter account prior to September 17, 2019.” ECF No. 1 at 44-45. There is no estimated number of class members included in the Complaint, nor is there an estimated total amount in controversy.
“[Defendants need not make extrapolations or engage in guesswork” to determine if an action is removable. Kuxhausen v. BMW Fin. Servs. NA LLC, 707 F.3d 1136, 1140 (9th Cir. 2013) (quoting Whitaker v. Am. Telecasting, Inc., 261 F.3d 196, 206 (2d Cir. 2001)). However, 28 U.S.C. § 1332(d) “requires a defendant to apply a reasonable amount of intelligence in ascertaining removability.” Id. Here, determining whether there are 100 members does not conclude the jurisdictional inquiry in this case as the amount in controversy requirement in this matter is dependent on the specific number of proposed class members. The statute that Plaintiff alleges Defendant violated provides for at least $5,000 in liquidated damages for each successfully proven violation. RCW 9.26A.140(4). Given that each successfully adjudicated violation of this statute would result in at least $5,000 in damages, there needs to be at least 1,001 class members to meet the $5 million threshold under 28 U.S.C. § 1332(d). The question then becomes whether Defendant could ascertain whether there would be 1,001 class members from the face of the Complaint.
Plaintiff alleges that Defendant should have known there would be at least 1,001 class members. ECF No. 8 at 12-14. However, the Ninth Circuit has “conclude[d] that notice of removability under § 1446(b) is determined through examination of the four corners of the applicable pleadings, not through subjective knowledge or a duty to make further inquiry.” Harris, 425 F.3d at 694 (emphasis added). Plaintiff provides no argument as to how he provided Defendant notice that the class was at least 1,001 members within the Complaint. The Complaint solely defines the proposed class as, “[a]ll Washington persons who provided a telephone number to Twitter associated with a Twitter account prior to September 17, 2019.” ECF No. 1 at 44-45. There is no estimate as to the number of individuals that class would encompass. This broad description of a proposed class does not render the Complaint's removability readily apparent. Thus, the 30-day clock set forth in 28 U.S.C. § 1446(b)(1) was not triggered on April 1, 2022 and it did not expire on May 2, 2022.
Plaintiff contends that Defendant should be held to the recently rendered standard from the Seventh Circuit in Railey v. Sunset Food Mart, Inc., 16 F.4th 234 (7th Cir. 2021). ECF No. at 8 at 12. There, the appellate court said, “If removability turns on information about the defendant that the defendant itself knows or can readily ascertain, the 30-day clock in § 1446(b)(1) begins to run. This is so because ‘[w]hen the defendant has vital knowledge that the plaintiff may lack, a burden that induces the removing party to come forward with the information-so that the choice between state and federal court may be made accurately-is much to be desired.'” Railey, 16 F.4th at 241 (alteration in original) (quoting Brill v. Countrywide Home Loans, Inc., 427 F.3d 446, 448 (7th Cir. 2005)). However, this non-binding authority directly contradicts the Ninth Circuit's decision in Harris prohibiting courts to require a defendant to use subjective knowledge, and the Court declines to apply such a requirement here.
4. The Second 30-day Window Under 28 U.S.C. § 1446(b)(3)
Because the Complaint was indeterminate-not readily removable on its face-a second 30-day window of removability would begin if Plaintiff served Defendant with an amended pleading or provided some other information from which Defendant could first ascertain that the case was removable. 28 U.S.C. § 1446(b)(3). The second 30-day window was not triggered prior to the filing of Plaintiff's motion to remand or Defendant's notice of removal. Defendant contends that Plaintiff did not provide Defendant with any additional information prior to filing its Motion to Remand. ECF No. 18 at 15-16. It was Defendant that supplemented the Complaint by conducting an analysis of certain business records-despite not being required to do so under Harris-and concluded that the class likely encompassed more than 10,000 individuals, more than sufficient to satisfy the CAFA requirements. ECF No. 2 at 2. Because Defendant supplemented the Complaint to determine how many individuals may be in the proposed class and Plaintiff did not amend the complaint or provide any other information to Defendant, the 30-day window under 28 U.S.C. § 1446(b)(3) was not triggered.
5. Defendant Properly Removed
A case may be removed under 28 U.S.C. § 1332(d) “‘at any time, provided that neither of the two thirty-day periods under [28 U.S.C.] § 1446(b)(1) and (b)(3) has been triggered.'” Kenny v. Wal-Mart Stores, Inc., 881 F.3d 786, 791 (9th Cir. 2018) (quoting Roth v. CHA Hollywood Med. Ctr., L.P., 720 F.3d 1121, 1123 (9th Cir. 2013)). Because neither of the 30-day windows had been triggered before May 19, 2022, Defendant was free to remove at any time before then. Accordingly, Defendant's Notice of Removal was timely on May 19, 2022, and the Court has jurisdiction over this matter.
JUDICIAL ESTOPPEL
A. Legal Standard
“[J]udicial estoppel[] ‘generally prevents a party from prevailing in one phase of a case on an argument and then relying on a contradictory argument to prevail in another phase.'” New Hampshire v. Maine, 532 U.S. 742, 749 (2001) (quoting Pegram v. Herdrich, 530 U.S. 211, 227 n.8 (2000)). “It is an equitable doctrine invoked not only to prevent a party from gaining an advantage by taking inconsistent positions, but also because of general considerations of the orderly administration ofjustice and regard for the dignity of judicial proceedings, and to protect against a litigant playing fast and loose with the courts.” Milton H. Greene Archives, Inc. v. Marilyn Monroe LLC, 692 F.3d 983, 993 (9th Cir. 2012) (internal quotation marks omitted). The Supreme Court has identified three factors the Court should assess to determine whether judicial estoppel is applicable in a case:
First, a party's later position must be clearly inconsistent with its earlier position. Second, courts regularly inquire whether the party has succeeded in persuading a court to accept that party's earlier position, so that judicial acceptance of an inconsistent position in a later proceeding would create the perception that either the first or the second court was misled . . . . A third consideration is whether the party seeking to assert an inconsistent position would derive an unfair advantage or impose an unfair detriment on the opposing party if not estopped.New Hampshire, 532 U.S. at 750-51 (citations and quotations omitted).
B. Discussion
Plaintiff argues Defendant has taken a contradictory stance in this case to that it took in Gray v. Twitter, Inc., No. 20-cv-01389 (W.D. Wash. filed Sept. 21, 2020). ECF No. 31 at 4. Specifically, Plaintiff asserts, “[Defendant] attempts to have its cake and eat it too by arguing that today, the Court must accept [Plaintiff's] legal theory, but tomorrow reject it in response to a Rule 12(b)(6) Motion.” ECF No. 31 at 4, 6. Essentially, Plaintiff argues Defendant's burden to establish Article III standing is the same to successfully dismiss a claim under Rule 12(b)(6). ECF No. 31 at 6-7. Plaintiff has conflated two legal inquiries. Whether a claim can survive under Rule 12(b)(6) is an entirely separate inquiry from the standing inquiry. Indeed, “the threshold question of whether [a] plaintiff has standing (and the court has jurisdiction) is distinct from the merits of his claim. Rather, ‘[t]he jurisdictional question of standing precedes, and does not require, analysis of the merits.'” Maya, 658 F.3d at 1068 (quoting Equity Lifestyle Props., Inc. v. Cnty. of San Luis Obispo, 548 F.3d 1184, 1189 n.10 (9th Cir. 2008)); see also Warth, 422 U.S. at 500 (standing “in no way depends on the merits of the . . . contention that particular conduct is illegal.”); Catholic League for Religious and C.R. v. City & Cnty. of San Francisco, 624 F.3d 1043, 1049 (9th Cir. 2010) (en banc) (“Nor can standing analysis, which prevents a claim from being adjudicated for lack of jurisdiction, be used to disguise merits analysis, which determines whether a claim is one for which relief can be granted if factually true.”).
Plaintiff Morgan was a class member in Gray v. Twitter, which Gray filed in the Western District of Washington in 2020. See Gray v. Twitter, No. 20-cv-01389, ECF No. 1 (Complaint). In that matter, Defendant filed and the parties litigated a Motion to Dismiss under Rule 12(b)(6). See Gray, ECF Nos. 17, 19, 21. A magistrate judge issued a Report and Recommendation, recommending the matter be dismissed with prejudice. See Gray, ECF No. 22. Gray objected to the Report and Recommendation and filed a motion to certify questions to the Washington Supreme Court. See Gray, ECF Nos. 24, 25. While that matter was pending, Plaintiff filed this matter in Spokane County Superior Court. During the August 24 hearing, the Court asked Plaintiff's counsel about a potential inconsistency of arguing that the Court in the Eastern District of Washington lacks Article III standing despite filing the Gray matter in district court in the Western District of Washington given the substantial similarity of the actions. Following that hearing, Gray voluntarily dismissed the case in the Western District. See Gray, ECF No. 36.
Accordingly, a district court can conclude that the requirements of Article III standing are satisfied prior to dismissing claims in the same case under Rule 12(b)(6). See generally In re Facebook, Inc. Internet Tracking Litig., 956 F.3d 589 (9th Cir. 2020); Eichenberger, 876 F.3d 979.
Plaintiff further argues Defendant should be judicially estopped from making the alleged contradictory argument. ECF No. 31 at 12. Plaintiff argues that judicial estoppel is appliable here because “(1) Twitter has previously argued [in Gray v. Twitter] that there is no privacy interest in a cell phone number, while here it says there is; (2) Twitter contends it succeeded in persuading the court in Gray v. Twitter that its earlier position was correct; and (3) Twitter would gain an unfair advantage by securing access to its preferred forum.” ECF No. 31 at 12.
First, Defendant did not argue that there is no privacy interest in a cell phone number in Gray v. Twitter for the purposes of a standing analysis. There, Defendant moved to dismiss on the basis that Plaintiff had inadequately plead facts to support her allegations, and Defendant denied disclosing contact information of users, and explained RCW 9.26A.140's purpose. Gray, ECF No. 17 at 8-12. More importantly, Defendant argued that a telephone number does not fall within the statute's definition of a telephone record and thereby causes Plaintiff's claim to fail as a matter of law. Id. at 14-26. Thus, Plaintiff's first assertion is without merit.
Even if Defendant had asserted that there is not a privacy interest in a cell phone number in Gray, Plaintiff's argument for judicial estoppel fails, because Defendant has not argued that there is a privacy interest in a cell phone number here. Plaintiff's argument mischaracterizes Defendant's argument in its Opposition to Plaintiff's Motion to Remand. What Defendant argues is that the cause of action Plaintiff has brought under RCW 9.26A.140 by virtue of the Criminal Profiteering Act is closely analogous to the common law tort of disclosure of private information such that Article III standing. Defendant acknowledges that Plaintiff alleges sufficient facts to confer Article III standing. This is permitted by Warth, Defendants of Wildlife, and National Wildlife Federation. ECF No. 30 at 9. Indeed, Defendant expressly states its intention to make the same argument-not a contradictory argument-that it had previously in Gray. ECF No. 30 at 9, n.2 (“In fact, an individual's own telephone number is not a ‘telephone record' within the meaning of the Washington statute, see Gray v. Twitter, Inc., No. 22-cv-1389, ECF No. 22, at 13-18 (W.D. Wash. Mar. 17, 2021)). Defendant's adherence to the legal standard while establishing Article III standing does not materially contradict its prior position in Gray. Thus, the first factor for consideration in judicial estoppel is not present.
Judicial estoppel is also inappropriate in this matter because Gray voluntarily dismissed the case before the Report and Recommendation of the magistrate judge-which recommended dismissal with prejudice-was adopted or rejected by the district judge. A final decision as to Defendant's arguments was not rendered.
CONCLUSION
The Court finds Defendant has established Plaintiff's allegations are sufficiently plead such that Article III standing has been satisfied. The Court also finds that Defendant has demonstrated the action is removeable under 28 U.S.C. § 1332(d) and Defendant's removal was timely.
Accordingly, IT IS HEREBY ORDERED:
1. Plaintiff's Motion to Remand, ECF No. 8, is DENIED.
a. Defendant shall answer or otherwise respond to Plaintiff's First Amended Complaint, ECF No. 35, no later than 30 days from the date of this order. See ECF No. 12 at 2.
IT IS SO ORDERED. The District Court Executive is directed to file this order and provide copies to the parties.