Wright v. Ulta Salon, Cosmetics & Fragrance, Inc.

Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 JOAN WRIGHT, individually and on Case No. 22-cv-1954-BAS-BLM behalf of others similarly situated, 12 ORDER: Plaintiff, 13 v. (1) GRANTING IN PART AND 14 DENYING IN PART ULTA SALON, COSMETICS & 15 PLAINTIFF’S MOTION FOR FRAGRANCE, INC., LEAVE TO FILE THE SECOND 16 Defendant. AMENDED COMPLAINT (ECF 17 No. 14); and 18 (2) TERMINATING AS MOOT 19 DEFENDANT’S MOTION TO 20 DISMISS THE FIRST AMENDED COMPLAINT (ECF 21 No. 13) 22 25 Before the Court is Plaintiff Joan Wright’s Motion for Leave to File her Proposed 26 Second Amended Complaint (“Motion”). (See Mot., ECF No. 4; Mem. in Supp. of Mot. 27 (“Mem.”), EC No. 14-1; Proposed Second Am. Compl. (“Proposed SAC”), ECF No. 14- 28 3.) Defendant Ulta Salon, Cosmetics & Fragrance, Inc. (“Ulta”) opposes (Opp’n, ECF No. 1 15), citing essentially the same grounds for dismissal that it proffered in its Motion to 2 Dismiss Wright’s First Amended Complaint (Mot. to Dismiss (“MTD”), ECF No. 13-1). 3 Wright replies. (Reply, ECF No. 16.) 4 The Court finds the Motion suitable for determination based upon the papers 5 submitted and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For 6 the reasons stated below, the Court GRANTS IN PART and DENIES IN PART Wright’s 7 Motion for Leave (ECF No. 14) and TERMINATES AS MOOT Ulta’s Motion to Dismiss 8 the First Amended Countercomplaint (ECF No. 13). 9 I. BACKGROUND1 10 Ulta, an Illinois-based beauty and cosmetics retailer, owns and operates 11 www.ulta.com (the “Website”), on which it sells products. (Proposed SAC ¶¶ 28, 37–38.) 12 Embedded in the HTML code of the Website is JavaScript computer code written by third- 13 party Quantum and installed on Ulta’s servers is Quantum’s session replay spyware. (See 14 id. ¶¶ 6–7, 45–46.) Quantum’s JavaScript and spyware enables it and Ulta to “see the 15 screens” of Website users and to “tap, record, and share users’ ‘sessions’” on the Website. 16 (See id. ¶¶ 44–45.) That is, “[w]hen consumers visit [the] [W]ebsite, the JavaScript 17 immediately loads onto their device . . . and is stored in their device’s cache or temporary 18 internet files.” (Id. ¶ 47.) “[T]he spyware then monitors and records communications the 19 device sends to, and receives from, [Ulta’s] servers while the consumer browses [the] 20 [W]ebsite.” (Id. ¶ 48.) “The communications are still allowed to travel their normal path 21 between the consumer’s device and [Ulta]’s servers, but the communications are tapped 22 and copied and sent to Quantum’s serves as well.” (Id.ˆ¶ 49 .) 23 24 25 26 1 The facts are taken from Wright’s Proposed Second Amended Complaint (ECF No. 14-3), to 27 which the presumption of truth attaches for the instant Motion. See, e.g., Ahmad v. Day, --- F. Supp. 3d - --, 2022 WL 17970160, at *1 (S.D.N.Y. Dec. 28, 2022) (holding that courts must assume the allegations 28 1 Quantum allegedly used the communications it tapped and recorded for Ulta “for its 2 own commercial benefit.” (Proposed SAC ¶¶ 79–80.) The terms of and conditions that 3 govern Ulta and Quantum’s business relationship state: 4 Quantum shall have the right to collect and analyze data and other information relating to the provision, use and performance of various aspects of the 5 Quantum Service and related systems and technologies (including without 6 limitation, information concerning Customer Data and data derived therefrom), and Quantum will be free (during and after the Term) to use such 7 information and data to improve and enhance the Quantum Technology and 8 for other development, diagnostic, and corrective purposes in connection with the Quantum Service and other Quantum offerings, and to disclose such data 9 solely in aggregate or other de-identified form in connection with its business. 10 11 (Id. ¶ 80 (emphasis added).) 12 At some point between April 2022 and April 2023, Wright, a resident of San Diego 13 County, visited the Website from her “cell phone” and/or “other mobile device[] to shop 14 for products.” (Proposed SAC ¶ 27, 37.) Once the Website loaded on Wright’s mobile 15 web browser, Wright’s “phone began sending and receiving electronic communications in 16 the form of instructions to and from [Ulta]’s computer servers utilized to operate its 17 [W]ebsite.” (Id. ¶ 40.) “The commands were sent as messages indicating to [Ulta] what 18 words and text were typed, any credit card number entered, CVV code, billing zip code, 19 first name, last name, phone number, address, email address, any search terms entered, and 20 what content was being clicked, requested, and inputted, . . . including any products 21 ordered.” (Id.) Through its spyware, Quantum, at the direction of Ulta, learned this 22 information and more, including “the pages and content” Wright viewed, her “scroll 23 movements,” “words and text typed even if not fully entered, copy and paste actions, any 24 search terms (even if not fully entered), mouse clicks and movements, keystrokes,” among 25 other things. (Id. ¶ 41; see also id. ¶ 52 (explaining in programmatic terms how Quantum’s 26 spyware operates).) 27 Wright alleges she had no clue that Ulta enabled Quantum to view and record her 28 communications, and “reasonably expected that [her] visits to [the] [W]ebsite would be 1 private.” (Proposed SAC ¶¶ 54–55.) And while she acknowledges that disclosures on 2 Ulta’s website indicated Ulta uses “spyware,” it does not disclose that the data the spyware 3 captures will be “collected,” “analyzed,” or “distributed” by third-party Quantum. (See id. 4 ¶¶ 57–58 (describing Ulta’s Privacy Policy in effect on August 10, 2022); ¶¶ 61–62 5 (December 29, 2022 Privacy Policy).) Hence, Wright avers Ulta and Quantum did not 6 obtain the necessary consent prior to tapping, recording, collecting and analyzing, and then 7 disclosing her communications. (Id. ¶¶ 62–63.) 8 Wright commenced this putative class action against Ulta on December 9, 2022. 9 (ECF No. 1.) She subsequently filed her First Amended Complaint, which asserts claims 10 under Sections 631, 632, and 632.7 of the California Invasion of Privacy Act (“CIPA”) and 11 a claim under the federal Wiretap Act. (First Am. Compl., ECF No. 11.) Ulta moved to 12 dismiss the First Amended Complaint for failure to state a claim pursuant to Federal Rule 13 of Civil Procedure (“Rule”) 12(b)(6). (See generally MTD.) Rather than respond, Wright 14 filed her Motion for Leave to Amend. (ECF No. 14.) Her proposed amendments delete 15 her claims under Section 632 of CIPA and the federal Wiretap Act and add additional 16 details about, inter alia, Quantum’s spyware, the technology Wright used to access the 17 Website, and the terms and conditions of Ulta and Quantum’s engagement. 18 II. LEGAL STANDARD 19 Rule 15(a) governs amended pleadings. Rule 15(a)(1) confers litigants with a right 20 to amend once as a matter of course and Rule 15(a)(2) covers all other amendments. When 21 the latter applies, “a party may amend its pleading only with the opposing party’s written 22 consent or the court’s leave.” Fed. R. Civ. P. 15(a)(2). Because Ulta does not consent to 23 Wright’s proposed amendments, the Court must determine whether to grant leave to Wright 24 to amend. 25 Under Rule 15(a)(2), granting leave to amend rests within the trial court’s sound 26 discretion. Swanson v. U.S. Forest Serv., 87 F.3d 339, 343 (9th Cir. 1996). However, “[i]n 27 exercising its discretion, a court must be guided by the underlying purpose of Rule 15—to 28 facilitate decision[s] on the merits rather than on the pleadings or technicalities.” DCD 1 Programs, Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir. 1987) (quotation marks omitted). 2 The policy behind that Rule—that courts should freely grant leave to amend—“is to be 3 applied with extreme liberality.” Morongo Band of Mission Indians v. Rose, 893 F.2d 4 1074, 1079 (9th Cir. 1990). “[S]ince Rule 15 favors a liberal policy towards amendment, 5 the nonmoving party bears the burden of demonstrating why leave to amend should not be 6 granted.” Genentech, Inc. v. Abbott Labs., 127 F.R.D. 529, 530–31 (N.D. Cal. 1989) (citing 7 Senza-Gel Corp. v. Seiffhart, 803 F.2d 661, 666 (Fed. Cir. 1986)). 8 Still, courts have discretion “to deny leave to amend due to . . . ‘futility of 9 amendment.’” Nat’l Council of La Raza v. Cegavske, 800 F.3d 1032, 1045 (9th Cir. 2010); 10 see Bonin v. Calderon, 59 F.3d 815, 845 (9th Cir. 1995) (“Futility of amendment can, by 11 itself, justify the denial of a motion for leave to amend.”). “[A] proposed amendment is 12 futile only if no set of facts can be proved under the amendment . . . that would constitute 13 a valid and sufficient claim[.]” Miller v. Rykoff-Sexton, Inc., 845 F.2d 209, 214 (9th Cir. 14 1988). Thus, the test of futility is identical to the one applied when considering challenges 15 under Rule 12(b)(6) for failure to state a claim upon which relief may be granted. See 16 Nordyke v. King, 644 F.3d 776, 788 n.12 (9th Cir. 2011) (“[The] proper test to be applied 17 when determining the legal sufficiency of a proposed amendment is identical to the one 18 used when considering the sufficiency of a pleading challenged under Rule 12(b)(6).” 19 (citation and quotation marks omitted)), rev’d per curiam on other grounds, 681 F.3d 1041 20 (2012); accord Glassman v. Computervision Corp., 90 F.3d 617, 623 (1st Cir. 1996) 21 (holding an amendment is futile if, as amended, the plaintiff still fails to state a claim upon 22 which relief could be granted). 23 Rule 12(b)(6) tests the legal sufficiency of the allegations underlying the claims in a 24 complaint. See Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The procedural 25 posture at Rule 12(b)(6) requires the court to accept all factual allegations pleaded in the 26 complaint as true and to construe those allegations, and draw all reasonable inferences 27 therefrom, in favor of the plaintiff. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337–38 28 (9th Cir. 1996). “A Rule 12(b)(6) dismissal may be based on either a ‘lack of cognizable 1 legal theory’ or ‘the absence of sufficient facts alleged under a cognizable legal theory.’” 2 Johnson v. Riverside Healthcare Sys. LP, 534 F.3d 1116, 1121 (9th Cir. 2008) (quoting 3 Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990)). 4 To avoid Rule 12(b)(6) dismissal, a complaint must plead sufficient factual 5 allegations to “state a claim for relief that is plausible on its face.” Ashcroft v. Iqbal, 556 6 U.S. 662, 678 (2008) (internal quotation marks and citations omitted). “A claim has facial 7 plausibility when the plaintiff pleads factual content that allows the court to draw the 8 reasonable inference that the defendant is liable for the misconduct alleged.” Id. at 678. 9 Detailed factual allegations are not required, but “[t]hreadbare recitals of the elements of a 10 cause of action, supported by mere conclusory statements, do not suffice.” Id. The “mere 11 possibility of misconduct” or “unadorned, the defendant-unlawfully harmed me 12 accusation[s]” fall short of meeting this plausibility standard. Id. at 678–79. “Determining 13 whether a complaint states a plausible claim is context specific, requiring the reviewing 14 court to draw on its experience and common sense.” Id. at 680 (citing Bell Atl. Corp. v. 15 Twombly, 550 U.S. 544, 556 (2007)). 16 III. ANALYSIS 17 The Proposed Amended Complaint lodges claims under two provisions of CIPA: 18 Section 631 (see Proposed SAC ¶¶ 109–24) and Section 637.2 (see id. ¶¶ 125–31). 19 However, Wright’s Section 631 claim posits several variants under subsections of that 20 statute. See infra Sec. III.A. Ulta claims all Wright’s claims are felled by incurable 21 deficiencies and, therefore, implores the Court to deny Wright’s Motion with prejudice. 22 While the Court agrees with Ulta that Wright’s own allegations doom several of her 23 theories of liability under Section 631 and her Section 637.2 claim in its entirety, the Court 24 also finds that the Proposed Amended Complaint contains adequate factual allegations to 25 support Wright’s claim that Ulta is vicariously liable for Quantum’s violation of Section 26 631. Hence, for the reasons stated below, the Court grants in part and denies in part 27 Wright’s Motion. (ECF No. 14.) 28 1 A. CIPA § 631 2 Titled the Wiretapping Act, Section 631 of CIPA prevents eavesdropping. Cal. 3 Penal Code § 631(a). As expounded by United States District Judge Jon S. Tigar, Northern 4 District of California, it creates four avenues of relief: 5 (1) Where a person, “by means of any machine, instrument, or contrivance, or in any other manner, intentionally taps, or makes any unauthorized connection 6 with any telegraph or telephone wire, line, cable, or instrument, including the 7 wire, line, Cable, or instrument” (“Clause 1”).

8 (2) Where a person “willfully and without the consent of all parties to the 9 communication, or in any unauthorized manner reads or attempts to read, or to learn the contents or meaning of any message, report, or communication 10 while the same is in transit” (“Clause 2”). 11 (3) Where a person “uses, or attempts to use, in any manner, or for any purpose, 12 or to communicate in any way, any information so obtained [by the means 13 proscribed in Clauses 1 or 2]” (“Clause 3”).

14 (4) Where a person “aids, agrees with, employs, or conspires with any person or 15 persons to unlawfully do, or permit, or cause to be done any of the acts or things mentioned above” (“Clause 4”). 16 17 Swarts v. The Home Depot, Inc., No. 23-cv-0995-JST, 2023 WL 5615453, at *5 (N.D. Cal. 18 Aug. 30, 2023) (quoting Cal. Penal Code § 631(a)); see also Javier v. Assurance IQ, LLC, 19 --- F. Supp. 3d ---, No. 20-cv-2860-CRB, 2023 WL 114225, at *4 (N.D. Cal. Jan. 5, 2023). 20 Wright alleges that Ulta aided and abetted Quantum to violate Clauses 1 through 3 21 of Section 631. Ulta contends that there are a myriad of issues both with the facts alleged 22 in the Second Amended Complaint and Wright’s legal theories of liability that render her 23 proposed amendments futile as to each variant of her Section 631 claim. 24 1. Clause 1 of Section 631(a) 25 Clause 1 prohibits “any person who, by means of any machine, instrument, or 26 contrivance, or in any other manner, intentionally taps or makes an unauthorized 27 connection . . . with any telegraph or telephone wire, line, cable, or instrument, including 28 the wire, line, cable, or instrument of any internal telephonic communication system.” Cal. 1 Penal Code § 631(a) (emphasis added). Based on the statutory language of Clause 1 2 emphasized in the preceding sentence, most courts to address the issue have held that that 3 Clause applies only to “telegraph and telephone” wires, lines, cables, or instruments,” and 4 not to internet connections. See, e.g., In re Google Inc., No. 13-MD-2430-LHK, 2013 WL 5 5423918, at *20 (N.D. Cal. Sept. 26, 2013); Williams v. What If Holdings, LLC, No. C 22- 6 3780 WHA, 2022 WL 17869275, at *2 (N.D. Cal. Dec. 22, 2022) (“[T]he first clause of 7 Section 631(a) concerns telephonic wiretapping specifically and does not apply to the 8 context of the internet.”); Javier, 2023 WL 114225, at *4 n.3 (“As Defendants correctly 9 argue, the first prong of Section 631 does not apply to internet communications[.]” (citing 10 Mastel v. Miniclip SA, 549 F. Supp. 3d 1129, 1134–36 (E.D. Cal. 2021))). This Court has 11 adopted this interpretation in its previous rulings. See Greenley v. Kochava, Inc., No. 22- 12 cv-1327-BAS-AHG, 2023 WL 48833466, at *16 (S.D. Cal. July 27, 2023). 13 Because Clause 1 is inapplicable to internet connections, prospective plaintiffs who 14 allege their communications have been surreptitiously intercepted when using their 15 smartphones as computers, e.g., to access and browse the internet, are foreclosed from 16 stating a claim under that sub-provision of Section 631. See Mastel, 549 F. Supp. 3d at 17 1135 (holding that “[a]lthough [smartphones] contain the word ‘phone’ in their name, and 18 have the capability of performing telephonic functions, they are, in reality, small 19 computers”); Licea v. Am. Eagle Outfitters, Inc., --- F. Supp. 3d ---, No. EDCV 22-1702- 20 MWF (JPR), 2023 WL 249630, at *5 (C.D. Cal. Mar. 7, 2023) (rejecting the argument that 21 the first clause of Section 631 applies to smartphones). 22 Here, Wright alleges that she “visited” the Website “from [her] cell phone[] and 23 other mobile devices.” (Proposed SAC ¶ 38.) The lone reasonable inference that arises 24 from this allegation is that Wright used a smartphone to access Ulta’s Website over the 25 internet. Hence, the communications that traversed between her mobile device and Ulta’s 26 servers fall outside the panoply of Clause 1 of Section 631. Cf. Swarts, 2023 WL 5615453, 27 at *6 (dismissing Clause 1 claim as inapposite to communications at issue where plaintiff 28 merely alleged he “visited Defendants’ website” via “his cellular telephone”). Wright 1 alleges that Clause 1 applies broadly to new technologies (see Proposed SAC ¶ 110), but 2 as mentioned above, courts have rejected this argument with near uniformity. 3 Accordingly, the Court finds Wright’s admission she utilized a cellular phone to 4 access the Website renders futile any amendment of her Section 631 claim premised upon 5 an alleged violation of Clause 1. See Airs Aromatics, LLC v. Victoria’s Secret Stores Brand 6 Mgmt., Inc., 744 F.3d 595, 600 (9th Cir. 2014) (“A party cannot amend pleadings to 7 ‘directly contradict[t] an earlier assertion made in the same proceeding.’” (quoting Russell 8 v. Rolfs, 893 F.2d 1033, 1037 (9th Cir. 1990))). 9 2. Clause 2 of Section 631(a) 10 It is well-established that Ulta, itself, cannot be held liable under CIPA for recording 11 to which it is a party—a principle known as the “party exception” to CIPA. See Warden 12 v. Kahn, 99 Cal. App. 3d 805, 811 (1979) “[S]ection 631 . . . has been held to apply only 13 to eavesdropping by a third party and not to recording by a participant to a conversation.”); 14 see also Javier, 2023 WL 114225, at *4. However, Clause 4 provides Wright with a 15 mechanism to hold Ulta vicariously liable for Quantum’s surreptitious recordings of 16 communications, see Swarts, 2023 WL 5615453, at *6–7 (citing Ribas v. Clark, 38 Cal. 3d 17 355, 358 (1985)). See Cal. Penal Code § 631(a) (providing that defendant may be liable 18 under CIPA when it “aids, agrees with, employs, or conspires with any person to 19 unlawfully do, or permit, or cause to be done any of the acts or things” prohibited by 20 Clauses 1 through 3). 21 Here, Wright seeks to hold Ulta liable for aiding Quantum to violate Clause 2. She 22 avers that, “[b]y utilizing the session replay spyware, [Ulta’s] co-conspirator [Quantum] 23 willfully and without consent, read or attempted to read or learn the contents or meaning 24 of electronic communications of Wright . . . while the electronic communications were in 25 transit or passing over a wire, line, or cable[.]” (Proposed SAC ¶ 113.) Wright also avers 26 that Ulta retained Quantum to provide its software services, including for spyware. (Id. ¶ 27 50; see also id. ¶ 53.) Ulta argues Wright’s claim under Clause 2 fails for two independent 28 reasons. 1 First, Ulta asserts that despite Wright’s invocation of Clause 4, the “party exception” 2 to CIPA still shields Ulta from liability because Quantum “operate[s] as a de facto recorder 3 and extension of [Ulta], and not as a true ‘third party’ that is ‘wiretapping’ or 4 ‘eavesdropping’ the communication.” (MTD at 10:5–11:2; collecting cases.) Ulta’s 5 enunciation of CIPA’s “party exception” as applied to Count 4 is correct. The question of 6 whether Ulta is vicariously liable for Quantum’s surreptitious recordings turns upon 7 whether Quantum “has the capability to use its record of [Wright’s interaction with Ulta] 8 for any other purpose” beyond furnishing the record to Ulta. See Yockey v. Salesforce, 9 Inc., No. 22-CV-9067-JST, 2023 WL 5519323, at *5 (N.D. Cal. Aug. 25, 2023) (quoting 10 Javier, 2023 WL 114225, at *6). After all, under California law, “[i]t is never a secret to 11 one party to a conversation that the other party is listening to a conversation; only a third 12 party can listen secretly to a private conversation.” Rogers v. Ulrich, 52 Cal. App. 3d 894, 13 897 (1975). But the unsuspecting speaker’s interest in privacy still remains intact when 14 the eavesdropping third-party is nothing more than an appendage of a conversant, whose 15 only purpose is to provide that conversant with records of the communication. See Swarts, 16 2023 WL 5615453, at *6–7 (interpreting California precedent in Rogers, 52 Cal. App. 3d 17 at 894, and Ribas v. Clark, 38 Cal. 3d 355, 358 (1985), to enunciate a standard for 18 application of the “party exception” to Clause 4 claims); see also Yockey, 2023 WL 19 5519323, at *5. 20 However, Ulta’s application of this standard to the facts alleged in the Proposed 21 Second Amended Complaint misses the mark. Ulta cites several cases where the defendant 22 merely used a third-party recorder as a “tool” to capture data. (MTD at 10:12–11:2 (citing 23 What If Holdings, 2022 WL 17869275, at *4; Licea, 2023 WL 2469630, at *8; Johnson v. 24 Blue Nile, Inc., No. 20-cv-8183, 2021 WL 1312771, at *2 (N.D. Cal. Apr. 8, 2021)). That 25 is not how Quantum and its spyware were utilized, here, according to Wright. She 26 explicitly alleges that the terms of Ulta’s agreement with Quantum enabled Quantum to 27 “use[] [Wright’s] communications for its own commercial benefit.” (Proposed SAC ¶ 80 28 (emphasis added).) In support of this averment, she cites the terms of Quantum’s Privacy 1 Policy, which state that Quantum “shall have the right” to use its recordings “to improve 2 and enhance the Quantum Technology and for other development, diagnostic and 3 corrective purposes in connection with the Quantum Service and other Quantum offerings, 4 and to disclose such data solely in aggregate or other de-identified form in connection with 5 its business.” (Id.) At this stage, allegations that Quantum retains the right to analyze and 6 distribute recorded communications for independent purposes are sufficient to demonstrate 7 that the “party exception” to CIPA does not shield Ulta from Clause 4 liability. 8 Second, Ulta contends that to adequately state the underlying Clause 2 violation, 9 Wright must allege Quantum captured Wright’s communication “in transit.” (MTD at 10 11:5–13:5.) Ulta claims that Wright pleads only conclusory averments concerning this 11 element. The Court disagrees. 12 Liability under Clause 2 arises when the purported CIPA violator “reads or attempts 13 to read, a communication that is in transit or passing over any wire, line, or cable, or is 14 being sent from, or received at any place within California.”2 Mastel, 548 F. Supp. 3d at 15 1135 (quoting Cal. Penal Code § 631(a).) Other courts have held that, at the motion to 16 dismiss stage, a plaintiff is not expected to prove or even know how and when its 17 communications were captured. See In re Vizio, Inc. Consumer Priv. Litig., 238 F. Supp. 18 3d 1204, 1228 (C.D. Cal. 2017). Indeed, a pleading standard to the contrary would require 19 the CIPA plaintiff to engage in a one-sided guessing game, for the relevant information 20 about data capture typically resides uniquely in the custody and control of the CIPA 21 defendant and its third-party recorder. However, a CIPA plaintiff “must provide fair notice 22 to [d]efendant” of how and when she “believe[s]” the defendant or the conspiring third- 23 party intercepts her communications. Id.; see also Licea, 2023 WL 2469630, at *9 24 25 26 2 Unlike Clause 1, Clause 2 applies to internet-based communications. In re Google, 2013 WL 27 5423918, at *20 (“[T]he Court finds no reason to conclude that the limitation of ‘telegraphic or telephone’ on ‘wire, line, cable, or instrument’ in the first clause of the statute should be imported to the second clause 28 1 (“Plaintiffs must provide more than conclusory allegations that messages were intercepted 2 ‘during transmission in real time.’”). 3 Wright proffers sufficient facts to support the “in transit” requirement of Clause 2. 4 She alleges that when she visited the Website, Quantum’s embedded JavaScript 5 “immediately load[ed] onto [her] device,” thereby installing Quantum’s session spyware . 6 (Proposed SAC ¶¶ 46, 47.) With Quantum’s spyware active, Wright’s communications 7 still “travel[led] their normal path between [her] device and [Ulta]’s servers, but the 8 communications [were] tapped and copied and sent to Quantum’s servers as well,” 9 unbeknownst to her. (Id. ¶¶ 49–50.) Crucially, Wright alleges “that the communications 10 [her] device sent to [Ulta] often arrived at Quantum’s servers before they arrived at [Ulta]’s 11 servers, even if only by a millisecond.” (Id. ¶ 89 (emphasis added).) This averment is 12 more than a conclusory recitation of the elements of a Clause 2 violation and, therefore, 13 suffices to establish Quantum captured Wright’s communications “in transit” at this early 14 stage of the litigation. 15 Accordingly, the Court finds this variant of Wright’s Section 631 claim is not futile 16 and, thus, grants Wright’s leave to pursue the Section 631 claim in her proposed Second 17 Amended Complaint, to the extent it is premised upon an alleged violation of Clause 2 vis 18 a vis Clause 4. 19 3. Clause 3 of Section 631(a) 20 Ulta does not present any argument as to why Wright’s claim that it aided and abetted 21 Quantum’s violation of Clause 3 is deficient.3 Therefore, Ulta fails to bear its “burden of 22 demonstrating why leave to amend should not be granted.” Genentech, 127 F.R.D. at 530– 23 31. Accordingly, the Court grants Wright leave to pursue the Section 631 claim in her 24 proposed Amended Complaint, to the extent it is premised upon an alleged violation of 25 Clause 3 vis a vis Clause 4. 26 27 3 Ulta argues that Wright fails to plead a Clause 3 claim because she has failed to state a claim under Clause 1 or 2. But for the reasons stated above, see supra Sec. III.A.2, Wright does adequately state 28 1 B. CIPA § 632.7 2 “[C]ourts applying § 632.7 have characterized the statute as prohibiting the 3 intentional recording of any communication without the consent of all parties where one 4 of the parties is using a cellular or cordless telephone.” McCabe v. Six Continents Hotels, 5 Inc., No. 12-cv-4818 NC, 2014 WL 465750, at *3 (N.D. Cal. Feb. 3, 2014). Section 6 632.7(a) states: 7 Every person who, without the consent of all the parties to a communication, intercepts or receives and intentionally records, or assists in 8 the interception or reception and intentional recordation of, a communication 9 transmitted between two cellular radio telephones, a cellular radio telephone and a land telephone, two cordless telephones and a landline telephone, or a 10 cordless telephone and a cellular radio telephone, shall be punished by a fine. 11 12 Cal. Penal Code § 632.7. 13 Ulta contends that Wright’s Section 632.7 claim is felled for the same reasons that 14 doomed her claim under Clause 1 of Section 631: Wright admits she used a cellular device 15 to access the Website, and communications originating from smartphones are not covered 16 by Section 632.7. (MTD at 17:23–18:11.) The Court agrees, and adopts the reasoning in 17 Licea, 2023 WL 2415592, at *2, and Mastel, 549 F. Supp. 3d at 1135, that when a consumer 18 utilizes a phone to access a website over the internet, the phone “functions as a computer, 19 not a phone.” Mastel, 549 F. Supp. 3d at 1135. If Section 632.7 is to apply to newer 20 technologies, like cell phones that operate as hand-held computers, it must be because 21 California’s Legislature amended the statute to incorporate such technologies. See Smith 22 v. LoanMe, Inc., 11 Cal. 5th 183, 202 n.10 (2021). 23 Accordingly, the Court finds Wright’s admission she used a cellular phone to access 24 the Website renders amendment of her Section 632.7 claim futile. See Airs Aromatics, 744 25 F.3d at 600. 26 IV. CONCLUSION 27 For the reasons set forth above, the Court GRANTS IN PART AND DENIES IN 28 PART Wright’s Motion for Leave to Amend. (ECF No 14.) Specifically, the Court | || DENIES WITH PREJUDICE Wright’s Motion to the extent she seeks to move forward 2 || with her Section 631 claim premised on Clause | of that Statute and her Section 632.7 3 ||claim. However, the Court GRANTS Wright’s request to amend her Section 631 claim 4 || alleging Ulta aided and abetted violations of Clauses 2 and 3 of Section 631. The Court 5 ||} ORDERS Wright to file a revised Second Amended Complaint that is consistent with this 6 || Order by no later than September 22, 2023. 7 The Court further TERMINATES AS MOOT Ulta’s Motion to Dismiss Wright’s 8 ||First Amended Complaint. (ECF No. 13.) See Ramirez v. Cnty. of San Bernadino, 806 9 || F.3d 1002, 1008 (9th Cir. 2015) (“It is well-established in our circuit that an ‘amended 10 ||complaint supersedes the original, the latter being treated thereafter as non-existent.’” 11 (quoting Forsyth v. Humana, Inc., 114 F.3d 1467, 1474 (9th Cir. 1997))). 12 IT IS SO ORDERED. / , 13 || DATED: September 8, 2023 Lin A (Ayphan 6 14 United States District Judge 15 16 17 18 19 20 21 22 23 24 25 26 27 28 _~14-