Court Opinion

ID: 9945870
Source: CourtListenerOpinion
Date Created: 2024-02-28 18:01:04.89931+00
Date Added: 2024-06-11T14:22:38.182889
License: Public Domain

NOT FOR PUBLICATION                            FILED
                    UNITED STATES COURT OF APPEALS                         FEB 28 2024
                                                                      MOLLY C. DWYER, CLERK
                                                                        U.S. COURT OF APPEALS
                           FOR THE NINTH CIRCUIT

JOSEPH TAYLOR; et al.,                          No.    22-16654

                Plaintiffs-Appellants,          D.C. No. 5:20-cv-07956-VKD

 v.
                                                MEMORANDUM *
GOOGLE, LLC,

                Defendant-Appellee.

                   Appeal from the United States District Court
                      for the Northern District of California
                    Virginia Kay DeMarchi, Magistrate Judge

                     Argued and Submitted February 14, 2024
                            San Francisco, California

Before: MILLER, BADE, and VANDYKE, Circuit Judges.

      Plaintiffs-Appellants appeal from the district court’s order dismissing the

first amended complaint with prejudice under Federal Rule of Civil Procedure

12(b)(6). Plaintiffs sued Google in a putative class action, asserting claims for

conversion and quantum meruit under California law, based on Google’s alleged

passive data transfers using Plaintiffs’ cellular data without their knowledge or

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
consent, and without compensation. We have jurisdiction under 28 U.S.C. § 1291

and review de novo. Hunley v. Instagram, LLC, 73 F.4th 1060, 1068 (9th Cir.

2023). We affirm in part, and we reverse and remand in part.

      1.     “Conversion is the wrongful exercise of dominion over the property of

another.” Welco Elecs., Inc. v. Mora, 166 Cal. Rptr. 3d 877, 881 (Ct. App. 2014).

Under California law, conversion has three elements: (1) the plaintiff owns or has a

right to possess the personal property; (2) the defendant disposes “of the property

in a manner that is inconsistent with the plaintiff’s property rights; and (3) resulting

damages.” Fremont Indem. Co. v. Fremont Gen. Corp., 55 Cal. Rptr. 3d 621, 638

(Ct. App. 2007).

      Plaintiffs adequately plead the first element of conversion. California law

requires “three criteria [to] be met before the law will recognize a property right.”

G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc., 958 F.2d 896, 903

(9th Cir. 1992). “First, there must be an interest capable of precise definition;

second, it must be capable of exclusive possession or control; and third, the

putative owner must have established a legitimate claim to exclusivity.” Id.; see

also Holistic Supplements, L.L.C. v. Stark, 275 Cal. Rptr. 3d 791, 806 (Ct. App.

2021) (agreeing that G.S. Rasmussen’s “test stakes out useful guideposts” for

determining whether “the property element of conversion is implicated”).

      Applying these criteria, we conclude that cellular data is capable of precise

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definition. Although intangible, cellular data serves the particular purpose of

enabling access to the cellular network; it can be precisely limited by a user’s data

plan; it can be measured when being used; and it can be attributed to a particular

user based on that user’s unique identifier code. See G.S. Rasmussen, 958 F.2d

at 903; Kremen v. Cohen, 337 F.3d 1024, 1030 (9th Cir. 2003) (concluding that a

registered domain name is capable of precise definition).

      Cellular data is also capable of exclusive possession or control. It can be

“valued, bought and sold,” Kremen, 337 F.3d at 1030; users may transfer their

interest in cellular data through mobile hotspots; and the right to transmit cellular

data over a cellular network is by its nature restricted to the user, G.S. Rasmussen,

958 F.2d at 903. In addition, the manner in which a user’s exclusive interest in

cellular data vests is analogous to that in the utilities context. As is the case for

utilities, the user’s claim to exclusive possession or control of cellular data vests

when the user causes “an actual diversion and beneficial use of the [data]” by using

the cellular network’s bandwidth to make data transfers. See Inyo Consol. Water

Co. v. Jess, 119 P. 934, 936 (Cal. 1911); see also Terrace Water Co. v. San

Antonio Light & Power Co., 82 P. 562, 563 (Cal. 1905).

      Plaintiffs also have a legitimate claim to exclusivity in their cellular data.

Users with cellular data plans have “reasonable investment-backed expectations”

in their ability to access their carriers’ cellular network. G.S. Rasmussen, 958 F.2d

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at 903. Indeed, Plaintiffs have purchased the right to transmit bytes of information

over their carriers’ networks up to the amounts provided by the terms of the plans.

      Plaintiffs adequately plead the second element of conversion because they

plausibly allege that Google uses Plaintiffs’ cellular data in a manner inconsistent

with their property interests. Carriers meter the cellular data consumed by every

transmission to and from a mobile device. When Google transmits information

from the user’s device to Google’s servers, the cellular data expended in that

transmission is allocated to the user and treated by the carrier as data that the

customer has consumed. Therefore, Google’s “unauthorized transfer” of bytes

using Plaintiffs’ data allotment necessarily prevents Plaintiffs from using all the

data they purchase from their carrier. Welco Elecs., 166 Cal. Rptr. 3d at 884

(holding that an “unauthorized transfer” of “part” of a plaintiff’s available credit

balance with a credit card company was conversion). As for Google, it “obtain[s]

a valuable benefit . . . without authorization or permission” from a user when it

piggybacks off the user’s data plan by accessing the cellular network through the

user’s unique identifier code. Rasmussen, 958 F.2d at 906.

      Plaintiffs adequately plead the third element of conversion because they

plausibly allege that they incur damages when Google converts a portion of their

cellular data. Under California Civil Code section 3336, the measure of damages

for conversion of personal property is “[t]he value of the property at the time of the

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conversion, with the interest from that time.” Virtanen v. O’Connell, 44 Cal. Rptr.

3d 702, 717 n.8 (Ct. App. 2006) (quoting section 3336); Lueter v. State, 115 Cal.

Rptr. 2d 68, 81 (Ct. App. 2002) (same); Tyrone Pac. Int’l, Inc. v. MV Eurychili,

658 F.2d 664, 666 (9th Cir. 1981) (same). This measure of damages “track[s] the

traditional common law conception of conversion as a forced sale.” Tyrone Pac.

Int’l, 658 F.2d at 666. Like a “forced sale,” id., Google’s alleged surreptitious use

of the cellular network through Plaintiffs’ data plans causes Plaintiffs to experience

an immediate, discrete loss of a specific sum of valuable cellular data, which is

charged against their data plans. Thus, the value of the converted cellular data is

the measure of Plaintiffs’ resulting damages. See Lueter, 115 Cal. Rptr. 2d at 81.

      The conversion claim was pleaded properly and should not have been

dismissed. Therefore, we reverse and remand to the district court for further

proceedings on that claim.

      2.     “Quantum meruit (or quasi-contract) is an equitable remedy implied

by the law under which a plaintiff who has rendered services benefiting the

defendant may recover the reasonable value of those services when necessary to

prevent unjust enrichment of the defendant.” In re De Laurentiis Ent. Grp. Inc.,

963 F.2d 1269, 1272 (9th Cir. 1992). “The requisite elements of quantum meruit

are (1) the plaintiff acted pursuant to ‘an explicit or implicit request for the

services’ by the defendant, and (2) the services conferred a benefit on the

                                            5
defendant.” Port Med. Wellness, Inc. v. Conn. Gen. Life Ins. Co., 233 Cal. Rptr. 3d

830, 852 (Ct. App. 2018) (quoting Day v. Alta Bates Med. Ctr., 119 Cal. Rptr. 2d

606, 610 (Ct. App. 2002)). To recover in quantum meruit, a plaintiff “must show

the circumstances were such that the services were rendered under some

understanding or expectation of both parties that compensation therefor was to be

made.” Huskinson & Brown, LLP v. Wolf, 84 P.3d 379, 381 (Cal. 2004) (quotation

marks omitted).

      Plaintiffs have not alleged that they provide cellular data to Google pursuant

to any explicit or implicit request by Google. See Day, 119 Cal. Rptr. 2d at 610.

Moreover, Plaintiffs concede that they cannot allege any expectation of payment

because they contend that Google uses their cellular data without their knowledge

or consent. See Huskinson, 84 P.3d at 381.

      Accordingly, Plaintiffs do not plausibly allege the elements of a quantum

meruit claim. We therefore affirm the district court’s dismissal of that claim.

      AFFIRMED in part; REVERSED and REMANDED in part.

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