Spears v. The Campbell's Company

Background

The plaintiffs—Melvin Colman, Gail Spears, and Revital Yogev—filed a proposed class action against The Campbell’s Company and Pacific Foods of Oregon LLC under California law. The complaint asserts six claims: invasion of privacy, intrusion upon seclusion, wiretapping under the California Invasion of Privacy Act (CIPA), use of a pen register under CIPA, common-law fraud or misrepresentation, and unjust enrichment.

The plaintiffs allege that the defendants’ websites displayed cookie-consent banners representing that users could control tracking and the use of their personal information. According to the complaint, however, third-party cookies continued to track users and intercept or collect information after users rejected or opted out of tracking. The alleged information included browsing history, website interactions, search terms, user inputs, device information, session information, user identifiers, and location data. The plaintiffs allege that the defendants integrated third-party tools into their websites, controlled whether the cookies operated, and benefited from the resulting data collection.

The defendants moved to dismiss under Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). Rule 12(b)(1) concerns the court’s subject-matter jurisdiction, including whether a plaintiff has standing. Rule 12(b)(6) tests whether the complaint states a legally sufficient claim. The defendants also asked the court to stay, or pause, the case while a California appellate court considered whether CIPA’s pen-register provision applies to website software.

Judicial Notice

The court granted the defendants’ first request for judicial notice as to legislative materials and state-court records. The court stated that it would not consider those documents for the truth of facts asserted in them because the plaintiffs’ complaint did not rely on them. The court denied as moot the defendants’ second request for judicial notice because the documents would not change the court’s analysis.

Standing for the CIPA Claims

The defendants argued that the plaintiffs had not alleged a concrete injury sufficient to establish Article III standing for the wiretapping and pen-register claims. The court rejected that argument. It held that the plaintiffs plausibly alleged an invasion of their privacy interests because the defendants allegedly allowed third parties to collect extensive information about the plaintiffs despite representing that users could prevent tracking.

The court distinguished a prior decision involving tracking on a single website. It reasoned that the allegations here involved representations that users would not be tracked, collection of broad categories of information, and tracking across websites and over time. The court therefore denied the defendants’ Rule 12(b)(1) motion as to Claims 3 and 4.

Sufficiency of the Claims

The court denied the Rule 12(b)(6) motion as to all six claims:

- Invasion of privacy and intrusion upon seclusion (Claims 1 and 2): The court held that the plaintiffs sufficiently alleged a reasonable expectation of privacy because the defendants allegedly offered an option to reject tracking cookies. The court also held that the allegations of collecting and compiling extensive information after users opted out were sufficient at the pleading stage to allege a highly offensive or serious privacy intrusion.

- Wiretapping under CIPA (Claim 3): The court found the allegations sufficient to plausibly show that third parties intercepted communications in real time while those communications traveled from users’ browsers to the defendants’ websites. The court also found a plausible allegation that the defendants knowingly assisted or encouraged the alleged conduct by installing and controlling the third-party cookies, leaving them active after opt-outs, and benefiting from them.

- Use of a pen register under CIPA (Claim 4): The court held that the plain language of California Penal Code section 638.51 plausibly applies to electronic communications without limiting the statute to telephone communications. The court also found sufficient allegations that at least some cookies recorded signaling or addressing information, even though other cookie functions allegedly collected communication contents.

- Fraud, deceit, or misrepresentation (Claim 5): The court held that the plaintiffs sufficiently alleged that the defendants represented that users could reject tracking cookies, intended users to rely on those representations, and continued tracking after users opted out. The court also found sufficient allegations of injury based on the loss of control over personal data and the plaintiffs’ alleged inability to decide whether to permit their data to be monetized.

- Unjust enrichment (Claim 6): The court treated this claim as a restitution theory rather than an independent cause of action. It held that the plaintiffs sufficiently alleged that the defendants benefited from the data collection and that the plaintiffs sought restitution on a theory distinguishable from their damages theories, at least at the pleading stage.

Request to Stay the Case

The court denied the defendants’ request for a stay. It reasoned that the pending California appellate matter concerned only one claim, while the other claims would continue regardless of the appellate outcome. The court also found that the defendants had not shown sufficient hardship from proceeding and that a stay could delay the plaintiffs’ ability to litigate the remaining claims.

Disposition

Judge Thomas S. Hixson denied the defendants’ motion to dismiss. The court denied the motion under Rule 12(b)(1) as to Claims 3 and 4 and denied it under Rule 12(b)(6) as to Claims 1 through 6. The court also denied the request for a stay, granted the first request for judicial notice, and denied as moot the second request for judicial notice. The order did not decide the ultimate merits of the claims.