Song Fi v. Google - antitrust opinion (robot views).pdf

8/18/2019 Song Fi v. Google - antitrust opinion (robot views).pdf

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U n i t e d S t a t e s D i s t r i c t C o u r t

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r t h e r n D i s t r i c t o f C a l i f o r n i a

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I N THE UNI TED STATES DI STRI CT COURT

FOR THE NORTHERN DI STRI CT OF CALI FORNI A

SONG FI , I NC. , J OSEPH N.BROTHERTON, LI SA M. PELLEGRI NO,N. G. B. , RASTA ROCK, I NC. ,

Pl ai nt i f f s,

v.

GOOGLE, I NC. , YOUTUBE LLC,

Def endant s.

________________________________/

No. C 14- 5080 CW ORDER GRANTI NGMOTI ON TO DI SMI SSSECOND AMENDEDCOMPLAI NT

( Docket No. 77)

Song f i , I nc. , t he Rast a Rock Cor por at i on, J oseph N.

Br ot her t on, pr esi dent of bot h Song f i and Rast a Rock, and

Br ot her t on' s si x- year - ol d son N. G. B. ( col l ecti vel y Pl ai nt i f f s) 1

f i l ed a compl ai nt agai nst Googl e, I nc. and YouTube, LLC. 2

Def endant s moved t o di smi ss t he 2AC under Federal Rul e of Ci vi l

Pr ocedur e 12( b) ( 6) . The Cour t gr ant s t he mot i on, wi t h l eave t o

amend.

BACKGROUND

I . Googl e, YouTube and the al l eged conspi r acy

Thi s case concer ns Def endant s' r emoval of a musi c vi deo

ent i t l ed "LuvYa LuvYa LuvYa" ( her eaf t er LuvYa) f r om i t s or i gi nal

page on YouTube' s websi t e. The Cour t r eci t es t he f act s as al l eged

i n t he 2AC, Docket No. 70.

1 Li sa Pel l egr i no, N. G. B. ' s mot her , i s no l onger a pl ai nt i f f .

2 YouTube i s whol l y owned and operat ed by Googl e.


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Def endant Googl e, t hr ough Def endant YouTube' s websi t e, i s

" t he domi nant pr ovi der of on- l i ne vi deo host i ng as wel l as a maj or

adver t i si ng pl at f or m f or i ndust r y and consumer ads, usi ng musi c

and ent ert ai nment vi deos as t he magnet f or consumer t r af f i c. " 2AC

¶ 15. Def endant s pr of i t f r om cont r i but or s' upl oaded vi deo cont ent

by sel l i ng pay- per - cl i ck adver t i si ng at pr i ces t hat ar e based on

t he number of t i mes a gi ven vi deo has been vi ewed, t r acked by t he

vi si bl e "vi ew count . " I d. ¶ 17- 19, 26. Def endant s cont r ol t hi s

vi ew count , i d. ¶ 62, and al so r ecei ve money f r om adver t i ser s, i d.

¶ 63.Bef or e i nt er act i ng wi t h YouTube' s websi t e, users must assent

t o a Ter ms of Ser vi ce Agr eement . I d. ¶ 21. I t st at es, i n par t :

"You agr ee not t o use or l aunch any aut omated syst em, i ncl udi ng

wi t hout l i mi t at i on, ' robot s , ' ' spi ders , ' or ' of f l i ne readers , '

t hat accesses t he Servi ce i n a manner t hat sends more r equest

messages t o YouTube servers i n a gi ven per i od of t i me than a human

can r easonabl y pr oduce i n the same per i od by usi ng a convent i onal

on- l i ne web br owser . " I d. ¶ 23.

Vi ew counts can be i nf l ated by t he use of such aut omated

syst ems. Pl ai nt i f f s al l ege t hat Def endant s commi t f r aud by

" i nvoi ci ng f or f ake r obot i c vi ews" t hat t hey know "ar e f ake and

t hat consi st of mi l l i second dur at i on t i mes. " I d. ¶ 31.

Def endant s sel l "sponsored ads" t o or gani zat i ons t hey pr omot e;

t hese or gani zat i ons pr of i t f r om r obot i c vi ew count f r aud t hat

Def endant s do not at t empt t o el i mi nat e. I d. ¶¶ 36- 37. These

pr omot ed or gani zat i ons i ncl ude Uni ver sal Musi c Gr oup ( Uni ver sal ) ,

School Boy Recor ds and Raymond Br aun Medi a Gr oup, al l of whi ch

al l egedl y conspi r ed t o pr omot e cer t ai n ar t i st s si gned t o


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Uni ver sal . I d. ¶ 58. On Def endant s' si de of t he conspi r acy, t he

2AC names Susan Woj ci cki , Lar r y Page and Ser gey Br i n, who

al l egedl y have di r ect knowl edge of Def endant s' par t i ci pat i on i n

t he vi ew count f r aud. I d. ¶ 59. The exi st ence of vi ew count

f r aud i s not di scl osed on Def endant s' websi t es or wi t hi n t he Ter ms

of Ser vi ce. I d. ¶¶ 42- 44.

Accor di ng t o Pl ai nt i f f s, t hi s conspi r acy benef i t s t he

conspi r at or s t o t he det r i ment of Pl ai nt i f f s, t he i ndependent

ar t i st communi t y and any ar t i st not si gned t o Uni ver sal or ot her

al i gned compani es. I d. ¶¶ 65- 66, 69. The 2AC names as " t her el evant mar ket s . . . musi c and vi deo di st r i but i on i n Cal i f or ni a

and t he Uni t ed St at es. " I d. ¶ 57; see al so i d. ¶ 65. I t al l eges

t hat t he conspi r acy al l ows Def endant s " t o r est r ai n t r ade by

' f i xi ng' per cei ved publ i c popul ar i t y thr ough i nt ent i onal l y f al se,

decept i ve, and mani pul at ed Vi ew Count s. " I d. ¶ 67.

As exampl es, t he 2AC poi nt s t o J ust i n Bi eber ' s "Baby" and

Psy' s "Gangnam St yl e" vi deos, both of whi ch achi eved f ame on

YouTube. Pl ai nt i f f s al l ege t hat , on or bef or e t he dat e t hat

Bi eber ' s " Baby" vi deo was upl oaded, Def endant s agr eed t o al l ow

Uni ver sal and Bi eber ' s manager , Scoot er Br aun, " t o r obot i cal l y and

syst emat i cal l y i nf l at e t he ' Baby' Vi ew Count t o over a bi l l i on

vi ews. " I d. ¶¶ 70- 75. Pl ai nt i f f s bol st er t hi s al l egat i on by

compar i ng t he "Baby" vi ew count t o Bi eber ' s r ecor d sal es, t he vi ew

count f or Mi chael J ackson' s "Thr i l l er " vi deo and t he popul at i ons

of t he Uni t ed St at es, t he wor l d and Bi eber ' s t ar get audi ence. I d.

¶¶ 76- 80. Even mor e i ncredi bl e, accor di ng t o Pl ai nt i f f s, i s the

2. 4 bi l l i on vi ew count di spl ayed f or Psy' s "Gangnam St yl e" vi deo.

I d. ¶¶ 81- 82. The al l eged conspi r acy among Br aun' s management


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company, wi t h whomPsy si gned, Uni ver sal and Def endant s permi t t ed

r obot i c vi ew count i nf l at i on. I d. ¶¶ 83- 89.

As f ur t her pr oof of t he conspi r acy, Pl ai nt i f f s ment i on an

ar t i cl e ent i t l ed "Psy, Bi eber and My J our ney I nt o t he Wor l d of

Fake YouTube Vi ews. " I d. ¶ 90. The ar t i cl e descr i bes Br aun

possi bl y pur chasi ng 200 mi l l i on YouTube vi ews f or $150, 000. I d.

¶¶ 90- 91. The ar t i cl e f ur t her descr i bes the "YouTube i ndust r y" as

havi ng "been scammi ng bi l l i ons f r om adver t i ser s wi t h f ake vi ews. "

I d. ¶ 93. Pl ai nt i f f s do not att ach t he ar t i cl e or expl ai n how i t s

aut hor obt ai ned t hi s i nf or mat i on.I n f ur t her ance of t hi s conspi r acy, Def endant s r emove vi deos

f r om ar t i st s not si gned wi t h conspi r at or s and post f al se and

def amat or y not i ces about t hem "t o keep vi deos of smal l er r ecor d

l abel s and t he i ndependent ar t i st communi t y f r om compet i ng wi t h

vi deos of t hose i n t he Conspi r acy. " I d. ¶ 94.

I I . Pl ai nt i f f s' LuvYa Vi deo

Pl ai nt i f f s upl oaded LuvYa, "a chi l dr en' s Val ent i ne' s Day

vi deo" on Febr uar y 14, 2014. I d. ¶ 95. The vi deo f eat ur ed

member s of a musi cal group cal l ed t he Rast a Rock Oper a. The 2AC

expl ai ns t hat t he Rast a Rock Cor por at i on does busi ness as t he

Rast a Rock Oper a. The vi deo st ar r ed Pl ai nt i f f N. G. B. I d.

Br ot her t on pl ayed t he t r umpet . I d. ¶ 110. Song f i i s Rast a

Rock' s publ i sher and di st r i but or . Song f i owns f i f t y per cent of

t he publ i shi ng and di st r i but i on r i ght s f or al l musi c, vi deo

pr oduct i ons and ot her i nt el l ect ual pr oper t y cr eat ed by Rast a Rock.

2AC ¶ 184.

Pl ai nt i f f s al l ege t hat , i n deci di ng t o assent t o t he Ter ms of

Servi ce and t o post LuvYa on YouTube, t hey r el i ed on Def endant s'


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"i ndi cat i on of i t s i nt ent t o pol i ce Vi ew Count f r aud" and t o

enf or ce t he Ter ms of Ser vi ce " f ai r l y among al l users i n an open,

honest and non- pr ej udi ci al manner . " 3 I d. ¶¶ 45- 53.

Br ot her t on and N. G. B. ' s mot her shar ed t he vi deo wi t h f ami l y

and f r i ends; Rast a Rock and Song f i shar ed i t as wel l . I d. ¶¶ 96-

99. The vi deo ul t i mat el y gat her ed over 23, 000 vi ews, l i kes and

publ i c comment s, "al l of whi ch wer e ear ned wi t hout any r obot i c

enhancement or any vi ol at i on" of t he Ter ms of Ser vi ce. I d. ¶ 100.

Song f i and Rast a Rock pr omoted LuvYa "i n negot i at i ons wi t h

pot ent i al f under s, busi ness par t ner s, sponsors and medi aor gani zat i ons. " I d. ¶ 122. I n par t i cul ar , promot i ng LuvYa hel ped

Rast a Rock secur e a sponsorshi p f r om Ni ke f or a pl anned J ul y 4,

2014 per f or mance by St evi e Mar co, a member of t he Rast a Rock Oper a

musi cal gr oup, on t he r oof of Ni ke' s Geor get own st or e i n

Washi ngt on, D. C. I d. ¶ 124. The 2AC does not al l ege t hat any

payment was ant i ci pat ed f or t hi s per f or mance.

I n Apr i l 2014, a Googl e repr esent at i ve cont act ed Song f i and

Rast a Rock t o per suade them t o adver t i se on YouTube, an of f er t hat

Song f i and Rast a Rock r ef used. I d. ¶ 103. Ther eaf t er ,

Def endant s r emoved LuvYa and post ed a not i ce i n i t s pl ace t hat

st at ed: "Thi s vi deo has been r emoved because i t s cont ent vi ol at es

YouTube' s Terms of Ser vi ce . . . Sorr y about t hat . " I d. ¶ 104.

The not i ce cont ai ned a l i nk t o t he Terms of Ser vi ce. The Terms of

Servi ce cont ai ned a l i nk t o and i ncorporated t he Communi t y

Gui del i nes, whi ch descr i bed "cont ent vi ol at i ons as i ncl udi ng chi l d

3 Pl ai nt i f f s make t hese char act er i zat i ons, but t he Ter ms of

Ser vi ce do not i ncl ude these repr esent at i ons.


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pornogr aphy, chi l d abuse, ani mal abuse, dr ug abuse, under- age

dr i nki ng, under - age smoki ng, bomb maki ng and t er r or i st act i vi t y. "

I d. ¶¶ 107- 08. The not i ce was "kept l i ve" on t he or i gi nal web

addr ess of t he musi c vi deo. I d. ¶ 106. Pl ai nt i f f s al l ege t hat

LuvYa di d not vi ol at e any cont ent pr ohi bi t i ons, i d. ¶ 109, and

t hat t hey have never vi ol at ed any aspect of t he Ter ms of Ser vi ce,

i d. ¶ 24. Def endant s sent a pr i vat e emai l t o Pl ai nt i f f s t hat

cl ar i f i ed t hat LuvYa was r emoved because i t s vi ew count was

i mpr oper l y i nf l at ed i n vi ol at i on of t he Ter ms of Ser vi ce. I d.

¶ 113.Fol l owi ng t he vi deo removal , Ni ke cancel l ed Mar co' s Four t h of

J ul y per f or mance ci t i ng "a possi bl e i mage probl em i n associ at i ng

Ni ke wi t h i nappr opr i at e chi l dr en' s cont ent . " I d. ¶ 126.

Addi t i onal l y, Song f i ' s f under , a const r uct i on f i r m whi ch had

shar ed LuvYa to hi ghl i ght i t s i nvest ment i n t he ar t s and f ami l y

val ues, suspended al l f undi ng unt i l t he not i ce coul d be r et r act ed.

I d. ¶ 129.

I I I . Pr ocedur al Hi st or y

Pl ai nt i f f s or i gi nal l y f i l ed t hei r compl ai nt i n t he Di str i ct

Cour t f or t he Di st r i ct of Col umbi a. Docket No. 1. Def endant s

moved t o enf or ce the cont r act ' s f or um sel ect i on cl ause, whi ch

r equi r ed t hat al l di sput es be deci ded i n Sant a Cl ar a Count y i n

Cal i f or ni a. Pl ai nt i f f s ar gued t hat t he cont r act wi t h YouTube,

i ncl udi ng bot h t he f or um sel ect i on cl ause and t he Ter ms of

Ser vi ce, was unconsci onabl e. Appl yi ng t he l aw of t he Di st r i ct of


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Col umbi a, 4 Docket No. 19, Di st r i ct of Col umbi a Opi ni on at 11, t he

Di st r i ct of Col umbi a cour t concl uded t hat t he Ter ms of Ser vi ce

wer e not unconsci onabl e, and t hat t he venue sel ect i on cl ause

r equi r i ng l i t i gat i on i n Sant a Cl ar a Count y was enf or ceabl e, i d. at

14- 15. The cour t t r ansf er r ed t he case t o t he Nor t her n Di st r i ct of

Cal i f orni a. I d. at 16.

On J une 10, 2015, Nor t her n Di st r i ct of Cal i f or ni a J udge Cont i

r ul ed on Def endant s' mot i on t o di smi ss Pl ai nt i f f s' Fi r st Amended

Compl ai nt , whi ch Pl ai nt i f f s f i l ed bef or e t he case was t r ansf er r ed.

Docket No. 53, Or der Di smi ss i ng Fi r st Amended Compl ai nt ( 1AC) . That compl ai nt al l eged f i ve causes of act i on: l i bel , breach of

expr ess cont r act , br each of i mpl i ed cont r act , t or t i ous

i nt er f er ence wi t h busi ness r el at i onshi ps, and vi ol at i ons of t he

D. C. Consumer Pr ot ect i on Pr ocedur es Act . I d. at 6.

The cour t di smi ssed t he breach of expr ess and i mpl i ed

cont r act cl ai ms. I t f ound t hat " t he Ter ms of Ser vi ce per mi t t ed

YouTube t o r emove ' Luv ya' and el i mi nat e i t s vi ew count , l i kes,

and comment s. " I d. at 13. "As a r esul t , " t he cour t concl uded,

"Pl ai nt i f f s cannot st at e a cl ai m f or br each of t he Ter ms of

Servi ce i n r emovi ng t he vi deo, because conduct aut hor i zed by a

cont r act cannot gi ve r i se t o a cl ai m f or br each of t he agr eement . "

I d. Fur t her , Pl ai nt i f f s di d not have a cause of act i on f or br each

of cont r act based on t he vi deo' s r el ocat i on because, under t he

Terms of Ser vi ce, " t he speci f i c l ocat i on of a vi deo i s an aspect

4 The Di st r i ct of Col umbi a cour t concl uded t hat "Cal i f or ni a

and Di st r i ct of Col umbi a l aw on t he i ssue of unconsci onabi l i t y donot conf l i ct . " D. C. Opi ni on at 11.


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of YouTube' s ' Ser vi ce' t hat i t r et ai ns t he r i ght t o di scont i nue at

any t i me. " I d. at 14.

Regar di ng t he l i bel cl ai m, t he cour t f ound " t hat YouTube' s

al l egedl y l i bel ous st at ement i s not l i bel ous on i t s f ace . . .

I nst ead, t o t he ext ent Pl ai nt i f f s have an act i onabl e l i bel cl ai m

i t i s a cl ai m f or l i bel per quod. " I d. at 16. Because l i bel per

quod r equi r es pl eadi ng speci al damages, t he cour t di smi ssed

Pl ai nt i f f s' l i bel cl ai ms but gr ant ed l eave t o amend. I d. at 17.

A t or t i ous i nt er f er ence cl ai m r equi r es an al l egat i on t hat t he

def endant ' s conduct was "wr ongf ul by some l egal measur e ot her t hant he f act of i nt er f er ence i t sel f . " I d. at 18 ( quot i ng Del l a Penna

v. Toyot a Mot or Sal es, U. S. A. , I nc. , 11 Cal . 4t h 376, 385 ( 1995) ) .

Because Pl ai nt i f f s had not adequat el y al l eged any of t hei r ot her

l egal t heor i es, J udge Cont i concl uded t hat t hey di d not sat i sf y

t hi s el ement . The cour t gr ant ed l eave t o amend t he t or t i ous

i nt er f er ence cl ai m, t oo. The cour t al so di smi ssed t he Di st r i ct of

Col umbi a Consumer Protect i on Procedur es Act cl ai m, but gr ant ed

l eave t o amend to pl ead a si mi l ar Cal i f or ni a consumer pr ot ect i on

cl ai m. I d. at 20.

I n J ul y 2015, Pl ai nt i f f s f i l ed a mot i on f or l eave f ur t her t o

amend t hei r compl ai nt by addi ng a f r aud cl ai m, a Cal i f or ni a

Car t wr i ght Act cl ai m and a Cal i f or ni a Consumer Legal Remedi es Act

cl ai m. The pr oposed compl ai nt st i l l cont ai ned t he t or t i ous

i nt er f er ence cl ai m and t he l i bel cl ai m. The cour t gr ant ed l eave

t o amend t o al l ow t he addi t i onal cl ai ms, but st at ed t hat "al l owi ng

addi t i onal new cl ai ms af t er t hi s amendment woul d be t oo

pr ej udi ci al t o Def endant s and no l onger i n t he i nt er est s of

j ust i ce, and caut i ons Pl ai nt i f f s agai nst any such f uture r equest . "


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Docket No. 67, Or der on Mot i on t o Fi l e Second Amended Compl ai nt at

8. Because J udge Cont i was about t o r et i r e and t he case woul d be

t r ansf er r ed t o a new j udge, t he cour t decl i ned t o make any

f i ndi ngs wi t h r espect t o t he suf f i ci ency of t he f r aud and

Car t wr i ght Act cl ai ms i n t he pr oposed Second Amended Compl ai nt

f i l ed wi t h t he mot i on. I d. The cour t al so gr ant ed l eave t o amend

t he pr oposed compl ai nt at t ached to t he mot i on to al l ow counsel "a

chance t o ensur e t hat t he act ual [ 2AC] f i l ed i s r ef i ned i n l i ght

of ar gument s by counsel and l aw ci t ed by t he Cour t . " I d.

Pl ai nt i f f s' 2AC does add f act ual al l egat i ons beyond t hose i n t hepr oposed amended compl ai nt f i l ed wi t h t hei r mot i on f or l eave t o

amend. However , as di scussed bel ow, t hei r al l egat i ons ar e st i l l

i nsuf f i ci ent t o st at e a cl ai m.

Pl ai nt i f f s al l ege f i ve l egal cl ai ms: f r audul ent conceal ment ,

vi ol at i on of t he Car t wr i ght Act , l i bel per quod, t or t i ous

i nt er f er ence and vi ol at i on of t he Cal i f or ni a Consumer s Legal

Remedi es Act . Def endant s f i l ed t hi s mot i on t o di smi ss, Docket No.

77, Pl ai nt i f f s r esponded, and Def endant s r epl i ed. The Cour t hel d

oral argument on Febr uary 23, 2016.

LEGAL STANDARD

A compl ai nt must cont ai n a “shor t and pl ai n st at ement of t he

cl ai m showi ng t hat t he pl eader i s ent i t l ed t o r el i ef . ” Fed. R.

Ci v. P. 8( a) . On a mot i on under Rul e 12( b) ( 6) f or f ai l ur e t o

st at e a cl ai m, di smi ssal i s appr opr i at e onl y when t he compl ai nt

does not gi ve t he def endant f ai r not i ce of a l egal l y cogni zabl e

cl ai m and t he gr ounds on whi ch i t r est s. Bel l At l . Cor p. v.

Twombl y, 550 U. S. 544, 555 ( 2007) . I n consi der i ng whet her t he

compl ai nt i s suf f i ci ent t o st at e a cl ai m, t he cour t wi l l t ake al l


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mat er i al al l egat i ons as t r ue and const r ue t hem i n t he l i ght most

f avor abl e t o t he pl ai nt i f f . NL I ndus. , I nc. v. Kapl an, 792 F. 2d

896, 898 ( 9t h Ci r . 1986) . However , t hi s pr i nci pl e i s i nappl i cabl e

t o l egal concl usi ons. "Thr eadbar e r eci t al s of t he el ement s of a

cause of act i on, suppor t ed by mer e concl usory st at ement s, " ar e not

t aken as t r ue. Ashcr of t v. I qbal , 556 U. S. 662, 678 ( 2009)

( ci t i ng Twombl y, 550 U. S. at 555) .

I n I qbal , 556 U. S. at 679, t he Supr eme Cour t l ai d out t he

f ol l owi ng appr oach f or assessi ng t he adequacy of a pl ai nt i f f ’ s

compl ai nt :

a cour t consi der i ng a mot i on to di smi ss can choose t o begi nby i dent i f yi ng pl eadi ngs t hat , because t hey ar e no mor e t hanconcl usi ons, ar e not ent i t l ed t o t he assumpt i on of t r ut h.Whi l e l egal concl usi ons can pr ovi de the f r amewor k of acompl ai nt , t hey must be suppor t ed by f act ual al l egat i ons.When t her e ar e wel l - pl eaded f act ual al l egat i ons, a cour tshoul d assume t hei r ver aci t y and then determi ne whether t heypl ausi bl y gi ve r i se t o an ent i t l ement t o r el i ef .

A cl ai m has f aci al pl ausi bi l i t y “when t he pl ai nt i f f pl eads f actual

cont ent t hat al l ows t he cour t t o dr aw t he reasonabl e i nf er ence

t hat t he def endant i s l i abl e f or t he mi sconduct al l eged. ” I d. at

678. “The pl ausi bi l i t y st andar d i s not aki n t o a ‘ pr obabi l i t y

r equi r ement , ’ but i t asks f or mor e t han a sheer possi bi l i t y t hat a

def endant has acted unl awf ul l y. ” I d. ( quot i ng Twombl y, 550 U. S.

at 556) . Det er mi ni ng whet her a compl ai nt st at es a pl ausi bl e cl ai m

f or r el i ef i s “a cont ext - speci f i c t ask t hat r equi r es t he r evi ewi ng

cour t t o dr aw on i t s j udi ci al exper i ence and common sense. ” I d.

at 679.

When gr ant i ng a mot i on t o di smi ss, t he cour t i s gener al l y

r equi r ed t o gr ant t he pl ai nt i f f l eave t o amend, even i f no r equest

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Cook, Per ki ss & Li ehe, I nc. v. N. Cal . Col l ect i on Ser v. I nc. , 911

F. 2d 242, 247 ( 9t h Ci r . 1990) . I n determi ni ng whether amendment

woul d be f ut i l e, t he cour t exami nes whet her t he compl ai nt coul d be

amended t o cur e t he def ect r equi r i ng di smi ssal "wi t hout

cont r adi ct i ng any of t he al l egat i ons of [ t he] or i gi nal compl ai nt . "

Reddy v. Li t t on I ndus. , I nc. , 912 F. 2d 291, 296 ( 9t h Ci r . 1990) .

Leave t o amend shoul d be l i beral l y gr ant ed, but an amended

compl ai nt cannot al l ege f act s i nconsi st ent wi t h t he chal l enged

pl eadi ng. I d. at 296- 97. Cour t s consi der whet her t he pl ai nt i f f s

have pr evi ousl y amended t he compl ai nt i n determi ni ng whet her t ogr ant l eave t o amend. See, e. g. , Fi d. Fi n. Cor p. v. Fed. Home

Loan Bank of S. F. , 792 F. 2d 1432, 1438 ( 9t h Ci r . 1986) ( "The

di st r i ct cour t ' s di scret i on t o deny l eave t o amend i s par t i cul ar l y

br oad wher e t he cour t has al r eady gi ven t he pl ai nt i f f an

oppor t uni t y t o amend hi s compl ai nt . " ) .

DI SCUSSI ON

I . Pr el i mi nar y Mat t er s

Pl ai nt i f f s al l ege t hat t he Cour t has di ver si t y j ur i sdi cti on

over t hi s l awsui t . 2AC ¶ 7. Thi s al l egat i on i s based i n par t on

t he asser t i on t hat Br ot her t on and N. G. B. ar e " r esi dent s" of

Washi ngt on, D. C. I d. ¶¶ 3- 4. However , t he Ni nt h Ci r cui t r equi r es

an al l egat i on of ci t i zenshi p, r at her t han mer e r esi dency. See

Mant i n v. Br oad. Musi c, I nc. , 248 F. 2d 530, 531 ( 9t h Ci r . 1957) .

I ndi vi dual r esi dent s of Washi ngt on, D. C. can be ci t i zens of

Washi ngt on, D. C. f or di ver si t y j ur i sdi ct i on pur poses and must so

al l ege. See Dr ai m v. Vi r t ual Geosat el l i t e Hol di ngs, I nc. , 522

F. 3d 452, 454 n. 1 ( D. C. Ci r . 2008) ( gr ant i ng an unopposed mot i on

t o amend t he compl ai nt t o st at e t hat an i ndi vi dual " r esi des i n,


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and i s a ci t i zen of , Washi ngt on, D. C. ") . Thus, f or t he Cour t ' s

j ur i sdi ct i on t o be proper , Pl ai nt i f f s must al l ege t hat Br ot her t on

and N. G. B. ar e ci t i zens of Washi ngt on, D. C.

I n addi t i on, i f N. G. B. i s t o cont i nue as a pl ai nt i f f , a

qual i f i ed adul t must move t he cour t t o be appoi nt ed N. G. B. ' s

guar di an ad l i t em.

I I . Car t wr i ght Act

The Car t wr i ght Act , codi f i ed at Cal i f or ni a Busi ness and

Prof essi ons Code sect i on 16700 et seq. , was "enacted t o pr omote

f r ee market compet i t i on and t o pr event conspi r aci es or agr eement si n r est r ai nt or monopol i zat i on of t r ade. " Exxon Cor p. v. Super .

Ct . , 51 Cal . App. 4t h 1672, 1680 ( 1997) . To st at e a cl ai m under

t he Car t wr i ght Act , Pl ai nt i f f s must al l ege: "( 1) t he f or mat i on and

oper at i on of t he conspi r acy; ( 2) i l l egal act s done pur suant

t her et o; and ( 3) damage pr oxi mat el y caused by such act s. " I n r e

Hi gh- Tech Emp. Ant i t r ust Li t i g. , 856 F. Supp. 2d 1103, 1126 ( N. D.

Cal . 2012) ( quot i ng Kol l i ng v. Dow J ones & Co. , 137 Cal . App. 3d

709, 718 ( 1982) ) . "Car t wr i ght Act cl ai ms ar e pr oper l y di smi ssed

' wher e the compl ai nt makes concl usor y al l egat i ons of a combi nat i on

and does not al l ege wi t h f act ual par t i cul ar i t y t hat separ at e

ent i t i es mai nt ai ni ng separ at e and i ndependent i nt er est s combi ned

f or t he pur pose t o r est r ai n t r ade. ' " I n r e Net f l i x Ant i t r ust

Li t i g. , 506 F. Supp. 2d 308, 320 ( N. D. Cal . 2007) ( quot i ng Fr eeman

v. San Di ego Ass' n of Real t or s, 77 Cal . App. 4t h 171, 189 ( 1999) ) ;

see al so Medi na v. Mi cr osof t Corp, 2014 WL 4243992, at *3 ( N. D.

Cal . ) ( "Li t i gant s must pl ead Car t wr i ght Act vi ol at i ons wi t h a hi gh

degr ee of par t i cul ar i t y, al l egi ng f actual al l egat i ons of speci f i c

conduct di r ect ed t owar d t he f ur t her ance of t he conspi r acy, i n mor e


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t han concl usor y t er ms. " ( ci t i ng G. H. I . I . v. MTS, I nc. , 147 Cal .

App. 3d 256, 265- 66 ( 1978) ) ) .

Def endant s argue t hat t he Car t wr i ght Act al l egat i ons i n t he

2AC ar e i nsuf f i ci ent wi t h r espect t o causat i on and damages.

Pl ai nt i f f s r espond t hat par t of t he al l eged conspi r acy was t hat

Def endant s r emoved vi deos of ar t i st s not si gned wi t h t hei r co-

conspi r at or s; al l egedl y, Pl ai nt i f f s wer e i nj ur ed by bot h t he

r emoval of t he vi deo and t he deval uat i on of t hei r i nt el l ect ual

pr oper t y r esul t i ng f r om i nf l at ed vi ew count s of ot her vi deos. See

2AC ¶ 94 ( "Whi l e G- Y and t he named G- Y i ndi vi dual s al l ow t heConspi r at or s t o r obot i cal l y i nf l at e t he Vi ew Count of cer t ai n

vi deos i n vi ol at i on of 4H of t he TOS wi t h i mpuni t y, G- Y at i t s

whi m r emoves cer t ai n vi deos of ar t i st s not si gned t o t he

Conspi r at or s and who have not vi ol ated the TOS. " ) . 5

Under t he Car t wr i ght Act , a pr oxi mat e cause r equi r ement ,

f r equent l y ref er r ed t o as t he "st andi ng t o sue" r equi r ement ,

r equi r es t hat t he par t y br i ngi ng t he act i on must be wi t hi n t he

"t ar get ar ea" of t he ant i t r ust vi ol at i on r at her t han "i nci dent al l y

i nj ur ed t her eby. " Kol l i ng, 137 Cal . App. 3d at 723. The i nj ur y

must be t he "di r ect r esul t of t he unl awf ul conduct , " r at her t han

"secondar y, " "consequent i al " or "r emot e. " I d. at 724. I n ot her

wor ds, an ant i t r ust pl ai nt i f f "must show t hat i t was i nj ur ed by

t he ant i compet i t i ve aspect s or ef f ect s of t he def endant ' s conduct ,

as opposed t o bei ng i nj ur ed by t he conduct ' s neut r al or even

pr ocompet i t i ve aspect s. " Fl agshi p Theat r es of Pal m Deser t , LLC v.

Cent ur y Theat r es, I nc. , 198 Cal . App. 4t h 1366, 1380 ( 2011) .

5 The 2AC r ef er s t o Def endant s as " G- Y. "


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For exampl e, consumers who al l eged payi ng excess i ve pr i ces

f or cel l ul ar ser vi ce due t o a pr i ce f i xi ng agr eement cl ai med a

di r ect i nj ur y. Cel l ul ar Pl us v. Super . Ct . , 14 Cal . App. 4t h

1224, 1234- 35 ( 1993) . Cor por at i ons t hat ef f ect ed sal es t hat wer e

i mpact ed by a pr i ce f i xi ng agr eement l i kewi se al l eged i nj ur y

adequat el y. I d. at 1235. However , " not al l busi ness ent i t i es

cl ai mi ng sal es wer e l ost due t o pr i ce f i xi ng" have necessar i l y

suf f er ed a di r ect ant i t r ust i nj ur y. I d.

The al l egat i ons i n t he 2AC do not suppor t t hat Pl ai nt i f f s'

i nj ur i es wer e pr oxi mat el y caused by t he al l eged conspi r acy. Thef act s al l eged i n t he 2AC r el at e t o a conspi r acy t o i nf l at e t he

YouTube vi ew count s of Uni ver sal ar t i st s such as Psy and J ust i n

Bi eber . No f act ual al l egat i ons suppor t t hat t hese conspi r at or s

al so agr eed t o r emove musi c vi deos f r om non- Uni ver sal ar t i st s.

Thus, t he 2AC does not al l ege t hat t he conspi r acy di r ect l y i nj ured

Pl ai nt i f f s.

Pl ai nt i f f s have al so i nsuf f i ci ent l y al l eged t hat t he al l eged

conspi r acy caused har m t o compet i t i on. Al t hough Pl ai nt i f f s ar gued

at t he hear i ng t hat YouTube i s an i mpor t ant vehi cl e f or musi c

di st r i but i on, t he conspi r acy al l egat i ons r el at e not t o YouTube as

a whol e but t o vi ew count mani pul at i on. Pl ai nt i f f s must al l ege

wi t h gr eat er par t i cul ar i t y how t he vi ew count mani pul at i on

conspi r acy al l egedl y har med compet i t i on.

I n addi t i on t o al l egi ng har m st emmi ng f r om t he vi deo' s

r emoval , Pl ai nt i f f s al l ege t hat t hey ar e ent i t l ed t o damages based

on t hei r "i nt el l ect ual pr oper t y . . . t hat was deval ued by

def endant s' ant i t r ust vi ol at i ons under t he Car t wr i ght Act . " 2AC

¶ 168. Pl ai nt i f f s' deval uat i on t heor y goes as f ol l ows.


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Def endant s per mi t t ed t hei r co- conspi r at or s t o use r obot i c vi ew

count i nf l at i on f or some vi deos, l i ke "Baby" and "Gangnam St yl e. "

Thi s caused ot her vi deos, l i ke Pl ai nt i f f s' , t o appear by

compar i son l ess popul ar t han t hey other wi se woul d. Thi s i n t ur n

woul d r educe f ut ur e sal es of ot her musi c t hat Pl ai nt i f f s woul d t r y

t o sel l . The Cour t concl udes t hat any damages al l eged under t hi s

t heor y ar e, at most , r emot e and specul at i ve.

Fur t her , t he Cour t f i nds t hat t he f act ual al l egat i ons ar e

i nsuf f i ci ent t o suppor t a cl ai m t hat Googl e or YouTube wer e

i nvol ved i n a conspi r acy t o i nf l at e vi ew count s. See Bel l At l .Cor p. v. Twombl y, 550 U. S. 544, 556 ( 2007) ( hol di ng t hat st at i ng a

cl ai m under t he Sherman Act " r equi r es a compl ai nt wi t h enough

f act ual mat t er ( t aken as t r ue) t o suggest t hat an agr eement was

made") . The 2AC f ai l s t o pr ovi de f act s wi t h any par t i cul ar i t y

suppor t i ng t hat Googl e or YouTube ent er ed i nt o t he conspi r acy.

Fur t her , i t does not al l ege suf f i ci ent l y how Def endant s wor ked

wi t h t he ot her al l eged conspi r at or s. Fi nal l y, Pl ai nt i f f s '

descr i pt i on of vi ew count s suggest s t hat t he number of "vi ews" i s

equal t o t he number of vi ewer s. I t i s pr obabl e t hat t hese vi ew

count s encapsul at e more vi ews t han vi ewers because vi ewers may

vi ew a vi deo mul t i pl e t i mes.

Because Pl ai nt i f f s have f ai l ed t o al l ege f act s suppor t i ng

t hat t he al l eged ant i t r ust vi ol at i on pr oxi mat el y caused t hem

i nj ur y, and f ai l ed t o al l ege f act s wi t h par t i cul ar i t y t hat woul d

suppor t a conspi r acy i ncl udi ng Def endant s, Def endant s' mot i on t o

di smi ss Pl ai nt i f f s' Car t wr i ght Act cl ai m i s GRANTED wi t h l eave t o

amend.


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I I I . Fr audul ent Conceal ment 6

“I n al l egi ng f r aud or mi st ake, a par t y must st at e wi t h

par t i cul ar i t y t he ci r cumst ances const i t ut i ng f r aud or mi st ake. ”

Fed. R. Ci v. P. 9( b) . The al l egat i ons must be “speci f i c enough t o

gi ve def endant s not i ce of t he par t i cul ar mi sconduct whi ch i s

al l eged t o const i t ut e t he f r aud charged so that t hey can def end

agai nst t he charge and not j ust deny t hat t hey have done anyt hi ng

wr ong. ” Semegen v. Wei dner , 780 F. 2d 727, 731 ( 9t h Ci r . 1985) .

St at ement s of t he t i me, pl ace and nat ur e of t he al l eged f r audul ent

act i vi t i es ar e suf f i ci ent , i d. at 735, pr ovi ded t he pl ai nt i f f set sf or t h “what i s f al se or mi sl eadi ng about a st at ement , and why i t

i s f al se. ” Ebei d v. Lungwi t z, 616 F. 3d 993, 998 ( 9t h Ci r . 2010) .

Sci ent er may be aver r ed gener al l y, si mpl y by sayi ng t hat i t

exi st ed. See Odom v. Mi cr osof t Cor p. , 486 F. 3d 541, 554 ( 9t h Ci r .

2007) ( en banc) ; Fed. R. Ci v. P. 9( b) ( “Mal i ce, i nt ent , knowl edge,

and other condi t i ons of a person' s mi nd may be al l eged

gener al l y”) . As t o mat t er s pecul i ar l y wi t hi n t he opposi ng par t y’ s

knowl edge, pl eadi ngs based on i nf or mat i on and bel i ef may sat i sf y

Rul e 9( b) i f t hey al so st at e t he f act s on whi ch t he bel i ef i s

f ounded. Moor e v. Kaypor t Package Expr ess, I nc. , 885 F. 2d 531,

540 ( 9t h Ci r . 1989) .

To be l i abl e f or f r audul ent conceal ment under Cal i f or ni a l aw,

“( 1) t he def endant must have conceal ed or suppr essed a mater i al

f act , ( 2) t he def endant must have been under a dut y t o di scl ose

6 Def endant s st at e t hat Pl ai nt i f f s "vaci l l at e bet ween

advanci ng an i mpl i ed mi sr epr esent at i on and a f r audul entconceal ment t heor y. " Repl y Br . at 6. Because t her e i s no i mpl i edmi sr epr esent at i on t heor y i n t he 2AC, t he Cour t di scusses onl y t hef r audul ent conceal ment t heor y.


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t he f act t o t he pl ai nt i f f , ( 3) t he def endant must have

i nt ent i onal l y conceal ed or suppr essed t he f act wi t h t he i nt ent t o

def r aud t he pl ai nt i f f , ( 4) t he pl ai nt i f f must have been unawar e of

t he f act and woul d not have act ed as he di d i f he had known of t he

conceal ed or suppr essed f act , and ( 5) as a r esul t of t he

conceal ment or suppr essi on of t he f act , t he pl ai nt i f f must have

sust ai ned damage. ” Hahn v. Mi r da, 147 Cal . App. 4t h 740, 748

( 2007) . Pl ai nt i f f s must pl ead f act s suppor t i ng t hese el ement s.

A dut y may ar i se wher e t her e i s a f i duci ar y or conf i dent i al

r el at i onshi p, wher e a def endant does not di scl ose f act s t hatmat er i al l y qual i f y a separ at e di scl osur e or r ender t hat di scl osur e

l i kel y t o mi sl ead, wher e a def endant knows t hat f act s not

r easonabl y di scover abl e by t he pl ai nt i f f ar e onl y known or

accessi bl e t o t he def endant , and wher e a def endant act i vel y

conceal s di scover y f r om t he pl ai nt i f f . War ner Const r . Cor p. v.

Ci t y of L. A. , 2 Cal . 3d 285, 294 ( 1970) . Wher e t her e i s no

f i duci ar y or conf i dent i al r el at i onshi p, t her e must be "some

r el at i onshi p bet ween t he par t i es whi ch gi ves r i se t o a dut y t o

di scl ose such known f act s. " Hof f man v. 162 N. Wol f e LLC, 228 Cal .

App. 4t h 1178, 1187 ( 2014) ( emphasi s i n or i gi nal ) . Thi s dut y "may

ar i se f r om t he r el at i onshi p bet ween . . . par t i es ent er i ng i nt o

any ki nd of cont r act ual agr eement . " I d. Thus, al t hough a

cont r act ual r el at i onshi p may l ay t he gr oundwor k f or a dut y t o

di scl ose, i t does not necessar i l y creat e a f i duci ar y dut y.

Def endant s ar gue t hat Pl ai nt i f f s di d not pr oper l y pl ead

damages f r om t he f r audul ent conceal ment . Under Cal i f or ni a l aw,

when no f i duci ar y r el at i onshi p exi st s, a f r audul ent conceal ment

pl ai nt i f f may onl y r ecover out - of - pocket l osses. Dal y v. Vi acom,


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I nc. , 238 F. Supp. 2d 1118, 1126 ( N. D. Cal . 2002) ; see al so

Al l i ance Mor t g. Co. v. Rot hwel l , 10 Cal . 4t h 1226, 1240 ( 1995)

( "I n Cal i f or ni a, a def r auded par t y i s or di nar i l y l i mi t ed t o

r ecover i ng hi s ' out - of - pocket ' l oss. ") . Out - of - pocket damages ar e

"di r ected t o r est or i ng t he pl ai nt i f f t o t he f i nanci al posi t i on

enj oyed by hi m pr i or t o t he f r audul ent t r ansact i on, and t hus

awar ds t he di f f er ence i n act ual val ue at t he t i me of t he

t r ansact i on bet ween what t he pl ai nt i f f gave and what he r ecei ved. "

Al l i ance Mor t g. , 10 Cal . 4t h at 1240; see al so Fl adeboe v. Am.

I suzu Mot or s I nc. , 150 Cal . App. 4t h 42, 66 ( 2007) . Out - of - pocketdamages are usual l y cal cul at ed as of t he t i me of t he t r ansact i on.

Ambassador Hotel Co. v. Wei - Chuan I nv. , 189 F. 3d 1017, 1032 ( 9t h

Ci r . 1999) ( ci t i ng Sal ahut di n v. Val l ey of Cal . , I nc. , 24 Cal .

App. 4t h 555, 568 ( 1994) ) ; see al so Negr et e v. Al l i anz Li f e I ns.

Co. of N. Am. , 2011 WL 4852314, at *9 ( C. D. Cal . ) .

As a t hr eshol d mat t er , t he 2AC does not suppor t t hat

Pl ai nt i f f s and Def endant s wer e i n a f i duci ar y r el at i onshi p. The

2AC st at es t hat a f i duci ar y r el at i onshi p "i s pr esent her e i n t he

f or m of a [ Ter ms of Ser vi ce] cont r act . " 2AC ¶ 20. Thi s i s a

l egal concl usi on t hat does not suf f i ce. Fur t her , under Cal i f or ni a

l aw, a cont r act , wi t hout mor e, does not cr eat e a f i duci ar y

r el at i onshi p. Oakl and Rai der s v. Nat ' l Foot bal l League, 131 Cal .


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App. 4t h 621, 633- 34 ( 2005) ( col l ect i ng cases) . 7 Al t hough t he

cont r act may have cr eat ed a r el at i onshi p f r om whi ch a dut y t o

di scl ose ar i ses, Pl ai nt i f f s have not pr oper l y al l eged a f i duci ar y

dut y. Thus, t he 2AC must al l ege out - of - pocket l osses t o sat i sf y

t he damages el ement of f r audul ent conceal ment .

Pl ai nt i f f s do not al l ege any out - of - pocket damages f r om

Def endant s' al l eged f r audul ent conceal ment of i nf l at ed vi ew

count s. The ment i ons of "out of pocket " damages and expenses

t hr oughout t he 2AC const i t ut e l egal concl usi ons. See, e. g. , 2AC

¶¶ 159; 203- 206. The damages Pl ai nt i f f s descr i be do not amount t oout - of - pocket damages because they do not r ef l ect t he di f f er ence

between what Pl ai nt i f f s pai d YouTube and what t hey r ecei ved.

I nst ead, t hey r el at e t o pot ent i al l osses of f ut ur e i ncome and

f i nanci al r el at i onshi ps wi t h ot her s. See, e. g. , 2AC ¶¶ 160

( "deval uat i on of pl ai nt i f f s' i nt el l ectual pr oper t y and t he mar ket

val ue of pl ai nt i f f s' l i ve per f or mances") , 203- 04 ( money l ost f r om

Rast a Rock' s ar r angement wi t h i t s const r uct i on f i r m f under ) . Some

of t he damages al l eged r ef l ect money t hat Pl ai nt i f f s pai d af t er

t hey agr eed t o t he Ter ms of Servi ce. See i d. ¶¶ 205- 06

( di scussi ng money pai d i n pr epar at i on f or t he J ul y 4, 2014

per f or mance on Ni ke' s r oof ) . Fi nal l y, i t i s not cl ear whi ch

Pl ai nt i f f s, i f any, suf f er ed any al l eged out - of - pocket damages.

7 I ndeed, t he Cal i f or ni a Cour t of Appeal hel d t hat a t ypi cal

f i l m di st r i but i on cont r act does not creat e a f i duci ar yr el at i onshi p bet ween t he owner of t he f i l m and t he di st r i but or .Recor ded Pi ct ur e Co. v. Nel son Ent m' t , I nc. , 53 Cal . App. 4t h 350,370 ( 1997) . I n l i ght of t hi s concl usi on, i t cannot be sai d t hatPl ai nt i f f s and Def endant s wer e i n a f i duci ar y r el at i onshi p basedon a cont r act t hat per mi t t ed Pl ai nt i f f s t o upl oad a vi deo ont o YouTube f or publ i c vi ewi ng.


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I n sum, no damages al l eged const i t ut e out - of - pocket l osses

pr oxi matel y caused by Def endant s' al l eged conceal ment of t hei r own

compl i ci t y i n and f aci l i t at i on of ar t i f i ci al vi ew count i nf l at i on.

See 2AC ¶¶ 42- 44. Rather , any damages were al l egedl y proxi matel y

caused by t he vi deo' s r emoval and the not i ce.

Pl ai nt i f f s make t wo addi t i onal ar gument s r egar di ng t he

damages they pl ead. They argue t hat a compl ai nt need not al l ege a

pr eci se cal cul at i on of damages and t hat t hey ar e ent i t l ed t o

exempl ar y damages under Cal i f or ni a Ci vi l Code sect i on 3343.

Nei t her argument ci r cumvent s t he out - of - pocket damagesr equi r ement .

I n addi t i on, Pl ai nt i f f s ' al l egat i ons of f r audul ent

conceal ment ar e not par t i cul ar enough t o sat i sf y Rul e 9( b) . The

2AC st at es t hat Def endant s pr omot e compani es t hat r obot i cal l y

i nf l at e t hei r vi ew count s, 2AC ¶¶ 35- 36, 42, but i t i s not cl ear

whi ch compani es t hese ar e. Pl ai nt i f f s f ai l t o al l ege when t he

al l eged f r audul ent scheme began. Fur t her , as t he Cour t poi nt ed

out at t he hear i ng, t he 2AC does not suf f i ci ent l y al l ege

det r i ment al r el i ance. Pl ai nt i f f s expl ai ned at t he hear i ng t hat

t hey woul d not have used YouTube as a cent r al component of t hei r

pr omot i onal ef f ort s had t hey known of Def endant s' vi ew count

pr act i ces, but t hey do not al l ege t he more advant ageous market i ng

t hey woul d have pursued had t hey not post ed LuvYa on YouTube.

Pl ai nt i f f s al so f ai l t o al l ege t hat t hey wer e unawar e of t he

f act s t hat Def endant s conceal ed.

For t hese r easons, Def endant s' mot i on to di smi ss wi t h respect

t o the f r audul ent conceal ment cl ai m i s GRANTED wi t h l eave to

amend.


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I V. Li bel Per Quod

"Li bel i s a f al se and unpr i vi l eged publ i cat i on by wr i t i ng,

pr i nt i ng, pi ctur e, ef f i gy, or other f i xed r epr esent at i on t o t he

eye, whi ch exposes any per son t o hat r ed, cont empt , r i di cul e, or

obl oquy, or whi ch causes hi m t o be shunned or avoi ded, or whi ch

has a t endency t o i nj ur e hi m i n hi s occupat i on. " Cal . Ci v. Code

§ 45. Li bel t hat i s not def amat or y on i t s f ace, t hat i s, l i bel

per quod, "i s not acti onabl e unl ess t he pl ai nt i f f al l eges . . .

t hat he has suf f er ed speci al damage as a pr oxi mat e resul t

t her eof . " I d. § 45a. J udge Cont i f ound t hat t he l i belal l egat i ons wer e not def amat or y per se, and expl ai ned t hat t hi s

cl ai m coul d move f or war d onl y i f Pl ai nt i f f s pr oper l y pl ead speci al

damages. 8 Or der Di smi ss i ng 1AC at 16- 17; see Newcombe v. Adol f

Coor s Co. , 157 F. 3d 686, 694 ( 9t h Ci r . 1998) ( expl ai ni ng t hat ,

under Cal i f or ni a l aw, "a pl ai nt i f f may onl y pr evai l on a cl ai m f or

l i bel i f t he publ i cat i on i s l i bel ous on i t s f ace or i f speci al

damages have been pr oven") . Def endant s do not di sput e t hat

Pl ai nt i f f s pl ead speci al damages i n t he 2AC. See Docket No. 80,

Repl y Br . at 10.

However , Def endant s argue t hat t he 2AC pl eads i nsuf f i ci ent

f act s t o al l ege both def amatory meani ng and r ef erence t o

Pl ai nt i f f s.

/ /

/ /

8 Pl ai nt i f f s ar gue t hat J udge Cont i i mpl i ci t l y f ound t hat

" t he [ 1AC] as pl ed adequat el y est abl i shed t he capaci t y of t heNot i ce t o be def amatory. " Response Br . at 19. The Cour t r eads nosuch i mpl i ci t r ul i ng i nt o J udge Cont i ' s or der .


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A. Def amat or y Meani ng

Def amatory meani ng deal s wi t h "t he i mpact of communi cat i ons

between ordi nary human bei ngs. " MacLeod v. Tr i bune Pub. Co. , 52

Cal . 2d 536, 550 ( 1959) . The meani ng must be measured "by t he

nat ur al and pr obabl e ef f ect upon t he mi nd of t he aver age reader . "

I d. at 551. I mpl i ed def amatory meani ng may exi st even when t here

i s "r oom f or an i nnocent i nt er pr et at i on. " I d. at 549.

Al t hough t he exi st ence of a def amatory meani ng i s general l y a

quest i on of f act f or t he j ur y, f eder al cour t s may consi der t he

i ssue at t he mot i on t o di smi ss st age. Chur ch of Sci ent ol ogy ofCal . v. Fl ynn, 744 F. 2d 694, 696 ( 9t h Ci r . 1984) ( ci t i ng For sher

v. Bugl i osi , 26 Cal . 3d 792, 803, 806 ( 1980) ) . I t i s i mpr oper f or

a di st r i ct cour t t o di smi ss a compl ai nt f or l ack of def amat or y

meani ng i f "by r easonabl e i mpl i cat i on a def amatory meani ng may be

f ound i n t he communi cat i on. " I d. ( quot i ng For sher , 26 Cal . 3d at

806) .

At t he out set , J udge Cont i expl ai ned i n hi s or der t hat t he

Communi t y Gui del i nes "are i ncorporated i n t he Ter ms of Servi ce by

r ef er ence. " Or der Di smi ssi ng 1AC at 21. Thus, t hi s Cour t

consi der s t he Communi t y Gui del i nes, t o whi ch Pl ai nt i f f s r ef er i n

t he operat i ve compl ai nt . See 2AC ¶ 108. The Communi t y Gui del i nes

cont ai n a bul l et poi nt l i st of "some common- sense rul es t hat wi l l

hel p you st eer cl ear of t r oubl e. " Docket No. 78, Vel t man Dec. ,

Ex. 1, Communi t y Gui del i nes. I n or der , t he bul l et poi nt s di scuss

t he f ol l owi ng t opi cs: "por nogr aphy or sexual l y expl i ci t cont ent , "

"bad st uf f l i ke ani mal abuse, dr ug abuse, under - age dr i nki ng and

smoki ng, or bomb maki ng, " " [ g] r aphi c or gr at ui t ous vi ol ence, "


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"gr oss- out vi deos . . . i nt ended t o shock or di sgust , " copyr i ght

vi ol at i ons, "hat e speech, " "predat or y behavi or , " and spam. I d.

Def endant s ment i on two rel at ed Cal i f or ni a Super i or Cour t

cases whi ch concl uded t hat no reasonabl e reader woul d f i nd a

def amatory meani ng i n t he Communi t y Gui del i nes. I n Bar t hol omew v.

YouTube, LLC, No. 15- 275833 ( Cal . Super . Ct . 2015) ( Bar t hol omew

I ) , t he cour t di smi ssed a cl ai m f or l i bel per se based on t hese

Communi t y Gui del i nes. Vel t man Dec. Ex. 2. I t r easoned t hat , even

assumi ng t he Communi t y Gui del i nes were not ext r i nsi c evi dence, "a

r easonabl e r eader woul d not i nf er t hat t he Vi deo cont ai ned t hespeci f i c ki nds of i mpr oper cont ent ment i oned i n the ' Communi t y

Gui del i ne Ti ps' subsect i on because t he subsect i on expl i ci t l y

st at es t hat t he cat egor i es l i st ed ar e mer el y exampl es set f or t h. "

I d. at 8 ( emphasi s i n or i gi nal ) . Fur t her , t he cour t expl ai ned, i t

i s " r eadi l y appar ent " t hat t he exampl es "do not const i t ut e an

exhausti ve l i st . " I d. Fi nal l y, the l i st i ncl udes spam. I d.

Ther eaf t er , Bar t hol omew amended her compl ai nt t o i ncl ude a

l i bel per quod cl ai m. The Super i or Cour t ' s August 5, 2015 or der

( Bar t hol omew I I ) sust ai ned YouTube' s demur r er , t hi s t i me wi t hout

l eave t o amend, f or sever al r easons. Vel t man Dec. Ex. 3. Fi r st ,

i t st at ed t hat t he not i ce on t he web page r ef er r ed t o YouTube' s

Terms of Ser vi ce, r at her t han i t s Communi t y Gui del i nes. I d. at 2.

As expl ai ned above, t hi s Cour t f i nds t hi s di st i nct i on

unper suasi ve. Second, t he Super i or Cour t expl ai ned t hat al t hough

some cat egor i es on t he l i st coul d be deemed l i bel ous, such as " Sex

and Nudi t y" and "Hat e Speech, " ot her cat egor i es, such as

"Chi l dr en, " "Copyr i ght " and "Pr i vacy, " do not necessar i l y evoke

of f ensi veness. I d. at 2- 3. Ul t i mat el y, t he cour t hel d t hat a


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r ef erence to t he Communi t y Gui del i nes as a whol e i s not r easonabl y

suscept i bl e t o a def amat or y i nt er pr et at i on. I d. at 3.

Thi s Cour t di sagr ees; i t woul d not be unr easonabl e f or an

average reader t o f i nd def amatory meani ng i n an accusat i on of

vi ol at i on of t he Communi t y Gui del i nes. Of t he ei ght bul l et poi nt s

l i st ed, t he f i r st f our ment i on por nogr aphy, chi l d expl oi t at i on,

ani mal abuse, bomb maki ng, vi ol ence and i nt ent t o shock or

di sgust . The si xth and sevent h bul l et poi nt s ment i on hat e speech,

as wel l as "predat or y behavi or , st al ki ng, t hr eat s, har assment ,

i nt i mi dat i on, i nvadi ng pr i vacy, r eveal i ng ot her peopl e' s per sonali nf or mat i on, and i nci t i ng ot her s t o commi t vi ol ent act s. "

Communi t y Gui del i nes. That t he f i f t h and ei ght h bul l et poi nt s

r ef er t o copyr i ght vi ol at i ons and spam does not r ender t he ot her

si x bul l et poi nt s non- def amat or y. Nor does t he non- exhaust i ve

nat ur e of t he l i st obvi at e any def amat or y meani ng. A f act - f i nder

coul d r easonabl y i nf er def amatory meani ng here. See Fl ynn, 744

F. 2d at 696 ( ci t i ng For sher , 26 Cal . 3d at 806) .

B. Ref er ence t o Pl ai nt i f f s

Pl ai nt i f f s must pl ead t hat t he al l egedl y def amat or y

st at ement s are "of and concer ni ng" t hem. Fl ynn, 744 F. 2d at 697.

A "def amat or y st at ement t hat i s ambi guous as t o i t s t ar get not

onl y must be capabl e of bei ng under st ood t o ref er t o t he

pl ai nt i f f , but al so must be shown act ual l y t o have been so

under st ood by a t hi r d par t y. " SDV/ ACCI , I nc. v. AT&T Cor p. , 522

F. 3d 955, 960 ( 9t h Ci r . 2008) .

Her e, Pl ai nt i f f s have not al l eged f acts suf f i ci ent t o sat i sf y

t hese r equi r ement s. Pl ai nt i f f s al l ege t hat Def endant s post ed t he

not i ce i n t he musi c vi deo' s or i gi nal pl ace, 2AC ¶ 104, and t hat


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t he not i ce r emai ned " l i ve" t her e, i d. ¶ 106. However , i t i s not

cl ear f r om t he compl ai nt who kept t he not i ce " l i ve" or f or how

l ong. Pl ai nt i f f s al so al l ege t hat N. G. B. was credi t ed f or hi s

act i ng per f or mance " [ o] n t he ' LuvYa' vi deo l i nk, " i d. ¶ 96, and

t hat Song f i had "pr omot ed" t he l i nk "aggr essi vel y t hr ough e- mai l

chai ns and soci al net wor k pl at f or ms wher ei n N. G. B. was i dent i f i ed

as bei ng t he st ar of t he ' LuvYa' musi c vi deo al ong wi t h the Rast a

Rock Oper a musi cal gr oup, " i d. at 98. However , i t i s not cl ear

f r om t hese al l egat i ons how a thi r d par t y vi ewer woul d have

connect ed each Pl ai nt i f f t o t he vi deo and t he not i ce or how at hi r d par t y woul d have ar r i ved at t he vi deo' s or i gi nal web page

and t hen associ at ed t he not i ce wi t h each Pl ai nt i f f . Pl ai nt i f f s

shoul d quote or at t ach t he emai l s and Facebook messages t hat

di ssemi nat ed t he l i nk t o t he web page t hat cont ai ned t he not i ce,

as wel l as any r el evant t ext t hat r emai ned on t he web page al ong

wi t h t he not i ce af t er t he vi deo' s r emoval , t hat coul d l i nk each

Pl ai nt i f f t o t he not i ce. See Dar naa LLC v. Googl e, 2015 WL

7753406, at *9- *10 ( N. D. Cal . ) ( gr ant i ng l eave t o amend i n a l i bel

per quod cl ai m wher e pl ai nt i f f di d not al l ege how YouTube not i ce

i dent i f i ed pl ai nt i f f ) .

The Cour t GRANTS Def endant s' mot i on t o di smi ss Pl ai nt i f f s'

l i bel per quod cl ai m, wi t h l eave t o amend.

V.

Cal i f orni a Consumer Legal Remedi es Act ( CLRA)

“The CLRA makes unl awf ul cer t ai n ‘ unf ai r methods of

compet i t i on and unf ai r or decept i ve act s or pr act i ces' used i n t he

sal e of goods or servi ces to a consumer. ” Wi l ens v. TD Waterhouse

Gr p. , I nc. , 120 Cal . App. 4t h 746, 753 ( 2003) ( quot i ng Cal . Ci v.

Code § 1770( a) ) . "By def i ni t i on, t he CLRA does not appl y t o


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unf ai r or decept i ve pr act i ces t hat occur af t er t he sal e or l ease

has occur r ed. " Moor e v. Appl e, I nc. , 73 F. Supp. 3d 1191, 1201

( N. D. Cal . 2014) ( col l ect i ng cases) ( emphasi s i n or i gi nal ) .

Sect i on 1780( a) pr ovi des, “Any consumer who suf f ers any damage as

a resul t of t he use or empl oyment by any person of a method, act ,

or pr act i ce decl ared t o be unl awf ul by Sect i on 1770 may br i ng an

act i on” under t he CLRA. Thus, t o pur sue a CLRA cl ai m, pl ai nt i f f s

must have been “exposed t o an unl awf ul pr act i ce” and “some ki nd of

damage must r esul t . ” Meyer v. Spr i nt Spect r um L. P. , 45 Cal . 4t h

634, 641 ( 2009) . To st at e a cl ai m under t he CLRA, pl ai nt i f f s must be

"consumer s. " "Consumer " i s def i ned as "an i ndi vi dual who seeks or

acqui r es, by pur chase or l ease, any goods or servi ces f or

per sonal , f ami l y, or househol d pur poses. " Cal . Ci v. Code

§ 1761( d) . "Goods" are " t angi bl e chat t el s bought or l eased f or

use pr i mar i l y f or per sonal , f ami l y, or househol d pur poses. " I d.

§ 1761( a) . The CLRA def i nes "ser vi ces" as "wor k, l abor , and

servi ces f or ot her t han a commer ci al or busi ness use, i ncl udi ng

ser vi ces f ur ni shed i n connect i on wi t h t he sal e or r epai r of

goods. " I d. § 1761( b) .

Pl ai nt i f f s Br ot her t on and N. G. B. al l ege t hat YouTube pr ovi des

consumer ser vi ces, 2AC ¶ 137, and t hat t hey pur chased or l eased

t he ser vi ces by pr ovi di ng consi der at i on i n t he f or m of

"pl ai nt i f f s' consumer t r af f i c on t he YouTube websi t e, " i d. ¶ 139.

Pl ai nt i f f s' al l egat i ons do not suppor t st andi ng f or t hei r CLRA

cl ai m.

Pl ai nt i f f s have not al l eged f act s suf f i ci ent t o suppor t t hat

YouTube provi des a ser vi ce under t he CLRA. Al t hough Pl ai nt i f f s


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may have ent er ed i nt o a cont r act wi t h YouTube, not al l cont r act s

ar e f or goods or servi ces. See, e. g. , Br ober g v. Guar di an Li f e

I ns. Co. of Am. , 171 Cal . App. 4t h 912, 924- 25 ( 2009) ( concl udi ng

t hat i nsur ance agr eement s are not " servi ces f ur ni shed i n

connect i on wi t h t he sal e or r epai r of goods" because they "ar e

si mpl y agr eement s t o pay i f and when an i dent i f i abl e event

occur s" ) . Nor i s Pl ai nt i f f s' use of t he YouTube websi t e t he use

of a ser vi ce. "Cal i f or ni a l aw i s cl ear t hat sof t war e i s not a

t angi bl e good or servi ce f or t he pur poses of t he CLRA. " I n r e

Sony Gami ng Net works & Cust omer Dat a Sec. Br each Li t i g. , 903 F.Supp. 2d 942, 972 ( S. D. Cal . 2012) ( hol di ng t hat t he comput er

net wor k syst em used t o pr ovi de Pl aySt at i on Net wor k servi ces, whi ch

per mi t t ed access t o var i ous t hi r d par t y ser vi ces, di d not

const i t ut e a "ser vi ce" under t he CLRA) .

Even i f YouTube pr ovi ded a ser vi ce, Pl ai nt i f f s di d not use

YouTube " f or ot her t han a commer ci al or busi ness use. " Cal . Ci v.

Code § 1761( b) . The t hr ust of t he 2AC i s t hat Pl ai nt i f f s upl oaded

t he vi deo and promoted i t f or commerci al pur poses. The 2AC

cont ai ns no f act s suppor t i ng t hat Pl ai nt i f f s upl oaded t he vi deo

f or any ot her pur pose. See, e. g. , Per s. v. Googl e, I nc. , 2007 WL

832941, at *7 ( N. D. Cal . ) ( hol di ng t hat because pl ai nt i f f ' s st at ed

pur pose f or usi ng a comput er pr ogr amwas commer ci al and pol i t i cal ,

pl ai nt i f f was not a consumer and di d not have st andi ng under t he

CLRA) .

Fur t her , t he f act s al l eged do not suppor t t hat Pl ai nt i f f s

ent er ed i nt o t he r el at i onshi p wi t h YouTube "by pur chase or l ease. "

Cal . Ci v. Code § 1761( d) . The "mor e gener al i zed not i on t hat t he

phr ase ' pur chase' or ' l ease' cont empl at es any l ess t han t angi bl e


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f or m of payment - - f i nds no suppor t under t he speci f i c st at ut or y

l anguage of t he CLRA. " Cl ar i dge v. RockYou, I nc. , 785 F. Supp. 2d

855, 864 ( N. D. Cal . 2011) ; see al so I n r e Zynga Pr i vacy Li t i g. ,

2011 WL 7479170, at *1- *2 ( N. D. Cal . ) ( gr ant i ng mot i on t o di smi ss

a CLRA cl ai m wher e t he pl ai nt i f f s "al l eged t hat t hey r ecei ved

Facebook' s ser vi ces ' f r ee of char ge' " ) . Pr ovi di ng consumer

t r af f i c f or YouTube, Pl ai nt i f f s ' al l eged consi der at i on, i s

cer t ai nl y a l ess than t angi bl e f or m of payment . See, e. g. , Yunker

v. Pandor a Medi a, I nc. , 2013 WL 1282980, at *12 ( N. D. Cal . )

( concl udi ng t hat pl ai nt i f f l acked st andi ng because t he per sonal l yi dent i f i abl e i nf or mat i on t hat Pandor a gat her ed when pl ai nt i f f

r egi st er ed f or Pandor a was a " l ess t han t angi bl e f or m of

payment ") . So i s upl oadi ng t he vi deo. Pl ai nt i f f s have f ai l ed t o

al l ege f act s suf f i ci ent t o suppor t CLRA st andi ng.

The 2AC' s CLRA al l egat i ons ar e i nsuf f i ci ent i n ot her ways,

t oo. The CLRA cl ai m cont ai ns al l egat i ons of f r aud. See, e. g. ,

2AC ¶ 149- 50 ( al l egi ng t hat f al se vi ew count s decei ve consumer s,

t her eby r epr esent i ng t hat vi deos have char act er i st i cs t hat t hey do

not have) . The f r aud- based port i on does not meet t he st andards of

Rul e 9( b) enunci at ed above.

I n addi t i on, Pl ai nt i f f s cannot base a CLRA cl ai m on an

al l egedl y unconsci onabl e cont r act cl ause. See i d. ¶¶ 154- 55

( al l egi ng t hat t he f ol l owi ng cl ause i s unconsci onabl e: "YouTube

r eserves t he r i ght t o di scont i nue any aspect of t he Ser vi ce at any

t i me. ") . The Di st r i ct of Col umbi a cour t r ul ed t hat t he

"di scont i nue ser vi ce" pr ovi si on of t he cont r act i s not

unconsci onabl e, Di st r i ct of Col umbi a Opi ni on at 13, and J udge

Cont i r easoned t hat t hi s cl ause suppor t ed di smi ssi ng Pl ai nt i f f s'


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br each of cont r act cl ai m. Fur t her , appl yi ng Cal i f or ni a l aw, i t i s

not pl ausi bl e t hat t hi s cont r act t er m i s unconsci onabl e because no

al l egat i ons suppor t t hat t he t er m i s " so one- si ded as t o ' shock

t he consci ence. ' " Pi nnacl e Museum Tower Ass' n v. Pi nnacl e Mar ket

Dev. ( US) , LLC, 55 Cal . 4t h 223, 246 ( 2012) ( quot i ng 24 Hour

Fi t ness, I nc. v. Super . Ct . , 66 Cal . App. 4t h 1199, 1213 ( 1998) ) .

For al l t hese r easons, t he Cour t GRANTS Def endant s' mot i on t o

di smi ss Pl ai nt i f f s' CLRA cl ai m. Because Pl ai nt i f f s cannot al l ege

f act s whi ch woul d est abl i sh t hei r st andi ng, di smi ssal i s wi t hout

l eave t o amend.

VI . Tor t i ous I nter f er ence wi t h Busi ness Rel at i onshi ps

J udge Cont i out l i ned t he el ement s f or a t or t i ous i nter f er ence

cl ai m. Or der Di smi ssi ng 1AC at 18. Pl ai nt i f f s st i l l f ai l t o

al l ege any wr ongf ul conduct ot her t han t he f act of i nt er f er ence

i t sel f , al t hough t hey may be abl e t o r emedy t hi s shor t comi ng.

Thus, t he Cour t GRANTS Def endant s' mot i on t o di smi ss Pl ai nt i f f s'

t or t i ous i nt er f er ence cl ai m, wi t h l eave t o amend. Pl ai nt i f f s may

move f or war d on t hi s cl ai m i f t hey successf ul l y al l ege one of t he

r emai ni ng causes of act i on.

CONCLUSI ON

The Cour t GRANTS Def endant s' mot i on t o di smi ss Pl ai nt i f f s'

Car t wr i ght Act cl ai m, Pl ai nt i f f s' f r audul ent conceal ment cl ai m,

Pl ai nt i f f s ' l i bel per quod cl ai m and Pl ai nt i f f s ' t or t i ous

i nt er f er ence wi t h busi ness r el at i onshi ps cl ai m, wi t h l eave t o

amend; Pl ai nt i f f s' CLRA cl ai m i s di smi ssed wi t hout l eave t o amend.

Wi t hi n f our t een days of t he dat e of t hi s or der , Pl ai nt i f f s

may f i l e an amended compl ai nt t o r emedy t he def i ci enci es

i dent i f i ed above. They may not add f ur t her cl ai ms. I f Pl ai nt i f f s


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f i l e an amended compl ai nt , Def endant s shal l r espond t o i t wi t hi n

f our t een days af t er i t i s f i l ed. I f Def endant s f i l e a mot i on t o

di smi ss, Pl ai nt i f f s shal l r espond t o t he mot i on wi t hi n f our t een

days af t er i t i s f i l ed. Def endant s' r epl y, i f necessar y, shal l be

due seven days ther eaf t er . Any mot i on t o di smi ss wi l l be deci ded

on the paper s.

I T I S SO ORDERED.

Dat ed: Apr i l 4, 2016CLAUDI A WI LKEN

Uni t ed St at es Di st r i ct J udge

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