Becker et al v. Skype Inc., No. 5:2012cv06477 - Document 68 (N.D. Cal. 2014)

Court Description: ORDER granting 38 Motion to Dismiss; finding as moot 58 Motion to Dismiss; denying 62 Motion for Administrative Relief signed by Judge Edward J. Davila on February 10, 2014. (ejdlc4S, COURT STAFF) (Filed on 2/10/2014)

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Becker et al v. Skype Inc. Doc. 68 1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 CANTON BECKER, JOSEPHINE ASPLUND, ) and DARRIN WESLEY, individually and on ) behalf of all others similarly situated, ) ) Plaintiffs, ) ) v. ) ) SKYPE INC., a Delaware Corporation, ) MICROSOFT CORPORATION, and ) DOES 1-20. ) ) ) Defendants. 18 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLANTIFF CANTON BECKER [Re: Docket No. 38] Presently before the Court is Defendants Skype Inc. and Microsoft Corporation’s 19 (collectively, “Defendants”) Motion to Dismiss Plaintiff Canton Becker (“Plaintiff”) from the 20 instant action pursuant to subsections (b)(1) and (b)(6) of Federal Rule of Civil Procedure 12. See 21 Docket Item No. 38. The Court found this matter suitable for decision without oral argument 22 pursuant to Civil Local Rule 7-1(b) and previously vacated the hearing. Having thoroughly 23 reviewed the parties’ briefing and for the following reasons the Court GRANTS Defendants’ 24 Motion. 25 I. 26 Background Skype provides both free and fee-based telephone services through an Internet connection. 27 See Docket Item No. 30 (Second Amended Class Action Complaint for Damages, “SAC”). 28 Plaintiff Becker opened a free Skype account in 2005. Id. In October 2006 he purchased a three1 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF CANTON BECKER month subscription for a fee-based “Skype Online Number” in order to communicate with clients 2 of his graphic design business while traveling. Id. At the end of the subscription period, he did not 3 renew the Online Number and service ended. Id. On five occasions through 2011, Plaintiff 4 purchased additional three-month subscriptions that he let lapse at the end of their terms. Id. Each 5 time he initiated service, he saw a notice that gave the option to permit Skype to auto-renew his 6 subscription at the end of the three-month period but did not select it. Id. On August 13, 2012 7 Plaintiff purchased another three-month Online Number subscription. Id. On November 10, 2012 8 he noticed he had been charged $18 for an additional three-month subscription despite not having 9 requested it. Id. Plaintiff spent two hours that day attempting to secure a refund from Skype, which 10 United States District Court For the Northern District of California 1 later that day agreed to refund the full amount. Plaintiff received his refund on November 16, 2012. 11 Id. On November 19, 2012, Plaintiff filed a Class Action Complaint for Damages along with 12 13 Josephine Asplund and Darrin Wesley in Santa Clara County Superior Court. See Docket Item No. 14 1, Ex. 1. Plaintiffs filed an Amended Complaint on December 19, 2012. Id. Two days later, on 15 December 21, 2012, Defendants removed the action to this Court pursuant to the Class Action 16 Fairness Act. See Docket Item No. 1 (Notice of Removal). Defendants filed a Motion to Dismiss 17 Plaintiffs’ Second, Fifth, and Sixth Claims on January 28, 2013 (Docket Item No. 14), which 18 ultimately was fully briefed, as well as a separate Motion to Dismiss for Lack of Jurisdiction on 19 April 10, 2013 (Docket Item No. 26), which was not. Plaintiffs filed a Second Amended Complaint 20 on April 24, 2013, which, upon filing, became the operative complaint in this matter. See Docket 21 Item No. 30. Defendants filed the instant Motion to Dismiss for Lack of Jurisdiction on May 9, 22 2013. See Docket Item No. 38. 23 24 II. Legal Standard A Rule 12(b)(1) motion challenges the federal court’s subject matter jurisdiction and may 25 be either facial or factual. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). A facial 12(b)(1) 26 motion involves an inquiry confined to the allegations in the complaint, whereas a factual 12(b)(1) 27 motion permits the court to look beyond the complaint to extrinsic evidence. Id. When a defendant 28 makes a facial challenge, all material allegations in the complaint are assumed true and the court 2 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF CANTON BECKER 1 must determine whether lack of federal jurisdiction appears from the face of the complaint 2 itself. Thornhill Publ’g Co. v. General Tel. Elec., 594 F.2d 730, 733 (9th Cir. 1979). “A party 3 invoking the federal court’s jurisdiction has the burden of proving the actual existence of subject 4 matter jurisdiction.” Thompson v. McCombe, 99 F.3d 352, 353 (9th Cir. 1996). 5 6 III. Discussion Defendants present two grounds on which they argue the Court should dismiss Plaintiff 7 Becker. First, they argue Plaintiff’s Complaint fails to allege an actual case or controversy as 8 required to establish this Court’s subject matter jurisdiction. Second, Defendants argue that even if 9 Plaintiff has established subject matter jurisdiction, his pleadings fail to state claims for which United States District Court For the Northern District of California 10 relief may be granted under the Unfair Competition Law (“UCL”), Consumer Legal Remedies Act 11 (“CLRA”), or the California Business and Professions Code (“B&P Code”). Because the Court 12 finds that Defendants’ subject matter jurisdiction argument is dispositive, it will only address that 13 ground. 14 15 A. Plaintiff Has Not Alleged Injury in Fact Article III, section 2 of the Constitution limits the jurisdiction of federal courts to actual 16 cases or controversies. In order to satisfy the standing requirements of Article III, “a plaintiff must 17 show (1) it has suffered an ‘injury in fact’ that is (a) concrete and particularized and (b) actual or 18 imminent, not conjectural or hypothetical; (2) the injury is fairly traceable to the challenged action 19 of the defendant; and (3) it is likely, as opposed to merely speculative, that the injury will be 20 redressed by a favorable decision.” Lujan v. Defenders of Wildlife, 504 U.S. 555, 560–561 (1992). 21 The parties agree that Plaintiff received a full refund of the allegedly unauthorized $18 service 22 renewal fee. Two issues remain in dispute. First, whether Skype’s failure to pay Plaintiff interest on 23 that refund or to compensate him for his time spent procuring it constitutes actual injury. Second, 24 whether Plaintiff has sufficiently demonstrated risk of imminent injury due to Skype’s ongoing 25 business practices, and therefore his standing to sue for injunctive relief. 26 Defendants cite several decisions in which plaintiffs who received a full refund prior to 27 filing suit were found to lack standing. See Gonzales v. Comcast Corp., Case No. 10-CV-01010, 28 2012 WL 10621 (E.D. Cal. Jan. 3, 2012); Demmick v. Cellco P’Ship, Case No. 06-2163, 2007 WL 3 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF CANTON BECKER 1 789040 (D. N.J. March 13, 2007); Arabian Am. Oil Co. v. Scarfone, 713 F. Supp. 1420 (M.D. Fla. 2 1989), aff’d, 939 F.2d 1472 (11th Cir. 1991). Plaintiff contends that, notwithstanding these cases, 3 his full refund was an inadequate remedy because he also should have been reimbursed for the two 4 hours he spent communicating with Skype in order to get it. Plaintiff cites no authority for the 5 proposition that personal time spent procuring a refund must be compensated. Rather, he argues 6 that he should be compensated for wages he presumably lost while on the phone with Skype. That 7 Plaintiff has identified a specific monetary value for his efforts—$85 per hour—does not render his 8 injury sufficiently concrete. Lujan v. Defenders, 504 U.S. at 560 (explaining that Article III injury 9 requires a plaintiff to demonstrate harm that is “‘concrete’…not conjectural or hypothetical”). That United States District Court For the Northern District of California 10 amount is meaningless if he cannot allege actual loss of work, which he has not. Plaintiff’s SAC 11 says only that he “could have instead billed out [the] time” he spent contacting Skype. See Docket 12 Item No. 1, Ex. 3 ¶44. This same conditional phrasing is repeated in his Opposition. See Docket 13 No. 39. Beyond these vague suggestions of lost opportunity, Plaintiff provides no allegations 14 relating to any specific work he set aside or was forced to forgo in order to pursue his refund. 15 It is on this point that the Southern California Housing Rights Center case cited by both 16 parties is most relevant. S. Cal. Hous. Rights Ctr. v. Los Feliz Towers Homeowners Ass’n, 426 F. 17 Supp. 2d 1061 (C.D. Cal. 2005). That decision did not necessarily hinge on whether the plaintiff 18 was an organization or an individual. Nor did its holding suggest that parties are automatically 19 entitled to compensation when their attention and resources are directed to one issue instead of 20 another. Rather, the central consideration was the concrete nature and scale of the Housing Rights 21 Center’s alleged injury. The court determined that the organization had standing because it 22 “present[ed] evidence of actual injury based on loss of financial resources in investigating [the] 23 claim.” Id. at 1069. Plaintiff’s pleadings, in contrast, include nothing to indicate actual loss of 24 business during the time he was pursuing his refund. Moreover, while the Southern California 25 Housing Rights Center plaintiffs alleged substantial and extended dedication of staff time, Plaintiff 26 Becker claims a loss of only two hours on a Saturday. Plaintiff provides no authority suggesting 27 that the Court may consider the opportunity cost of pursuing a refund sufficient to constitute actual 28 injury absent any allegations that Plaintiff actually lost billable work. 4 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF CANTON BECKER 1 Plaintiff also fails to cite any precedent or statutory authority to support his argument that 2 he is entitled to interest on his refund, let alone that the loss of that interest constitutes sufficient 3 injury to establish standing. Plaintiff contacted Skype on November 10 and Skype agreed to refund 4 the $18 that day. See Docket No. 39. It took six days for the funds to return to Plaintiff’s bank 5 account. Id. Defendants estimate that interest, if owed, would be in the range of 1.5-3.55 cents. See 6 Docket No. 38. Faced with a comparable scenario, the court in Gonzales found that estimated 7 damages of 0.5 cents to $1.64 were too speculative and de minimus to convey standing. Gonzales, 8 2012 WL 10621 at *7. Even assuming a legal entitlement to interest, the de minimus amount 9 alleged lost is similarly inadequate to establish Article III standing in this case. United States District Court For the Northern District of California 10 11 B. Plaintiff Cannot Show a Likelihood of Future Injury Besides failing to establish an Article III injury, which is required to convey subject matter 12 jurisdiction over each of his claims, Plaintiff has also failed to establish the threat of imminent 13 injury, which is required in order to grant his requested injunctive relief. To establish standing on 14 this basis, a plaintiff must demonstrate that he is “realistically threatened by a repetition of the 15 violation.” Gest v. Bradbury, 443 F.3d 1177, 1181 (9th Cir.2006). A mere assertion of the intention 16 to do something in the future is not sufficient to confer standing, as “[s]uch ‘some day’ 17 intentions—without any description of concrete plans, or indeed any specification of when the 18 some day will be…” In re Intel Laptop Battery Litig., Case No. 09-CV-02889, 2011 WL 7290487 19 (N.D. Cal. Apr. 7, 2011) (quoting Summers v. Earth Island Institute, 555 U.S. 488, 495 (2009)). 20 Plaintiff argues that because he continues to purchase Skype Online Numbers and plans to 21 do so in the future, he is at risk of future harm. Having already been subject to the contested auto- 22 renew policy, spoken to Skype about it, and received a refund for the first auto-renew applied to his 23 account, Plaintiff simply cannot reasonably argue that he stands to be fooled again in the future. As 24 other courts have well recognized, “[i]f a plaintiff has knowledge of a defendant’s practices, that 25 plaintiff cannot have standing to seek injunctive relief to redress injuries caused by those practices, 26 because the plaintiff’s knowledge precludes him from showing a likelihood of being injured in the 27 future by those practices.” In re Intel Laptop Battery Litig., 2011 WL 7290487 at *2 (quoting 28 Laster v. T–Mobile USA, Inc., Case No. 05-CV-1167, 2009 WL 4842801, at *3–4 (S.D. Cal. 5 Case No.: 5:12-CV-06477-EJD ORDER GRANTING DEFENDANTS’ MOTION TO DISMISS PLAINTIFF CANTON BECKER

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