Masry v. Lowe's Companies, Inc. ( 2024 )

1 2 3 4 UNITED STATES DISTRICT COURT 5 NORTHERN DISTRICT OF CALIFORNIA 6 Case No. 24-cv-00750-CRB 7 OMAR MASRY, et al., ORDER GRANTING PLAINTIFFS’ 8 Plaintiffs, MOTION TO REMAND AND DENYING AS MOOT DEFENDANTS’ 9 v. MOTION TO DISMISS 10 LOWE’S COMPANIES, INC., et al., Docket Nos. 32, 33. 11 Defendants. 12 13 14 15 I. INTRODUCTION 16 This is a class action lawsuit regarding an alleged non-disparagement clause in the terms of 17 use of Lowe’s website, Lowes.com. Before the Court are two motions: a motion to remand and a 18 motion to dismiss. Plaintiffs Omar Masry and Elliot Mass, on behalf of themselves and others 19 similarly situated, (“Plaintiffs”) move to remand this action to state court. Docket No. 33. 20 Defendants Lowe’s Companies, Inc. and Lowe’s Home Centers, LLC (“Defendants”) move to 21 dismiss Plaintiffs’ first amended complaint. Docket No. 32. Under Civil Local Rule 7-1(b), the 22 Court finds the matter suitable for disposition on the pleadings. For the following reasons, the 23 Court GRANTS Plaintiffs’ motion to remand and DENIES AS MOOT Defendants’ motion to 24 dismiss. 25 II. BACKGROUND 26 On November 21, 2023, Plaintiffs filed this class action lawsuit against Defendants in state 27 court. Notice of Removal, Ex. 1 (Compl.), Docket No. 1-1. On February 7, 2024, Defendants 1 complaint. First Am. Compl. (“FAC”), Docket No. 31. On August 2, 2024, Defendants filed a 2 motion to dismiss Plaintiffs’ FAC. Docket No. 32. Four days later, Plaintiffs filed a motion to 3 remand this case to state court. Docket No. 33. 4 III. LEGAL STANDARD 5 “Federal courts are courts of limited jurisdiction,” “possess[ing] only that power 6 authorized by Constitution and statute.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 7 377 (1994). To establish standing under Article III of the Constitution, Plaintiffs must establish 8 the following elements: 9 1. “The plaintiff must have suffered an injury in fact” that is “concrete and 10 particularized,” and “actual or imminent, not conjectural or hypothetical,” 11 2. “There must be a causal connection between the injury and the conduct complained 12 of,” and 13 3. “It must be likely, as opposed to merely speculative, that the injury will be 14 redressed by a favorable decision.” Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992). 15 IV. DISCUSSION 16 Plaintiffs lack Article III standing because they fail to establish an injury in fact. To 17 establish standing under Article III, Plaintiffs must establish that they have “suffered an injury in 18 fact,” that is “concrete and particularized” as well as “actual or imminent, not conjectural or 19 hypothetical.” Id. 20 In their FAC, Plaintiffs allege that a clause in the terms of use (“Terms”) of Lowes’s 21 website violates California Civil Code Sections 1670.8(a)(1) and 1670.8(a)(2). Plaintiffs take 22 issue with the following alleged provision of Lowe’s Terms: 23 You agree that any User Content that you share, publish or authorize 24 us to Use:…does not defame, misrepresent or contain disparaging remarks about Lowe’s Organization or its products, or other people, 25 products, services, or companies. 26 Docket No. 31-1 at 8. 27 The relevant portion of Section 1670.8 states: consumer's right to make any statement regarding the seller or 1 lessor or its employees or agents, or concerning the goods or services. 2 (2) It shall be unlawful to threaten or to seek to enforce a provision 3 made unlawful under this section, or to otherwise penalize a consumer for making any statement protected under this section. 4 Cal. Civ. Code § 1670.8 (emphasis added). 5 As four California district courts have recently held, Section 1670.8 “‘concerns a free 6 speech right that is analogous to, or has a close relationship with, rights traditionally protected 7 under the First Amendment and the corresponding provisions in the California Constitution.’” 8 O’Donnell v. Crocs Retail, LLC, No. 2:24-CV-02726-SVW-PD, 2024 WL 3834704, at *3 (C.D. 9 Cal. Aug. 15, 2024) (quoting Sweeney v. Paramount Glob., No. LA CV24-00708-JAK (RAOx), 10 2024 U.S. Dist. LEXIS 129148, at *9 (C.D. Cal. July 19, 2024)); see Pulbrook v. Nationwide Mut. 11 Ins. Co., No. 3:24-cv-00469-MMC (N.D. Cal. May 22, 2024); see Maldonado v. BPS Direct LLC, 12 No. 2:24-cv-00098-MRA-MAR, 2024 U.S. Dist. LEXIS 142247, at *9 (C.D. Cal. Aug. 9, 2024). 13 Cases implicating the First Amendment right to free speech face a “relaxed standing 14 analysis.” Canatella v. California, 304 F.3d 843, 853 n. 11 (9th Cir. 2002). However, “[e]ven in 15 the First Amendment context, a plaintiff must show a credible threat of enforcement.” Italian 16 Colors Rest. v. Becerra, 878 F.3d 1165, 1171 (9th Cir. 2018). To determine whether Plaintiffs 17 face a credible threat in the pre-enforcement context, the Court evaluates: “1) the likelihood that 18 the law will be enforced against the plaintiff; 2) whether the plaintiff has shown, ‘with some 19 degree of concrete detail,’ that she intends to violate the challenged law; and 3) whether the law 20 even applies to the plaintiff.” Id. at 1171–72 (quoting Lopez v. Candaele, 630 F.3d 775, 786 (9th 21 Cir. 2010)). 22 Similar to the O’Donnell, Pulbrook, Sweeney, and Maldonado courts, the Court evaluates 23 whether Plaintiffs’ FAC contains any factual allegations that “Plaintiffs violated or intended to 24 violate the Terms,” “that Plaintiffs are self-censoring in fear of violating the Terms,” or “that 25 Defendant[s] sought to enforce the Terms.” O'Donnell, 2024 WL 3834704, at *4. It does not. 26 First, there are no factual allegations that Plaintiffs have made or intend to make statements 27 that would violate the Terms. 1 Second, there are no factual allegations that Plaintiffs are engaging in self-censorship out 2 of fear of violating the Terms. Plaintiffs allege that “Defendants’ conduct…aim[s] to stifle 3 California consumers’ right to free speech, and the right of the California public to hear lawful 4 discourse.” Docket No. 31 at 9. Yet, Plaintiffs offer no factual allegations demonstrating such 5 stifling, whether self-imposed by Plaintiffs or otherwise. 6 Third, there are no factual allegations that Lowe’s evinced an intent to take action against 7 Plaintiffs concerning an alleged violation of the Terms. Plaintiffs state that “threats of 8 enforcement…are alleged to have been made in this case.” Docket No. 31 at 7. However, 9 Plaintiffs offer no facts to support this statement. For example, Plaintiffs state that 10 “Lowe’s…threatens to suspend or terminate any user’s right to use” Lowe’s websites. Id. at 8. 11 But Plaintiffs offer no facts regarding actual threats made by Lowe’s to Plaintiffs regarding 12 suspensions or terminations of their rights to use Lowe’s websites. In other words, Plaintiffs offer 13 no factual allegations regarding “Defendants’ efforts to silence their customers and prospective 14 customers.” Id. at 9. 15 As a result, Plaintiffs fail to “show a credible threat of enforcement.” Italian Colors, 878 16 F.3d at 1171. Therefore, Plaintiffs do not establish an injury in fact, necessary to establish Article 17 III standing. Lujan, 504 U.S. at 561. 18 V. CONCLUSION 19 For the foregoing reasons, the Court GRANTS Plaintiffs’ motion to remand and DENIES 20 AS MOOT Defendants’ motion to dismiss. The Court REMANDS this case to California state 21 court and VACATES all upcoming hearings and deadlines before this Court. 22 23 IT IS SO ORDERED. 24 25 Dated: November 7, 2024 26 27 ______________________________________