Yeh v. Twitter, Inc. ( 2023 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 7 HENRY YEH, Case No. 23-cv-01790-HSG 8 Plaintiff, ORDER GRANTING PLAINTIFF’S MOTION TO REMAND AND 9 v. TERMINATING AS MOOT DEFENDANT’S MOTION TO DISMISS 10 TWITTER, INC., AND REQUEST FOR JUDICIAL NOTICE 11 Defendant. Re: Dkt. Nos. 22, 31, 32 12 13 Pending before the Court are Plaintiff Henry Yeh’s motion to remand and Defendant 14 Twitter’s motion to dismiss. Dkt. Nos. 22, 31. The Court finds this matter appropriate for 15 disposition without oral argument and the matter is deemed submitted. See Civil L.R. 7-1(b). For 16 the reasons discussed below, the Court GRANTS the motion to remand, Dkt. No. 22, and 17 TERMINATES AS MOOT the motion to dismiss, Dkt. No. 31, as well as the associated request 18 for judicial notice, Dkt. No. 32. 19 I. BACKGROUND 20 To provide adequate procedural background on this motion, the Court begins not with the 21 origins of this case, but of another: Price v. Twitter, Inc. Price v. Twitter was filed in May 2022 22 and alleged various state and common law causes of action arising from Twitter’s allegedly 23 deceptive disclosure and sale of user contact information for marketing purposes.1 Case No. 22- 24 cv-03173, Dkt. No. 1. Both parties consented to magistrate judge jurisdiction, and the case was 25 assigned to The Honorable Sallie Kim. On August 15, 2022, Twitter moved to dismiss the Price 26 27 1 At the time of filing, the relevant defendant was known as “Twitter, Inc.” Now, of course, that 1 action, arguing, among other things, that the plaintiffs lacked Article III standing. Id., Dkt. No. 29 2 at 16–20.2 Its attack on standing was detailed and extensive: Twitter dedicated pages to arguing 3 that the Price plaintiffs failed to establish “any particularized, concrete, or future injury from 4 Twitter’s alleged use of basic contact information to display more relevant advertising.” Id. at 20. 5 Judge Kim agreed that the Price plaintiffs failed to adequately plead injury sufficient for standing, 6 and on December 6, 2022, granted Twitter’s motion with leave to amend. Id., Dkt. No. 50. 7 Meanwhile, virtually identical cases were bubbling up elsewhere in the district. On August 8 15, 2022 – the same day Twitter filed its motion to dismiss in the Price action – a group of 9 plaintiffs that included Henry Yeh filed Gianakopoulos v. Twitter, Inc., Case No. 22-cv-04674- 10 AGT. A few days later, yet more plaintiffs initiated another follow-on action: McClellan v. 11 Twitter, Inc., Case No. 22-cv-04758-TSH. On September 23, 2022, both the Gianakopoulos and 12 McClellan actions were reassigned to Judge Kim. See Case No. 22-cv-03173, Dkt. No. 38. 13 Accordingly, by the time the Price plaintiffs received Judge Kim’s December ruling on 14 Defendant’s motion to dismiss, multiple cases had been filed alleging overlapping claims. The 15 Price, Gianakoploulos, and McClellan actions were consolidated in January 2023, id., Dkt. No. 16 53, and the plaintiffs ultimately filed their consolidated amended complaint on February 6, 2023. 17 Id., Dkt. No. 56. Notably, the consolidated complaint dropped Mr. Yeh as a named plaintiff. See 18 id. On March 1, 2023, Twitter once again moved to dismiss the consolidated amended Price 19 complaint, and once again argued that the plaintiffs’ amended allegations did not support Article 20 III standing. Id., Dkt. Nos. 59 (MTD II); 66 (Reply II). In its Reply, however, Twitter asserted 21 that because standing was intertwined with the merits for some of Plaintiffs’ claims, the court 22 could consider (and then dismiss) those claims on the merits. Id., Reply II at 10. 23 While Twitter’s motion was pending, Mr. Yeh reappeared, only this time in state court. 24 On March 10, 2023, Mr. Yeh (represented by the same counsel) filed a class action complaint 25 substantively identical to the consolidated Price complaint in the San Francisco County Superior 26 Court. Defendants timely removed Yeh v. Twitter, Inc. to federal court, arguing that jurisdiction 27 1 over this Class Action Fairness Action (“CAFA”) case is proper under 28 U.S.C. §§ 1332(d) 2 (which vests district courts with original jurisdiction over civil actions in which the amount in 3 controversy exceeds $5 million, there is minimal diversity of citizenship between the parties, and 4 the action involves at least 100 class members), 1441, 1446, and 1453. Case No. 23-cv-01790- 5 HSG, Dkt. No. 1. On April 26, 2023, Judge Kim found that Yeh was related to the consolidated 6 Price action, and the case was reassigned to her. See Case No. 22-cv-03173, Dkt. No. 72. 7 However, because Mr. Yeh did not consent to magistrate jurisdiction, the case was reassigned to 8 this Court. Days later, the consolidated Price action was voluntarily dismissed without a ruling on 9 Twitter’s second motion to dismiss. Id., Dkt. No. 77. 10 Following the dismissal and closure of the consolidated Price action, Mr. Yeh’s case 11 remained before this Court. Yeh v. Twitter, Case No. 23-cv-01790-HSG.3 On May 12, 2023, Mr. 12 Yeh moved to remand his case to state court, arguing that the Court’s subject matter jurisdiction 13 was in question given Defendant’s prior attacks on Article III standing for the similarly situated 14 Price plaintiffs. Dkt. No. 22 (“Mot.”). Twitter moved to dismiss the case (on grounds other than 15 deficient standing), Dkt. No. 31, and then opposed Mr. Yeh’s motion to remand, Dkt. No. 36. 16 II. LEGAL STANDARD 17 A suit may be removed from state court to federal court only if the federal court would 18 have had subject matter jurisdiction over the case. See 28 U.S.C. § 1441(a); see Caterpillar Inc. v. 19 Williams, 482 U.S. 386, 392 (1987) (“Only state-court actions that originally could have been filed 20 in federal court may be removed to federal court by the defendant.”). “If at any time before final 21 judgment it appears that the district court lacks subject matter jurisdiction, the case shall be 22 remanded.” 28 U.S.C. § 1447(c); see also Gaus v. Miles, Inc., 980 F.2d 564, 566 (9th Cir. 1992) 23 (“Federal jurisdiction must be rejected if there is any doubt as to the right of removal in the first 24 instance.”). Even in a CAFA case, where there is “no antiremoval presumption,” Dart Cherokee 25 Basin Operating Co., LLC v. Owens, 574 U.S. 81, 82 (2014), the removing party bears the burden 26 of establishing federal jurisdiction. See Provincial Gov’t of Marinduque v. Placer Dome, Inc., 582 27 1 F.3d 1083, 1087 (9th Cir. 2009); see also Abrego Abrego v. The Dow Chemical Co., 443 F.3d 676, 2 685 (9th Cir. 2006) (“[U]nder CAFA the burden of establishing removal jurisdiction remains, as 3 before, on the proponent of federal jurisdiction.”). 4 Article III standing is a core component of a court’s jurisdiction, without which a case 5 cannot remain in federal court. See Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004) 6 (“A suit brought by a plaintiff without Article III standing is not a ‘case or controversy,’ and an 7 Article III federal court therefore lacks subject matter jurisdiction over the suit.”); see also 8 TransUnion LLC v. Ramirez, 141 S. Ct. 2190, 2203–07 (2021) (discussing Article III standing). 9 Notably, “[t]he party invoking federal jurisdiction bears the burden of establishing” Article III’s 10 injury, redressability, and causation requirements. Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 11 (1992); see also Jones v. Ford Motor Co., 85 F.4th 570, 573 (9th Cir. 2023) (“Upon removal, the 12 burden to demonstrate Article III jurisdiction shifts to the Defendant as [t]he party invoking 13 federal jurisdiction.”) (internal quotations omitted); Smelt v. Cnty. of Orange, 447 F.3d 673, 632 14 (9th Cir. 2006) (“The burden of showing that there is standing rests on the shoulders of the party 15 asserting it.”). Where Article III standing is not established in a removed case, “the proper course 16 is to remand for adjudication in state court.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 17 970 n.6 (9th Cir. 2018). This rules applies “to a case removed pursuant to CAFA as to any other 18 type of removed case.” See Polo v. Innoventions Int’l, LLC, 833 F.3d 1193, 1196 (9th Cir. 2016). 19 III. DISCUSSION 20 The parties do not dispute that on the facts of this case, statutory standing exists under 21 CAFA. The only real dispute is whether Defendant has met its burden of establishing Article III 22 standing. The Court agrees with Plaintiff that it has not, and accordingly will remand the case. 23 The crux of Plaintiff’s motion is that Defendant – the party who invoked federal 24 jurisdiction by removing the case from state court – bears the burden of showing that Mr. Yeh’s 25 claims articulate an injury-in-fact sufficient to confer Article III standing. Mot. at 4. Though all 26 removing parties bear the burden of establishing federal jurisdiction, Twitter’s task here is 27 unusually challenging: since it previously spilled considerable ink in the Price action arguing that 1 remove this materially identical case to federal court comes as something of a plot twist. See Mot. 2 at 2. Given the inconsistency between Defendant’s arguments in Price and its actions in Yeh, 3 Plaintiff’s motion puts Defendant on the spot to “submit support for standing.” Mot at 4. 4 Defendant did not. To be sure, it did other things: it argued that there is “no antiremoval 5 presumption” under CAFA, and that the Court has jurisdiction to hear its claims because the 6 “jurisdictional arguments are intertwined with the merits.” Dkt. No. 36 (“Opp.”) at 7. But 7 nowhere in its opposition did Twitter “affirmatively state that Plaintiff has standing under Article 8 III” – let alone articulate how. Dkt. No. 40 (“Reply”) at 7. Establishing jurisdiction (including 9 Article III standing) was Defendant’s obligation as the party removing the case and invoking 10 federal jurisdiction. See Jones, 85 F.4th at 573; see also Envtl. Research Ctr. v. Heartland 11 Products, 29 F. Supp. 3d 1281, 1282 (C.D. Cal. 2014) (noting removing party bears the burden of 12 “establishing the existence of a case or controversy under Article III, including the core 13 component of standing.”) (internal quotations omitted); Brimer v. Amash Imports, Inc., No. C11- 14 5291 EMC, 2012 WL 13080724, at *2 (N.D. Cal. Jan. 10, 2012) (“As with removability generally, 15 the burden of proving that plaintiff has Article III standing is with the removing defendants.”). 16 While Plaintiff admittedly did not put forward an affirmative argument as to why standing does 17 not exist (which would be the typical posture), the Court cannot ignore that Defendant already did. 18 Without Defendant now showing that standing is proper after previously arguing to the contrary, 19 the Court cannot consider the merits of the case. See Bates v. United Parcel Service, Inc., 511 20 F.3d 974, 985 (9th Cir. 2007) (en banc) (“Standing is a threshold matter central to our subject 21 matter jurisdiction. We must assure ourselves that the constitutional standing requirements are 22 satisfied before proceeding to the merits.”); see also Reply at 10 (collecting cases). 23 Though Defendant suggests that this Court can rule on the merits under Rule 12(b)(6) 24 instead of on jurisdictional grounds under 12(b)(1) because the “jurisdiction and merits [issues] 25 are intertwined,” Opp. at 12–14, the Court is not persuaded. After carefully reviewing the parties’ 26 cited cases, the Court is of the view that the “intertwined” principle is far narrower than Defendant 27 urges. Instead of granting courts broad license to review a case whenever merits and jurisdictional 1 may occur when a party’s right to recovery rests upon the interpretation of a federal statute that 2 provides both the basis for the court’s subject matter jurisdiction and the plaintiff’s claim for 3 relief.” Williston Basin Interstate Pipeline Co. v. An Exclusive Gas Storage Leasehold & 4 Easement in the Cloverly Subterranean, Geological Formation, 524 F.3d 1090, 1094 (9th Cir. 5 2008) (emphasis added); see also Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 6 2004); Thornhill Publ’g Co. v. Gen. Tel. Co., 594 F.2d 730, 734 (9th Cir.1979).4 Since in this 7 case the “jurisdiction inquiries do not arise under a federal statute, but instead under Article III,” 8 Reply at 13, that exceptional rule just does not apply. 9 And though Defendant asserts that “absent ‘truly frivolous’ claims, issues that are 10 intertwined with the merits are not matters of constitutional standing,” it cites no authority clearly 11 establishing this purported “bedrock principle.” Opp. at 13. To the extent that Defendant raises 12 this argument to suggest that this Court need not find Article III standing before proceeding to 13 evaluate Plaintiff’s UCL and contract claims, the Court finds no support for that contention, and 14 the cases Defendant cite (which, as Plaintiff points out, did not arise in the context of remand) do 15 not supply it. In many of Defendant’s cited cases, for example, the courts clearly addressed the 16 question of Article III standing, even if they then proceeded to dismiss on the merits certain 17 statutory claims for standing reasons. See, e.g., Van Patten v. Vertical Fitness Grp., LLC, 847 18 F.3d 1037, 1042–43 (9th Cir. 2017) (performing Article III analysis); Mastel v. Miniclip SA, 549 19 F. Supp. 3d 1129, 1138–39 (E.D. Cal. 2021) (same); Bass v. Facebook, Inc., 394 F. Supp. 3d 20 1024, 1032–34 (N.D. Cal. 2019) (same). These cases simply do not suggest that where 21 jurisdiction is in doubt, as it is here, the Court can nonetheless proceed to rule on the merits of 22 23 4 The only controlling case that Defendant cites is Williston, which clearly stands for the notion that resolution on Rule 12(b) rather than Rule 12(1) may be appropriate “where jurisdiction rises 24 or falls, exclusively, on a federal statute.” Opp. at 12; Reply at 12. The only other authorities that Defendant cites are two district court cases. In In re Facebook, Inc., Consumer Priv. User Profile 25 Litig., 402 F. Supp. 3d 767, 788 (N.D. Cal. 2019), which did not involve a federal statute, the court referred to the “intertwined” principle, quoting Williston, but did not ultimately apply it or 26 suggest that it should be applied beyond the context discussed in Williston. The other case found similarly. Boston Sci. Corp. v. BioCardia, Inc., 524 F. Supp. 3d 914 (N.D. Cal. 2021). The Court 27 does not read these cases to run contrary to the well-established general rule, and finds it 1 state and common law claims. 2 Ultimately, Defendant’s argument that the Court can maintain jurisdiction under a plainly 3 inapplicable “intertwined” theory falls short of establishing that Plaintiff has standing, which is its 4 burden. Defendant’s attempt to evade that burden here is notable given its prior arguments against 5 standing. And while Defendant highlights that it is not seeking dismissal on standing grounds, 6 Opp. at 6, that decision cannot itself establish Plaintiff’s Article III standing, especially given 7 Defendant’s concerted standing attacks in Price, which Defendant admits involved “nearly 8 identical injury allegations” as those here. Opp. at 14. Where “Defendant[’s] prior standing 9 arguments . . . leave doubt as to whether Plaintiff has Article III standing, Defendant[] cannot 10 avoid” its jurisdictional burden as the removing party by agreeing to not seek dismissal for lack of 11 standing. Iglesias v. Welch Foods Inc., No. 17-CV-00219-TEH, 2017 WL 1227393, at *3 n.3 12 (N.D. Cal. Apr. 4, 2017). 13 For all of these reasons, the Court is persuaded that since Defendant did not meet its 14 affirmative burden of establishing Plaintiff’s Article III standing after previously putting it in 15 question repeatedly in materially identical litigation, remand is appropriate. Courts “generally 16 must remand” rather than dismiss cases where federal jurisdiction is in doubt. Polo, 833 F.3d at 17 1196. Remand is generally “the correct remedy because a failure of federal subject-matter 18 jurisdiction means only that the federal courts have no power to adjudicate the matter.” Id. 19 (emphasis in original); see also Davidson, 889 F.3d at 970 n.6 (9th Cir. 2018). But state courts 20 “are not bound by the constraints of Article III.” Polo, 833 F.3d at 1196. 21 Notwithstanding these principles, Twitter argues that remand would be futile and the case 22 must be dismissed “because Plaintiff cannot state core elements of his claims[.]” Opp. at 15. 23 Even putting aside questions about the continuing vitality of the “futility” doctrine in this circuit, 24 see Polo, 833 F.3d at 1197–99, the Court disagrees. As Plaintiff correctly points out, Defendant 25 has not shown – as it must to secure dismissal rather than remand – that “the eventual outcome of 26 [the] case after remand is so clear as to be foreordained.” Id. at 1198. It only conclusorily asserts 27 that dismissal is certain because Plaintiff’s claims fail due to inadequate injury and damage 1 definitively doomed in state court, and accordingly will remand rather than dismiss. 2 || IV. CONCLUSION 3 The Court GRANTS Plaintiff's motion to remand (Dkt. No. 22) and TERMINATES AS 4 || MOOT Defendant’s motion to dismiss (Dkt. No. 31) and its associated request for judicial notice 5 (Dkt. No. 32). The Court REMANDS the case to San Francisco Superior Court. The Clerk is 6 || DIRECTED to close the case. 7 IT IS SO ORDERED. 8 Dated: December 4, 2023 9 Alauwrd 3 HAYWOOD S. GILLIAM, JR. 10 United States District Judge 11 12 © 15 16 = 17 Z 18 19 20 21 22 23 24 25 26 27 28