540 F.Supp.2d 1121
(Cite as: 540 F.Supp.2d 1121)
© 2009 Thomson Reuters/West. No Claim to Orig. US Gov. Works.
540 F.Supp.2d 1121 / Page XXX540 F.Supp.2d 1121
(Cite as: 540 F.Supp.2d 1121)
United States District Court,
N.D. California.
Joel RUIZ, on behalf of himself and all others similarly situated, Plaintiffs,
v.
GAP, INC., and Does 1-9 inclusive, Defendants.
Case No. 07-5739 SC.
March 24, 2008.
Background: Job applicant brought putative class action against prospective employer, alleging that employer negligently permitted laptop computers containing unencrypted personal information of job applicants to be stolen, giving rise to increased risk of identity theft, and asserting claims for negligence, bailment, violation of California's unfair competition statute, violation of California's constitutional right to privacy, and violation of California Civil Code § 1798.85. Employer moved for judgment on the pleadings and to dismiss.
Holdings: The District Court, Samuel Conti, J., held that:
(1) applicant sustained an injury, as required to state a negligence claim under California law;
(2) applicant failed to state a claim for bailment;
(3) applicant failed to allege any loss of property, as required to state a claim for violation of California's unfair competition statute;
(4) employer did not violate California's constitutional privacy right; and
(5) employer failed to show that California statute prohibiting public display of an individual's social security number did not provide a private right of action.
Motion granted in part and denied in part.
West Headnotes
[1] Evidence 157 11
157 Evidence
157I Judicial Notice
157k11 k. Historical Facts. Most Cited Cases
District Court would not take judicial notice of a study from an internet site on identity theft, and a list, also from an internet site, of data breach incidents reported in California in the last two years, where neither of these documents contained information which was generally known within the territorial jurisdiction of the court, or capable of accurate and ready determination. Fed.Rules Evid.Rule 201, 28 U.S.C.A.
[2] Federal Courts 170B 12.1
170B Federal Courts
170BI Jurisdiction and Powers in General
170BI(A) In General
170Bk12 Case or Controversy Requirement
170Bk12.1 k. In General. Most Cited Cases
Those who seek to invoke the jurisdiction of the federal courts must satisfy the threshold requirement imposed by Article III of the Constitution by alleging an actual case or controversy. U.S.C.A. Const. Art. 3, § 2, cl. 1.
[3] Federal Civil Procedure 170A 103.2
170A Federal Civil Procedure
170AII Parties
170AII(A) In General
170Ak103.1 Standing
170Ak103.2 k. In General; Injury or Interest. Most Cited Cases
Federal Civil Procedure 170A 103.3
170A Federal Civil Procedure
170AII Parties
170AII(A) In General
170Ak103.1 Standing
170Ak103.3 k. Causation; Redressability. Most Cited Cases
The irreducible constitutional minimum of standing contains three elements: (1) the plaintiff must have suffered an injury in fact, that is, an invasion of a legally protected interest which is concrete and particularized and actual or imminent, not conjectural or hypothetical; (2) there must be a causal connection between the injury and the conduct complained of; and (3) it must be likely, as opposed to merely speculative, that the injury will be redressed by a favorable decision. U.S.C.A. Const. Art. 3, § 2, cl. 1.
[4] Federal Civil Procedure 170A 103.5
170A Federal Civil Procedure
170AII Parties
170AII(A) In General
170Ak103.1 Standing
170Ak103.5 k. Pleading. Most Cited Cases
In determining whether an alleged risk of a future harm may give rise to an injury in fact, as required for standing to sue, the court must presume that general allegations embrace those specific facts that are necessary to support the claim.
[5] Federal Civil Procedure 170A 103.2
170A Federal Civil Procedure
170AII Parties
170AII(A) In General
170Ak103.1 Standing
170Ak103.2 k. In General; Injury or Interest. Most Cited Cases
The elements of standing are not mere pleading requirements but rather an indispensable part of the plaintiff's case.
[6] Negligence 272 462
272 Negligence
272XIV Necessity and Existence of Injury
272k462 k. Particular Cases. Most Cited Cases
Job applicant who was allegedly subjected to increased risk of identity theft when laptop computers containing unencrypted personal information of job applicants was stolen from prospective employer's recruiter sustained an injury, as required to state a negligence claim under California law.
[7] Negligence 272 202
272 Negligence
272I In General
272k202 k. Elements in General. Most Cited Cases
Under California law, an action in negligence requires a showing that the defendant owed the plaintiff a legal duty, that the defendant breached the duty, and that the breach was a proximate or legal cause of injuries suffered by the plaintiff.
[8] Bailment 50 2
50 Bailment
50k2 k. Particular Forms of Bailment. Most Cited Cases
Bailment 50 16
50 Bailment
50k16 k. Conversion by Bailee. Most Cited Cases
Under California law, prospective employer's alleged failure to maintain adequate security procedures to protect against theft of laptop computers which contained unencrypted personal information of job applicants did not support applicant's bailment claim, where, even if applicant's social security number could be construed as personal property which applicant delivered to employer with expectation that it be returned, employer did not seek to unlawfully retain possession of it.
[9] Bailment 50 25
50 Bailment
50k24 Actions Between Bailor and Bailee
50k25 k. Nature and Form. Most Cited Cases
Under California law, job applicant's bailment claim against prospective employer, for failure to maintain adequate security procedures to protect against theft of laptop computers which contained unencrypted personal information of job applicants, was duplicative of his claim for negligence, where any damages applicant might be able to recover on bailment claim would be recoverable under his negligence claim.
[10] Bailment 50 32
50 Bailment
50k24 Actions Between Bailor and Bailee
50k32 k. Damages. Most Cited Cases
Under California law, damages under bailment are typically related to the reasonable value of the property that was not returned.
[11] Antitrust and Trade Regulation 29T 252
29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(D) Particular Relationships
29Tk252 k. Employer and Employee. Most Cited Cases
Job applicant failed to allege any loss of property, as required to state a claim for violation of California's unfair competition statute, based on prospective employer's alleged failure to maintain adequate security procedures to protect against theft of laptop computers which contained unencrypted personal information of job applicants. West's Ann.Cal.Bus. & Prof.Code § 17200 et seq.
[12] Antitrust and Trade Regulation 29T 135(1)
29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(A) In General
29Tk133 Nature and Elements
29Tk135 Practices Prohibited or Required
29Tk135(1) k. In General; Unfairness. Most Cited Cases
California's unfair competition statute prohibits any unfair competition, which means any unlawful, unfair, or fraudulent business act or practice. West's Ann.Cal.Bus. & Prof.Code § 17200 et seq.
[13] Antitrust and Trade Regulation 29T 138
29T Antitrust and Trade Regulation
29TIII Statutory Unfair Trade Practices and Consumer Protection
29TIII(A) In General
29Tk133 Nature and Elements
29Tk138 k. Reliance; Causation; Injury, Loss, or Damage. Most Cited Cases
To pursue either an individual or a representative claim under the California unfair competition law, a plaintiff must have suffered an injury in fact and lost money or property as a result of such unfair competition. West's Ann.Cal.Bus. & Prof.Code § 17200 et seq.
[14] Constitutional Law 92 1228
92 Constitutional Law
92XI Right to Privacy
92XI(B) Particular Issues and Applications
92k1227 Records or Information
92k1228 k. In General. Most Cited Cases
Labor and Employment 231H 21
231H Labor and Employment
231HI In General
231Hk9 Pre-Employment Issues
231Hk21 k. Other Particular Issues. Most Cited Cases
Under California law, prospective employer's alleged failure to maintain adequate security procedures to protect against theft of laptop computers which contained unencrypted personal information of job applicants did not rise to level of an egregious breach of social norms underlying California's constitutional privacy right. West's Ann.Cal. Const. Art. 1, § 1.
[15] Constitutional Law 92 1210
92 Constitutional Law
92XI Right to Privacy
92XI(A) In General
92k1210 k. In General. Most Cited Cases
Constitutional Law 92 1215
92 Constitutional Law
92XI Right to Privacy
92XI(A) In General
92k1215 k. Reasonable, Justifiable, or Legitimate Expectation. Most Cited Cases
Under California law, a plaintiff alleging an invasion of privacy in violation of the state constitutional right to privacy must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy; and (3) conduct by defendant constituting a serious invasion of privacy. West's Ann.Cal. Const. Art. 1, § 1.
[16] Constitutional Law 92 1210
92 Constitutional Law
92XI Right to Privacy
92XI(A) In General
92k1210 k. In General. Most Cited Cases
Under California law, actionable invasions of privacy must be sufficiently serious in their nature, scope, and actual or potential impact to constitute an egregious breach of the social norms underlying the privacy right. West's Ann.Cal. Const. Art. 1, § 1.
[17] Action 13 3
13 Action
13I Grounds and Conditions Precedent
13k3 k. Statutory Rights of Action. Most Cited Cases
Labor and Employment 231H 130
231H Labor and Employment
231HIII Rights and Duties of Employers and Employees in General
231Hk128 Actions by Employee Against Employer
231Hk130 k. Right of Action. Most Cited Cases
Prospective employer failed to show that California statute prohibiting public display of an individual's social security number did not provide a private right of action on behalf of job applicant whose unencrypted social security number was contained in laptop computer stolen from employer's recruiter. West's Ann.Cal.Civ.Code § 1798.85.
*1124 Mark Punzalan, Christine Pedigo Bartholomew, Rosemary M. Rivas, Finkelstein, Thompson LLP, San Francisco, CA, Ben Barnow, Barnow and Associates P.C., Chicago, IL, Karen J. Marcus, Mila Bartos, Finkelstein Thompson & Loughran, Tracy D. Rezvani, Finkelstein Thompson LLP, Duvall Foundry, Washington, DC, for Plaintiffs.
Claudia Maria Vetesi, William Lewis Stern, Morrison & Foerster LLP, San Francisco, CA, for Defendants.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR JUDGMENT ON THE PLEADINGS
SAMUEL CONTI, District Judge.
I. INTRODUCTION
This matter comes before the Court on Defendant Gap, Inc.'s Motion for Judgment on the Pleadings (“Motion”).FN1 Docket No. 8. Plaintiff Joel Ruiz filed an Opposition and Gap submitted a Reply. Docket Nos. 18, 23. For the reasons stated herein, the Defendant's Motion is GRANTED IN PART and DENIED IN PART. All dismissals are with prejudice as none of the dismissed claims is curable by amendment.
FN1. Gap's Motion also devotes itself to demonstrating that Ruiz has failed to state a claim. Thus, the Motion is treated as both a motion for judgment on the pleadings and a motion to dismiss for failure to state a claim. Moran v. Peralta Comm. College Dist., 825 F.Supp. 891, 893 (N.D.Cal.1993).
Various other motions have also been submitted, including a motion to strike Ruiz's class allegations, Gap's request for judicial notice, and a motion to dismiss Gap's counterclaim. The motion to strike the class allegations merely reargues Gap's standing arguments and makes premature arguments regarding class certification. Neither argument is persuasive or appropriate and the motion is DENIED.
[1] Gap's request for judicial notice is also DENIED. Federal Rule of Evidence 201 permits courts to take judicial notice of facts that are “not subject to reasonable dispute.” Gap seeks judicial notice for two sets of materials: a study from an internet site on identity theft, and a list, also from an internet site, of data breach incidents reported in California in the last two years. Neither of these documents contain information which is “generally known within the territorial jurisdiction of the trial court” or “capable of accurate and ready determination.” Fed.R.Evid. 201. In short, these materials are not remotely akin to the type of facts which may be appropriately judicially noticed.
Finally, Ruiz has moved to dismiss Gap's counterclaim. Gap's counterclaim seeks a declaratory judgment “that its actions were in compliance with federal and state laws, and that Mr. Ruiz and the putative class he purports to represent are not entitled to any relief.” Counterclaim, Docket No. 3, ¶ 15. Gap's counterclaim raises no new issues of law or fact and is completely superfluous to Ruiz's lawsuit. Ruiz's motion to dismiss the counterclaim is GRANTED.
II. BACKGROUND
The following facts are taken from Plaintiff's Complaint, unless otherwise noted. Ruiz, a citizen of Texas, applied online for a position with one of Gap's stores in late 2006. Gap is a clothing store based in San Francisco. As part of the application, Ruiz was required to provide personal information, including his social security number. On September 28, 2007, Gap disclosed that two laptop computers were stolen from a vendor with whom Gap had contracted for recruiting purposes. The laptops contained the personal information, *1125 including social security numbers, of approximately 800,000 Gap job applicants. The information was not encrypted and was therefore easily accessible. In response to these thefts, Gap notified the applicants whose personal information was on the computers and offered to provide these applicants, including Plaintiff, with twelve months of credit monitoring and fraud assistance without charge.FN2 Gap also is providing $50,000 worth of identity theft insurance. Opp'n at 3.
FN2. As a condition of receiving the credit monitoring, the applicants were apparently required to waive their right to a jury trial should the credit monitoring service prove inadequate. Compl., Docket No. 1, ¶ 38.
In reaction to the theft of the laptops, Ruiz filed the present class action, asserting the following causes of action: (1) negligence; (2) bailment; (3) violation of California Business and Professions Code § 17200 et seq.; (4) violation of the California Constitutional right to privacy; and (5) violation of California Civil Code § 1798.85.FN3Plaintiff seeks damages and injunctive relief.
FN3. California Civil Code § 1798.85 prohibits a company from “[r]equiring an individual to use his or her social security number to access an Internet Web site, unless a password or unique personal identification number or other authentication device is also required to access the Internet Web site.”
III. LEGAL STANDARD