Stark v. Patreon, Inc.

Background

Brayden Stark, Judd Oostyen, Kevin Black, and Maryann Owens brought a proposed class action against Patreon, Inc. They alleged that when users watched videos on Patreon’s website, Patreon sent the video title and the user’s Facebook identification number to Facebook through Facebook’s tracking tool, the “Pixel.” The plaintiffs alleged that the Facebook identification number could be used to locate the user’s Facebook profile and that Patreon did not adequately disclose or obtain separate written consent for this sharing.

The complaint asserted four types of claims: violation of the federal Video Privacy Protection Act; violations of the “unlawful,” “unfair,” and “fraudulent” prongs of California’s Unfair Competition Law; violation of California’s Consumer Legal Remedies Act; and unjust enrichment. Patreon moved to dismiss all claims under Rule 12(b)(6), which tests whether the complaint states a legally sufficient claim.

Court’s Analysis

The court considered Patreon’s terms of use, privacy policy, and cookie policy because the complaint referred to those documents and their authenticity was not disputed. The court considered what the policies said, but it did not treat descriptions in those documents as conclusive proof of how Patreon actually operated when those descriptions conflicted with the complaint’s allegations.

For the Video Privacy Protection Act claim, the court held that the plaintiffs had not alleged whether the videos they watched were live broadcasts or prerecorded videos available on demand. The court held that a video must be prerecorded to qualify as a “similar audiovisual material” covered by the statute. Because the complaint did not provide that necessary fact, the court dismissed the Video Privacy Protection Act claim with leave to amend.

The court rejected Patreon’s other arguments for dismissing the Video Privacy Protection Act claim at the pleading stage. The plaintiffs sufficiently alleged that Patreon was engaged in delivering video content through its platform, even though content creators also participated in creating or delivering the videos. The plaintiffs also sufficiently alleged disclosure of personally identifying information and Patreon’s knowledge of that disclosure. The court explained that the relevant question was whether an ordinary person could use the Facebook identification number to identify a person’s video-watching behavior, not merely whether Facebook could do so using information already in its possession.

The court found that the plaintiffs sufficiently alleged economic loss for purposes of standing under California’s Unfair Competition Law. They alleged that they would not have paid Patreon’s subscription fees, or would have paid less, if Patreon had disclosed how it shared user data with Facebook.

The court dismissed the Unfair Competition Law claim under the “unlawful” prong to the extent it depended on the dismissed Video Privacy Protection Act claim, with leave to amend. The court denied dismissal to the extent that claim was based on an alleged violation of the Consumer Legal Remedies Act.

The court denied dismissal of the Unfair Competition Law claims under the “fraudulent” and “unfair” prongs. It concluded that the plaintiffs plausibly alleged that Patreon made partial disclosures about data sharing without disclosing the alleged Facebook Pixel sharing, which could support a duty to disclose additional information. The court also declined to dismiss the “unfair” claim while the related disclosure theory remained viable.

The court denied dismissal of the Consumer Legal Remedies Act claim, which the parties treated as covering substantially the same theory as the “fraudulent” Unfair Competition Law claim.

The court also denied dismissal of the unjust enrichment claim. It concluded that California law recognizes such a claim in at least some circumstances, or alternatively that the claim could be treated as a quasi-contract claim seeking restitution. The plaintiffs sufficiently alleged that Patreon received membership fees that it otherwise would not have received if it had disclosed the challenged data-sharing practice.

Disposition

Patreon’s motion to dismiss was granted as to the Video Privacy Protection Act claim and the Unfair Competition Law claim under the “unlawful” prong to the extent that claim was based on the Video Privacy Protection Act. Those claims were dismissed with leave to amend if the plaintiffs could allege that the videos were prerecorded. The motion was otherwise denied. The plaintiffs could file an amended complaint by October 27, 2022.

The court did not reach the parties’ constitutional arguments concerning the Video Privacy Protection Act. Judge Joseph Spero also vacated the scheduled hearing and continued the case-management conference to November 18, 2022.