Holden v. Fluent, Inc. ( 2020 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 COQUESE HOLDEN, et al., 7 Case No. 20-cv-03816-JCS Plaintiffs, 8 ORDER GRANTING MOTION TO v. DISMISS FIRST AMENDED 9 COMPLAINT UNDER RULE 12(B)(6) FLUENT, INC., et al., OR, IN THE ALTERNATIVE, FOR A 10 MORE DEFINITE STATEMENT Defendants. UNDER RULE 12(E) 11 Re: Dkt. No. 17 12 13 14 I. INTRODUCTION 15 This action was removed from San Mateo County Superior Court on the basis of diversity 16 jurisdiction. See Notice of Removal (dkt. 1). In the First Amended Complaint, dkt. no. 15 17 (“FAC”), Plaintiffs Coquese Holden and ten other individuals name as defendants Fluent, Inc. and 18 Fluent, LLC (collectively, “Fluent”), as well as fifty individuals identified only as Does 1–50. 19 Plaintiffs assert three state law claims against Fluent based on “at least 1,300 emails” (“the 20 emails”) they allegedly received from Fluent. Presently before the Court is Fluent’s Motion to 21 Dismiss First Amended Complaint Under Rule 12(b)(6) Or, In The Alternative, For a More 22 Definite Statement Under Rule 12(e) (“Motion”). The Court held a hearing on the Motion on 23 November 20, 2020. For the reasons set forth below, Fluent’s Motion is GRANTED.1 24 25 26 27 1 II. BACKGROUND 2 A. Allegations in First Amended Complaint2 3 Plaintiffs Coquese Holden, Kristy Fontes, Stephanie Heller, Lashana Grant, Bryan Hilliard, 4 Steven Hoffer, Diedre Love, Angela Johnson, Noah Meiner, Nace Reynold, and Juanita Williams 5 allege that they were citizens of California and domiciled in California at the time that they 6 received the emails that are the basis of their claims. FAC ¶¶ 12–22. They further allege that 7 they accessed the emails from California. Id. According to Plaintiffs, Defendant Fluent Inc. is “a 8 business entity . . . and is now, and was at all relevant times, a Delaware corporation with a 9 primary place of business in New York, New York doing business and soliciting California 10 residents using unlawful email practices.” Id. ¶ 23.3 11 Plaintiffs allege that Fluent sends “unsolicited spam emails to individuals baiting them 12 with free offerings in exchange for inputting personal information” that it then sells to other 13 parties. Id. ¶ 3. According to Plaintiffs, Fluent never provides the free “offering” but “continues 14 to obtain more [and] more information until the consumer gives up on their pursuit of the free 15 offer.” Id. ¶ 4. Plaintiffs allege that the emails Fluent sends are “unsolicited commercial email 16 advertisements,” id. ¶ 7, and that they are “unlawful because they are materially false and 17 deceptive, by inclusion of third parties’ domain names without permission by the third parties, 18 and/or materially falsified/misrepresented information in the email headers[.]” Id. ¶ 33. 19 Plaintiffs allege that Fluent “advertised in, sent, and/or conspired to send [Plaintiffs] at 20 least one thousand and three hundred (1,300) unlawful spam” emails. FAC ¶ 31. According to 21 2 Because a plaintiff’s factual allegations are generally taken as true in resolving a motion to 22 dismiss under Rule 12(b)(6), this order summarizes Plaintiffs’ allegations as if true. See Parks Sch. of Bus. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Nothing in this order should be 23 construed as resolving any issues of fact that might be disputed at a later stage of the case. 3 The FAC does not contain any separate factual allegations about the second defendant, Fluent 24 LLC, which was added after the case was removed to federal court. Rather, it treats the two defendants as a single corporate entity for the purposes of subject matter jurisdiction. Because “an 25 LLC is a citizen of every state which its owners/members are citizens,” Johnson v. Columbia Properties Anchorage, LP, 437 F.3d 894, 899 (9th Cir. 2006), diversity jurisdiction depends on 26 the citizenship of all of the members of the LLC and may be destroyed if any owner or member of Fluent LLC is a citizen of California. At oral argument, counsel for Fluent represented to the 27 Court that Fluent LLC’s only member is Fluent, Inc. Because Fluent, Inc. is a Delaware 1 Plaintiffs, “most of the spams that [they] received advertising Fluent’s website showed purported 2 names in the Name From field, e.g., ‘Fargo Rewards,’ ‘Wells-Fargo-Survey,’ ‘US Bank-Visa Card 3 Rewards!,’ ‘Amazon Reward Zone,’ and ‘Scott Peru.’” Id. ¶ 41. The sample email reproduced in 4 the same paragraph carries the header: “ALERT: (1) AMAZON© Surprise for Kristy”; the line 5 below states: “Save by Day ” and below that there is a line with the 6 following: “To: luv16starrz@yahoo.com.” Id. In the body of the email, a prominent caption 7 “SAVE by day” is followed by: 8 AMAZON SURPRISE FOR KRISTY An AMAZON© card has been loaded with a mystery amount for you kristy. 9 Reveal the balance and receive the card by using the instructions at attached website. 10 AMAZON© Surprise 11 12 Id. Plaintiffs allege that the “From Names” are “false, or at minimum, misleading, as they 13 represent that the spams are from Wells Fargo, US Bank, Amazon, or an individual named Scott 14 Peru, as opposed to Fluent.” Id. ¶ 42. They further allege that Fluent may not have registered 15 these “generic phrases” as fictitious business names and that even if they have, they do not 16 identify Fluent. Id. ¶ 43. Plaintiffs allege that Fluent intentionally used these misleading “From 17 Names” so that Recipients would not know who the emails were from when viewing them from 18 the “inbox view,” forcing recipients to open them in order to determine whether they were from 19 their bank or some other entity to which they had consented to receive commercial advertisements. 20 Id. ¶ 43–44. 21 Plaintiffs also allege that “[m]ost of the spams that [they] received contain email headers 22 with falsified and/or misrepresented information.” Id. ¶ 47. Some allegedly carried headers 23 advertising Fluent’s “GET ISNTAHARD products,” aimed at erectile dysfunction. Id. ¶ 48. 24 Plaintiffs allege that the volume of emails with such headers indicates that Fluent was not aware if 25 the recipients had this condition, supporting the inference that Plaintiffs did not consent to receive 26 them. Id. Plaintiffs also allege that they received emails from Fluent “with falsified . . . headers 27 which claim to contain gift cards from ‘Wells-Fargo[ ]’” and emails that “knowingly use[d] 1 to have recipients open the emails and sign up for its products and services[.]” Id. ¶¶ 49–50. 2 As an example of emails Plaintiffs received with misleading subject lines, Plaintiffs 3 reproduce an email with the subject line “Wells Fargo Wants to Give you $1,000!” that purports to 4 be from “Scott Peru