In Re Google Assistant Privacy Litigation, Case No. 19-04286

Case 5:19-cv-04286-BLF Document 138 Filed 07/01/21 Page 1 of 37
3 UNITED STATES DISTRICT COURT
4 NORTHERN DISTRICT OF CALIFORNIA
5 SAN JOSE DIVISION
7 IN RE GOOGLE ASSISTANT PRIVACY Case No. 19-cv-04286-BLF

LITIGATION
8
ORDER ON DEFENDANTS’ MOTION
9 TO DISMISS THE THIRD
CONSOLIDATED AMENDED
10 COMPLAINT
11 [Re: ECF 120]
12 The instant litigation comprises three separately-filed cases that the Court has consolidated.
Northern District of California
United States District Court
13 See ECF 42; ECF 109. The cases generally allege that Defendants Google LLC and Alphabet, Inc.
14 (collectively, “Google”) unlawfully intercepted, recorded, disclosed, and used the private
15 conversations of thousands of users of the Google Assistant software. Presently before the Court is
16 Defendants’ motion to dismiss the entire consolidated suit. ECF 120. Having considered the parties’
17 arguments and the applicable law, the Court GRANTS IN PART and DENIES IN PART the motion
18 to dismiss.
19 I. BACKGROUND
20 This is a putative consumer class action concerning the Google Assistant, a virtual assistant
21 software developed by Defendants Google LLC and Alphabet, Inc. for use on various Google
22 Assistant Enabled Devices (“GAEDs”) manufactured by Defendants and by third parties.
23 Specifically, the operative Third Consolidated Amended Class Action Complaint (“3AC”), which
24 was filed on November 9, 2020, ECF 118, contains the following allegations:
25 The Google Assistant is a voice-activated software, which means that users can ask questions
26 of and give instructions to the Google Assistant using their voices. 3AC ¶¶ 2-4, 79. This software
27 comes preloaded onto certain devices, such as the Google Home, the Google Pixel smartphones,
28 and third party-manufactured smartphones that use the Google Android operating system; it can also
1 be installed on a range of devices. Id. Because the Google Assistant is voice-activated, it is
2 constantly listening for “hotwords”—i.e., “Okay Google” or “Hey Google.” Id. ¶ 80. It does this by
3 recording and analyzing short snippets of audio, which are stored locally in the Google Assistant
4 Enabled Device’s random-access memory (“RAM”); these snippets are continuously overwritten,
5 however, if no hotwords are detected. Id. ¶ 81. When the hotwords are detected, the Google Assistant
6 switches into “active listening” mode, meaning that it begins recording and analyzing audio in order
7 to carry out the user’s command. Id. ¶ 82. The Google Assistant can also be manually activated by
8 pressing a button on the device. Id.
9 Plaintiffs allege that Defendants keep and use the audio recordings for two purposes other
10 than carrying out the user’s command: (1) to target personalized advertising to users, and (2) to
11 improve the voice recognition capabilities of the Google Assistant. 3AC ¶¶ 83, 113. Sometimes, the
12 Google Assistant may be triggered into active listening mode when the Google Assistant
13 misperceives other words as the hotwords. This is known as a “false accept.” Id. ¶ 244. Plaintiffs
14 believe that in such situations, Defendants do not destroy the audio recordings, but rather continue
15 to use them for personalized advertising and to analyze the accuracy of the Google Assistant—just
16 as Defendants would do with authorized recordings. Id. ¶¶ 83, 105-113. As evidence, Plaintiffs point
17 to the investigation carried out by VRT NWS, in which VRT NWS reviewed “more than a thousand”
18 audio recordings and “identified 153 conversations” that were recorded due to false accepts. Id. ¶
19 104.
20 This suit is based on Defendants’ use of audio recordings in “false accept” situations. 3AC
21 ¶ 1, 6-8, 244. In Plaintiffs’ view, such use is an invasion of privacy, especially because many of the
22 recorded conversations take place in individuals’ homes. Id. ¶¶ 85-88; see also ¶¶ 18-75. Plaintiffs
23 also believe that this practice contravenes the privacy assurances that Defendants make to users in
24 their Privacy Policy. Id. ¶ 90. Plaintiffs are particularly troubled by the fact that some of the
25 recordings include the conversations of children because they do not believe that these children can
26 consent to being recorded. Id. ¶ 115.
27 Based on the foregoing, Plaintiffs have sued Google LLC and its parent company Alphabet
28 Inc. under various state and federal laws. There are 10 claims in the 3AC: (1) violation of the federal
2
1 Wiretap Act, 18 U.S.C. §§ 2510 et seq.; (2) violation of the federal Stored Communications Act
2 (“SCA”), 18 U.S.C. §§ 2702 et seq.; (3) violation of the California Invasion of Privacy Act
3 (“CIPA”), Cal. Penal Code § 632; (4) intrusion upon seclusion under California common law; (5)
4 invasion of privacy, in violation of Article I, Section 1 of the California Constitution; (6) breach of
5 contract under California common law; (7) violation of the California Unfair Competition Law
6 (“UCL”), Cal. Bus. & Prof. Code §§ 17200 et seq.; (8) violation of the California Consumers Legal
7 Remedies Act (the “CLRA”), Cal. Civ. Code §1750, et seq.; (9) fraud, deceit, and/or
8 misrepresentation under California common law; and (10) request for declaratory judgment under
9 the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. 3AC ¶¶ 148-288.
10 These claims are brought by seven Named Plaintiffs:
11 • Melissa Spurr is a resident of Union County, New York. 3AC ¶ 18. She alleges that
12 she owned at least three Google Home devices during the Class Period. Id. ¶ 20.
13 • B.S. is a minor member of Plaintiff Spurr’s household; as such, she has allegedly
14 interacted with Plaintiff Spurr’s Google Home device during the Class Period. 3AC
15 ¶¶ 19-20. She brings suit by and through her legal guardian, Plaintiff Spurr. Id.
16 • Lourdes Galvan is a resident of Los Angeles County, California. 3AC ¶ 27. She
17 alleges that she interacted with a Google Assistant-enabled Samsung Galaxy Tab
18 and a Google Assistant-enabled Samsung smartphone during the Class Period. Id. ¶
19 29.
20 • E.G., is a member of Plaintiff Galvan’s household; she was a minor during a portion
21 of the Class Period but now brings suit on her own. 3AC ¶¶ 28-29. Like Plaintiff
22 Galvan, E.G. alleges that she owned and interacted with a Google Assistant-enabled
23 Samsung Galaxy Tab and a Google Assistant-enabled Samsung smartphone during
24 the Class Period. Id. ¶ 29.
25 • Asif Kumandan is a resident of Kings County, New York. 3AC ¶ 38. He alleges that
26 he owned a Google Assistant-enabled Google Pixel smartphone during the Class
27 Period. Id. ¶ 39.
28 • Edward Brekhus is a resident of Marin County, California. 3AC ¶ 45. He alleges

3
1 that he owned a Google Assistant-enabled Google Home Mini device during the
2 Class Period. Id. ¶ 46. Brekhus obtained the device pursuant to a Spotify promotion.
3 Id.
4 • Jon Hernandez is a resident of Los Angeles County, California. 3AC ¶ 61.
5 Hernandez alleges that he purchased a Google Home Mini device during the Class
6 Period. Id. ¶ 62. He further alleges that he owned two other GAEDs during the Class
7 Period. Id. ¶ 67.
8 Defendants now move to dismiss the 3AC pursuant to Fed. R. Civ. P. 12(b)(6). Mot. at 1,
9 ECF 120. The motion has been fully briefed and was heard on May 6, 2021. See Opp., ECF 124;
10 Reply, ECF 129; ECF 134 (minute entry for hearing).
11 II. LEGAL STANDARD

12 A Rule 12(b)(6) motion to dismiss for failure to state a claim tests the legal sufficiency of a
13 complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). A claim will normally survive a
14 motion to dismiss if it offers a “short and plain statement ... showing that the pleader is entitled to
15 relief.” See Fed. R. Civ. P. 8(a)(2). This statement “must contain sufficient factual matter, accepted
16 as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678
17 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A claim has facial
18 plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable
19 inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678. “The
20 plausibility standard is not akin to a ‘probability requirement,’ but it asks for more than a mere
21 possibility that a defendant has acted unlawfully.” Id. (quoting Twombly, 550 U.S. at 556). “Where
22 a complaint pleads facts that are ‘merely consistent with’ a defendant’s liability, it ‘stops short of
23 the line between possibility and plausibility of ‘entitlement to relief.’’” Iqbal, 556 U.S. at 678
24 (quoting Twombly, 550 U.S. at 557).
25 When considering a Rule 12(b)(6) motion, the court must accept as true all factual
26 allegations in the complaint as well as all reasonable inferences that may be drawn from such
27 allegations. LSO, Ltd. v. Stroh, 205 F.3d 1146, 1150 n. 2 (9th Cir. 2000). Such allegations must be
28 construed in the light most favorable to the nonmoving party. Shwarz, 234 F.3d at 435.
4
1 Fraud allegations elicit a more demanding standard. Rule 9(b) provides: “In alleging fraud
2 ..., a party must state with particularity the circumstances constituting fraud.... Malice, intent,
3 knowledge, and other conditions of a person’s mind may be alleged generally.” Fed. R. Civ. P. 9(b).
4 This means that “[a]verments of fraud must be accompanied by the ‘who, what, when, where, and
5 how’ of the misconduct charged.” Vess v. Ciba–Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir.
6 2003). Like the basic “notice pleading” demands of Rule 8, a driving concern of Rule 9(b) is that
7 defendants be given fair notice of the charges against them. See, e.g., In re Lui, 646 Fed. Appx. 571,
8 573 (9th Cir. 2016) (“Rule 9(b) demands that allegations of fraud be specific enough to give
9 defendants notice of the particular misconduct ... so that they can defend against the charge and not
10 just deny that they have done anything wrong.”) (quotation omitted); Odom v. Microsoft Corp., 486
11 F.3d 541, 553 (9th Cir. 2007) (Rule 9(b) requires particularity “so that the defendant can prepare an
12 adequate answer”). This heightened-pleading standard can apply even to claims that do not innately
13 require proof of fraud. E.g., Vess, 317 F.3d at 1103–05.
14 If such a claim nonetheless avers fraudulent conduct, then at least those averments must
15 satisfy Rule 9(b); and, if a claim rests “entirely” on a “unified course of fraudulent conduct,” then
16 “the pleading of that claim as a whole must satisfy the particularity requirement of Rule 9(b).” Id.
17 at 1103–04. Finally, “[a] motion to dismiss a complaint or claim ‘grounded in fraud’ under Rule
18 9(b) for failure to plead with particularity is the functional equivalent of a motion to dismiss under
19 Rule 12(b)(6) for failure to state a claim.” Id. at 1107.
20 A court’s review on a 12(b)(6) motion to dismiss “is limited to the complaint, materials
21 incorporated into the complaint by reference, and matters of which the court may take judicial
22 notice.” Cedar Point Nursery v. Shiroma, 923 F.3d 524, 530 (9th Cir. 2019) (citing Tellabs, Inc. v.
23 Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007)). Moreover, in evaluating the complaint, the
24 court must “accept factual allegations in the complaint as true and construe the pleadings in the light
25 most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d
26 1025, 1031 (9th Cir. 2008). At the same time, a court need not accept as true “allegations that
27 contradict matters properly subject to judicial notice” or “allegations that are merely conclusory,
28 unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d
5
1 1049, 1055 (9th Cir. 2008) (internal quotation marks and citations omitted).
2 III. REQUEST FOR JUDICIAL NOTICE AND INCORPORATION BY REFERENCE

3 Defendants have submitted five exhibits that they ask the Court to review in ruling on their
4 motion to dismiss. See Mot. 2-3; Bali Decl., ECF 121 ¶¶ 2-7, Exhs. A-F. Defendants believe these
5 exhibits are either incorporated by reference in the 3AC or subject to judicial notice. Plaintiffs do
6 not oppose this request.
7 There are two doctrines that permit district courts to consider material outside the pleadings
8 without converting a motion to dismiss into a motion for summary judgment: judicial notice under
9 Federal Rule of Evidence 201 and incorporation by reference. Khoja v. Orexigen Therapeutics, Inc.,
10 899 F.3d 988, 998 (9th Cir. 2018), cert. denied sub nom. Hagan v. Khoja, 139 S. Ct. 2615 (2019).
11 The judicial notice doctrine permits a court to take judicial notice of matters that are “not subject to
12 reasonable dispute.” Fed. R. Evid. 201(b). A fact is “not subject to reasonable dispute” if it is
13 “generally known,” or “can be accurately and readily determined from sources whose accuracy
14 cannot reasonably be questioned.” Fed. R. Evid. 201(b)(1)–(2). However, “[j]ust because the
15 document itself is susceptible to judicial notice does not mean that every assertion of fact within
16 that document is judicially noticeable for its truth.” Khoja, 899 F.3d at 999. For instance, though
17 public records are generally subject to judicial notice, a court may not take judicial notice of disputed
18 facts within public records. Id.
19 “[I]ncorporation-by-reference is a judicially created doctrine that treats certain documents
20 as though they are part of the complaint itself.” Khoja, 899 F.3d at 1002. This doctrine permits a
21 court to consider a document “if the plaintiff refers extensively to the document or the document
22 forms the basis of the plaintiff’s claim.” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003).
23 A court generally “may assume an incorporated document’s contents are true for purposes of a
24 motion to dismiss under Rule 12(b)(6).” Khoja, 899 F.3d at 1003 (internal quotations omitted).
25 Because all inferences must still be drawn in the nonmoving party’s favor, however, “it is improper
26 to assume the truth of an incorporated document if such assumptions only serve to dispute facts
27 stated in a well-pleaded complaint.” Id.
28 Exhibit A is a copy of the current version of the Google Terms of Service, effective as of
6
1 March 31, 2020. Bali Decl. ¶ 2. Exhibit B is a copy of the Google Privacy Policy, effective as of
2 December 19, 2019. Id. ¶ 3. Exhibit C is a copy of the Google Terms of Service, effective as of
3 October 25, 2017. Id. ¶ 4. Exhibit D is a copy of the Google Terms of Service, effective as of April
4 14, 2014. Id. ¶ 5. These documents “form the basis” for Plaintiffs’ claims for breach of contract as
5 they contain the contract terms that were allegedly breached. See 3AC ¶¶ 237, 242. Defendants’
6 request to incorporate by reference Exhibits A-D is GRANTED. See Ritchie, 342 F.3d at 908;
7 accord Bass v. Facebook, Inc., 394 F. Supp. 3d 1024, 1037 n.1 (N.D. Cal. 2019) (granting
8 Facebook’s request to incorporate by reference the Terms of Service because the consolidated
9 complaint relied upon them to allege the breach of contract claims and statutory claims).
10 Defendants also ask the Court to consider Exhibit E— a true and correct copy of the
11 “Transcript of Proceedings Before the Honorable Beth Freeman United States District Judge” from
12 the April, 9 2020 hearing on Google’s Motion to Dismiss Plaintiffs’ Consolidated Amended Class
13 Action Complaint. Mot. at 2-3; Bali Decl. ¶ 6. Courts may properly take judicial notice of other
14 court filings and matters of public record. Reyn's Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741,
15 746 n.6 (9th Cir. 2006). Defendants’ request for judicial notice of Exhibit E is GRANTED.
16 Lastly, Exhibit F purports to be a copy of the “Manage audio recordings in your Web & App
17 Activity” webpage from Google’s Help Center. Bali Decl. ¶ 7. This document is not incorporated
18 by reference by the 3AC; rather, Defendants ask the Court take judicial notice of it because it appears
19 on a publicly accessible website. Mot. at 3 (citing Fed. R. Evid. 201(b)). The existence of this
20 document is a judicially noticeable fact, and therefore the Court GRANTS Defendants’ unopposed
21 request. See, e.g., Opperman v. Path, Inc., 84 F. Supp. 3d 962, 976 (N.D. Cal. 2015) (collecting
22 cases in which courts have taken judicial notice of publicly available policies and agreements). The
23 Court notes, however, that this notice does not establish that the document is valid or otherwise
24 binding on the Plaintiffs. See Datel Holdings Ltd. v. Microsoft Corp., 712 F. Supp. 2d 974, 984
25 (N.D. Cal. 2010).
26 IV. DISCUSSION
27 The Court made extensive findings regarding the legal viability of Plaintiffs’ previous
28 complaint when considering Defendants’ previous motion to dismiss. See Order on Motion to
7
1 Dismiss, ECF 80. The Court addressed each element of each claim in detail. See generally id; see
2 also Defendants’ Motion to Dismiss Consolidated Amended Class Action Complaint, ECF 56 at i-
3 ii (attacking Plaintiffs’ claims in turn). Defendants adopt a more particularized approach in the
4 instant motion. See Mot. at i-ii. The Court addresses each argument raised by Defendants in turn.
5 A. Counts 1, 3, 4, and 5 and the Reasonable Expectation of Privacy

6 Plaintiffs bring claims 1, 3, 4, and 5 for violation of the Wiretap Act, violation of CIPA §
7 632, intrusion upon seclusion under California common law, and invasion of privacy in violation of
8 the California Constitution. According to Defendants, Plaintiffs Galvan, E.G., and Kumandan’s
9 privacy claims fail because they have not alleged that Google intercepted their private
10 communications. Mot. at 6-10.
11 To state a claim under the Wiretap Act or CIPA § 632 or for intrusion upon seclusion or
12 invasion of privacy, Plaintiffs must allege facts showing that they had a reasonable expectation of
13 privacy in the oral communications that they allege were recorded without their consent. See Order
14 on Motion to Dismiss at 11 (must allege “reasonable expectation of privacy” in oral communications
15 to state a claim under the Wiretap Act) (quoting United States v. McIntyre, 582 F.2d 1221, 1223
16 (9th Cir. 1978)); id. at 28 (to state a CIPA Section 632 claim, plaintiffs must allege “confidential
17 communications,” which requires a “reasonable expectation of privacy”) (citing Kearney v.
18 Salomon Smith Barney, Inc., 39 Cal.4th 95, 117, n.7 (2006)); id. at 31 (the intrusion must have
19 occurred “under circumstances that would give rise to a reasonable expectation of privacy” to state
20 a claim for intrusion upon seclusion or invasion of privacy); see also Hernandez v. Hillsides, Inc.,
21 47 Cal. 4th 272, 285, 288 (2009).
22 Defendants argue that the 3AC does not allege facts showing that Plaintiffs frequently had
23 oral communications near their devices under circumstances giving rise to a reasonable expectation
24 of privacy. Mot. at 7-10. The Court addressed this argument in part in its order on Defendants’
25 previous motion to dismiss. This Court concluded that the Named Plaintiffs’ allegations were “too
26 vague” to infer that Plaintiffs’ respective GAEDs intercepted their private conversations. Order on
27 Motion to Dismiss at 11. Although this Court rejected Defendants’ suggestion that Plaintiffs were
28 required to identify specific communications that Plaintiffs reasonably believed to be private and
8
1 that were wrongly recorded, it nonetheless found that Plaintiffs failed to allege that they had a
2 reasonable expectation of privacy in the intercepted communications. Id. In support of this
3 conclusion, the Court pointed to the lack of “facts regarding the participants in the conversations,
4 the locations of the conversations, or examples of content from the conversations.” Id. at 12. The
5 Court highlighted that lack of detail was “especially glaring” for Plaintiffs who interacted with
6 smartphones because “smartphones are by their nature mobile and are frequently used in public
7 places.” Id. The 3AC includes extensive amendments about the Named Plaintiffs’ usage of their
8 GAEDs. 3AC ¶¶ 18-75
9 In light of these amendments, the Court is satisfied that Plaintiffs allege sufficient facts to
10 show that they frequently had oral communications near their devices under circumstances giving
11 rise to a reasonable expectation of privacy. Plaintiffs Galvan and E.G., who are members of the
12 same household, allege that they own a Samsung smartphone and a Galaxy Tab device. 3AC ¶ 29.
13 Plaintiffs Galvan and E.G. allegedly charge these devices in their living or dining room during the
14 day and in the bedroom at night. Id. ¶ 31. They further allege that they have private conversations
15 with family members “in their home, bedroom, and car” in the presences of the GAEDs. Id. ¶¶ 30-
16 31. For example, on September 17, 2018, the Galvan family had a “private disciplinary
17 conversation” “concerning personal responsibility. This confidential conversation was recorded
18 without a hot word.” Id. ¶ 32; see also id. ¶ 33 (conversation about Galvan parents’ childhood in the
19 inner city). Similarly, Plaintiff Kumandan alleges that he “frequently carried his Google Pixel
20 smartphone on his person, including to areas within his home where he has a reasonable expectation
21 of privacy.” Id. ¶ 39. Kumandan alleges that his GAED recorded a conversation between him and
22 his wife about BBQ sauce at their joint residence “where they have expectation of privacy.” Id. ¶
23 40; see also id. ¶ 42 (On July 6, 2019, “Google recorded Plaintiff Kumandan’s interaction with his
24 family member and/or a friend which took place in privacy and to the exclusion of all other persons
25 where Plaintiff Kumandan had a reasonable expectation of privacy”). Contrary to Defendants’
26 assertion to the contrary, Mot. at 8, these allegations properly detail the circumstances under which
27 Plaintiffs’ private conversations occurred. Plaintiffs Galvan, E.G., and Kumandan all allege that the
28 GAEDs intercepted conversations between family members that occurred inside their respective
9
1 homes. Such interceptions occurred “surreptitiously” without Plaintiffs uttering a hot word or
2 manually activating the devices. Id. ¶¶ 32, 43. While Defendants seem to take issue with the fact
3 that Plaintiffs’ decline to go into more granular detail about the content of their conversations, this
4 demand has already been rejected by the Court, Order on Motion to Dismiss at 11, and undermines
5 the alleged private nature of the conversations. In sum, the Court finds that Plaintiffs had a subjective
6 expectation that these conversations were not being overheard or recorded and that this expectation
7 was objectively reasonable. McIntyre, 582 F.2d at 1223.
8 Defendants further argue that Plaintiffs fail to allege facts showing that false accepts
9 routinely occur. Mot. at 10. As an initial matter, Plaintiffs need not plead this allegation in light of
10 amendments to the 3AC. In the Court’s previous Order, it held Plaintiffs must allege that “they
11 frequently have oral communications near their respective Google Assistant Enabled Devices under
12 circumstances giving rise to a reasonable expectation of privacy” coupled with an allegation that
13 “false accepts routinely occur” to support an inference that their private conversations were
14 intercepted. Order on Motion to Dismiss at 12; see also id. (“At the motion hearing, Defendants
15 represented that through their accounts, users can view all their past conversations with the Google
16 Assistant, including false accepts. If that is the case, Plaintiffs are advised to avail themselves of
17 that information.”). This holding was made in context of the previous complaint, in which the
18 Plaintiffs failed to identify any conversations that Defendants surreptitiously recorded. Plaintiffs
19 have now rectified this problem and have identified multiple conversations that Defendants recorded
20 even where Plaintiffs did not utter a hot word or manually activate the devices. See generally 3AC
21 ¶¶ 18-75.
22 The Court declines to heed Defendants’ objection for a second reason. Defendants object
23 that the allegations in the complaint do not establish that false accepts occur frequently and that
24 “[t]he relevant inquiry is how frequently the Assistant records communications which are not
25 intended for it, and Plaintiffs’ own allegations show that this figure is low.” Mot. at 10. But this
26 inquiry is more properly considered at the summary judgment phase. At the motion to dismiss phase,
27 the complaint is construed in a light most favorable to the plaintiff, Everest & Jennings, Inc. v.
28 American Motorists Ins. Co., 23 F.3d 226, 228 (9th Cir.1994), and all reasonable inferences are to
10
1 be drawn in favor of the plaintiff, Jacobson v. Hughes Aircraft, 105 F.3d 1288, 1296 (9th Cir.1997).
2 In the 3AC, Plaintiffs Galvan, E.G., and Kumandan allege that they often engaged in private
3 conversations near their GAEDs and identified specific occurrences of private conversations that
4 were allegedly intercepted. 3AC ¶¶ 27-44. Plaintiffs further allege that “[o]f the 11 recorded
5 conversations reflected in the Google account connected to Plaintiff Galvan’s smart phone, all 11
6 were non-consensually recorded by Google and the Google Assistant Enabled Device” and “[o]f the
7 seven recorded conversations that Plaintiff Kumandan’s Google account currently reflects, five, or
8 71%, were non-consensually recorded by Google and Google Assistant Enabled Device.” Id. ¶¶ 36,
9 44. Drawing all reasonable inferences in favor of the Plaintiffs, the 3AC adequately alleges that
10 false accepts routinely occur.
11 The Court DENIES Defendants’ Motion to Dismiss based on a failure to allege that Google
12 intercepted Plaintiffs’ private communications

13 B. Count 1 and Unlawful Disclosure or Use

14 The Wiretap Act “is designed to prohibit ‘all wiretapping and electronic surveillance by
15 persons other than duly authorized law enforcement officials engaged in investigation of specified
16 types of major crimes.’” Greenfield v. Kootenai County, 752 F.2d 1387, 1388 (9th Cir. 1985)
17 (quoting S. Rep. No. 1097, 90th Cong., 2d Sess.). In Count 1 of the 3AC, Plaintiffs allege that the
18 Defendants violated 18 U.S.C. § 2511(1)(a) of the Wiretap Act, which makes it unlawful for a person
19 to “intentionally intercept[], endeavor[] to intercept, or procure[] any other person to intercept or
20 endeavor to intercept, any wire, oral, or electronic communication.” Id. § 2511(1)(a); see 3AC ¶¶
21 160-162. The Wiretap Act also imposes liability on any person who “intentionally discloses” to
22 “any other person the contents of any wire, oral, or electronic communication,” or “intentionally
23 uses” the “contents of any wire, oral or electronic communication” while “knowing or having reason
24 to know that the information was obtained through the [unlawful] interception,” id. § 2511(1)(c)-
25 (d); Plaintiffs allege that Defendants also violate these provisions. See 3AC ¶¶ 163-168.
26 Defendants now argue that Plaintiffs’ theory that Google is liable under § 2511(1)(c)-(d) for
27 disclosing and using unlawfully intercepted oral communications to target personalized advertising
28 to them fails as a matter of law. Mot. at 11-13. Defendants contend that (1) “the only Plaintiffs who
11
1 allege that they were targeted with personalized advertisements are Kumandan, Galvan, and E.G.”,
2 (2) “‘liability for disclosure or use is contingent on the original interception being unlawful’”; and
3 (3) “there are no allegations that Google disclosed Plaintiffs’ communications to a third party for
4 the purpose of targeting advertisements.” Mot. at 11 (quoting Order on Motion to Dismiss at 15)
5 (emphasis in original).
6 First, the Court agrees with Defendants that the Plaintiffs’ allegations of targeted advertising
7 are limited to Plaintiffs Galvan, E.G., and Kumandan. In the 3AC, Galvan and E.G. allege the
8 following facts regarding Google’s use of private conversations for targeted advertising:
9 Several times, topics of Plaintiff Galvan’s and Plaintiff E.G.’s

10 private conversations were used to target advertisements to them. In
one such instance, Plaintiff E.G. was doing research on Los Angeles
11 gangs and was having a conversation regarding these gangs during
her parents’ childhood (who both grew up in the inner city).
12 Following this conversation, Plaintiff E.G. receive targeted
advertising in the form of suggested videos by YouTube, a Google-

13
owned company.
14
3AC ¶ 33. Kumandan alleges:
15
On at least one occasion, the subject matter of a conversation
16 between Plaintiff Kumandan and his wife were used to target
advertisements to Plaintiff Kumandan. In one such instance,
17
Plaintiff Kumandan was speaking to his wife about BBQ sauces.
18 Plaintiff Kumandan did not search for or otherwise interact with
Google regarding the same subject matter. Following this
19 conversation, Plaintiff Kumandan received targeted advertisement
where an ad for a BBQ sauce was displayed on Plaintiff
20 Kumandan’s Instagram page. This conversation took place in
Plaintiff and his spouse’s joint residence where they have
21
expectation of privacy
22
Id. ¶ 40. Plaintiffs do not argue otherwise. See Opp. at 10. Accordingly, the Court DISMISSES
23
WITHOUT LEAVE TO AMEND any Wiretap Act claim based on targeted advertising by Plaintiffs
24
25 Spurr, B.S., Brekhus, and Hernandez.
26 Defendants next argue that Plaintiffs’ Wiretap Act claim must be dismissed because
27 Plaintiffs Galvan, E.G., and Kumandan fail to plead facts showing that the alleged interception was
28 unlawful. Mot. at 11-12; see Noel v. Hall, 568 F.3d 743, 751 (9th Cir. 2009); 18 U.S.C. § 2511(c),
12
(d) (prohibiting the use or disclosure of the contents of any wire communications “obtained through
1
2 the interception of a wire . . . communication in violation of this subsection”). But, as explained in
3 Section III.A, Plaintiffs Galvan, E.G., and Kumandan successfully alleged that Defendants
4 intercepted a “wire, oral, or electronic communication.” 18 U.S.C. § 2511(a)(1). And the Court has
5
previously held that Plaintiffs successfully alleged that such interception was intentional. Order on
6
Motion to Dismiss at 9-10.
7
Defendants’ final argument is that there are no allegations that Google disclosed any
8
recordings to any third party. This argument speaks solely to the viability of Plaintiffs’ claims under
9
10 18 U.S.C. § 2511(c). See Mot. at 11 (“there are no allegations that Google disclosed Plaintiffs’
11 communications to a third party for the purpose of targeting advertisements” (emphasis in

12 original)). Plaintiffs Galvan and E.G. allege that, for the purposes of targeted advertising,
13
Defendants disclosed the contents of E.G.’s conversations to YouTube:
14
Several times, topics of Plaintiff Galvan’s and Plaintiff E.G.’s
15 private conversations were used to target advertisements to them. In
one such instance, Plaintiff E.G. was doing research on Los Angeles
16 gangs and was having a conversation regarding these gangs during
17 her parents’ childhood (who both grew up in the inner city).
Following this conversation, Plaintiff E.G. received targeted
18 advertising in the form of suggested videos by YouTube, a Google-
owned company. The video concerned an individual whose name
19 was specifically mentioned in the conversation. Plaintiffs Galvan
and E.G. have recognized that other ads have been targeted to them
20 following their private conversations in their home.
21
3AC ¶ 33. According to Defendants, these allegations fail as a matter of law because “E.G. does
22
not allege that Google disclosed the conversation to any third party, as YouTube is not a third party,
23
but rather ‘a Google-owned company.’” Mot. at 12 (quoting 3AC ¶ 33, citing Bali Decl., Exh. B at
24
25 19, 35). In response, Plaintiffs argue that whether YouTube is a third party entity is a factual
26 question that requires interrogation into the nature of the relationship between Defendants and
27 YouTube. While the relationship between a defendant and a third party entity often may require a
28
factual interrogation in some circumstances, there are no allegations in the current pleading to
13
suggest that YouTube is a third party. This is true even when construing Plaintiffs’ allegations in a
1
2 light most favorable to their claims. Indeed, the pleading itself states that YouTube is a Google-
3 owned company. 3AC ¶ 33. Accordingly, the Court DISMISSES WITHOUT LEAVE TO AMEND
4 Galvan and E.G.’s Wiretap Act claim to the extent it is predicated on unlawful disclosure for the
5
purpose of targeted advertising.
6
Meanwhile, Kumandan alleges that, for the purposes of targeted advertising, Defendants
7
disclosed the contents of his conversation to Instagram:
8
On at least one occasion, the subject matter of a conversation
9
between Plaintiff Kumandan and his wife were used to target
10 advertisements to Plaintiff Kumandan. In one such instance,
Plaintiff Kumandan was speaking to his wife about BBQ sauces.
11 Plaintiff Kumandan did not search for or otherwise interact with
Google regarding the same subject matter. Following this
12 conversation, Plaintiff Kumandan received targeted advertisement
where an ad for a BBQ sauce was displayed on Plaintiff

13
Kumandan’s Instagram page.
14
3AC ¶ 40. Defendants take an everything-but-the-kitchen-sink approach to Kumandan’s pleading,
15
arguing that there is no allegation that this conversation occurred near Kumandan’s GAED, no
16
17 allegation as to the temporal gap between the conversation recording and the targeted advertising,
18 and no allegation that Google disclosed Kumandan’s conversation to Instagram. Mot. at 11.
19 None of these arguments carry the day. First, the Court has already found that Kumandan
20 properly alleged that the conversation occurred near his Google Pixel. Second, the Court is unaware
21
of any authority suggesting that Kumandan needs to specify the exact time period between his
22
alleged conversation and the targeted Instagram advertisement. Viewing the pleadings in the light
23
most favorable to Plaintiffs, the Court finds it sufficient that Kumandan pled that the targeted
24
25 advertisement occurred after the identified intercepted conversation. Finally, the Court rejects
26 Defendants’ argument that Plaintiffs must allege the specific mechanics behind Google’s alleged
27 disclosure to Instagram. See Mot. at 11 (“there are no facts at all connecting the advertisement that
28
was displayed on Instagram to Google or the Assistant, and [Plaintiffs’] attempt to draw such a
14
connection is pure speculation”). While Google suggests that Kumandan’s pleadings are wholly
1
2 speculative, the Court finds it eminently plausible that Google disclosed Kumandan’s intercepted
3 conversations to Instagram, thus enabling Instagram to provide Kumandan with targeted
4 advertisements.
5
Finally, Defendants argues that “to the extent Plaintiffs contend that Google used
6
Kumandan’s and/or E.G.‘s conversations to target advertisements, such use is expressly permitted
7
under the Privacy Policy and thus not actionable.” Mot. at 12 (emphasis in original). The Privacy
8
Policy, of which the Court has taken judicial notice, contains a section entitled “Information we
9
10 collect as you use our services.” Bali Decl., Exh. B at 29. That section states, “We collect
11 information about your activity in our services, which we us to do things like recommend a
12 YouTube video you might like.” Id.; see also id. at 23 (Google “collect[s] information about your
13
activity in our services, which we use to do things like recommend a YouTube video you might
14
like.”).
15
In the Court’s previous order, it found that Google’s Privacy Policy was too vague to
16
17 conclusively establish consent to disclosure of the recordings. See Order on Motion to Dismiss at
18 21-22. The Court now finds that Google’s Privacy Policy is too vague to conclusively establish
19 consent to use of the recordings. The question before the Court is whether the Privacy Policy
20 adequately indicated to users that Defendants would use recordings made absent manual activation
21
or the utterance of a hot word, such that users could fairly be said to have “agreed” to these
22
disclosures. In re Facebook, Inc., Consumer Privacy User Profile Litig., 402 F. Supp. 3d 767, 789
23
(N.D. Cal. 2019). The Court considers this question “objectively, from the perspective of a
24
25 reasonable . . . user.” Id. The Court find that while Google’s Privacy Policy does disclose that it
26 will collect and use information for targeted advertising, it does not sufficiently apprise users that
27 it will use recordings made in the absence of manual activation or a hot word utterance. See In re
28
Facebook, Inc., Consumer Privacy User Profile Litigation, 402 F. Supp. 3d at 792 (“Although
15
Facebook points to a section in its Data Use Policy entitled ‘Service Providers’ which says ‘we give
1
2 your information to the people and companies that help us provide, understand, and improve the
3 services we offer,’ that statement does not come close to disclosing the massive information-sharing
4 program with business partners that the plaintiffs allege in the complaint.”). As such, it cannot serve
5
as a valid consent.
6
7 C. Count 2: Stored Communications Act

Count 2 alleges violations of the Stored Communications Act (“SCA”). As the Ninth Circuit
8
has explained, the SCA is modeled off the common law of trespass. Theofel v. Farey-Jones, 359
9
F.3d 1066, 1072–73 (9th Cir. 2004). “Just as trespass protects those who rent space from a
10
commercial storage facility to hold sensitive documents, the Act protects users whose electronic
11
communications are in electronic storage with an ISP or other electronic communications facility.”
12
Id. (internal quotations and citations omitted). An ECS provider “shall not knowingly divulge to any
13
person or entity the contents of a communication while in electronic storage by that service”; if it
14
does so, it is liable for unlawful disclosure of customer communications under § 2702(a). 18 U.S.C.
15
§ 2702(a)(1). Defendants now argue that, as with Plaintiffs’ Wiretap Act claims, “there are no
16
factual allegations supporting any contention that Google disclosed information to third parties for
17
the purpose of targeted advertising.” Mot. at 12. Accordingly, Defendants request that the Court
18
dismiss Plaintiffs’ unlawful disclosure claim under 18 U.S.C. § 2702(a)(1) based on targeted
19
advertising.
20
The Court has dismissed Plaintiffs Spurr, B.S., Galvan, E.G., Brekhus, and Hernandez’s
21
Wiretap Act claims under 18 U.S.C. § 2511(c) based on a theory of targeted advertising. See Section
22
III.B. Accordingly, the Court DISMISSES WITHOUT LEAVE TO AMEND any SCA claim based
23
on targeting advertising by Plaintiffs Spurr, B.S., Galvan, E.G., Brekhus, and Hernandez.
24
25 D. Count 6: Common Law Breach of Contract

Count 6 is a claim for breach of contract based on Defendants’ Terms of Service (“TOS”)
26
and the Privacy Policy contained therein. 3AC ¶¶ 181-196. In order to plead a claim for breach of
27
contract, Plaintiffs must allege: (1) the existence of a contract with Defendants, (2) their
28
16
1 performance under that contract, (3) Defendants breached that contract, and (4) they suffered
2 damages. In re Facebook, Inc. Internet Tracking Litig., 2020 WL 1807978, at *14 (citing Oasis
3 West Realty, LLC v. Goldman, 51 Cal. 4th 811, 821 (2011)). Defendants move to dismiss on the
4 grounds that Plaintiffs fail to (1) plead how any website is incorporated into the Terms of Service
5 (“TOS”), (2) identify any conduct by Google that is in breach of any contractual term, or (3)
6 identify any damages suffered by Plaintiffs. See Mot. at 13-18.
7 i. Specific Contractual Provisions: FAQ in the Nest Help Center

8 In the Court’s order considering Defendants’ previous motion to dismiss, it found that
9 Plaintiffs adequately identified certain provisions of Google’s Privacy Policy. Order on Motion to
10 Dismiss at 33-34. This Court found, however, that certain identified provisions of the Privacy
11 Policy could not form the basis for a breach of contract claim because the operative complaint
12 made no reference to such provisions. Id. at 34 (“The Consolidated FAC makes no reference to
13 this provision, which means the Court cannot consider it to be alleged for purposes of the instant
14 motion.”). Finally, the Court concluded that Plaintiffs were unable to base their contract claim on
15 provisions from “different websites, including the ‘Google Nest Help Center’ and the ‘Google
16 Safety Center’” because the websites were not binding on the parties. Id. at 34-35 (“But this vague
17 statement is hardly sufficient to establish that the particular websites cited by Plaintiffs are part of
18 the TOS or otherwise are binding upon the parties.”).
19 Defendants now argue that the FAQ in the Nest Help Center is not incorporated into
20 Google’s Terms of Service, and therefore cannot be the basis for a breach of contract claim. Mot.
21 at 13-14. Plaintiffs respond that “[c]ontrary to Google’s argument, the allegations regarding
22 Google’s breach are not premised on the FAQs referenced in the [3]AC. Rather, the citation to the
23 FAQs is simply included to aid the interpretation of the potentially ambiguous term ‘use audio
24 features’ in the context of GAEDs.” Opp. at 12. Accordingly, the Court DISMISSES Plaintiffs’
25 breach of contract claim to the extent that it is premised on the FAQ in the Nest Help Center.
26 ii. Breach
27 The Court now turns to whether Plaintiffs have alleged that Defendants breached the terms
28 of the Privacy Policy. Plaintiffs allege that they entered into a valid contract with Google, “which
17
1 Google breached in three separate and distinct ways: (1) by recording Plaintiffs’ private
2 conversations when they are not using their Google Assistant Enabled Devices; (2) by disclosing
3 to third parties Plaintiffs’ private conversations without their consent; and (3) by changing the way
4 Defendants collected and used information without Plaintiffs’ knowledge or consent.” 3AC ¶ 236.
5 According to Defendants, Plaintiffs have failed to plausibly plead facts to support their claims.
6 Mot. at 14-16.
7 Plaintiffs adequately allege the first two identified theories of breach, but miss the mark on
8 the third. Plaintiffs’ first theory—that Google breached the Privacy Policy by recording Plaintiffs’
9 private conversations when they are not using their GAEDs—is predicated on the following
10 Privacy Policy provision:
11 Your activity
12
We collect information about your activity in our services, which

13 we use to do things like recommend a YouTube video you might

like. The activity information we collect may include:
14
...
15
16 • Voice and audio information when you use audio features.
17 Bali Decl., Exh. B at 21; TAC ¶ 242. Defendants claim that Plaintiffs have failed to allege a
18 breach of this provision because it “does not say that Google will collect audio information only
19
when the user utters a hotword or manually activates the device. . . . audio features are being used
20
when the Assistant is activated; there is nothing in this provision limiting the meaning of ‘use’ to
21
only intentional uses.’” Mot. at 14-15 (emphasis added). In other words, Defendants ask the Court
22
23 to find as a matter of law that this provision is broad enough to permit Google to record
24 conversations even where a hotword on manual activation does not occur.
25 The Court declines to do so. At the motion to dismiss stage, the Court must draw all
26 reasonable inferences in favor of Plaintiffs. See Retail Prop. Trust v. United Bhd. of Carpenters &
27
Joiners of Am., 768 F.3d 938, 945 (9th Cir. 2014). Under this standard, the Court cannot conclude
28
18
that the Privacy Policy provision’s reference to the “use [of GAED] audio features” applies to
1
2 scenarios in which the Plaintiffs do not affirmatively use GAED audio features, but the GAED
3 nonetheless records audio. TAC ¶ 242 (emphasis added); see also Transcript (“Tr.”) at 7:3-10
4 (“[THE COURT:] In my view the Plaintiffs have [it] right that audio features are used when the
5
consumer chooses to use them, not when the device mistakenly or otherwise picks up unintended
6
conversations. And so I think it is at least a reasonable inference that the phrase ‘when audio
7
features are used’ really is limited to when there is a decision to manually engage or to state a
8
hotword.”). And while Defendants stress that “the Nest FAQ make clear that Google Home
9
10 records conversations when a hotword is ‘detected’ not when it is spoken,” Mot. at 15, they
11 simultaneously argue that the Nest FAQ is not incorporated into the Privacy Policy and is thus not
12 a proper basis of Plaintiffs’ breach of contract claim, Mot. at 13-14.
13
Plaintiffs’ second theory—that Google breached the Privacy Policy by disclosing to third
14
parties Plaintiffs’ private conversations without their consent—is predicated on the following
15
Privacy Policy provision:
16
17 When Google shares your information
18 We do not share personal information with companies,

organizations, or individuals outside of Google except in the
19 following cases:
20 With your consent
21
We’ll share personal information outside of Google when we have
22 your consent. For example, if you use Google Home to make a
reservation through a booking service, we’ll get your permission
23 before sharing your name or phone number with the restaurant.
We’ll ask for your explicit consent to share any sensitive personal
24 information.
25
With domain administrators
26
...
27
For external processing
28
19
We provide personal information to our affiliates and other trusted

1 businesses or person to process it for us, based on our instructions
2 and in compliance with our Privacy Policy and any other appropriate
confidentiality and security measures.
3
For legal reasons
4
...
5
6 Bali Decl., Exh. B at 29; TAC ¶¶ 245, 251. Defendants contend that they have not breached this
7 provision solely because “this Court already found that the Privacy Policy permits disclosure ‘for
8 external processing’ without consent.” Mot. at 16 (citing Order on Motion to Dismiss at 35). But
9
the Court’s determination was driven by its finding that the operative complaint did “not
10
adequately plead that Plaintiffs’ ‘personal information’ has been shared. The vague and
11
conclusory allegation that Plaintiffs ‘private conversations’ were recorded and disclosed does not
12
suffice.” Order on Motion to Dismiss at 35. As the Court explained at length above, this
13
14 deficiency has now been rectified. And the parties do not dispute that Plaintiffs have not consented
15 to the disclosure of their personal information. Mot. at 16; Opp. at 15. This theory of breach may
16 thus proceed.
17
Plaintiffs’ third theory—that Google breached the Privacy Policy by changing the way
18
Defendants collected and used information without Plaintiffs’ knowledge or consent —is
19
predicated on the following Privacy Policy provision:
20
21 The information Google collects, and how that information is used,

depends on how you use our services and how you manage your
22 privacy controls.
23 Bali Decl., Exh. B at 29; TAC ¶¶ 252. According to Plaintiffs Brekhus and Hernandez, Defendants
24 breached this provision because
25
[Google] changed the method that [it] collected information and
26 changed the way the information was used without regard to how
Plaintiffs and the Purchaser Subclass used the services or managed
27 their privacy controls, without notice to or consent by Plaintiffs. As
alleged herein, Google changed the method of collecting
28
information from being based on actions by the user, such as
20
manual activation or using “hot words,” to being based on

1 sounds not made by the user necessarily, but by other items in the
2 home such as smoke alarms, glass breaking, or other noises.
3 TAC ¶¶ 253. But nothing in the identified contract provision suggests that Google is contractually
4 prohibited from making changes to how it collects or uses consumer information. Tr. at 7:14-16
5
(“[THE COURT:] I haven't actually seen anything in the pleading that would tell me that Google
6
promised not to do that.”), 38:22-25 (“[THE COURT:] You have pointed to nothing in the
7
documents -- in the contracts that tells me that Google promised to never update and -- or to say:
8
We promise we will never do a software update you don't like.”), 40:12-13 (“[THE COURT:] You
9
10 are basically suing on a bug that was unintentional, claiming it to be a breach of contract.”). And
11 Plaintiffs do not point this Court to a single instance where another court has allowed a similar
12 theory of breach to proceed. See Opp. at 16-17. Accordingly, the Court DISMISSES the third
13
theory of Plaintiffs’ contract claim WITHOUT LEAVE TO AMEND.
14
15 iii. Damages
16 Plaintiffs proffer three damages theories: (1) benefit of the bargain, (2) “harm to
17 [Plaintiffs’] “privacy interests,” and (3) “disgorgement of profits made by Google as a result of its
18 breach of contract.” 3AC ¶¶ 254-256; see Opp. at 17-18. Defendants believe all of these theories
19 to be flawed. See Mot. at 17-18.
20 The first theory is benefit of the bargain damages: “the services Plaintiffs . . . received in
21 exchange for the purchase price of Google Assistant Enabled Devices were worth less than the
22 services they paid for because Plaintiffs’ information was recorded without their consent and
23 divulged to third parties.” 3AC ¶ 254. Also known as expectation damages, a benefit of the
24 bargain measure of damages is intended “to give the injured party the benefit of his bargain and
25 insofar as possible to place him in the same position he would have been in had the promisor
26 performed the contract.” Coughlin v. Blair, 262 P.2d 305, 314 (Cal. 1953); see also Twin City Fire
27 Ins. Co. v. Philadelphia Life Ins. Co., 795 F.2d 1417, 1425 (9th Cir. 1986).
28 Courts have approved damages based on benefit of the bargain in several technology cases
21
1 involving privacy. For instance, in In re Yahoo! Inc. Customer Data Sec. Breach Litig., Plaintiff
2 Mortensen alleged that he paid “$19.95 each year since December 2007 for Yahoo’s premium
3 email service” but did not acquire the full value of Yahoo’s service because it was not secure. 313
4 F. Supp. 3d 1113, 1130 (N.D. Cal. 2018). There, Plaintiff Mortensen plausibly lost the benefit of
5 the bargain in that he received a less valuable email service than the one he paid for. See id.
6 Similarly, in In re Anthem, Inc. Data Breach Litig., plaintiffs paid premiums to defendants for
7 health insurance plans. No. 15-MD-02617-LHK, 2016 WL 3029783, at *7-*8 (N.D. Cal. May 27,
8 2016). When the defendants experienced various breaches of its database containing individuals’
9 health record information, the plaintiffs alleged, inter alia, that the defendants had breached their
10 privacy policies. Id. at *9. The Court allowed the plaintiff to pursue a theory of benefit of the
11 bargain losses on the theory that some portion of their premiums went toward paying for robust
12 security measures, which they allegedly did not receive. Id. at *13.
13 The Court previously found that Plaintiffs failed to allege that they have paid anything to
14 Defendants for the GAEDs:
15 Not only does the Consolidated FAC say nothing about any fee or
16 premium paid, it appears that the Google Assistant is available free
of charge for use on Google Assistant Enabled Devices. See Consol.
17 FAC ¶ 21. As a result, it cannot be said that Plaintiffs received less
than what they paid for—they appeared to have paid nothing. See In
18 re LinkedIn User Privacy Litig., 932 F. Supp. 2d 1089, 1093 (N.D.
Cal. 2013) (rejecting plaintiffs’ benefit of the bargain theory because
19
“the FAC fails to allege that Plaintiffs actually provided
20 consideration for the security services which they claim were not
provided”). The Court therefore does not believe that benefit of the
21 bargain is a viable damages theory.
22 Order on Motion to Dismiss at 37.
23 Defendants argue that Plaintiffs B.S., Galvan, E.G., and Brekhus “fail to allege that they
24 paid Google anything for the Assistant, much less any privacy protective features.” Mot. at 17.
25 And the allegations in the 3AC of Plaintiffs Kumandan, Spurr, and Hernandez, Defendants
26 contend, do not rectify the problem the Court previously identified because while they “allege that
27 they ‘purchased Google Manufactured Devices,’” they “fail to allege that they paid a premium for
28 a certain level of privacy protection they did not receive.” Mot. at 17 (quoting 3AC ¶ 238).
22
1 The Court easily concludes that Plaintiffs Kumandan, Spurr, and Hernandez have
2 adequately pled expectation damages. The 3AC explicitly alleges that “Plaintiffs Kumandan,
3 Spurr, Hernandez and Google Manufactured Device Subclass Members would not have
4 purchased, or would not have paid as high a price, for the Google Assistant Enabled Devices if
5 they had known that Google would breach the TOS and Privacy Policy by recording and revealing
6 Plaintiffs private conversations.” 3AC ¶ 254.
7 The same cannot be said for the remaining Plaintiffs. There is no allegation even
8 supporting an inference that B.S. even owned a GAED. See 3AC ¶ 20 (“Plaintiff Spurr owned at
9 least three Google Home devices during the Class Period.”). And Brekhus explicitly alleges that
10 he obtained his GAED for free via a promotion with third-party company Spotify. 3AC ¶ 46. That
11 Brekhus “would not have paid for Spotify or ordered the Google Home device . . . had he known
12 that any of Google’s representations were false,” has no bearing on the benefit of Brekhus’ bargain
13 with Defendants. 3AC ¶ 55 (emphasis added). Finally, while Plaintiffs Galvan and E.G. allege that
14 they owned a Samsung smart phone and a Galaxy Tab during the Class Period, 3AC ¶ 29, the
15 Court cannot infer from this information that they purchased the devices from Google (as opposed
16 to some other entity). Accordingly, the Court GRANTS Defendants’ motion on this ground as to
17 Galvan, E.G., B.S. and Brekhus and DENIES Defendants’ motion on this ground as to Kumandan,
18 Spurr, and Hernandez.
19 Plaintiffs’ second theory of damages—harm to their privacy interests—is adequately pled.
20 Generally, a plaintiff may seek damages for “the detriment caused by the breach.” Stephens v. City
21 of Vista, 994 F.2d 650, 657 (9th Cir. 1993) (citing Cal. Civ. Code § 3300). In this case, the
22 detriment Plaintiffs say they suffered was an invasion of their privacy. Plaintiffs are entitled to
23 seek compensatory damages or perhaps nominal damages for such harm. See In re Facebook, Inc.,
24 Consumer Privacy User Profile Litig., 402 F. Supp. 3d at 802; Cal. Civ. Code § 3360. As
25 discussed a length above, Plaintiffs have amended their complaint to sufficiently allege an
26 invasion of their privacy, and the 3AC plausibly alleges that Plaintiffs’ own private conversations
27 were intercepted. Accordingly, the Court DENIES Defendants’ motion on this ground.
28 Plaintiffs’ third theory of damages is that Plaintiffs are entitled to “disgorgement of the
23
1 profits Google has obtained as a result of the improved functionality of Google Assistant resulting
2 from its sharing of private conversations in breach of its contract with Plaintiff[s] and Class
3 Members.” 3AC ¶ 256. The Ninth Circuit has said that “under California law, a defendant’s unjust
4 enrichment can satisfy the ‘damages’ element of a breach of contract claim, such that
5 disgorgement is a proper remedy.” Foster Poultry Farms, Inc. v. SunTrust Bank, 377 Fed. App’x
6 665, 669 (9th Cir. 2010) (citing Ajaxo Inc. v. E*Trade Group, Inc., 135 Cal. App 4th 21, 56-57
7 (2005)). The Ninth Circuit has further held that “California law recognizes a right to disgorgement
8 of profits resulting from unjust enrichment, even where an individual has not suffered a
9 corresponding loss.” In re Facebook, Inc. Internet Tracking Litig., 2020 WL 1807978, at *5-*6.
10 To plead a theory of disgorgement, Plaintiffs must show “that they retain a stake in the
11 profits garnered.” Id. at *6. The Court previously concluded that
12 Plaintiffs attempt to plead that they are entitled to the “substantial

13 profits” that Defendants’ have earned using their “personal

information” because Defendants’ use was unauthorized. Consol.
14 FAC ¶¶ 199-200. But Plaintiffs have not adequately alleged that
their unspecified “personal information” has financial value or that
15 Defendants have profited from the information. Although courts
have found that individuals’ browsing history may plausibly carry
16
financial value, In re Facebook, Inc. Internet Tracking Litig., 2020
17 WL 1807978, at *6., Plaintiffs have not pleaded any description of
the “personal information” that Defendants’ allegedly used. Without
18 such facts, Plaintiffs’ assertion that Defendants garnered
“substantial profits” from the information is purely conclusory. See,
19 e.g., Varga v. Wells Fargo Bank, N.A., 796 Fed. App’x 430, 431 (9th
Cir. 2020) (“Varga’s conclusory assertion that she was ‘deprived of
20
the contractual and consumer protections and benefits’ of the notice
21 provision is insufficient to plausibly allege” damages.). The Court
finds that Plaintiffs have plausibly demonstrated that any profits
22 were unjustly earned by virtue of Defendants’ use being allegedly
unauthorized. In re Facebook, Inc. Internet Tracking Litig., 2020
23 WL 1807978, at *6.
25 To rectify these defects, the 3AC alleges that “[t]he unlawfully-obtained private
26 conversations have financial value, in that they enabled Google to improve the functionality of the
27 Google Assistant and to better target advertisements to Google users, thereby increasing Google’s
28 revenue.” 3AC ¶ 256. While Defendants argue that this allegation is pure speculation, Mot. at 18,
24
1 Plaintiffs have offered at least one example of the financial value of their intercepted personal
2 information. Plaintiff Kumandan pled that he had a conversation inside his home with his wife
3 about BBQ sauce, and that, later, he received a targeted Instagram advertisement for BBQ sauce.
4 3AC ¶ 40. Plaintiff also allege that “[i]mproving the functionality of Google Assistant is necessary
5 to allow Google to continue to compete with the increasingly crowded virtual assistant market and
6 to buttress the price of the Google Manufactured Devices.”). Id. ¶ 10. Drawing all inferences in
7 favor of Plaintiffs, the Court finds it plausible that Google was able to monetize Plaintiffs’
8 unauthorized recordings via targeted advertising and by improving the Google Assistant
9 functionality. The Court DENIES Defendants’ motion on this ground.
10 E. Counts 8 and 9 and Fed. R. Civ. P. 9(b)

11 In Count 8, Plaintiffs Brekhus and Hernandez allege that Defendants have violated the
12 CLRA by making “improper representations” about Google Home devices and by advertising
13 Google Home devices “with intent not to sell them as advertised.” 3AC ¶¶ 263-270. In Count 9,
14 Plaintiffs Brekhus and Hernandez allege that Defendants have engaged in common law fraud,
15 deceit, and/or misrepresentation by “fraudulently and deceptively inform[ing] Plaintiffs that the
16 Google Home Product had adequate security measures in place and that Defendants would not
17 misuse their personal information.” 3AC ¶¶ 271-278. Defendants move to dismiss both claims,
18 arguing that neither claim meets the requisite Fed. R. Civ. P. 9(b) standard. Mot. at 18-20, 22-23.
19 Fraud allegations must be pled “with particularity.” Fed. R. Civ. P. 9(b). To satisfy Rule
20 9(b), “a pleading must identify the who, what, when, where, and how of the misconduct charged,
21 as well as what is false or misleading about the purportedly fraudulent statement, and why it is
22 false.” Cafasso, U.S. ex rel. v. Gen. Dynamics C4 Sys., Inc., 637 F.3d 1047, 1055 (9th Cir. 2011)
23 (internal marks omitted). Rule 9(b)’s heightened pleading standard extends to Plaintiffs’ CLRA
24 claim as it sounds in fraud. Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009).
25 Plaintiffs do not dispute that the fraud and CLRA claims fall under this standard. See Opp. at 21-
26 25. They do dispute whether their pleadings meet this standard. Id.
27 The Court finds the pleadings as to these claims exceedingly thin. Indeed, the Court
28 struggled to identify a specific, cogent theory of fraudulent conduct alleged in the 3AC pursuant to
25
1 which Brekhus and Hernandez intend to sue. See Tr. at 43:19-44:18 (clarifying theory of fraud).
2 The allegation in the 3AC that Defendants promised “adequate security measures” is vague to the
3 point of meaninglessness. 3AC ¶ 272 (“Defendants have fraudulently and deceptively informed
4 Plaintiffs that the Google Home Product had adequate security measures in place and that
5 Defendants would not misuse their personal information.”). It is Plaintiffs’ responsibility to detail
6 what these security measures would be, and how Google failed to provide them. See Cafasso, 637
7 F.3d at 1055.
8 In the opposition brief and at the motion hearing, Plaintiffs clarified that their theory of
9 fraud is predicated on Google’s ability to expand the circumstances upon which the GAEDs would
10 initiate recordings. Opp. at 22 (“the claims are that Google promised that the Google Home
11 devices would active in only three limited circumstances, when in fact, Google retained the ability
12 to unilaterally add additional circumstances, and it did so in the form of ‘alarm events.’”); see also
13 Tr. at 43:19-44:12 (“THE COURT: So you are saying that Google had a present intention to
14 change the terms that it didn't disclose? That's what you are saying? [PLAINTIFFS]: Yes, Your
15 Honor . . . We allege that at the time they made those representations, they knew that they could
16 and would change the circumstances under which . . . the devices could record and transmit.”). To
17 this end, the pleading includes allegations that GAEDs belonging to third parties began recording
18 audio after the detection of smoke alarms or breaking glass. 3AC ¶¶ 108-109. In response, Google
19 explained that these recordings were accidental and were triggered by a software update that was
20 consequently rolled back. Id. ¶ 110.
21 Acknowledging that this theory is less amorphous than Plaintiffs’ “adequate security
22 measures” theory, the Court nonetheless finds that it still falls far short of Rule 9’s requirements.
23 First, the Court is unable to find where this unified theory of fraud is alleged in the complaint.
24 Instead, Plaintiffs have peppered relevant allegations throughout without providing the Court any
25 guiding common thread. Cf. Tinian Women Ass'n v. United States Dep't of the Navy, 976 F.3d 832,
26 841 (9th Cir. 2020) (“Potentially relevant facts and regulations are scattered in different parts of
27 the complaint, and a district court's job is not to piece together a jigsaw puzzle of claims.”). And,
28 even ignoring this flaw, the 3AC is void of facts that so much as suggest that (1) Brekhus and
26
1 Hernandez justifiably and detrimentally relied on Defendants’ alleged misrepresentations or (2)
2 Google, at the time of the alleged misrepresentations, had the intent to mislead or omit material
3 information about the future circumstances under which the GAEDs would record audio. Plaintiffs
4 must plead additional facts that establish these “indispensable elements of fraud.” Vess v. Ciba-
5 Geigy Corp. USA, 317 F.3d 1097, 1105 (9th Cir. 2003) (“indispensable elements of a fraud claim
6 include a false representation, knowledge of its falsity, intent to defraud, justifiable reliance, and
7 damages” (internal marks and citation omitted).
8 The Court GRANTS Defendants’ motion to dismiss Counts 8 and 9. While the Court
9 remains skeptical that Plaintiffs can fix the identified defects, because this is the first instance the
10 Court has had to consider these claims, Plaintiffs are allowed LEAVE TO AMEND. See Eminence
11 Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1052 (9th Cir. 2003) (citing Foman v. Davis, 371
12 U.S. 178, 182 (1962).

13 F. Count 7: California UCL

14 Count 7 is brought under California’s Unfair Competition Law (“UCL”), which prohibits
15 any “unlawful, unfair or fraudulent business practice and unfair, deceptive, untrue or misleading
16 advertising.” Cal. Bus. & Prof. Code § 17200. The California Supreme Court has clarified that the
17 UCL, because it is “written in the disjunctive,” prohibits three separate types of unfair
18 competition: (1) unlawful acts or practices, (2) unfair acts of practices, and (3) fraudulent acts or
19 practices. Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999);
20 accord Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1168 (9th Cir. 2012). To plead a UCL
21 claim, a plaintiff’s allegations must show that a defendant’s conduct violates one of these three
22 “prongs.” Id. In addition, because a UCL claim may only be brought by “a person who has
23 suffered injury in fact and has lost money or property as a result of the unfair competition,” Cal.
24 Bus. & Prof. Code § 17204, a plaintiff must “demonstrate some form of economic injury.”
25 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 323 (2011). This requirement is sometimes
26 referred to as “UCL standing.” Id. at 320-21.
27 In their motion to dismiss, Defendants contend that Plaintiffs have failed to allege
28 economic injury, which would preclude any UCL claim. Mot. at 20-21. Defendants also challenge
27
1 the sufficiency of Plaintiffs’ allegations as to both of the UCL prongs alleged (“unlawful” and
2 “unfair”). Mot. at 23-24.
3 i. Economic injury
4 The Court begins by addressing Defendants’ contention that Plaintiffs have not alleged
5 economic injury, as necessary to bring a UCL claim. Mot. at 20. Under California law, a UCL
6 plaintiff must “(1) establish a loss or deprivation of money or property sufficient to qualify as
7 injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e.,
8 caused by, the unfair business practice or false advertising that is the gravamen of the claim.”
9 Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 322 (2011). “There are innumerable ways in
10 which economic injury” may be shown; for instance:
11 A plaintiff may (1) surrender in a transaction more, or acquire in a

transaction less, than he or she otherwise would have; (2) have a
12 present or future property interest diminished; (3) be deprived of
money or property to which he or she has a cognizable claim; or (4)

13 be required to enter into a transaction, costing money or property, that

would otherwise have been unnecessary.
14
Id. at 323.
15
In the instant case, Plaintiffs advance two theories of economic injury. First, Plaintiffs
16
allege overpayment for their Google Assistant Enabled Devices, i.e. “that had they known their
17
private communications would be intercepted, recorded, disclosed, and misused, they would not
18
have made their purchase, or would have paid less for them. Opp. at 18 (citing 3AC ¶¶ 11, 126,
19
254, 261). Certainly, overpayment is an economic injury under the UCL. See, e.g., Davidson v.
20
Kimberly-Clark Corp., 889 F.3d 956, 966 (9th Cir. 2018), cert. denied, 139 S. Ct. 640 (2018). The
21
question becomes whether Plaintiffs have pleaded sufficient facts to establish overpayment here.
22
This Court previously held that the complaint sufficiently alleged that “Plaintiffs
23
Kumandan and Spurr ‘purchased their Google Manufactured Device either directly from Google
24
or from actual or apparent agents of Google.’” Order on Motion to Dismiss at 45 (quoting Consol.
25
FAC ¶ 215). Neither the 3AC, nor Defendants’ motion, changes that conclusion. See U.S. v.
26
Alexander, 106 F.3d 874, 876 (9th Cir. 1997); see also Reply at 14 (“Plaintiffs B.S., Galvan, E.G.,
27
Brekhus, and Hernandez have not alleged economic loss”). The Court thus turns to consider the
28
28
1 allegations of Galvan, E.G., B.S., Brekhus, and Hernandez.
2 Defendants maintain that the 3AC contains insufficient details regarding Plaintiffs’
3 purchase of their GAEDs. Mot. at 20. According to Defendants, the 3AC does not allege that
4 Plaintiffs purchased and overpaid for their devices. Id. They continue: “Plaintiffs contend
5 generally that they ‘would not have purchased a [GAED], or would have paid less’ had they
6 known about Google’s alleged conduct ([3]AC ¶ 261), but absent any further detail explaining
7 how Plaintiffs suffered an economic loss from a service they paid nothing for, this is nothing more
8 than a legal conclusion.” Id.
9 That is true of Named Plaintiff B.S., who allegedly interacted with a GAED that she did
10 not own. 3AC ¶ 20 (“Plaintiff Spurr owned at least three Google Home devices”). It is also true of
11 Named Plaintiffs Galvan and E.G., who allegedly interacted with devices not manufactured by
12 Defendants, a Samsung smartphone and the Samsung Galaxy Tab, id. ¶ 29, and Named Plainitff
13 Brekhus, who interacted from a device he received for free pursuant to his paid Spotify
14 subscription, id. ¶ 46. Because these Named Plaintiffs have failed to allege that they paid any
15 money for a Google Assistant Enabled Device, they cannot have been injured by overpayment.
16 See Order on Motion to Dismiss at 45. Named Plaintiff Hernandez, however, alleges that he
17 purchased a Google Home Mini device from Best Buy in December 2018. 3AC ¶ 62. He also
18 alleges that he “would not have purchased the Google Home device, nor would he have set it up or
19 used it, had he known that any of Google’s representations [about activation phrases and manual
20 activation] were false.” Id. ¶ 66. The Court therefore finds that Plaintiff Hernandez has plausibly
21 alleged that he would not have purchased his GAED, or would have paid less for it, if he had been
22 aware of Defendants’ practices with regard to false accepts.
23 Plaintiffs’ second theory of economic injury is that they have a “property interest” in the
24 recordings that were unlawfully obtained by Google and that they are therefore entitled to
25 restitution. 3AC ¶¶ 261-62; see Opp. at 19 (citing Korea Supply Co. v. Lockheed Martin Corp., 29
26 Cal. 4th 1134, 1144 (2003)). According to Plaintiffs, “Google profited from the use of Plaintiffs’
27 unauthorized recordings by using them to improve the functionality of Google Assistant and for
28 targeted advertising.” Opp. at 23. The California Supreme Court has “defined an order for
29
1 ‘restitution’ as one ‘compelling a UCL defendant to return money obtained through an unfair
2 business practice to those persons in interest from whom the property was taken.’” Korea Supply
3 Co., 29 Cal. 4th at 1144. In other words, restitution under the UCL must “restore the status quo”
4 by “returning to the plaintiff” funds taken from him or “benefits in which the plaintiff has an
5 ownership interest.” Id. at 1148-49; see also Hadley v. Kellogg Sales Co., 324 F. Supp. 3d 1084,
6 1113 (N.D. Cal. 2018) (“[I]t is well-established that nonrestitutionary disgorgement, which
7 focuses on the defendant's unjust enrichment, is unavailable in a ... class action under the FAL,
8 CLRA, and UCL.” (internal quotation marks omitted)). Defendants object, and contend that
9 Plaintiffs fail to allege that their voice recordings have any value or, in the alternative, that
10 Plaintiffs fail to connect such value to “‘a realistic economic harm or loss that is attributable to
11 [Google’s] alleged conduct.’” Mot. at 20-21 (quoting In re Facebook Internet Tracking Litig., 140
12 F.Supp.3d 922, 931 (N.D. Cal. 2015).

13 The Court finds that Plaintiffs’ theory of economic loss here is “purely hypothetical.” In re
14 Facebook, Inc., Consumer Priv. User Profile Litig., 402 F. Supp. 3d 767, 804 (N.D. Cal. 2019);
15 see also id. at 784 (“The plaintiffs do not plausibly allege that they intended to sell their non-
16 disclosed personal information to someone else.”). While Plaintiffs contend that the value of their
17 “voice recordings can be inferred by the fact that Google uses them to improve the functionality of
18 Google Assistant and to target advertising,” Opp. at 19, there are no facts to suggest that Plaintiffs
19 intended to monetize their individual voice recordings, nor is there any facts that suggest there is a
20 market in which Plaintiffs could sell such recordings. That Defendants were able to monetize and
21 profit from the unauthorized recordings does not give rise to an inference that Plaintiffs “lost
22 money or property,” Cal. Bus. & Prof. Code § 17204. As another court in this district has
23 explained, claiming that a defendant “may have gained money through its sharing or use of the
24 plaintiffs’ information” is “different from saying the plaintiffs lost money.” In re Facebook, Inc.,
25 Consumer Privacy User Profile Litig., 402 F. Supp. 3d at 804. And while Plaintiffs cite to In re
26 Facebook, Inc. Internet Tracking Litigation in a Hail Mary attempt to save this theory, there, the
27 Ninth Circuit discussed the value of Facebook user’s browsing histories in the context of the
28 Computer Data and Access Fraud Act (“CDAFA”), disgorgement, and Article III standing. 956
30
1 F.3d 589, 600-601 (9th Cir. 2020), cert. denied sub nom. Facebook, Inc. v. Davis, 141 S. Ct. 1684
2 (2021) (“California law requires disgorgement of unjustly earned profits1 regardless of whether a
3 defendant's actions caused a plaintiff to directly expend his or her own financial resources . . . This
4 unauthorized use of their information for profit would entitle Plaintiffs to profits unjustly earned.
5 Thus, Plaintiffs sufficiently alleged a state law interest whose violation constitutes an injury
6 sufficient to establish standing to bring their claims for CDAFA violations and California common
7 law trespass to chattels, fraud, and statutory larceny.”). Indeed, the “requirement that injury be
8 economic renders standing under section 17204 substantially narrower than federal standing under
9 [Article III], which may be predicated on a broader range of injuries. Kwikset Corp., 51 Cal. 4th at
10 324.
11 In sum, the Court GRANTS Defendants’ motion to dismiss Galvan, E.G., B.S., and
12 Brekhus’s UCL claims for failure to adequately plead economic injury. Plaintiffs Kumandan,
13 Spurr, and Hernandez have adequately pled economic injury. Because their UCL claims shall go
14 forward, the Court proceeds to consider of the adequacy of Plaintiffs Kumandan, Spurr, and
15 Hernandez’s pleadings under the unlawful and unfair prongs of the UCL.
16
1
17 This Court has already stressed the difference between disgorgement—which the Ninth Circuit
considered in In re Facebook, Inc. Internet Tracking Litigation—and restitution—which Plaintiffs
18 seek here:
19 “‘Disgorgement’ is a broader remedy than restitution” in that

disgorgement “has been used to refer to surrender of all profits
20 earned as a result of an unfair business practice regardless of
whether those profits represent money taken directly from persons
21 who were victims of the unfair practice.” [Korea Supply Co., 29 Cal.
4th] at 1145 (emphasis in original). By contrast, restitution under the
22 UCL must “restore the status quo” by “returning to the plaintiff”
funds taken from him or “benefits in which the plaintiff has an
23 ownership interest.” Id. at 1148-49. Put another way, restitutionary
disgorgement “focuses on the plaintiff’s loss, and nonrestitutionary
24 disgorgement “focuses on the defendant’s unjust enrichment.”
Meister v. Mensinger, 230 Cal. App. 4th 381, 398 (2014). Although
25 the defendant’s benefit and the plaintiff’s loss are often the same,
nonrestitutionary disgorgement may also be had “where a benefit
26 has been received by the defendant but the plaintiff has not suffered
a corresponding loss.” Id. (internal quotations and alterations
27 omitted).
31
i. Unlawful Prong
1
The “unlawful” prong of the UCL “borrows violations of other laws and treats them as
2
unlawful practices that the unfair competition law makes independently actionable.” Cel-Tech, 20
3
Cal. 4th at 180. In other words, to be “unlawful” under the UCL, Defendants’ conduct must
4
violate another “borrowed” law. HSBC Bank Nevada, 691 F.3d at 1168. “Virtually any state,
5
federal or local law can serve as the predicate for an action under section 17200.” Id. (quoting
6
People ex rel. Bill Lockyer v. Fremont Life Ins. Co., 104 Cal. App. 4th 508, 515 (2002))
7
(alterations omitted). Here, Plaintiffs predicate their “unlawful” claim on Defendants’ alleged
8
violations of (1) the Wiretap Act, (2) the SCA, (3), CIPA §632, (4) the common law prohibition of
9
intrusion upon seclusion, (5) the California Constitution’s right of privacy, (6) the CLRA, and (7)
10
Cal. Bus. & Prof. Code § 22576,2 for having breached the Privacy Policy. Opp. at 20; 3AC ¶ 258.
11
Because Plaintiffs assert each of these alleged violations as independent counts, the Court
12
has already considered the adequacy of Plaintiffs’ allegations as to those counts. The Court’s
13
findings in that regard are equally determinative of the validity of Plaintiffs’ UCL claim. See Mot.
14
at 24 (“To the extent this claim is premised on other claims that are subject to dismissal, Plaintiffs’
15
‘unlawful’ UCL claim fails as well.”). The Court has not dismissed any of these claims in full but
16
has narrowed them where appropriate; accordingly, the Court DISMISSES WITHOUT LEAVE
17
TO AMEND Plaintiffs’ UCL unlawful claim to the extent it is predicated on aspects of predicate
18
claims the Court has dismissed.
19
ii. Unfair Prong
20
21
2
22 This provision states:
23 An operator of a commercial Web site or online service that collects

personally identifiable information through the Web site or online service
24 from individual consumers who use or visit the commercial Web site or
online service and who reside in California shall be in violation of this section
25 if the operator fails to comply with the provisions of Section 22575 or with
the provisions of its posted privacy policy in either of the following ways:
26 (a) Knowingly and willfully.
27 (b) Negligently and materially.
28 Cal. Bus. & Prof. Code § 22576. Plaintiffs allege that Defendants violate this provision by virtue
of its breach of contract, as alleged in Count 6. See 3AC ¶¶ 241, 258.
32
1 Plaintiffs allege that Defendants have “engaged in business acts or practices deemed
2 ‘unfair’ under the UCL.” 3AC ¶ 259. “The UCL does not define the term ‘unfair.’ In fact, the
3 proper definition of ‘unfair’ conduct against consumers is currently in flux among California
4 courts.” Hodsdon v. Mars, Inc., 891 F.3d 857, 866 (9th Cir. 2018) (internal quotations omitted).
5 For some years, the California Courts of Appeal formulated different tests, such as whether the
6 practice “offends an established public policy or when the practice is immoral, unethical,
7 oppressive, unscrupulous or substantially injurious to consumers,” Cel-Tech, 20 Cal. 4th at 184
8 (quoting S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861, 887 (1999))
9 (“South Bay test”), or whether “the gravity of the harm to the alleged victim” outweighs “the
10 utility of the defendant’s conduct,” id. (quoting State Farm Fire & Casualty Co. v. Superior
11 Court, 45 Cal. App. 4th 1093, 1104 (1996)) (“State Farm Fire test”). Then, in Cel-Tech, the
12 California Supreme Court appeared to confine “unfair” to “conduct that threatens an incipient
13 violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects
14 are comparable to or the same as a violation of the law, or otherwise significantly threatens or
15 harms competition.” 20 Cal. 4th at 187. “It further required that ‘any finding of unfairness to
16 competitors under section 17200 be tethered to some legislatively declared policy or proof of some
17 actual or threatened impact on competition.’” HSBC Bank Nevada, 691 F.3d at 1170 (quoting Cel–
18 Tech, 20 Cal. 4th at 185). The Cel-Tech Court explained that the prior definitions were “too
19 amorphous” and “provide[d] too little guidance to courts and businesses.” HSBC Bank Nevada,
20 691 F.3d at 1169 (quoting Cel–Tech, 20 Cal. 4th at 185).
21 However, the Cel-Tech court expressly limited its decision, stating, “Nothing we say
22 relates to actions by consumers or by competitors alleging other kinds of violations of the unfair
23 competition law such as ‘fraudulent’ or ‘unlawful’ business practices or ‘unfair, deceptive, untrue
24 or misleading advertising.’” Cel–Tech, 20 Cal. 4th at 187 n.12. Consequently, California courts
25 remain divided on whether the Cel-Tech definition applies to “consumer actions” or whether the
26 State Farm Fire and South Bay tests remain valid. See HSBC Bank Nevada, 691 F.3d at 1170. The
27 Ninth Circuit has noted this continued controversy but awaits the California Supreme Court’s
28 resolution of it. See id.; Hodsdon, 891 F.3d at 866. In this case, the parties follow the Ninth
33
1 Circuit’s lead and argue under Cel-Tech and the prior balancing tests from State Farm Fire and
2 South Bay. See 3AC ¶ 259; Mot. at 23-24; Opp. at 20-21.
3 First, as to Plaintiffs’ claim that Defendants’ conduct is unfair under the Cel-Tech test, the
4 Court finds that Plaintiffs have alleged harm to competition or violation of the “letter, policy, or
5 spirit of the antitrust laws.” HSBC Bank Nevada, 691 F.3d at 1170. See Mot. at 24. In particular,
6 Plaintiffs argue that “Google’s actions . . . have violated California’s strong public policy of
7 protecting privacy. Google’s conduct of intercepting, recording, disclosing, and otherwise
8 misusing Plaintiffs’ and Class members’ private conversations violated the Wiretap Act, SCA,
9 CIPA §632, California common law, the California constitution, and breached its contract with
10 Plaintiffs.” Opp. at 21 (citing 3AC ¶ 260). Plaintiffs also cite to the United States House of
11 Representatives Subcommittee on Antitrust, Commercial and Administrative Law report entitled
12 “Investigation of Competition in Digital Markets.” 3AC ¶ 123. According to Plaintiffs, this report
13 finds that “as competition has been reduced online, consumers have been subject to privacy abuses
14 by Google, including through the use of the voice assistant, Google Assistant” and that “there is a
15 significant potential for misuse of data collected by voice assistants to harm competition or
16 consumers.” Id. At this current juncture, the Court finds these allegations sufficient under Cel-
17 Tech.
18 Second, as to the pre-Cel-Tech definitions of “unfair,” some courts have treated the State
19 Farm Fire and South Bay tests as distinct tests; others, including the Ninth Circuit, have referred
20 to them together as the “balancing test,” see HSBC Bank Nevada, 691 F.3d at 1169; accord
21 Herskowitz v. Apple Inc., 940 F. Supp. 2d 1131, 1146 (N.D. Cal. 2013). In any event, the parties
22 agree that both tests require the Court to “weigh the utility of the defendant’s conduct against the
23 gravity of the harm to the alleged victim.” HSBC Bank Nevada, 691 F.3d at 1169; see Mot. at 23;
24 Opp. at 20. Plaintiffs contend that “Google’s conduct of secretly intercepting, recording,
25 disclosing, and misusing their communications harmed them by invading their privacy and there is
26 no corresponding benefit to consumers. Opp. at 21 (citing 3AC ¶ 260). According to Defendants,
27 Plaintiffs have failed to pass the balancing test because they “admit that the Assistant provides a
28 substantial benefit to consumers” and “concede that they took advantage of these benefits and
34
1 wish to continue doing so.” Mot. at 24 (citing 3AC ¶¶ 4, 20, 29, 39, 51, 65, 67, 79, 80, 82, 127).
2 At the motion to dismiss stage, the Court cannot say that the benefits from Google
3 Assistant’s unauthorized recordings necessarily outweighs the harms from such recordings. See
4 McCoy v. Alphabet, Inc., No. 20-CV-05427-SVK, 2021 WL 405816, at *10 (N.D. Cal. Feb. 2,
5 2021) (“At the motion to dismiss stage, the Court cannot say that the benefits from collecting that
6 information to develop new products, features, and technologies for the benefit of the users and
7 the public necessarily outweighs the harm.”); In re iPhone Application Litig., 844 F. Supp. 2d
8 1040, 1073 (N.D. Cal. 2012) (“While the benefits of Apple's conduct may ultimately outweigh the
9 harm to consumers, this is a factual determination that cannot be made at this stage of the
10 proceedings.”); see also Order on Motion to Dismiss at 51 (“Just how ‘occasional’ the error is,
11 however, is a question of fact that remains unanswered at this stage. Moreover, the harm that is
12 asserted here is the invasion of privacy, which is difficult to quantify. The Court cannot say, as a
13 matter of law, that the utility of the Google Assistant necessarily outweighs the harm from false
14 accepts.”).
15 Defendants’ motion to dismiss on the unfair prong of the UCL is DENIED.
16 G. Count 10: Declaratory Judgment

17 Finally, Defendants move to dismiss Count 10, Plaintiffs’ request for declaratory judgment
18 under the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq.3 Declaratory relief is appropriate
19 when (1) “the judgment will serve a useful purpose in clarifying and settling the legal relations in
20
21 3
In the instant motion, Defendants insist that they previously moved to dismiss this claim. Mot. at
22 24. A review of Google’s prior briefing reveals that Google did, indeed, move to dismiss
Plaintiffs’ declaratory judgment claim—in a single footnote buried at the end of twenty-five page
23 brief. This Court’s Standing Orders are clear that “[f]ootnotes shall not be used to cite to legal
authorities or evidence.” Standing Order for Civil Cases IV.F. The Court assumed that it did not
24
need to caution parties not to raise dispositive arguments in footnotes. See Estate of Saunders v.
25 Comm'r, 745 F.3d 953, 962 fn. 8 (9th Cir. 2014) (“Arguments raised only in footnotes, or only on
reply, are generally deemed waived”); Khoja v. Orexigen Therapeutics, Inc., 498 F. Supp. 3d
26 1296, 1309 fn. 4 (S.D. Cal. 2020); Cheever v. Huawei Device USA, Inc., No. 18-CV-06715-JST,
2019 WL 8883942, at *3 (N.D. Cal. Dec. 4, 2019); Sanders v. Sodexo, Inc., No. 2:15-cv-00371-
27 JAD-GWF, 2015 WL 4477697, at *5 (D. Nev. July 20, 2015) (“‘Many courts will disregard
arguments raised exclusively in footnotes.’” (quoting Bryan Garner, The Redbook: A Manual on
28
Legal Style 168 (3d ed. 2013))).
35
1 issue,” and (2) “it will terminate and afford relief from the uncertainty… giving rise to the
2 proceeding.” Bilbrey by Bilbrey v. Brown, 738 F.2d 1462, 1470 (9th Cir. 1984) (citations omitted).
3 “A claim for declaratory relief is unnecessary where an adequate remedy exists under some other
4 cause of action.” Mangindin v. Washington Mut. Bank, 637 F. Supp. 2d 700, 707 (N.D. Cal.
5 2009); see also Tyson v. Nationstar Mortg. LLC, No. 15-cv-01548, 2016 WL 39903, at *5 (N.D.
6 Cal. Jan. 4, 2016) (dismissing declaratory relief where “Plaintiffs’ declaratory relief claim is
7 duplicative of their TILA rescission claim”).
8 The Court finds that Plaintiffs have not met the requirements for declaratory relief.
9 Pursuant to their declaratory judgment claim, Plaintiffs seek a declaration that “Defendants
10 continue to owe a legal duty to not intercept, record, disclose, and otherwise misuse Plaintiffs’ and
11 Class Members’ confidential communications under, inter alia, the common law, the Wiretap Act,
12 the SCA, CIPA, Cal. Penal Code §632, and Cal. Bus. & Prof. Code §22576.” 3AC ¶ 283. They
13 also seek an injunction “enjoining Google from engaging in the unlawful conduct alleged in this
14 claim and requiring Google to delete all recordings of Class Members, to cease further recording,
15 and to implement functionality sufficient to prevent unauthorized recordings in the future.” Id. ¶
16 284. The injunctive relief Plaintiffs seek is duplicative of the relief Plaintiffs seek under the UCL.
17 Compare 3AC ¶ 262 with id. ¶ 284. In other words, if Plaintiffs are successful in their alternate
18 claims for relief, Plaintiffs’ claim for declaratory relief would be unnecessary. See Tyson, 2016
19 WL 39903, at *5. Accordingly, the Court GRANTS WITHOUT LEAVE TO AMEND
20 Defendants’ motion to dismiss Plaintiffs' cause of action for declaratory relief.
21 V. ORDER
22 For the foregoing reasons, the Court rules on Defendants’ motion to dismiss the 3AC as
23 follows:
24 • Count 1: GRANTED IN PART and DENIED IN PART WITHOUT LEAVE TO
25 AMEND
27 AMEND
28 • Count 3: DENIED
36
4 AMEND
6 AMEND
7 • Count 8: GRANTED WITH LEAVE TO AMEND
8 • Count 9: GRANTED WITH LEAVE TO AMEND
9 • Count 10: GRANTED WITHOUT LEAVE TO AMEND
10 Any amended complaint is due by August 2, 2021. Plaintiffs are directed to file a redlined
11 complaint as an attachment to any amended complaint. Leave to amend is restricted to Counts 8
12 and 9; Plaintiff may not add new parties or claims without obtaining prior express leave of the
13 Court. Any future motion to dismiss SHALL be limited to Counts 8 and 9. Briefing on the motion
14 shall be limited to 5 pages for the opening and opposition briefs and 3 pages for the reply brief.
15 IT IS SO ORDERED.
16 Dated: July 1, 2021
17 ______________________________________
BETH LABSON FREEMAN
18 United States District Judge
19
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37

In Re Google Assistant Privacy Litigation, Case No. 19-04286

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In Re Google Assistant Privacy Litigation, Case No. 19-04286

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Case 5:19-cv-04286-BLF Document 138 Filed 07/01/21 Page 1 of 37

3 UNITED STATES DISTRICT COURT

4 NORTHERN DISTRICT OF CALIFORNIA

5 SAN JOSE DIVISION

7 IN RE GOOGLE ASSISTANT PRIVACY Case No. 19-cv-04286-BLF

1 be installed on a range of devices. Id. Because the Google Assistant is voice-activated, it is

8 pressing a button on the device. Id.

26 consent to being recorded. Id. ¶ 115.

9 the Declaratory Judgment Act, 28 U.S.C. §§ 2201 et seq. 3AC ¶¶ 148-288.

10 These claims are brought by seven Named Plaintiffs:

23 Samsung Galaxy Tab and a Google Assistant-enabled Samsung smartphone during

24 the Class Period. Id. ¶ 29.

26 he owned a Google Assistant-enabled Google Pixel smartphone during the Class

27 Period. Id. ¶ 39.

28 • Edward Brekhus is a resident of Marin County, California. 3AC ¶ 45. He alleges

4 • Jon Hernandez is a resident of Los Angeles County, California. 3AC ¶ 61.

7 Period. Id. ¶ 67.

10 Reply, ECF 129; ECF 134 (minute entry for hearing).

11 II. LEGAL STANDARD

24 (quoting Twombly, 550 U.S. at 557).

13 require proof of fraud. E.g., Vess, 317 F.3d at 1103–05.

19 Rule 12(b)(6) for failure to state a claim.” Id. at 1107.

2 III. REQUEST FOR JUDICIAL NOTICE AND INCORPORATION BY REFERENCE

6 not oppose this request.

18 facts within public records. Id.

19 “[I]ncorporation-by-reference is a judicially created doctrine that treats certain documents

27 stated in a well-pleaded complaint.” Id.

25 (N.D. Cal. 2010).

5 A. Counts 1, 3, 4, and 5 and the Reasonable Expectation of Privacy

10 communications. Mot. at 6-10.

14 on Motion to Dismiss at 11 (must allege “reasonable expectation of privacy” in oral communications

17 communications,” which requires a “reasonable expectation of privacy”) (citing Kearney v.

21 47 Cal. 4th 272, 285, 288 (2009).

2 reasonable expectation of privacy in the intercepted communications. Id. In support of this

8 GAEDs. 3AC ¶¶ 18-75

17 conversation” “concerning personal responsibility. This confidential conversation was recorded

25 where Plaintiff Kumandan had a reasonable expectation of privacy”). Contrary to Defendants’

7 was objectively reasonable. McIntyre, 582 F.2d at 1223.

10 false accepts routinely occur.

12 intercepted Plaintiffs’ private communications

13 B. Count 1 and Unlawful Disclosure or Use

19 to “intentionally intercept[], endeavor[] to intercept, or procure[] any other person to intercept or

9 Several times, topics of Plaintiff Galvan’s and Plaintiff E.G.’s

advertising in the form of suggested videos by YouTube, a Google-

25 Spurr, B.S., Brekhus, and Hernandez.

2 the interception of a wire . . . communication in violation of this subsection”). But, as explained in

11 communications to a third party for the purpose of targeting advertisements” (emphasis in

where an ad for a BBQ sauce was displayed on Plaintiff

3 conversations to Instagram, thus enabling Instagram to provide Kumandan with targeted

7 C. Count 2: Stored Communications Act

25 D. Count 6: Common Law Breach of Contract

6 identify any damages suffered by Plaintiffs. See Mot. at 13-18.

7 i. Specific Contractual Provisions: FAQ in the Nest Help Center

18 the TOS or otherwise are binding upon the parties.”).

10 Privacy Policy provision:

We collect information about your activity in our services, which

13 we use to do things like recommend a YouTube video you might

16 • Voice and audio information when you use audio features.

24 conversations even where a hotword on manual activation does not occur.

17 When Google shares your information

18 We do not share personal information with companies,

We provide personal information to our affiliates and other trusted

21 The information Google collects, and how that information is used,