Kellman v. Spokeo, Inc.

Background

This putative class action alleges that Spokeo, Inc. violated various state laws by, among other things, making plaintiffs' personal information available on its website. Plaintiffs moved for leave to file a second amended complaint while their motion for class certification was pending.

The proposed second amended complaint would add William Williams as a plaintiff and create a proposed Ohio Viewed-Prior-to-Purchase Class. That proposed subclass would include Ohio residents who were not registered Spokeo.com users, whose teaser profile was viewed immediately before a user purchased a Spokeo.com subscription on or after November 18, 2017, and whose profile included a name and home address. The proposed amendment did not add any new claims or causes of action. The court explained that the proposed subclass sought recovery under Ohio Revised Code section 2741, a statute already involved in the existing complaint.

Legal Standard

Federal Rule of Civil Procedure 15(a) governs requests to amend a complaint. Courts generally grant leave to amend liberally. The relevant factors include undue delay, bad faith or an improper delaying purpose, repeated failure to correct earlier deficiencies, prejudice to the opposing party, and whether the proposed amendment would be futile. Prejudice to the opposing party is the most important factor, and absent prejudice or a strong showing on another factor, the rule favors allowing amendment.

Parties' Arguments and Analysis

The court found no evidence of bad faith, an improper delaying purpose, or futility. It also found no repeated failure to correct deficiencies. Plaintiffs said they could not previously have included Williams's claims because they had not learned until a few months before moving for class certification that Spokeo could detect customers who viewed the site before purchasing a subscription, and Williams did not retain plaintiffs' counsel until July 2023, seven days before the motion was filed.

Spokeo argued that the plaintiffs had delayed and that the amendment would prejudice it by requiring additional depositions and discovery and by adding a damages subclass. The court rejected undue delay as a basis for denial, explaining that any earlier search for a client with similar facts would have been speculative and unreasonable. It acknowledged that allowing the amendment would slightly delay the class-certification schedule, but found that Spokeo would need to depose Williams and possibly conduct additional discovery whether Williams joined this case or filed a separate case. The court concluded that allowing the amendment would improve efficiency.

The court also rejected Spokeo's argument that the proposed subclass presented a new claim. Plaintiffs had already asserted a claim under Ohio Revised Code section 2741 based on an existing Ohio class. The amendment added another class member and a proposed subclass seeking relief under that statute, rather than adding a new legal claim or cause of action. The court found that any prejudice was limited and could be addressed by giving Spokeo additional time to depose Williams.

Ruling

Judge William H. Orrick granted the motion for leave to file the second amended complaint. He ordered plaintiffs to file a clean, non-redlined version within three days. He also ordered the parties to meet and confer about a modified class-certification briefing schedule and file a stipulation within seven days. The court stated that, absent good cause, this would be the last amendment allowed.