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Dan Valentine and W. Brand v. Wide-Open West Finance

December 20, 2012

DAN VALENTINE AND W. BRAND BOBOSKY, INDIVIDUALLY AND (PROPOSED) BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFFS,
v.
WIDE-OPEN WEST FINANCE, LLC, DEFENDANT.



The opinion of the court was delivered by: Judge Edmond E. Chang

MEMORANDUM OPINION AND ORDER

Plaintiffs Dan Valentine and W. Brand Bobosky bring this proposed class action against their Internet service provider (ISP), Defendant WideOpen West Finance, LLC (which does business as WOW!, but the opinion will lower the volume and drop the exclamation point), alleging that WOW intercepted their electronic communications in violation of the Electronic Communications Privacy Act (ECPA), 18 U.S.C. § 2510 et seq.*fn1 Specifically, Plaintiffs allege that WOW contracted with NebuAd, Inc., a third-party advertising service, to divert WOW's customers' Internet communications to a NebuAd device installed on WOW's network. NebuAd then used this information to serve targeted advertisements to WOW's customers. Plaintiffs allege that WOW's diversion of their electronic communications without their consent constitutes a direct violation of §§ 2511(1)(a), 2511(1)(c), and 2511(1)(d) of the ECPA. In the alternative, Plaintiffs allege that WOW and NebuAd acted jointly and severally to intercept Plaintiffs' electronic communications in violation of the ECPA. WOW now moves to dismiss Plaintiffs' second amended complaint pursuant to Federal Rule of Civil Procedure 12(b)(6), as well as to strike the class allegations under Federal Rule of Civil Procedure 23(d)(1)(D). For the following reasons, WOW's motion to dismiss [R. 136] is granted as to the § 2511(1)(a) interception claim, but the parties have not addressed the disclosure and use claims under, respectively, §§ 2511(1)(c) and (d). WOW's motion to strike Plaintiffs' class allegations [R. 139] is denied.

I. Background

In evaluating a motion to dismiss, the Court must accept as true the complaint's factual allegations and draw reasonable inferences in the Plaintiffs' favor. Ashcroft v. al-Kidd, ------ U.S. ------, 131 S. Ct. 2074, 2079 (2011). Plaintiffs Dan Valentine and W. Brand Bobosky are Illinois residents who contracted with WOW to receive Internet service. R. 135, 2d Am. Compl. ¶¶ 13, 14. WOW is a commercial provider of high-speed, broadband Internet services to over 300,000 customers in several major metropolitan areas in Illinois, Indiana, Michigan, and Ohio. Id. ¶ 15. Plaintiffs allege that, in around late 2007, WOW entered into an agreement with NebuAd, Inc., a company that serves targeted online advertisements. Id. ¶ 25. The agreement required WOW to license and install a NebuAd Ultra-Transparent Appliance in each of WOW's broadband network facility locations, a process which WOW completed by early March 2008. Id. ¶¶ 26, 32. WOW diverted its customers' Internet traffic-including their navigation activity, file downloads, email messages, instant messages, and certain voice-over-Internet-protocol conversations-to the Appliance, which allowed NebuAd to access and analyze the information to serve targeted advertisements to WOW customers. Id. ¶¶ 45, 93. In exchange, WOW received monthly payments from NebuAd for ongoing access to its customers' information. Id. ¶ 7. Plaintiffs, who claim to be WOW customers whose communications were intercepted pursuant to WOW's agreement with NebuAd, brought this proposed class action against WOW, alleging that WOW's interception of customers' electronic communications violated § 2511(1)(a) of the ECPA. Id. ¶¶ 12, 87, 88, 107. As discussed later, Plaintiffs also allege that WOW disclosed and used their electronic communications to NebuAd in violation of § 2511(1)(c) and § 2511(1)(d) of the ECPA. Id. ¶¶ 48, 52, 56, 58, 59, 64(i), 64(j), 89 (citing 2511(1)(c)), 92, 95, 98 (those preceding paragraphs all allege disclosure); id. ¶ 107 (citing 2511(1)(d), use).

By way of background, this lawsuit originates from a proposed class action filed by Plaintiff Valentine and others in the United States District Court for the Northern District of California in November 2008. R. 137, Def.'s Br. at 2. In that proceeding, Plaintiffs sued WOW and five other ISPs who had contracted with NebuAd, claiming that the ISPs had violated the ECPA by installing hardware on their network facilities that intercepted their online communications. Id. at 3. In October 2008, the ISPs were dismissed for lack of personal jurisdiction, forcing the Plaintiffs to file individual actions against each of the six ISPs in various federal courts. Id.; see also Valentine v. NebuAd, Inc., No. 08-5113, 2009 WL 8186130, at *1 (N.D. Cal. Oct. 6, 2009). In this District, Valentine brought the present lawsuit against WOW in December 2009, asserting seven claims under both federal and Illinois state law. Def.'s Br. at 3.In April 2011, this Court determined that the six non-ECPA claims were subject to WOW's mandatory arbitration clause, and stayed the ECPA claim pending the resolution of the arbitration. Id. Plaintiffs subsequently announced their intent to abandon the arbitrable claims and to proceed solely on the ECPA claim. Id. This Court thus dismissed the arbitrable claims and allowed Plaintiffs to file the present second amended complaint. Id.

II. Standard of Review

Under Federal Rule of Civil Procedure 8(a)(2), a complaint generally need only include "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). This short and plain statement must "give the defendant fair notice of what the claim is and the grounds upon which it rests." Bell Atl. v. Twombly, 550 U.S. 544, 555 (2007) (quotation and citation omitted). The Seventh Circuit has explained that this rule "reflects a liberal notice pleading regime, which is intended to 'focus litigation on the merits of a claim' rather than on technicalities that might keep plaintiffs out of court." Brooks v. Ross, 578 F.3d 574, 580 (7th Cir. 2009) (quoting Swierkiewicz v. Sorema N.A., 534 U.S. 506, 514 (2002)).

"A motion under Rule 12(b)(6) challenges the sufficiency of the complaint to state a claim upon which relief may be granted." Hallinan v. Fraternal Order of Police Chicago Lodge No. 7, 570 F.3d 811, 820 (7th Cir. 2009). "[W]hen ruling on a defendant's motion to dismiss, a judge must accept as true all of the factual allegations contained in the complaint." Erickson v. Pardus, 551 U.S. 89, 94 (2007) (citing Twombly, 550 U.S. at 555-56); McGowan v. Hulick, 612 F.3d 636, 638 (7th Cir. 2010) (courts accept factual allegations as true and draw all reasonable inferences in plaintiff's favor). "[A] complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). These allegations "must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555. The allegations that are entitled to the assumption of truth are those that are factual, rather than mere legal conclusions. Iqbal, 556 U.S. at 678-79.

III. Analysis

WOW advances two theories in support of its motion to dismiss. First, WOW contends that Plaintiffs failed to plead a valid interception claim under the ECPA because they do not allege that WOW actually acquired the contents of any customer communications. Second, and in the alternative, WOW asserts that Plaintiffs consented to any interception of their Internet activity. The Court addresses each of these arguments in turn.

A. Interception & Secondary Liability

WOW first contends that Plaintiffs' second amended complaint must be dismissed because Plaintiffs have failed to plead a valid ECPA claim. Specifically, WOW asserts that Plaintiffs' complaint must fail because they do not allege that WOW ever acquired the contents of any intercepted communications. R. 136, Def.'s Mot. Dismiss at 1. The ECPA, which amended the Federal Wiretap Act of 1968,18 U.S.C. § 2510 et seq., was designed to "protect against the unauthorized interception of electronic communications." Ameritech Corp. v. McCann, 297 F.3d 582, 583 (7th Cir. 2002). Plaintiffs allege that WOW intentionally intercepted and diverted their Internet communications to the NebuAd Appliance in violation of § 2511(1)(a) of the ECPA, which prohibits the intentional interception of any electronic communication. 2d Am. Compl. ¶ 87; see also 18 U.S.C. § 2511(1)(a).

The only issue in dispute is whether Plaintiffs have sufficiently pled that WOW "intercepted" their electronic communications within the meaning of the ECPA. The ECPA defines "intercept" as the "aural or other acquisition of the contents of any . . . electronic . . . communication through the use of any electronic, mechanical, or other device." 18 U.S.C. § 2510(4) (emphasis added). "Contents" include "any information concerning the substance, purport, or meaning of that communication." 18 U.S.C. § 2510(8).

WOW contends that because Plaintiffs have not alleged that WOW itself acquired the contents of Plaintiffs' communications, they have failed to state a valid claim under 18 U.S.C. § 2511(1)(a). Def.'s Br. at 12. To make out a valid interception claim under the ECPA, a plaintiff must allege that the defendant "acqui[red]" the contents of his or her electronic communications. § 2510(4) (defining interception as "acquisition"); see, e.g., Kirch v. Embarq Mgmt. Co., 2011 WL 3651359, at *6 (D. Kan. Aug. 19, 2011). In Kirch, the district court granted summary judgment for the defendant ISP where the plaintiff had failed to plead that the ISP had actually acquired the plaintiff's electronic communications. Id. Like this case, Kirch was an ECPA action brought against an ISP for diverting its customers' Internet communications through the NebuAd Appliance. There, the court noted that although the term "acquisition" is not defined in the ECPA, "to acquire" commonly means "to come into possession, control, or power of disposal." Id. Thus, the court reasoned that in order to "intercept" a ...


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