Casillas v. Berkshire Hathaway Homestate Insurance Co. ( 2022 )

Filed 6/10/22
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF
CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
HECTOR CASILLAS, et al., B302442
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. BC670058)
v.
BERKSHIRE HATHAWAY
HOMESTATE INSURANCE
COMPANY, et al.,
Defendants and Respondents.
APPEAL from a judgment of the Superior Court of
Los Angeles County, David S. Cunningham III, Judge.
Affirmed.
Green & Noblin, Robert S. Green, James Robert
Noblin, and Emrah M. Sumer; Law Offices of Mark Ravis &
Associates, Mark Ravis and David Martin, for Plaintiffs and
Appellants.
Gibson, Dunn & Crutcher, Deborah L. Stein, Jeremy S.
Smith and Wesley Sze, for Defendants and Respondents
Berkshire Hathaway Homestate Insurance Company and
Cypress Insurance Company.
Proskauer Rose, Lary Alan Rappaport and Jessica M.
Griffith, for Defendant and Respondent Zenith Insurance
Company.
Manning & Kass, Ellrod, Ramirez, Trester and Dennis
B. Kass, for Defendant and Respondent Oliver Glover.
Freeman Mathis & Gary and Stephen M. Caine, for
Defendant and Respondent William Reynolds.
________________________________________________
INTRODUCTION
The elements of the tort of trespass to chattels include
“injury to the plaintiff’s personal property or legal interest
therein.” (Intel Corp. v. Hamidi (2003) 30 Cal.4th 1342,
1348, 1350-1351 (Intel).) In this opinion, we hold appellants
Hector Casillas and Adela Gonzalez failed to plead facts
satisfying this element in alleging that respondents -- three
insurance companies and two investigators -- copied
appellants’ electronic litigation files from a third-party
computer system, in violation of appellants’ interests in
privacy and confidentiality. We conclude appellants failed to
2
allege any actionable injury because: (1) they did not allege
damage or disruption to the computer system, as required by
Intel; and (2) in any event, they did not allege injury to the
copied files or their asserted property interests therein.
According to appellants, respondents Berkshire
Hathaway Homestate Insurance Company (Berkshire),
Cypress Insurance Company (Cypress), Zenith Insurance
Company (Zenith), William Reynolds, and Oliver Glover
conspired to “hack” a third-party computer system. At the
direction of the insurance-company respondents, Reynolds
and Glover allegedly copied thousands of electronic litigation
files, which had been uploaded to the system by workers’
compensation and personal injury attorneys and their clients
(including appellants), and transmitted the copies to
insurers and insurance defense law firms for use in
litigation. Appellants first sued respondents in federal
district court on various causes of action, including invasion
of privacy. After abandoning their invasion-of-privacy claim,
they added a claim of trespass to chattels, which the district
court dismissed without addressing the merits.
Appellants then filed the instant trespass-to-chattels
claim, to which respondents demurred. The trial court
sustained respondents’ demurrers, concluding appellants
failed to state a trespass-to-chattels claim because, inter
alia, they did not allege any damage or disruption to the
computer system from which the files were copied, as the
court concluded was required under Intel, supra, 30 Cal.4th
1342. The court granted appellants leave to amend their
3
complaint, but appellants declined to do so, instead electing
to appeal the judgment subsequently entered on the
demurrers.
On appeal, appellants contend the court erred in
sustaining respondents’ demurrers to their claim of trespass
to chattels. As indicated above and explained in more detail
below, we agree with the trial court that appellants failed to
state a claim. Accordingly, we affirm.
BACKGROUND
A. Respondents’ Copying of Electronic Files
We take the following facts from the allegations of
appellants’ complaint, which we must assume true on this
appeal: HQSU Sign Up Services, Inc. owned the “‘HQSU
system,’” comprising computer servers, a database housed on
those servers, and a website through which the database
was accessible. Attorneys for workers’ compensation and
personal injury plaintiffs contracted with HQSU to provide
administrative services for certain clients, including
appellants. HQSU presented each new client with a blank
in-take packet, in which the client entered “medical,
financial and legal information.” HQSU uploaded the
completed packet to HQSU’s database, in a file associated
with the client’s counsel. Counsel used HQSU’s website to
download the in-take packet, then created and uploaded
“documents that would be typical in a litigation file, such as
correspondence, memos to file, research memos, etc.” As the
client’s case proceeded, the file was updated by counsel,
4
counsel’s staff, and the client, all of whom could use HQSU’s
website to download or post comments on existing
documents, and upload revised or additional documents.
The website and file contained “password and privacy
notifications,” because the file was “intended” to be available
only to counsel, counsel’s staff, and the client, following
verification of username and password.
Respondents conspired to “hack” the files on the HQSU
system. At the direction of respondents Berkshire, Cypress,
and Zenith, respondents Reynolds and Glover “repeatedly
launched what are known as directory traversal attacks. A
directory traversal attack is a[n] HTTP exploit allowing
hackers to access restricted directories and execute
commands outside of the web server’s root directory.” By
means of these directory traversal attacks, conducted almost
daily for 15 months, Reynolds and Glover copied
approximately 33,000 litigation files, including appellants’,
from the HQSU system. They transmitted the copies to
insurers and insurance defense law firms. Although the
copying “was not done in connection with any particular
litigation,” certain copied documents were later used in
defense of workers’ compensation claims.
B. Appellants’ Claim of Trespass to Chattels
In 2015 and 2016, appellants separately filed
complaints against respondents in federal district court,
containing causes of action for, inter alia, invasion of
privacy. Without specifically addressing the invasion-of-
5
privacy claim, the district court dismissed all of appellants’
claims for failure to adequately allege standing to sue in
federal court, and granted leave to amend. (Casillas v.
Berkshire Hathaway Homestate Cos. (C.D.Cal. Aug. 22, 2016,
No. CV 15-4763 AG (JEMx)) 2016 U.S.Dist.LEXIS 184127,
at *6-*8.) Abandoning their invasion-of-privacy claim,
appellants amended their federal complaints to include other
claims, including a trespass-to-chattels claim under
California law. The district court dismissed the complaints
without addressing the merits of the trespass-to-chattels
claim. (See Casillas v. Berkshire Hathaway Homestate Cos.
(C.D.Cal. June 27, 2017, No. CV 15-04763 AG (JEMx)) 2017
U.S.Dist.LEXIS 99549, at *8-*12 [dismissing appellants’ sole
remaining federal law claim on the merits, and declining to
exercise supplemental jurisdiction over state law claims],
affd. (9th Cir. 2019) 770 Fed.Appx. 329.)
Soon thereafter (in July 2017), appellants filed the
instant complaint, which contained a cause of action for
1
trespass to chattels. Appellants alleged respondents
“intentionally interfered with Plaintiffs’ information in their
litigation files hosted by HQSU on its database and servers
and the documents they, their counsel, and counsel’s staff
1
We need not address the other cause of action contained in
appellants’ complaint, viz., a claim for violation of the
Confidentiality of Medical Information Act, Civil Code section 56
et seq., to which the trial court also sustained a demurrer with
leave to amend, as appellants raise no issue concerning it.
6
caused to be uploaded to the HQSU database and servers by
obtaining that information from those files and those
documents and then wrongfully using them for their own
purposes.” They further alleged they suffered a number of
harms: (1) “Their personal property interest in the
information in the files, the files themselves, the documents
used to generate those files, and the documents contained in
those files were violated when accessed by others not
entitled to access them and then made available for use
against them in a court of law or administrative claims
process”; (2) “Their right to privacy, including the right to
privacy enshrined in Article 1 of the California Constitution,
was and continues to be violated”; and (3) “Their attorney-
client and work product privileges for communications with
their counsel in their workers’ compensation proceeding, the
2
first of which is a right personal to them, was breached.”
2
Appellants alleged several other related harms based on
respondents’ obtaining the information in the copied files,
including: (1) violation of their statutory rights to privacy of
medical information; (2) undermining of their “right to assistance
of counsel in civil matters,” as well as their “faith in the integrity
and fairness of the civil justice system”; and (3) unspecified costs
incurred in taking steps to mitigate risks that the copied
information might be used against them, including by “at least
consider[ing]” settling their underlying litigation on unfavorable
terms, and by taking unspecified protective measures against
identity theft. We need not address these alleged harms, as
appellants develop no argument concerning them.
7
Appellants sought compensatory damages and injunctive
relief.
C. Judgment on Respondents’ Demurrers
In November 2017, respondents demurred to the
3
complaint. Relying on Intel, supra, 30 Cal.4th 1342,
respondents argued appellants failed to state a trespass-to-
chattels claim because they did not allege any damage or
disruption to the computer system from which the electronic
files were copied. Respondent Glover additionally argued
that the claim failed because (1) the copied information was
not property; and (2) appellants failed to allege any injury to
their asserted property interests in the information, instead
complaining of injury to their privacy interests. In
December 2017, appellants filed an opposition to the
demurrers, and respondents filed replies (none of these
briefs are in the record). The trial court stayed the case
pending resolution of appellants’ appeal from the dismissal
of their federal complaints; the stay was lifted in May 2019.
In July 2019, the court issued a tentative ruling
sustaining the demurrers with leave to amend, and held a
hearing. Appellants conceded respondents had not damaged
the HQSU system, corrupted the files they allegedly copied
from the system, or impaired appellants’ access to the files.
3
Respondents Reynolds and Glover each filed separate
demurrers, while respondents Berkshire, Cypress, and Zenith
filed a joint demurrer.
8
Appellants argued they nevertheless suffered actionable
harm, viz., the “loss of privacy and confidentiality” caused by
respondent’s viewing and copying the files. They further
argued Intel did not require them to allege damage or
disruption to the HQSU system, because their claim
concerned trespass to the files, not the system. Respondents’
counsel maintained that appellants’ failure to allege damage
or disruption to the HQSU system was fatal under Intel.
Adopting its tentative ruling, the court concluded
appellants had failed to state a claim of trespass to chattels.
The court agreed with respondents that the claim failed
under Intel: “[P]ursuant to Intel, a plaintiff alleging trespass
to chattels based on unauthorized access to a computer
system must allege damage or disruption to that computer
system. Here, Plaintiffs have not done so.” The court
rejected appellants’ attempt to distinguish Intel:
“Plaintiffs argue that Intel does not control here,
because the facts of Intel did not include
unauthorized access to a computer system or
downloading of files. . . . [¶] However, as
Demurring Defendants note, the Intel court
reached its holding by examining those cases
involving robotic data collection, which did
involve copying electronic information. See, e.g.,
eBay, Inc. v. Bidder’s Edge, Inc. (N.D. Cal. 2000)
100 F.Supp.2d 1058 [(eBay)]; Register.com, Inc. v.
Verio, Inc. (S.D.N.Y. 2000) 126 F.Supp.2d 238[(Register)]; Ticketmaster Corp. v. Tickets.com,
9
Inc. (C.D. Cal., Aug. 10, 2000, Case No.
99CV7654) 2000 WL 1887522[(Ticketmaster)]. . . . [¶] Subsequent cases have
applied Intel to instances of alleged hacking,
similar to Plaintiffs’ allegations here. See, e.g.,
Capitol Audio Access, Inc. v. Umemoio (E.D. Cal.
2013) 980 F.Supp. 2d 1154, 1160 [(Capitol Audio)]
(dismissing a trespass to chattel claim where the
plaintiff alleged the defendant had accessed a
password protected, proprietary database without
authorization); Vertkin v. Vertkin (N.D. Cal. Dec.
6, 2007) 2007 WL 4287512, at *3 [(Vertkin)]
(dismissing a trespass to chattel claim where the
plaintiff alleged that the defendant had installed
keystroke recording software onto the plaintiff’s
computer ‘in order to obtain personal information’
without authorization). [¶] None of Plaintiffs’
authorities support the proposition that an
actionable trespass to chattel claim exists when
an alleged tortfeasor neither damages nor
impairs a plaintiff’s computer system.”
The court sustained the demurrers with leave to
4
amend.
4
As an additional ground for sustaining the demurrers to
the trespass-to-chattels claim, the court concluded appellants
failed to adequately allege they had any cognizable property
interest in either the HQSU system or the information in the
(Fn. is continued on the next page.)
10
In August 2019, appellants filed notice that they
declined to amend their complaint. They stipulated to
entry of judgment on the demurrers, which they timely
appealed.
DISCUSSION
Appellants contend the trial court erred in sustaining
respondents’ demurrers to their cause of action for trespass
to chattels. “‘In reviewing the sufficiency of a complaint
against a general demurrer, we . . . “treat the demurrer as
admitting all material facts properly pleaded, but not
contentions, deductions or conclusions of fact or law.
[Citation.] We also consider matters which may be judicially
noticed.”’” (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th
759, 764.) “When, as here, a demurrer to a complaint is
sustained with leave to amend and the plaintiff declines to
amend the complaint, . . . we assume the complaint
contained the strongest statement of the plaintiff’s cause or
causes of action. [Citation.] Thus, unlike when a demurrer
is sustained without leave to amend, we determine only
whether the plaintiff stated a cause of action, and not
whether the plaintiff might be able to do so.” (Ibid.) “The
judgment of dismissal must be affirmed if the unamended
copied files. In defending the court’s ruling on appeal,
respondents argue that “[m]ost fundamentally,” appellants failed
to allege any injury to such a property interest. Because we
agree, we need not address whether appellants adequately
alleged they had such a property interest in the first instance.
11
complaint is objectionable on any ground raised by the
demurrer.” (Eisenberg et al., Cal. Practice Guide: Civil
Appeals & Writs (The Rutter Group 2021) Ch. 8-C
¶ 8:136.3e.) Below, we conclude the trespass-to-chattels
claim was objectionable on a ground raised in the demurrers,
viz., appellants’ failure to allege any actionable injury to a
property interest.
A. Trespass to Chattels under Intel
“[T]he trespass to chattels tort . . . may not, in
California, be proved without evidence of an injury to the
plaintiff’s personal property or legal interest therein.” (Intel,
supra, 30 Cal.4th at 1348.) “In modern American law
generally, ‘[t]respass [to chattels] remains as an occasional
remedy for minor interferences, resulting in some damage,
but not sufficiently serious or sufficiently important to
amount to the greater tort’ of conversion.” (Id. at 1351.)
“[I]njury to the personal property or the possessor’s interest
in it is an element of the action . . . .” (Id. at 1352.)
In Intel, our Supreme Court held this element was not
satisfied in the absence of damage or disruption to the
computer system allegedly trespassed against. (Intel, supra,30 Cal.4th at 1347, 1352-1353.) There, Intel brought a
trespass-to-chattels claim against former employee Hamidi
who, on six occasions, had made unauthorized use of Intel’s
email system to send criticisms of its employment practices
to numerous current employees. (Id. at 1346, 1348-1349.)
Although Intel presented no evidence the messages caused
12
physical damage or functional disruption to its computer
system, it presented uncontradicted evidence that staff time
was spent attempting to block further messages, and that
the messages’ contents caused discussion among employees
and managers. (Id. at 1346, 1349.) The trial court granted
Intel summary judgment, and enjoined Hamidi from sending
unsolicited emails on the system. (Id. at 1350.) The Court of
Appeal affirmed, concluding the absence of injury to Intel’s
property was immaterial in light of Intel’s showing that
Hamidi’s use of its property disrupted its business. (Ibid.)
Our Supreme Court reversed. (Id. at 1366.) After reviewing
prior decisions analyzing unauthorized electronic contact
with computer systems as potential trespasses to chattels,
the court concluded, “the tort does not encompass, and
should not be extended to encompass, an electronic
communication that neither damages the recipient computer
system nor impairs its functioning.” (Id. at 1347; see also id.
at 1352-1353 [detailing absence of damage or impairment].)
In explaining that its holding was consistent with the
aforementioned caselaw, the Supreme Court discussed three
cases in which the electronic contact at issue consisted of
“unauthorized robotic data collection” from websites: eBay,
supra, 100 F.Supp.2d 1058; Register, supra, 126 F.Supp.2d
238; and Ticketmaster, supra, 2000 WL 1887522. (Intel,
supra, 30 Cal.4th at 1354-1357.) Each case suggested that
such data collection could constitute trespass to chattels only
if it caused or threatened harm to the website’s computer
system, either by finding insufficient evidence of such harm
13
to support a trespass-to-chattels claim (Ticketmaster), or by
granting injunctive relief in reliance on evidence that third-
party repetition of the data collection would harm the
websites’ systems (eBay and Register). (See Intel, at 1354-
1357.) Distinguishing the latter cases, our Supreme Court
emphasized Intel had failed to show any appreciable effect
on its computer system, or likelihood thereof. (Intel, at 1356-
1357.)
Regarding Hamidi’s messages’ alleged disruptive effect
on Intel’s business, our Supreme Court concluded this effect
was not the type of property harm actionable as trespass to
chattels: “While unwelcome communications, electronic or
otherwise, can cause a variety of injuries to economic
relations, reputation and emotions, those interests are
protected by other branches of tort law; in order to address
them, we need not create a fiction of injury to the
communication system. [¶] Nor may Intel appropriately
assert a property interest in its employees’ time. . . .
Whatever interest Intel may have in preventing its
employees from receiving disruptive communications, it is
not an interest in personal property, and trespass to chattels
is therefore not an action that will lie to protect it.” (Id. at
1359.) By analogy to intrusive telephone calls, the court
implied that trespass to chattels likewise would not lie to
protect interests in privacy: “The consequential economic
damage Intel claims to have suffered, i.e., loss of
productivity caused by employees reading and reacting to
Hamidi’s messages and company efforts to block the
14
messages, is not an injury to the company’s interest in its
computers . . . any more than . . . the loss of privacy caused
by an intrusive telephone call would be an injury to the
recipient’s telephone equipment.” (Intel, supra, 30 Cal.4th at
1347; see also id. at 1361-1362 [“the contents of a telephone
communication may cause a variety of injuries and may be
the basis for a variety of tort actions (e.g., . . . invasion of
privacy), but the injuries are not to an interest in property,
. . . and the appropriate tort is not trespass”].)
B. Analysis
We agree with the trial court that appellants failed to
state a claim of trespass to chattels. Appellants conceded
respondents’ alleged copying of electronic files from the
HQSU system did not cause any damage or disruption to the
system. As the trial court observed, “[P]ursuant to Intel, a
plaintiff alleging trespass to chattels based on unauthorized
access to a computer system must allege damage or
disruption to that computer system. Here, Plaintiffs have
not done so.” (See Intel, supra, 30 Cal.4th at 1347, 1352-
1353.)
For the same reasons given by the court, we reject
appellants’ attempt to distinguish Intel on the ground that
there, defendant Hamidi did not copy electronic files. First,
as noted, Intel explained that its holding was consistent with
prior cases suggesting that robotic data collection from a
website -- including the copying of electronic information --
could constitute trespass to chattels only if it caused or
15
threatened harm to the website’s computer system. (Intel,
supra, 30 Cal.4th at 1354-1357.) Second, subsequent cases
have applied Intel’s injury requirement to claims based on
the copying of electronic files or information. (See Capitol
Audio, supra, 980 F.Supp.2d at 1156, 1160 [online publisher
failed to state trespass-to-chattels claim against defendant
who made and distributed unauthorized copies of publisher’s
electronic documents on publisher’s website, where publisher
failed to allege actionable interference with property under
Intel, viz., interference causing damage or disruption (citing
Intel, at 1357)]; Vertkin, supra, 2007 WL 4287512, at *1, *3
[plaintiff failed to state trespass-to-chattels claim against
defendant who obtained personal information from plaintiff’s
computers by means of secretly installed programs, where
plaintiff “failed to allege that her computers were impaired
as to their condition or quality or that she was unable to use
these computers for a substantial period of time” (citing
Intel, at 1357)]; Hiossen, Inc. v. Kim (C.D.Cal., Aug. 17, 2016,
No. CV1601579SJOMRWX) 2016 WL 10987365, at *1-*3,
*10-*11 (Hiossen) [corporation failed to state trespass-to-
chattels claim against former employee and competitor,
where former employee copied confidential information from
password-protected customer accounts on corporation’s
website, and used information to competitor’s advantage, but
plaintiff failed to allege damage or disruption to computer
system (citing Intel, at 1356)].) Appellants fail to address
any of these cases, though all are cited in respondents’ brief
on appeal, and two -- Capitol Audio and Vertkin -- were cited
16
in the trial court’s ruling. We conclude the court properly
applied Intel in sustaining respondents’ demurrers to
appellants’ trespass-to-chattels claim.
Even had Intel not required appellants to allege
damage or disruption to the HQSU system, we would
conclude the demurrers were properly sustained, because
appellants failed to allege any actionable injury to the copied
files or their asserted property interests therein. Appellants
conceded the files had not been corrupted, and their own
access to the files had not been impaired. Because the
copying did not affect the files or appellants’ ability to use
them, it caused no actionable injury to their asserted
property interests. (See 123 Los Robles LLC v.
Metzler (C.D.Cal. Aug. 14, 2017, No. 2:17-CV-00392-RGK-
SK) 2017 U.S.Dist.LEXIS 223232 (Los Robles), at *1, *12
[LLC failed to state trespass-to-chattels claim against
member who copied and used confidential information from
financial records on LLC’s bank’s computers, where
information “remained unaltered and available to [LLC] on
the bank’s computers”]; cf. Intel, supra, 30 Cal.4th at 1348[disruption caused by contents of unauthorized emails was
not actionable as trespass to chattels because it was “an
injury entirely separate from, and not directly affecting, the
possession or value of personal property”].)
We reject appellants’ reliance on their interests in
privacy and confidentiality. As noted, Intel implied that
trespass to chattels would not lie to protect interests in
privacy. (See Intel, supra, 30 Cal.4th at 1361-1362 [“the
17
contents of a telephone communication may cause a variety
of injuries and may be the basis for a variety of tort actions
(e.g., . . . invasion of privacy), but the injuries are not to an
interest in property, . . . and the appropriate tort is not
trespass”]; id. at 1347 [analogizing Intel’s loss of
productivity, which was not actionable as trespass to
chattels, to loss of privacy caused by intrusive telephone
call].) Consistent with Intel’s implication, subsequent cases
have rejected trespass-to-chattels claims without regard to
asserted violations of the plaintiffs’ privacy interests. (See
Los Robles, supra, 2017 U.S.Dist.LEXIS at *12 [“Plaintiff’s
interest in the confidentiality of its financial information is
not the type of possessory interest protected by the tort of
trespass to chattels”]; In re iPhone Application Litigation
(N.D. Cal. 2012) 844 F.Supp.2d 1040, 1048-1051, 1069
[plaintiffs failed to state trespass-to-chattels claim against
companies that allegedly violated plaintiffs’ privacy rights by
allowing third-party apps to collect and use confidential
information from plaintiffs’ mobile devices]; Vertkin, supra,
2007 WL 4287512, at *3-*4 [plaintiff failed to state trespass-
to-chattels claim against defendant who obtained personal
information from plaintiff’s computers by means of secretly
installed programs, even though plaintiff adequately stated
invasion-of-privacy claim on same allegations]; cf. Hiossen,
supra, 2016 WL 10987365, at *11 [corporation’s “‘financial
injury’” resulting from former employee’s copying
confidential information and using it to competitor’s
advantage was not actionable as trespass to chattels].)
18
Contrary to appellants’ contentions, the “merger
doctrine” does not establish that their privacy interests were
merged with their asserted property, much less allow them
to convert privacy harms into property harms. The merger
doctrine is merely an exception to the traditional rule that
intangible property cannot be the subject of conversion; it
recognizes conversion of intangible property, such as stock,
where the plaintiff’s intangible property interests are merged
with a document, such as a stock certificate. (See Gaab &
Reese, Cal. Practice Guide: Civil Procedure Before Trial,
Claims and Defenses (The Rutter Group 2021) Ch. 12(II)-B
¶¶ 12:109-12:110.) Because the traditional rule has been
eroded or rejected, the merger doctrine, as an exception to
the rule, now has little or no significance. (See id. ¶ 12:111;
Thomas et al., Cal. Civil Practice: Torts (2021) § 15:4.) Here,
at most, the doctrine could support appellants’ position that
they had cognizable property interests in the electronic files
(an issue we need not address). The doctrine could not
establish that such asserted property interests were injured.
Appellants have not cited -- and we have not found --
any authority supporting their reliance on privacy interests
as a basis for their claim of trespass to chattels. Instead,
appellants attempt to support their claim by
misrepresenting a number of federal cases. For instance,
appellants suggest that in TransUnion LLC v. Ramirez
(2021) 594 U.S. __ [141 S.Ct. 2190], in which the Supreme
Court held that certain members of a plaintiff class had
Article III standing to bring a claim in federal court (id. at
19
2208-2209), the court relied on the defendant’s
dissemination of confidential information about the class
members, harming their interests in privacy. In fact, the
court’s holding was based on the defendant’s dissemination
of defamatory information about the class members, causing
harm to their reputation. (See id. at 2200, 2209 [class
members suffered concrete “reputational harm” when
labeled as potential terrorists, drug traffickers, or serious
criminals in credit reports disseminated by defendant].) The
court’s holding is immaterial here, because it concerned the
injury-in-fact requirement of Article III standing, which
differs from the injury element of a trespass-to-chattels
claim under California law. (See In re iPhone Application
Litigation, supra, 844 F.Supp.2d at 1053-1055, 1069
[concluding plaintiffs alleged sufficient injury in fact to
establish Article III standing, but dismissing trespass-to-
chattels claim on the merits for failure to allege actionable
injury].) Indeed, Intel implied that reputational harm -- the
injury in fact in TransUnion -- would not be actionable as
trespass to chattels. (See Intel, supra, 30 Cal.4th at 1359[“While unwelcome communications, electronic or otherwise,
can cause a variety of injuries to economic relations,
reputation and emotions, those interests are protected by
other branches of tort law” (italics added)].) As noted, Intel
implied the same concerning harm to privacy interests.
Appellants also misrepresent United States v.
Ackerman (10th Cir. 2016) 831 F.3d 1292, a child-
pornography prosecution in which the Tenth Circuit held,
20
contrary to a district court’s ruling on the defendant’s motion
to suppress evidence, that a government actor’s opening and
examining the defendant’s email constituted a search within
the meaning of the Fourth Amendment. (Id. at 1294-1295,
1308-1309.) Appellants assert the Tenth Circuit determined
the unauthorized viewing of the email “injured the plaintiff
[sic] by violating his Fourth Amendment rights,” in a
manner that “would be the proper subject of a trespass to
chattels claim.” In fact, the court discussed trespass to
chattels only in explaining that the Fourth Amendment
protects even dignitary interests in personal property -- as
trespass-to-chattels doctrine did “at the time of the
founding,” before adoption of the modern requirement for
actual injury. (Id. at 1307-1308; see also Intel, supra, 30
Cal.4th at 1352 [“modern day trespass to chattels differs
both from the original English writ and from the action for
trespass to land: ‘ . . . the dignitary interest in the
inviolability of chattels, unlike that as to land, is not
sufficiently important to . . . [warrant liability] in the
absence of any actual damage’” (quoting Prosser & Keeton,
Torts (5th ed. 1984) § 14, p. 87) (italics omitted)].)
Finally, appellants misrepresent Synopsys, Inc. v.
Ubiquiti Networks, Inc. (N.D. Cal. 2018) 313 F.Supp.3d 1056.
There, the plaintiff used anti-piracy software, secretly
embedded into other software it knew the defendants would
download, to collect data from the defendants’ computers.
(Id. at 1063-1065.) One defendant filed a trespass-to-
chattels counterclaim, which the district court dismissed,
21
stating: “To the extent defendants base their trespass claims
on the accessing of their systems by the anti-piracy software,
they must but have not alleged facts showing that access
impaired the intended functioning of defendants’ systems.
And to the extent that defendants base their trespass claim
on the anti-piracy software’s securing of and use of
defendants’ data, that common law claim would be
preempted by [California’s Uniform Trade Secrets Act].” (Id.
at 1080.) Contrary to appellants’ representations, the court
neither “explicitly” recognized appellants’ theory of liability,
nor suggested in dictum that the trespass-to-chattels
5
counterclaim would have had merit absent preemption.
In sum, we conclude the trial court properly sustained
respondents’ demurrers to appellants’ trespass-to-chattels
claim, because appellants failed to allege any actionable
injury to a property interest, whether in the HQSU system
or in the files copied from it. In response to appellants’
unfounded warnings that affirmance will leave future
victims of hacking without any effective remedy, we
emphasize that our holding concerns only appellants’
attempt to plead the tort of trespass to chattels, an
“‘occasional’” remedy for minor interferences with property.
5
Appellants’ reliance in their reply and at oral argument on
U.S. v. Bohonus (9th Cir. 1980) 628 F.2d 1167 is misplaced, as
that case concerned an interpretation of the federal mail-fraud
statute, not any common law tort, much less trespass to chattels
under California law. (Id. at 1170-1172.)
22
(Intel, supra, 30 Cal.4th at 1351.) In light of appellants’
declining to amend their complaint, we express no opinion
whether they might have adequately pled other causes of
action -- e.g., for violations of the Comprehensive Computer
Data Access and Fraud Act (CCDAFA) (Pen. Code, § 502), or
6
for the tort of invasion of privacy. (Cf. Hiossen, supra, 2016
WL 10987365, at *5-*6, *8-*11 [allegations that defendant
copied and used confidential information on corporation’s
website failed to state trespass-to-chattels claim, but
adequately stated claims for violations of CCDAFA and
other statutes]; Vertkin, supra, 2007 WL 4287512, at *3-*4
[allegations that defendant obtained personal information
from plaintiff’s computers failed to state trespass-to-chattels
claim, but adequately stated invasion-of-privacy claim].)
Having abandoned a privacy claim during their federal
litigation, appellants effectively attempted, both in the trial
court and on appeal, to repackage an alleged invasion of
privacy as a trespass to chattels. Because appellants failed
to plead facts satisfying the latter tort’s element of injury to
a property interest, the trial court properly sustained
respondents’ demurrers.
6
Appearing to contradict their own warnings that similarly
situated plaintiffs will lack any remedy other than trespass to
chattels, appellants assert that their allegations satisfied the
criteria for an invasion-of-privacy claim.
23
DISPOSITION
The judgment is affirmed. Respondents are awarded
their costs on appeal.
CERTIFIED FOR PUBLICATION
MANELLA, P. J.
We concur:
WILLHITE, J.
CURREY, J.
24