Gordon v. Robinhood Financial LLC et al, No. 2:2019cv00390 - Document 36 (E.D. Wash. 2020)
Court Description: ORDER DENYING DEFENDANT'S MOTION TO DISMISS UNDER RULE 12(b)(6). Defendant Robinhood Financial LLC's Motion to Dismiss, ECF No. 11 , is DENIED. Signed by Chief Judge Thomas O. Rice. (LLH, Courtroom Deputy)
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Gordon v. Robinhood Financial LLC et al Doc. 36 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON ISAAC GORDON, personally, and an individual, and all those similarly situated, Plaintiffs, 11 v. ROBINHOOD FINANCIAL LLC, a Delaware limited liability company, 12 Defendant. 10 NO: 2:19-CV-0390-TOR ORDER DENYING DEFENDANT’S MOTION TO DISMISS UNDER RULE 12(b)(6) 13 14 BEFORE THE COURT is Defendant Robinhood Financial LLC’s Motion to 15 Dismiss (ECF No. 11). The Court has reviewed the record and files herein, the 16 completed briefing, and is fully informed. The motion was submitted for 17 consideration without oral argument. For the reasons discussed below, the Motion 18 to Dismiss (ECF No. 11) is denied. 19 20 ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 1 Dockets.Justia.com 1 BACKGROUND 1 2 Plaintiff Isaac Gordon is a Washington individual who regularly uses a 3 cellular telephone or similar device to send and receive transmissions of electronic 4 text messages. ECF No. 9 at 8, ¶ 5.2. Defendant Robinhood Financial LLC 5 operates an online investment brokerage service and conducts related business 6 activities including a “refer-a-friend” (RAF) program, which allows current 7 subscribers to send links to other devices containing invitations to sign up for the 8 Defendant’s online brokerage services. Id. at 8-10, ¶¶ 5.3, 5.4, 5.10. As part of the 9 RAF program, existing subscribers can send invitations to new users to subscribe 10 to Robinhood’s services without their affirmative consent. Id. at 9, ¶ 5.6. In July 11 of 2019, the Plaintiff received an unsolicited commercial electronic text message 12 that was allegedly either initiated or assisted in its transmission by the Defendant. 13 Id. at 9, ¶¶ 5.8, 5.9. Contained in the text message transmitted to the Plaintiff was 14 an invitation to the Plaintiff to sign up for the Defendant’s online brokerage 15 services, promising special incentives for doing so. Id. at 9-10, ¶ 5.10. The 16 message stated “Your free stock is waiting for you! Join Robinhood and we’ll both 17 18 1 19 (ECF No. 9), which are to be taken as true for purposes of the Motion to Dismiss. 20 This summary is not exhaustive but is limited to the facts necessary for this Order. The background facts are gleaned from Plaintiff’s First Amended Complaint ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 2 1 get a stock like Apple, Ford, or Facebook for free. Sign up with my link.” Id. The 2 invitation did not include an “opt out” or “stop” option, enabling the recipient to 3 preclude further messages. Id. at 10, ¶ 5.12. 4 Plaintiff originally filed this case in the Superior Court for Spokane County, 5 on October 29, 2019, cause no. 19-2-04574-32, and Defendant filed a notice of 6 removal with this court on November 13, 2019. ECF No. 1. Plaintiff filed his 7 First Amended Complaint on December 10, 2019, alleging that the Defendant’s 8 RAF program is violative of Washington’s Consumer Protection Act (CPA), RCW 9 19.86, et seq., vis à vis the Defendant’s violations of Washington’s Commercial 10 11 12 Electronic Mail Act (CEMA), RCW 19.190. ECF No. 9 at 2, ¶ 2. Defendant’s motion to dismiss for failure to state a claim under Fed. R. Civ. P. 12(b)(6) is now before the Court. ECF No. 11. 13 STANDARD OF REVIEW 14 Federal Rule of Civil Procedure 12(b)(6) provides that a defendant may 15 move to dismiss the complaint for “failure to state a claim upon which relief can be 16 granted.” “The burden of demonstrating that no claim has been stated is upon the 17 movant.” Glanville v. McDonnell Douglas Corp., 845 F.2d 1029 (9th Cir. 1988). 18 A motion to dismiss for failure to state a claim will be denied if the plaintiff alleges 19 “sufficient factual matter, accepted as true, to ‘state a claim to relief that is 20 ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 3 1 plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell 2 Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). 3 While the plaintiff’s “allegations of material fact are taken as true and 4 construed in the light most favorable to the plaintiff[,]” the plaintiff cannot rely on 5 “conclusory allegations of law and unwarranted inferences [] to defeat a motion to 6 dismiss for failure to state a claim.” In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 7 1403 (9th Cir. 1996) (citation and brackets omitted). That is, the plaintiff must 8 provide “more than labels and conclusions, and a formulaic recitation of the 9 elements.” Twombly, 550 U.S. at 555. When deciding, the Court may consider the 10 plaintiff’s allegations and any “materials incorporated into the complaint by 11 reference . . . .” Metzler Inv. GMBH v. Corinthian Colleges, Inc., 540 F.3d 1049, 12 1061 (9th Cir. 2008) (citing Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 13 308, 322 (2007)). 14 DISCUSSION 15 Defendant moves the court to dismiss with prejudice Mr. Gordon’s claim 16 arising under RCW 19.86.090, the CPA, via RCW 19.190.060(1), CEMA. ECF 17 No. 11 at 22. 18 CEMA was enacted in 1998 by the Washington Legislature to address 19 “unwanted [e-mail] messages collectively referred to as ‘spam.’” Final B. Rep. on 20 Second Engrossed Substitute H.B. 1888, 59th Leg., Reg. Sess. (Wash. 2005) ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 4 1 (defining “spam”); LAWS OF 1998, ch. 149, § 4 (codified in RCW 19.190.030). 2 Sending a commercial e-mail containing false or misleading information 3 constitutes a “violation of the consumer protection act.” RCW 19.190.030; Wright 4 v. Lyft, Inc., 189 Wash. 2d 718, 724 (2017). 5 In 2003, lawmakers responding to the rise of unsolicited commercial text 6 messages sent to cell phones amended CEMA seeking to “limit the practice” of 7 unsolicited commercial text messages. Laws of 2003, ch. 137, § 1; Wright, 189 8 Wash. 2d at 724. The amendment to the CEMA precluded initiation or assisting 9 the sending of a commercial text messages to Washington residents. Id. 10 11 12 13 14 15 16 17 18 Specifically, RCW 19.190.060(1) provides: No person conducting business in the state may initiate or assist in the transmission of an electronic commercial text message to a telephone number assigned to a Washington resident for cellular telephone or pager service that is equipped with short message capability or any similar capability allowing the transmission of text messages. In turn, CEMA provides the following definitions: “Assist the transmission” means actions taken by a person to provide substantial assistance or support which enables any person to formulate, compose, send, originate, initiate, or transmit a commercial electronic mail message or a commercial electronic text message when the person providing the assistance knows or consciously avoids knowing that the initiator of the commercial electronic mail message or the commercial electronic text message is engaged, or intends to engage, in any practice that violates the consumer protection act. 19 20 RCW 19.190.010(1). ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 5 1 2 3 4 “Initiate the transmission” refers to the action by the original sender of an electronic mail message or an electronic text message, not to the action by any intervening interactive computer service or wireless network that may handle or retransmit the message, unless such intervening interactive computer service assists in the transmission of an electronic mail message when it knows, or consciously avoids knowing, that the person initiating the transmission is engaged, or intends to engage, in any act or practice that violates the consumer protection act. 5 6 7 RCW 19.190.010(7). Here, Plaintiff’s statement of facts in the First Amended Complaint provides 8 a series of allegations, redundantly and alternatively alleging that Defendant 9 formulated the processes and procedures of the RAF program by which it either 10 initiated or substantially assisted in the transmission of its commercial messages to 11 its customers (subscribers) or “third party intermediaries,” and for which it 12 encouraged its customers to forward to others through the promise of remuneration 13 in the form of free stock. ECF No. 9 at 8-22. In essence, Plaintiff alleges that 14 Defendant paid its customers to distribute its commercial message to friends and 15 family using the electronic mail message system, and this is alleged to have 16 violated CEMA and consequently be a violation of the CPA. 17 Pleading in the alternative is certainly allowed. Fed. R. Civ. P. 8(d). “A 18 party may state as many separate claims . . . as it has, regardless of consistency.” 19 Fed. R. Civ. P. 8(d)(3). If a party makes alternative statements, the pleading is 20 sufficient if any one of them is sufficient. Fed. R. Civ. P. 8(d)(2). ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 6 1 At this stage of the proceeding, Plaintiff alleges “sufficient factual matter, 2 accepted as true, to ‘state a claim to relief that is plausible on its face.’” See 3 Twombly, 550 U.S. at 570. 4 ACCORDINGLY, IT IS HEREBY ORDERED: 5 6 7 8 9 1. Defendant Robinhood Financial LLC’s Motion to Dismiss, ECF No. 11, is DENIED. 2. The District Court Executive is hereby directed to enter this Order and furnish copies to counsel. DATED June 17, 2020. 10 11 THOMAS O. RICE Chief United States District Judge 12 13 14 15 16 17 18 19 20 ORDER DENYING MOTION TO DISMISS UNDER RULE 12(b)(6) ~ 7
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