Cody v. Ring LLC

Background

In September 2022, Annette Cody used Ring LLC’s website chat feature to communicate briefly with a customer representative. Cody alleged that Ring routed the chats through Kustomer, Inc.’s server, allowing Kustomer to intercept and collect chat data. She also alleged that Meta used data obtained through Kustomer’s interception for targeted advertising.

Cody initially filed a putative class action against Ring and other defendants. Her first amended complaint asserted claims under two provisions of the California Invasion of Privacy Act. After the court granted Ring’s motion to dismiss that pleading with leave to amend, Cody filed the Second Amended Complaint, which asserted only a claim under California Penal Code section 631(a).

Legal standard

Ring moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not state a legally recognized claim supported by enough facts to make liability plausible. The court generally accepts the complaint’s factual allegations as true at this stage, but allegations that merely repeat the elements of a claim are not enough.

A court ordinarily gives a plaintiff an opportunity to amend a defective complaint when justice requires. It may deny that opportunity when further amendment would be futile, meaning the proposed changes would not fix the problems requiring dismissal.

Why the claim failed

Cody alleged that Ring was liable under the fourth clause of section 631(a) for aiding or coordinating with Kustomer’s alleged violation of the statute’s second clause. The court first examined whether Cody had adequately alleged that Kustomer itself violated the second clause.

The second clause addresses reading or learning the contents of a message without the required consent or authorization while the message is still “in transit.” The court found that Cody’s allegations did not explain specifically how Kustomer’s software intercepted communications made through Ring’s chat tool while those communications were in transit. Information about Kustomer’s integration with Facebook did not establish how Kustomer handled Ring’s web chats, because Cody did not allege that Ring had integrated Kustomer’s software into a Facebook business account or explain how the Facebook information applied to Ring.

The court also found that Cody had not adequately alleged that Kustomer was an independent third-party eavesdropper. Cody alleged that Ring, Kustomer, and Meta profited from using private chat data and pointed to Kustomer’s marketing materials, partnerships, and knowledge base. But the court concluded that these allegations did not provide specific facts showing that Kustomer could use information from Ring’s website for another purpose. Because Cody had not adequately alleged an underlying violation by Kustomer, her claim that Ring aided, agreed with, employed, or conspired with Kustomer under section 631(a)’s fourth clause necessarily failed.

The court did not decide the parties’ dispute about whether the fourth clause requires knowledge or intent, because the absence of a sufficiently alleged underlying violation resolved the claim.

Leave to amend and disposition

Ring asked the court to dismiss the Second Amended Complaint with prejudice, arguing that Cody had already had three opportunities to plead a section 631(a) violation. Cody proposed additional allegations about automatic routing software, communications being routed to Kustomer’s servers, and Kustomer’s description of itself as an “AI Powerhouse.” The court found those proposed allegations insufficiently specific and, except for one allegation that repeated previously rejected vague language, not specific to Ring or Kustomer’s conduct involving Ring.

The court therefore granted Ring LLC’s motion to dismiss, denied leave to amend, and dismissed the Second Amended Complaint with prejudice.