Bui-Ford v. Tesla, Inc. ( 2024 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 DAVID BUI-FORD, WILLIAM 7 WALKER, AFZAL DAMJI, Case No. 4:23-CV-02321 8 CHANRITHY MEAS, SUN CAO, ORDER ON MOTION TO DISMISS ROGER SCULLION, EDWARD PLAINTIFFS’ FIRST AMENDED 9 RUMANN, JAMIE SCHAEFER, CLASS ACTION COMPLAINT AND THEODORE SMITH, ALLYSON MOTION TO STRIKE CLASS 10 BOMHOF, VICTOR MANUEL, ALLEGATIONS CHARLES WARD, ANDREW 11 Re: ECF No. 31 BUCKLIN, and LUCAS BUTLER, on 12 behalf of themselves and others similarly situated, 13 14 Plaintiffs, 15 v. 16 TESLA, INC. d/b/a TESLA MOTORS, 17 INC., a Delaware corporation, 18 Defendant. 19 20 Pending before the Court is Tesla Inc.’s Motion to Dismiss (ECF No. 31) Plaintiffs’1 First 21 Amended Complaint (ECF No. 23, “FAC”). The Court will grant the motion in part and deny it in 22 part. 23 I. BACKGROUND 24 Tesla designs, manufactures, markets, and sells electric vehicles. FAC ¶ 35. As Tesla 25 discloses on its website, “Tesla vehicles regularly receive over-the-air software updates that add 26 new features and enhance existing ones over Wi-Fi.” Id. ¶ 45. Plaintiffs allege that Tesla 27 1 knowingly designs these software updates to deplete the battery and reduce the driving range of 2 some Tesla Model S and Model X vehicles by at least 20% without any warning to the customer. 3 Id. ¶¶ 2, 57–60. Although many owners receive a notice on their vehicles’ screens or on the Tesla 4 app on their phones asking them to install the update, some owners receive no notice at all. Id. 5 ¶¶ 4, 15, 22, 24, 29, 31, 32, 34. Instead, the car automatically downloads and installs the update. 6 Id. In many cases, car owners must then pay third parties hundreds of dollars to reverse the 7 software update so that they can continue to experience the battery performance they had before 8 the update. Id. ¶ 2. In some other cases, the software updates render the batteries inoperable, 9 requiring car owners to purchase a new battery at a cost of up to $15,000. Id. 10 Plaintiffs now bring this action on behalf of themselves and those similarly situated, 11 asserting claims on behalf of a nationwide Class (or in the alternative on behalf of the State Sub- 12 Classes) for violations of the Computer Fraud and Abuse Act, 18 U.S.C. § 1030 et seq. (“CFAA”); 13 California’s Computer Data Access and Fraud Act, Cal. Penal Code § 502, et seq. (“CDAFA”); 14 California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 (“UCL”); and trespass to 15 chattel under California law. Plaintiffs also bring claims for the common law tort of trespass to 16 chattel under the laws of Arizona, Florida, Illinois, Michigan, Texas, Virginia, and Washington 17 State on behalf of state-specific sub-classes. 18 II. LEGAL STANDARD 19 A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of claims alleged in the 20 complaint. Fed. R. Civ. P. 12(b)(6); Conservation Force v. Salazar, 646 F.3d 1240, 1241–42 (9th 21 Cir. 2011). The complaint “must contain sufficient factual matter, accepted as true, to ‘state a 22 claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 23 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 24 167 L.Ed.2d 929 (2007). When deciding whether to grant a motion to dismiss, the court must 25 construe the alleged facts in the light most favorable to the plaintiff. See Retail Prop. Tr. v. United 26 Bhd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014) (providing the court must 27 “draw all reasonable inferences in favor of the nonmoving party” for a Rule 12(b)(6) motion). 1 allegation.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. Dismissal “is proper only where there is no 2 cognizable legal theory or an absence of sufficient facts alleged to support a cognizable legal 3 theory.” Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). 4 III. DISCUSSION2 5 A. Computer Fraud and Abuse Act (CFAA), 18 U.S.C. § 1030 et seq. 6 The CFAA is a federal criminal statute that also authorizes civil actions for any person 7 who suffers damage or loss by reason of a violation of the statute. 18 U.S.C. § 1030(g). “The 8 CFAA prohibits a number of different computer crimes, the majority of which involve accessing 9 computers without authorization or in excess of authorization, and then taking specified forbidden 10 actions, ranging from obtaining information to damaging a computer or computer data.” LVRC 11 Holdings LLC v. Brekka, 581 F.3d 1127, 1131 (9th Cir. 2009) (citing 18 U.S.C. 1030(a)(1)–(7) 12 (2004). Plaintiffs allege that Tesla violated Section 1030(a)(4) and Sections 1030(a)(5)(A–C). To 13 establish a violation of Section1030(a)(4), Plaintiff must plead facts to show that Tesla: 14 knowingly and with intent to defraud, accesse[d] a protected computer without authorization, or exceed[ed] authorized access, and 15 by means of such conduct further[ed] the intended fraud and obtains anything of value, unless the object of the fraud and the thing obtained 16 consist[ed] only of the use of the computer and the value of such use [was] not more than $5,000 in any 1-year period[.] 17 18 U.S.C. § 1030(a)(4). To establish a violation of Section 1030(a)(5), Plaintiffs must allege facts 18 that Tesla: 19 (A) knowingly cause[d] the transmission of a program, information, code, or command, and as a result of such conduct, intentionally 20 cause[d] damage without authorization, to a protected computer; 21 (B) intentionally accesse[d] a protected computer without authorization, and as a result of such conduct, recklessly cause[d] 22 damage; or 23 (C) intentionally accesse[d] a protected computer without authorization, and as a result of such conduct, cause[d] damage and 24 loss. 25 18 U.S.C. § 1030(a)(5). 26 27 1. Section 1030(a)(4) 1 Plaintiffs fail to plead that Tesla “obtain[ed] anything of value” “by means of” its alleged 2 unauthorized access. Although Smith, Bomhof, and Bucklin allege that Tesla’s software updates 3 required them eventually to purchase new batteries from Tesla, FAC ¶¶ 26–28, 32, they fail to 4 allege that Tesla received something of value from its “access” of the computer. See Fish v. Tesla, 5 SACV21060PSGJDEX, 2022 WL 1552137, at *9 (C.D. Cal. May 12, 2022) (plaintiff failed to 6 plead Tesla obtained “anything of value” under Section 1030(a)(4) when Tesla allegedly degraded 7 plaintiff’s car batteries through software updates); see also Calendar Research LLC v. Stubhub, 8 Inc., No. 2:17-cv-04062-SVW-SS, 2020 WL 4390391, at *22–23 (C.D. Cal. May 13, 2020) 9 (plaintiff failed to present any evidence defendant “obtained anything of value” under Section 10 1030(a)(4) by “backing up” his employee account.”). Plaintiffs’ claims under this prong fail. 11 2. Section 1030(a)(5)(A) 12 Section 1030(a)(5)(A) provides liability for “knowingly caus[ing] the transmission of a 13 program, information, code or command, and as a result of such conduct, intentionally caus[ing] 14 damage without authorization, to a protected computer.” Tesla does not appear to contest that it 15 “knowingly cause[d] the transmission of a program, information, code, or command” by sending 16 various software updates. The dispute here centers on whether Tesla, as a result of its knowing 17 transmission, “intentionally cause[d] damage without authorization” to Plaintiffs’ car batteries. 18 Plaintiffs allege that Tesla knowingly designed updates that “limit[ed] the maximum charge 19 voltage and usable amount of battery capacity which [led] to significant amounts of range loss and 20 loss of performance” in their vehicles immediately after downloading. FAC ¶¶ 10–34, 61, 91. An 21 update called “BMS_u029” often showed that the car’s battery was depleted or inoperable. Id. ¶¶ 22 3, 11, 24, 32, 51. Plaintiffs support this contention of intentional design with allegations that Tesla 23 had knowledge that the software updates reduced battery life due to its pre-release and post-release 24 testing, general monitoring of the industry, and comments on publicly available internet forums. 25 Id. ¶¶ 56–64. Plaintiffs further support this contention with allegations suggesting that Tesla could 26 profit from the repair or replacement of degraded batteries or new cars altogether. Id. ¶¶ 13, 29, 27 1 without any consent or prompting. Id. ¶ 4. When Tesla does prompt users for consent, it 2 nevertheless fails to inform owners that its software updates may impact battery life. Id. ¶¶ 10–34. 3 Tesla argues, among other things, that Plaintiffs fail to plead sufficient information about 4 the specific software updates at issue and the technical mechanism by which these updates caused 5 damage. The Court disagrees; Plaintiffs plausibly explain how various software updates result in 6 immediate battery degradation, itself often signaled by a common error code. While there might 7 be further relevant technical information that is currently in Tesla’s exclusive control, and which 8 discovery might reveal, at this stage, “Plaintiff[s] [are] not required to plead the mechanical details 9 of an alleged defect in order to state a claim.” Cholakyan v. Mercedes-Benz USA LLC, 796 F. 10 Supp. 2d 1220, 1237 n.60 (C.D. Cal. 2011) (“allegations of an unspecified ‘design flaw that 11 caused the windshield in those vehicles to have a high propensity to crack or chip under 12 circumstances that would not cause non-defective windshields to similarly fail’” sufficient to state 13 claim (citing Ehrlich v. BMW of N. Am., LLC, 801 F. Supp. 2d 908, 912 (C.D. Cal. 2010)); see 14 also Marsikian v. Mercedes Benz USA, LLC, 2009 WL 8379784, at *1 (C.D. Cal. May 4, 2009) 15 (allegation that vehicles had “defective air intake system,” which was part of the “climate control 16 system,” sufficient to state claim). Plaintiffs in other CFAA cases have succeeded in stating a 17 claim with similar levels of technical specificity at this stage. For example, the court in Fish v. 18 Tesla, Inc. held that plaintiffs stated a claim under this subsection when Tesla damaged plaintiffs’ 19 car batteries through software updates without permission and caused such damage intentionally. 20 2022 WL 1552137, at *9 (C.D. Cal. May 12, 2022).3 The Court finds that all Plaintiffs except 21 3 In In re Apple Inc. Device Performance Litig., plaintiffs alleged that Apple designed two updates 22 to slow the processing speed of plaintiffs’ phones. Despite plaintiffs’ voluntary installation of the update, the court found they “never gave permission for Apple to cause damage to their iPhones” 23 because “[n]either the software update notification nor the software update release notes made any mention of [the] severe throttling effect.” 347 F. Supp. 3d 434, 451–52 (N.D. Cal. 2018), on 24 reconsideration in part, 386 F. Supp. 3d 1155 (N.D. Cal. 2019). In In re Apple & AT & TM Antitrust Litig., plaintiffs alleged that Apple intended to fully disable iPhones that contained 25 unapproved program unlocks through a software update, and Apple was aware of the potential ramifications of the update prior to release. 596 F. Supp. 2d 1288, 1308 (N.D. Cal. 2008). The 26 court found that plaintiffs did not authorize this damage to their iPhones given the “ambiguity surrounding” Apple’s warning and the fact that Plaintiffs allege that some downloading of the 27 update was “unsuspected.” Id. In San Miguel v. HP Inc., plaintiffs adequately alleged that HP 1 Cao adequately plead that Tesla knowingly caused a transmission that damaged their car batteries 2 without permission and caused such damage intentionally. 3 3. Section 1030(a)(5)(B) and Section 1030(a)(5)(C) 4 Unlike subsection (a)(5)(A), subsections (a)(5)(B) and (a)(5)(C) require that Plaintiffs 5 allege that defendant “intentionally accesses a protected computer” “without authorization.”4 6 Plaintiffs Damji, Rumman, Meas, Schaefer, Bomhof, Manuel, Ward, and Bucklin allege that Tesla 7 pushed the software update to their car’s systems without prompting or notice such that they could 8 not have provided consent.5 FAC ¶¶ 15, 17, 22–25, 27–33. These Plaintiffs adequately plead that 9 Tesla intentionally accessed their computers without authorization. 10 However, Plaintiffs Bui-Ford, Walker, Smith, and Butler downloaded the software updates 11 voluntarily. Id. ¶ 11, 13, 26, 34.6 These Plaintiffs argue that Tesla nevertheless accessed their 12 computers without authorization because they concealed the true nature of the updates through 13 misleading omissions in statements to consumers. But these allegations do not establish 14 unauthorized conduct under this prong. Although courts do not “foreclose” claims of vitiated 15 consent under these subsections, users who voluntarily installed software “have serious difficulty” 16 pleading unauthorized access under the CFAA, especially given the heightened pleading 17 requirements applied in consumer-protection claims sounding in fraud. In re Apple Inc. Device 18 Performance Litig., 347 F. Supp. 3d at 452 (N.D. Cal. 2018), citing Vess v. Ciba-Geigy Corp. 19 USA, 317 F.3d 1097, 1103–04 (9th Cir. 2003); see also In re Sony PS3 Other OS Litig., 551 F. 20 installation of the disabling firmware. 317 F.Supp.3d 1075, 1084–86 (N.D. Cal. 2018). See also 21 Parziale v. HP, Inc., 445 F. Supp. 3d 435, 448–50 (N.D. Cal. 2020) (same). 4 In section (a)(5)(A), “without authorization” modifies “causing damage,” but here, “without 22 authorization” modifies “intentional access.” See In re Apple Inc. Device Performance Litig., 347 F. Supp. 3d 434, 451–52 (N.D. Cal. 2018). 23 5 The Court notes that the FAC does not make clear whether some Plaintiffs were ever prompted with consent for the updates at issue. For example, Plaintiff Meas alleges that he “did not consent 24 to these updates, and, although he can delay the update, he cannot reject it outright. If he doesn’t agree to a specific time, he continues to receive pop-up notifications unless he sets a time for the 25 update.” FAC ¶ 17. Drawing all inferences in favor of Plaintiffs, the Court interprets these Plaintiffs’ allegations to mean that they were not directly prompted for consent for these updates. 26 6 Smith’s allegations do not address whether he provided consent, and explain that he “does not have the ability to decline the software updates outright.” In the context of the FAC, this 27 allegation appears to imply that the update prompt would continue to appear until he updated the 1 App’x 916, 923 (9th Cir. 2014) (“[U]sers who had ‘voluntarily installed’ software that allegedly 2 caused harm cannot plead unauthorized ‘access’ under the CFAA.”); In re Apple & AT & TM 3 Antitrust Litig., No. 07-CV-05152-JW, 2010 WL 3521965, at *7 (N.D. Cal. July 8, 2010) (noting 4 that “[v]oluntary installation runs counter to . . . [the] CFAA’s requirement that the alleged act was 5 ‘without authorization’”). Plaintiffs’ allegations of misleading omissions do not establish, for 6 example, that Tesla posed as a different entity or misdescribed the nature of the software updates 7 to gain access to Plaintiffs’ vehicle systems. See In re Apple Inc. Device Performance Litig., 347 8 F. Supp. 3d at 452 (declining to find vitiated consent when Apple described update that degraded 9 the phone battery as one that “include[d] bug fixes and improve[d] the security of [the] iPhone” or 10 “include[d] bug fixes and improvements”). Plaintiffs Bui-Ford, Walker, Smith, and Butler 11 therefore fail to plead a claim under subsections (a)(5)(B) and (a)(5)(C). 12 4. CFAA’s Loss Requirement 13 To plead loss under the CFAA, a plaintiff must show a “loss to 1 or more persons during 14 any 1-year period . . . aggregating at least $5,000 in value[.]” Creative Computing v. 15 Getloaded.com LLC, 386 F.3d 930, 933–35 (9th Cir. 2004). Contrary to Tesla’s assertion, 16 Plaintiffs can aggregate such losses under the various software updates alleged, as binding case 17 law in this Circuit makes clear that no “single act” requirement exists in the CFAA: 18 The syntax makes it clear that . . . the $5,000 floor applies to how much damage or loss there is to the victim over a one-year period, 19 not from a particular intrusion. Multiple intrusions can cause a single impairment, and multiple corruptions of data can be described 20 as a single “impairment” to the data. The statute does not say that an ‘impairment’ has to result from a single intrusion, or has to be a 21 single corrupted byte. 22 Id. at 933–35. Tesla claims that most Plaintiffs suffered no actual cognizable losses under the 23 CFAA. The CFAA maintains a narrow conception of “loss,” Andrews v. Sirius XM Radio Inc., 24 932 F.3d 1253, 1262 (9th Cir. 2019), which includes “any reasonable cost” to “respond[ ] to an 25 offense” or to return a system “to its condition prior to the offense.” Section 1030(e)(11). Such 26 costs can include those “incurred to repair a battery or otherwise remedy the alleged diminution in 27 battery capacity” after software updates. See Fish, 2022 WL 1552137, at *8. Plaintiffs Smith, 1 updates, and thus plead a cognizable cost as aggregated over the relevant period. FAC ¶¶ 26–29, 2 32. 3 Plaintiffs Bui-Ford, Cao, Walker, Damji, Rumann, Schaefer, Meas, Ward, and Butler did 4 not repair or replace their batteries. Id. ¶¶ 11, 13, 15, 17, 22–25, 31, 32. Allegations that Tesla 5 deprived Plaintiffs of the value of their batteries, without more, cannot satisfy the “narrow 6 conception of ‘loss’” under the CFAA. See Fish, 2022 WL 1552137, at *8 (finding no cognizable 7 loss because Plaintiffs failed to “allege[] that they incurred any costs to remedy Tesla’s alleged 8 improper access to their vehicles’ battery systems.”); see also Cottle v. Plaid Inc., 536 F. Supp. 3d 9 461, 485–86 (N.D. Cal. 2021) (dismissing theories of loss premised on lost value). As such, they 10 fail to allege cognizable loss under the CFAA. 11 Accordingly, the Court grants the motion and dismisses Bui-Ford, Cao, Walker, Damji, 12 Rumann, Schaefer, Meas, Ward, and Butler’s CFAA claims as to all prongs; Smith’s claim may 13 only go forward to the extent it relies on Section 1030(a)(5)(A). 14 B. California Comprehensive Computer Data Access and Fraud Act (CDAFA), California Penal Code § 502 15 Plaintiffs bring their CDAFA claims under subsections (c)(3), (c)(4) and (c)(7), which 16 establish liability for a defendant who: 17 (3) Knowingly and without permission uses or causes to be used 18 computer services; 19 (4) Knowingly accesses and without permission adds, alters, damages, deletes, or destroys any data, computer software, or 20 computer programs which reside or exist internal or external to a computer, computer system, or computer network; 21 . . . [or] 22 23 (7) Knowingly and without permission accesses or causes to be accessed any computer, computer system, or computer network. 24 Cal. Penal Code §§ 502(c)(3), (4), (7). Liability under Section 502(c) turns on an analysis of the 25 specific “acts” that are alleged to constitute an offense and whether there was “permission” to 26 engage in those acts. Officia Imaging, Inc. v. Langridge, No. SACV172228DOCDFMX, 2018 27 WL 6137183, at *12 (C.D. Cal. Aug. 7, 2018). 1 This analysis necessarily changes across the subsections at issue. Under subsections (c)(3) 2 and (c)(7), “use” or “access” must be both knowing and without permission. But under subsection 3 (c)(4), “without permission” does not modify “access” or “use” but instead modifies “adds, alters, 4 damages, deletes, or destroys any data, computer software, or computer programs.” The Court 5 highlights this distinction in the wake of the Ninth Circuit’s holding in State v. Christensen, 828 6 F.3d 763, 789 (9th Cir. 2015), which clarified the requirements under subsection (c)(2) of the 7 CDAFA. This subsection provides liability for “[k]nowingly access[ing] and without permission 8 tak[ing], cop[ing], or mak[ing] use of any data from a computer . . .” According to the Ninth 9 Circuit, subsection (c)(2) merely requires knowing access and subsequent use of data on the 10 computer without permission; the court noted that this definition contrasted with Section 11 1030(a)(2) of the CFAA, which provides liability for “intentionally access[ing] a computer 12 without authorization.” Id. Subsection (c)(4) of the CDAFA, which contains the same structure 13 as subsection (c)(2), similarly requires knowing access paired with alteration of computer data 14 without permission. Contrary to Plaintiffs’ assertions, the logic of Christensen does not extend to 15 subsections (c)(3) and (c)(7) to wholly remove the “without permission” requirement as it relates 16 to access. Nor does Christensen displace case law requiring a defendant to “circumvent[] 17 technical or code based barriers” to access a computer “without permission” as to subsections 18 (c)(3) and (c)(7). See Opperman v. Path, Inc., 87 F. Supp. 3d 1018, 1053–54 (N.D. Cal. 2014); 19 Facebook, Inc. v. Power Ventures, Inc., 844 F. Supp. 2d 1025, 1036 (N.D. Cal. 2012). 20 Under subsections (c)(3) and (c)(7), Plaintiffs’ claims fail because they do not plead that 21 Tesla overcame any technical or code-based barriers to access Plaintiffs’ computers. Under 22 subsection (c)(4), Tesla “knowingly access[ed]” Plaintiffs’ car “computer system” by pushing out 23 and installing the software updates. Tesla’s updates “altered” the computer in a way that degraded 24 their car batteries, and Tesla did not inform them that installation of the updates would cause such 25 damage; as such, Plaintiffs did not consent to this alteration. See In re Apple Inc. Device 26 Performance Litig., 347 F. Supp. 3d 434, 454 (N.D. Cal. 2018). Plaintiffs adequately plead that 27 Tesla acted without permission in “add[ing], alter[ing], damag[ing], delet[ing], or destroy[ing] any 1 Each Plaintiff must also allege that he or she experienced economic “damage or loss by 2 reason of a violation.” Cal. Penal Code § 502(e)(1). Like the CFAA, the CDAFA allows an 3 individual who “suffers damage or loss by reason of a violation” to state a claim. NovelPoster v. 4 Javitch Canfield Grp., 140 F. Supp. 3d 954, 964 (N.D. Cal. 2014). The Court imports the loss 5 requirements from the CFAA except as to the $5,000 requirement found in the CFAA. See Nowak 6 v. Xapo, Inc., No. 5:20-CV-03643-BLF, 2020 WL 6822888, at *5 (N.D. Cal. Nov. 20, 2020) 7 (analyzing CDAFA under CFAA’s loss requirement); see also Ticketmaster L.L.C. v. Prestige Ent. 8 W., Inc., 315 F. Supp. 3d 1147, 1174 (C.D. Cal. 2018) (“The CDAFA is California’s state-law 9 analogue to the CFAA”); Brodsky v. Apple Inc., 445 F. Supp. 3d 110, 131 (N.D. Cal. 2020) 10 (internal citations removed) (“While the CDAFA does not impose a minimum of $5,000 in 11 damages, the rest of ‘the necessary elements of [§] 502 do not differ materially from the necessary 12 elements of the CFAA.’”). Here, only Plaintiffs Smith, Manuel, Bomhof, and Bucklin plead a 13 cognizable “damage or loss” and thus plead violations of 502(c)(4). 14 Tesla separately challenges the application of the CDAFA (as well as the UCL and 15 California common law trespass to chattel claims) to the non-California Plaintiffs. But the 16 presumption against the extraterritoriality of California law does not apply where the misconduct 17 occurs in California. In re iPhone 4S Consumer Litig., No. 12–cv–1127–CW, 2013 WL 3829653, 18 at *7–8 (N.D. Cal. July 23, 2013); Wershba v. Apple Computer, Inc., 91 Cal.App.4th 224, 243 19 (2001) (California statutes apply to “non-California members of a nationwide class where the 20 defendant is a California corporation and some or all of the challenged conduct emanates from 21 California.”). Here, Plaintiffs allege that “at least some of the decisions behind the software 22 updates and responses to the software updates were made at the [Tesla] engineering headquarters 23 in Palo Alto, California” and provide supporting facts for that proposition. See FAC ¶¶ 36–40. In 24 re Mattel, Inc., 588 F. Supp. 2d 1111, 1119 (C.D. Cal. 2008) (“Plaintiffs have adequately alleged 25 that [Defendants’] conduct occurred, if at all, in—or had strong connections to—California. 26 Plaintiffs complain of misrepresentations made in reports, company statements, and advertising 27 that are reasonably likely to have come from or been approved by Mattel corporate headquarters in 1 California common law trespass claims as applied to the non-California Plaintiffs. 2 Accordingly, the Court grants the motion to dismiss as to Plaintiffs Bui-Ford, Walker, 3 Damji, Cao, Meas, Rumman, Schaefer, Ward, and Butler’s CDAFA claim. 4 C. Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 5 Plaintiffs seek injunctive relief under the UCL based on violations of the CFAA, CDAFA 6 and California common law trespass. Specifically, Plaintiffs request injunctive relief “compelling 7 Tesla to stop unilaterally updating software or modifying the performance of their vehicles 8 without their consent.” FAC ¶ 8. 9 Tesla argues that Plaintiffs cannot request injunctive relief because they have failed to 10 establish that there is no adequate remedy at law. See Sonner v. Premier Nutrition Corp., 971 11 F.3d 834, 845 (9th Cir. 2020). In response, Plaintiffs argue that their complaint “describe[s] 12 Defendant’s control over Plaintiffs’ vehicles and the accompanying software, Defendant’s 13 software update that artificially reduces battery performance, the nature of the harms inflicted on 14 Plaintiffs, the challenges Plaintiffs face in attempting to reverse or circumvent the software, and 15 Defendant’s refusal to acknowledge the problem or explain its cause.” ECF No. 33 at 28. The 16 Court understands that Plaintiffs oppose Tesla’s conduct in pushing out updates that drain their 17 batteries, and so want the Court to order Tesla to stop. But regardless of how Plaintiffs may feel 18 about the conduct, the question is whether money damages would sufficiently compensate 19 Plaintiffs for their injuries. As in other cases involving automotive defects, the answer is yes. See, 20 e.g., Goldstein v. Gen. Motors LLC, No. 19CV1778-LL-AHG, 2022 WL 484995, at *4 (S.D. Cal. 21 Feb. 16, 2022) (money damages adequate to compensate purchasers of automobiles whose in- 22 vehicle infotainment devices ceased functioning normally). 23 A plaintiff may still seek injunctive relief under the UCL if monetary damages would not 24 protect against an unquantifiable future harm. Sharma v. Volkswagen AG, 524 F. Supp. 3d 891, 25 908 (N.D. Cal. 2021); Linton v. Axcess Fin. Servs., Inc., 2023 WL 4297568, at *3 (N.D. Cal. June 26 30, 2023); (“retrospective monetary damages will not prevent the future harm only remediable by 27 an injunction”). But Plaintiffs’ request for “an order temporarily and permanently enjoining Tesla 1 standard. Just as past harms to the batteries are compensable with monetary damages, future 2 harms to the battery through software updates should be equally quantifiable. Plaintiffs’ 3 conclusory allegation of Tesla’s continuing practices in its plea for relief does not establish 4 otherwise. See Sharma v. Volkswagen AG, 524 F. Supp. 3d 891, 908–09 (N.D. Cal. 2021) 5 (dismissing UCL claim for injunctive relief for vehicle repair or buyback because no facts 6 showing “monetary damages would not provide nearly identical relief”); TopDevz, LLC v. 7 LinkedIn Corp., No. 20-CV-08324-SVK, 2021 WL 6113003, at *6 (N.D. Cal. Dec. 27, 2021) 8 (finding no future harm “because it is not clear from the SAC that ‘the alleged fraud is ongoing’”); 9 see also Hamm v. Mercedes-Benz USA, LLC, 2022 WL 913192, at *3 (N.D. Cal. Mar. 29, 2022) 10 (dismissing UCL claim for “declaratory relief and an injunction . . . [that] will trigger Defendant’s 11 obligations . . . to replace at its expense the defective parts and . . . safety recall” because damages 12 are adequate). 13 The Court grants the motion to dismiss each Plaintiff’s UCL claim. 14 D. California Trespass to Chattels 15 In California, trespass to chattels “lies where an intentional interference with the 16 possession of personal property has proximately caused injury.” In re Apple Inc. Device 17 Performance Litig., 347 F. Supp. 3d at 455 (quoting Thrifty-Tel, Inc. v. Bezenek, 46 Cal.App.4th 18 1559, 54 Cal.Rptr.2d 468, 473 (1996). The California Supreme Court has held that the principles 19 underlying the tort apply to allegations of digital trespass. See Intel Corp. v. Hamidi, 30 Cal.4th 20 1342 (2003). Thus, “[i]n order to prevail on a claim for trespass based on accessing a computer 21 system, the plaintiff must establish: (1) defendant intentionally and without authorization 22 interfered with plaintiff’s possessory interest in the computer system; and (2) defendant’s 23 unauthorized use proximately resulted in damage.” eBay, Inc. v. Bidder’s Edge, Inc., 100 F. Supp. 24 2d 1058, 1069–70 (N.D. Cal. 2000) (citing Thrifty-Tel, Inc., 54 Cal.Rptr.2d at 473). Like 25 Plaintiffs’ CFAA claim, the California trespass claim turns on whether Tesla acted “without 26 authorization.” Parziale v. HP, Inc, No. 5:19-CV-05363-EJD, 2020 WL 5798274, at *7 (N.D. 27 Cal. Sept. 29, 2020). A plaintiff may satisfy the damages element by pleading that the trespass 1 No. 12-CV-05160 WHA, 2013 WL 5340490, at *4 (N.D. Cal. Sept. 24, 2013) (citing Intel Corp. 2 v. Hamidi, 30 Cal.4th 1342, 1356 (2003)). 3 Tesla intentionally degraded Plaintiffs’ car batteries without authorization through its 4 software updates. All Plaintiffs except Cao therefore plausibly state intentional interference 5 without authorization. C.f. supra Section III(A)(2). All of these Plaintiffs but Cao also plead a 6 loss in the “condition, quality, or value” of their Tesla batteries given this alleged degradation. 7 FAC ¶¶ 10–17, 21–34. 8 The Court also rejects Tesla’s contention that choice of law issues preclude this Court from 9 applying California trespass law to the non-California Plaintiffs. As a general matter, conflict of 10 law issues should be settled at class certification because “choice of law analysis is a fact-specific 11 inquiry, which requires a more developed factual record than is available at the motion to dismiss 12 stage.” Azar v. Gateway Genomics, LLC, No. 15CV2945 AJB (WVG), 2017 WL 1479184, at *3 13 (S.D. Cal. Apr. 25, 2017); see also Opperman, 87 F. Supp. 3d at 1040–41 (denying motion to 14 dismiss based on argument that non-resident plaintiffs lacked standing to assert California 15 statutory claims); Forcellati v. Hyland’s, Inc., 876 F. Supp. 2d 1155, 1159 (C.D. Cal. 2012) 16 (“[c]ourts rarely undertake choice-of-law analysis to strike class claims at this early stage in 17 litigation”); Fernandez v. CoreLogic Credco, LLC, 593 F. Supp. 3d 974, 989 (S.D. Cal. 2022) 18 (citing cases). Tesla nevertheless argues that because the trespass to chattel claims “materially 19 differ” across jurisdictions in terms of the elements, statute of limitations, claim accrual, and 20 cognizable damages, the Court should apply the government interest prong at this juncture. 21 Defendant “can only meet [its] burden by engaging in an analytically rigorous discussion of each 22 prong of California’s ‘governmental interests’ test based on the facts and circumstances of this 23 case, and this [p]laintiff’s allegations.” Thomas v. Dun & Bradstreet Credibility Corp., 100 F. 24 Supp. 3d 937, 947 (C.D. Cal. 2015) (alterations in original). Tesla’s “cursory reference” to other 25 states’ laws fails to demonstrate the relevance of these supposedly material differences in the 26 context of the facts alleged. Id.; Azar v. Gateway Genomics, LLC, No. 15CV2945 AJB (WVG), 27 2017 WL 1479184, at *3 (S.D. Cal. Apr. 25, 2017); Pokorny v. Quixtar, Inc., 601 F.3d 987, 995 1 this case”). 2 The Court grants the motion to dismiss as to Plaintiff Cao’s California trespass to chattels 3 claim. 4 E. Trespass to Chattel Claims Under Florida, Virginia, Michigan, Washington, Arizona, and Texas Law 5 Plaintiffs bring claims for common law trespass under the state laws of Florida, Virginia, 6 Michigan, Washington, Arizona, and Texas. Tesla argues that each of these state trespass claims 7 fail because some courts in these jurisdictions cite or favorably reference the Restatement 8 (Second) of Torts as the source of law for trespass claims. The Restatement chapter on trespass 9 requires either a “dispossession” or “intermeddling” for trespass of chattel claims, which in turn 10 requires “physical contact” with the chattel. See Rest. 2d of Torts § 217; id. at Comment (e). 11 Because physical contact is impossible in the case of cyber trespass, Tesla argues claims in states 12 that rely on the Restatement must be dismissed. But Tesla’s citation to some non-cyber trespass 13 cases that cite favorably to the trespass chapter of the Restatement—which itself does not mention 14 cyber trespass—does not require this Court to disallow such claims as a matter of law. For 15 example, courts in Florida and Virginia have explicitly allowed cyber trespass claims. See Klein v. 16 Oved, No. 9:22-CV-80160-KAM, 2022 WL 4772399, at *6 (S.D. Fla. Aug. 19, 2022) (“Without 17 any word from Florida courts stating this [trespass to chattels involving cyberspace trespass] claim 18 is not viable, however, the Court is inclined to let this count proceed.”); State Analysis, Inc. v. Am. 19 Fin. Servs. Assoc., 621 F. Supp. 2d 309, 320 (E.D. Va. 2009) (allowing trespass to chattels claim 20 when defendant accessed password-protected area of website without authorization). The Court is 21 able to identify a clear prohibition on such cyber trespass claims only in Texas, so the Court 22 dismisses only the Texas trespass claim as a matter of law. See DHI Grp., Inc. v. Kent, No. CV H- 23 16-1670, 2017 WL 1088352, at *11 (S.D. Tex. Mar. 3, 2017), report and recommendation 24 adopted, No. CV H-16-1670, 2017 WL 1079184 (S.D. Tex. Mar. 22, 2017) (holding that trespass 25 to chattel claim involving wrongful download and access of plaintiff’s digital content cannot be 26 maintained because it involves intangible property) (citing In re Simons Broadcasting, LP, No. 27 W–11–CA–172, 2013 WL 9542015 (W.D. Tex. Nov. 19, 2013). 1 The Court grants the motion to dismiss as to Plaintiff Manuel and Ward’s Texas trespass to 2 chattel claim. 3 F. Motion to Strike Class Allegations 4 Tesla moves to strike Plaintiffs’ proposed class. Tesla argues that differences in class 5 members’ allegations defeat the proposed class. Tesla further argues that the proposed class 6 consists primarily of class members who are subject to arbitration clauses, and because Plaintiffs 7 are not subject to such clauses, they are atypical. But “[c]ourts in this district rarely grant motions 8 to strike class allegations at the pleading stage on the ground that the claims at issue are not 9 subject to certification under Rule 23.” Langan v. United Servs. Auto. Ass’n, 69 F. Supp. 3d 965, 10 988 (N.D. Cal. 2014) (citing authorities); in re Wal–Mart Stores, Inc. Wage & Hour Litig., 505 F. 11 Supp. 2d 609, 614–16 (N.D. Cal. 2007) (“Generally, courts review class allegations through a 12 motion for class certification. . . . [T]he granting of motions to dismiss class allegations before 13 discovery has commenced is rare.”). The record now before the Court offers no reason to depart 14 from its prevailing practice. 15 CONCLUSION 16 For the foregoing reasons, the Court: 17 • dismisses Plaintiff Bui-Ford, Cao, Walker, Damji, Rumann, Schaefer, Meas, Ward, and 18 Butler’s CFAA claims with leave to amend; allows Smith’s claim to proceed to the extent it relies 19 on Section 1030(a)(5)(A), although the Court grants to leave to amend Smith’s claim; 20 • denies the motion to dismiss the CFAA claims as to all other Plaintiffs; 21 • dismisses Plaintiffs Bui-Ford, Walker, Damji, Meas, Rumman, Schaefer, Ward, Cao 22 and Butler’s CDAFA claim with leave to amend, and denies the motion to dismiss the CDAFA 23 claim as to all other Plaintiffs; 24 • dismisses Plaintiffs’ UCL claim with leave to amend; 25 • dismisses Plaintiff Cao’s California trespass to chattels claim with leave to amend, and 26 denies the motion to dismiss the California trespass to chattels claim as to all other Plaintiffs; 27 • dismisses Plaintiff Manuel and Ward’s Texas trespass to chattel claim with leave to 1 e denies the motion to dismiss the Florida, Virginia, Michigan, Washington and Arizona 2 || trespass to chattel claims; and 3 e denies the motion to strike class allegations. 4 Plaintiffs may file an amended complaint within 21 days, solely to correct the deficiencies 5 identified in this order. If no amended complaint is filed by that date, the claims dismissed in this 6 || order will be dismissed with prejudice. 7 IT IS SO ORDERED. 8 || Dated: February 20, 2024 . 9 J TIGAR 10 Un States District Judge 11 12 13 © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28