Court Opinion

ID: 9893537
Source: CourtListenerOpinion
Date Created: 2023-10-27 17:00:43.040266+00
Date Added: 2024-06-11T09:04:26.430627
License: Public Domain

FOR PUBLICATION

  UNITED STATES COURT OF APPEALS
       FOR THE NINTH CIRCUIT

MARK JONES; MICHAEL MCKEE,                No. 22-35447

             Plaintiffs-Appellants,     D.C. No. 3:21-cv-
                                          05666-DGE
 v.

FORD MOTOR COMPANY, a                      OPINION
Delaware Corporation,

             Defendant-Appellee.

      Appeal from the United States District Court
        for the Western District of Washington
      David G. Estudillo, District Judge, Presiding

        Argued and Submitted August 22, 2023
                 Seattle, Washington

                Filed October 27, 2023

Before: Michael Daly Hawkins, Susan P. Graber, and M.
         Margaret McKeown, Circuit Judges.

                  Per Curiam Opinion
2                 JONES V. FORD MOTOR COMPANY

                          SUMMARY *

      Article III Standing / Washington Privacy Act

    The panel affirmed the district court’s judgment
dismissing for failure to state a claim a class action alleging
that the Ford Motor Company made unlawful recordings of
plaintiffs’ private communications in violation of the
Washington Privacy Act (“WPA”).
    The panel rejected plaintiffs’ request for remand to the
Washington state court because it was based on the flawed
argument that Ford “self-rebutted the assertion of Art. III
jurisdiction” when it alleged that plaintiffs failed to plead a
statutory injury under the WPA in its motion to dismiss. The
injury-in-fact prong of Article III standing and the merits of
a WPA claim are separate inquiries. With respect to
constitutional injury-in-fact, the complaint’s allegations
plausibly articulated an Article III injury because they
claimed violation of a substantive privacy right. Article III
standing was thus satisfied, and the district court properly
retained jurisdiction.
    Turning to the merits of the WPA claim, the panel
rejected plaintiffs’ claim that a violation of the WPA itself is
an invasion of privacy that constitutes remediable injury. An
invasion of privacy, without more, is insufficient to meet the
statutory injury requirements of WPA Section
9.73.060. Plaintiffs must allege an injury to “his or her

*
 This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
                JONES V. FORD MOTOR COMPANY                3

business, his or her person, or his or her reputation.” Wash.
Rev. Code § 9.73.060. Plaintiffs failed to do so here.

                        COUNSEL

Joel Ard (argued), Ard Law Group PLLC, Bainbridge
Island, Washington; William R. Restis, Restis Law Firm PC,
San Diego, California; for Plaintiffs-Appellants.
Peder K. Batalden (argued) and Emily V. Cuatto, Horvitz &
Levy LLP, Burbank, California; Aaron D. Van Oort
(argued), Faegre Drinker Biddle & Reath LLP, Minneapolis,
Minnesota; Eric B. Wolff (argued), Perkins Coie LLP,
Seattle, Washington; Anthony Todaro and Jeffrey B.
DeGroot, DLA Piper LLP (US), Seattle, Washington; for
Defendants-Appellees.

                        OPINION

PER CURIAM:

    Plaintiffs Mark Jones and Michael McKee appeal the
dismissal of their class action alleging that the Ford Motor
Company (“Ford”) made unlawful recordings of their
private communications in violation of the Washington
Privacy Act (“WPA”).
I. BACKGROUND
    Ford manufactures and sells automobiles with integrated
infotainment systems that allow drivers and passengers to
use their cellphones hands-free while operating Ford
4               JONES V. FORD MOTOR COMPANY

vehicles. According to the complaint, as part of this design,
the infotainment system automatically downloads, copies,
and indefinitely stores the call logs and text messages of any
cellphone connected to it. If text messages or call logs are
deleted from a cellphone, the vehicle nevertheless retains the
communications on the vehicle’s on-board memory, even
after the cellphone is disconnected. Vehicle owners cannot
access or delete their personal information once it has been
stored.
    Plaintiff Jones owns a Ford vehicle equipped with such
a system. He exchanged private text messages with Plaintiff
McKee before subsequently connecting his cellphone to the
vehicle’s on-board infotainment system. Both Plaintiffs
allege that their private communications were unlawfully
recorded from Plaintiff Jones’s cellphone and permanently
stored on his Ford vehicle in violation of the WPA. Plaintiffs
do not allege, however, that Ford actually accessed the
personal communications on the vehicle. Instead, Plaintiffs
allege that the information may be accessed by a third-party
company, for example, the Berla Corporation (“Berla”).
According to the Plaintiffs, Berla produces hardware and
software capable of extracting stored text messages and call
logs stored on a vehicle’s on-board memory. Berla products
are not generally available to the public, and sales access is
restricted to law enforcement, the military, civil and
regulatory agencies, and select private investigation service
providers.
    Plaintiffs initially filed their complaint in Washington
state court. Ford removed to federal court under the Class
Action Fairness Act (“CAFA”), and Plaintiffs did not
challenge removal. Ford then moved to dismiss the
operative complaint under Federal Rule of Civil Procedure
(“Rule”) 12(b)(6) for failure to state a claim. The district
                JONES V. FORD MOTOR COMPANY                   5

court granted the motion to dismiss on two alternative
grounds: (1) Plaintiffs failed to allege an injury to their
“person,” “business,” or “reputation,” as the WPA requires,
and (2) Ford did not violate the WPA merely by
manufacturing and selling vehicles with infotainment
systems. Plaintiffs timely appealed.
II. STANDARD OF REVIEW
    We review de novo a district court’s determination
whether a party has standing. See Tailford v. Experian Info.
Sols., Inc., 26 F.4th 1092, 1098 (9th Cir. 2022). We also
review de novo a district court’s dismissal for failure to state
a claim under Rule 12(b)(6). Dougherty v. City of Covina,
654 F.3d 892, 897 (9th Cir. 2011).
III. DISCUSSION
   A. Jurisdiction.
    Article III of the Constitution limits the “Judicial Power”
of the federal courts to “Cases, in Law and Equity, arising
under this Constitution [and] the Laws of the United States.”
U.S. CONST. art. III, § 2, cl. 1. “[A]ny civil action brought
in a State court of which the district courts of the United
States have original jurisdiction, may be removed by the
defendant . . . .” 28 U.S.C. § 1441(a). Upon removal, the
burden to demonstrate Article III jurisdiction shifts to the
Defendant as “[t]he party invoking federal jurisdiction.”
Lujan v. Defs. of Wildlife, 504 U.S. 555, 561 (1992); see also
Tailford, 26 F.4th at 1099. Plaintiffs ask the court to remand
this case to the Washington state court by applying a “strong
presumption against removal jurisdiction.” But no such
presumption applies when a case is removed under CAFA.
Dart Cherokee Basin Operating Co. v. Owens, 574 U.S. 81,
6                JONES V. FORD MOTOR COMPANY

89 (2014); Jauregui v. Roadrunner Transp. Servs., Inc., 28
F.4th 989, 992–93 (9th Cir. 2022).
    Plaintiffs seek remand based on the flawed argument that
Ford “self-rebutted the assertion of Art. III jurisdiction”
when it alleged that Plaintiffs failed to plead a statutory
injury under the WPA in its motion to dismiss. This we
decline to do. Plaintiffs’ challenge fails because the injury-
in-fact prong of Article III standing and the merits of a WPA
claim are separate inquiries. See Maya v. Centex Corp., 658
F.3d 1060, 1068 (9th Cir. 2011).              To establish the
constitutional minimum for Article III jurisdiction, a
plaintiff must plead an injury-in-fact; this creates a pleading
floor. A particular cause of action may require more—for
instance, a particular type of injury or a threshold magnitude
of injury—without raising the constitutional pleading floor.
A failure to plead the more-specific or more-demanding
statutory injury shows a failure to state a claim, not a failure
to establish standing. See Salmon Spawning & Recovery All.
v. Gutierrez, 545 F.3d 1220, 1225 (9th Cir. 2008) (“If a
plaintiff has shown sufficient injury to satisfy Article III, but
has not been granted statutory standing, the suit must be
dismissed under Federal Rule of Civil Procedure 12(b)(6),
because the plaintiff cannot state a claim upon which relief
can be granted.”). As such, demanding that Plaintiffs plead
a WPA-specific injury to establish jurisdiction “conflate[s]
standing with the merits.” See Lazar v. Kroncke, 862 F.3d
1186, 1198–99 (9th Cir. 2017).
    With respect to constitutional injury-in-fact, the relevant
law is settled. A statute that codifies a common law privacy
right “gives rise to a concrete injury sufficient to confer
standing.” In re Facebook, Inc. Internet Tracking Litig., 956
F.3d 589, 598 (9th Cir. 2020). And this court has
consistently found that “[v]iolations of the right to privacy
                JONES V. FORD MOTOR COMPANY                   7

have long been actionable at common law.” Eichenberger
v. ESPN, Inc., 876 F.3d 979, 983 (9th Cir. 2017); see also
Patel v. Facebook, Inc., 932 F.3d 1264, 1272–73 (9th Cir.
2019). The WPA codifies such substantive privacy rights
and “is one of the most restrictive electronic surveillance
laws ever promulgated.” State v. Roden, 321 P.3d 1183,
1185 (Wash. 2014) (en banc); see also State v. Clark, 916
P.2d 384, 391–92 (Wash. 1996) (en banc).
    Here, the complaint alleges that the vehicle’s system
downloads all text messages and call logs from Plaintiffs’
cellphones as soon as they are connected. The complaint
also alleges that the infotainment system permanently stores
the private communications without Plaintiffs’ knowledge
or consent. At the pleading stage, those allegations plausibly
articulate an Article III injury because they claim violation
of a substantive privacy right. See Eichenberger, 876 F.3d
at 983. Whether Plaintiffs “will be successful on the merits
in [this] suit against [Ford] does not affect whether [they
have] standing to pursue such a suit.” Iten v. Los Angeles,
No. 22-55480, 2023 WL 5600292, at *8 (9th Cir. Aug. 30,
2023) (citation omitted). Article III standing is thus
satisfied, and the district court properly retained jurisdiction
to hear this case.
   B. Injury.
    To bring a claim under the WPA, a plaintiff must show
that “a violation of [the WPA] has injured his or her
business, his or her person, or his or her reputation. A person
so injured shall be entitled to actual damages . . . or
liquidated damages.” WASH. REV. CODE § 9.73.060. On
appeal, Plaintiffs claim that a violation of the WPA itself is
an invasion of privacy that constitutes remediable injury.
But the statutory text does not support their interpretation.
8               JONES V. FORD MOTOR COMPANY

    It is well established that “[s]tatutes must be interpreted
and construed so that all the language used is given effect,
with no portion rendered meaningless or superfluous.”
Whatcom Cnty. v. City of Bellingham, 909 P.2d 1303, 1308
(Wash. 1996) (en banc); see also Corley v. United States,
556 U.S. 303, 314 (2009). If Plaintiffs’ understanding of the
statute were sufficient to establish a claim, WPA
Section 9.73.060 would be surplusage because a violation of
the statute alone, without more, would automatically satisfy
an injury to the person. Yet, the statute expressly requires
an injury to one’s business, person, or reputation. We find it
difficult to believe Washington intended such a redundant
outcome.
    This issue has been percolating through district courts in
our circuit, and they have reached the same conclusion. See,
e.g., Brinkley v. Monterey Fin. Servs., LLC, 340 F. Supp. 3d
1036, 1044–45 & n.3 (S.D. Cal. 2018) (finding that the
invasion of privacy inherent in the unauthorized recording of
an individual’s conversation, without more, is insufficient to
meet the Section 9.73.060 injury requirement); Russo v.
Microsoft Corp., No. 4:20-cv-04818-YGR, 2021 WL
2688850, at *3 n.3 (N.D. Cal. June 30, 2021) (finding that
the WPA’s cause of action applies only to those claiming
that a violation has injured business, person, or reputation).
    We embrace this analysis and hold that an invasion of
privacy, without more, is insufficient to meet the statutory
injury requirements of Section 9.73.060. To succeed at the
pleading stage of a WPA claim, Plaintiffs must allege an
injury to “his or her business, his or her person, or his or her
reputation.” WASH. REV. CODE § 9.73.060. Plaintiffs failed
                  JONES V. FORD MOTOR COMPANY                       9

to do so here. 1 We note that Plaintiffs were given an
opportunity to amend their complaint but declined to do so.
    AFFIRMED.

1
 Because our injury determination dispositively resolves this case, we
need not address the district court’s alternative holding that the WPA
does not extend liability to manufacturing. See Johnson v. Riverside
Healthcare Sys., LP, 534 F.3d 1116, 1121 (9th Cir. 2008).