UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

Present: The Honorable Lisa Bredahl Deputy Clerk

ANDREW J. GUILFORD Not Present Court Reporter / Recorder Tape No.

Attorneys Present for Plaintiffs:

Attorneys Present for Defendants:

Proceedings:

[TENTATIVE] ORDER GRANTING MOTION TO DISMISS

Plaintiffs Lisa Liberi (Liberi), Lisa M. Ostella (Ostella), Go Excel Global, Phillip J. Berg, Esq., and the Law Offices of Phillip J. Berg (collectively, Plaintiffs) filed a lengthy First Amended Complaint (FAC) against various defendants (Defendants), including the computer company Oracle Corporation (Oracle or Defendant), for the illegal access and publication of Plaintiffs private data. Oracle now files a Motion to Dismiss (Motion) contesting all of the claims brought against it. After considering all of the arguments and papers submitted, the Motion is GRANTED in its entirety without leave to amend. BACKGROUND The following facts are taken from the Plaintiffs FAC. The Court assumes these facts are true for the purposes of this Order. On June 17, 2011, Plaintiffs filed a FAC against nineteen defendants, including Oracle. A small portion of the excessively detailed 172 page FAC raises factual allegations against Oracle. (FAC 175- 186.) Plaintiffs allege that Oracle partnered with Defendants Yosef Taitz and his company Daylight CIS (Daylight CIS), to develop
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

software to make Daylight software (Daylight) fully compatible with Oracle database servers via a product called DayCart (DayCart). (FAC 179.) Furthermore, Oracles Relational Database Software architecture incorporates the Daylight program. (FAC 177.) Plaintiffs complain that Daylight permits remote applicational execution, cross site scripting, remote interface, and injection attacks. (FAC 178.) Taking advantage of Daylights capabilities and Oracles vulnerabilities, Defendant Yosef Taitz was able to gain top level user access to any computer; server; and/or database in which Oracle products are located. (FAC 180.) Defendant Reed and Intelius allegedly used the Daylight and Oracle software to assist them in their business of assembling and selling consumer information, including information about Plaintiffs Liberi and Ostella. (FAC 70, 145, 179.) This consumer data included social security numbers, addresses, telephone numbers, maiden names, credit reports, and criminal records. (FAC 146.) Defendant Taitz allegedly utilized the Daylight and Oracle software to illegally access Defendants Reed and Intelius databases and copy Plaintiffs private information. (FAC 176-179, 303.) Defendant Taitz then gave this information to his wife, Defendant Orly Taitz, who had a long and convoluted history with Plaintiffs which the Court will avoid wading into here. (FAC 183.) Orly Taitz allegedly published Plaintiffs private information and used this confidential data to perform other harassing acts, such as giving strangers Plaintiffs home addresses. (FAC 408 - 411.) Plaintiffs claim various injuries, including emotional distress and financial harm. Plaintiffs seeks to allege twelve separate claims against Oracle: Claims One, Two, Three, Five, Six, Eight, Nine, Fourteen, Seventeen, Eighteen, Nineteen, and Twenty. The underling theory of these claims is that Oracle is responsible for Plaintiffs injuries because it knowingly created and distributed the insecure software that allowed Defendant Yosef Taitz to access their private information. Oracle now moves to dismiss all claims against it. LEGAL STANDARD
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

A court should dismiss a complaint when its allegations fail to state a claim upon which relief can be granted. F ED. R. C IV. P. 12(b)(6). A complaint need only include a short and plain statement of the claim showing that the pleader is entitled to relief. F ED. R. C IV. P. 8(a)(2). [D]etailed factual allegations are not required. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1940 (2009) (citing Bell Atl. Corp. v. Twombly, 550 U.S. 554, 555 (2007) (stating that a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations)). The Court must accept as true all factual allegations in the complaint and must draw all reasonable inferences from those allegations, construing the complaint in the light most favorable to the plaintiff. Pollard v. Geo Group, Inc., 607 F.3d 583, 585 n.3 (9th Cir. 2010). But the complaint must allege sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face. Iqbal, 129 S. Ct. at 1949 (quoting Twombly, 550 U.S. at 570). A claim has facial plausibility when the pleaded factual content allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged. Iqbal, 129 S. Ct at 1940 (citing Twombly, 550 U.S. at 556). A court should not accept threadbare recitals of a cause of actions elements, supported by mere conclusory statements, id., or allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences, Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001). The Ninth Circuit recently addressed post-Iqbal pleading standards in Starr v. Baca, F.3d , 2011 WL 2988827, at *14 (9th Cir. July 25, 2011). The Starr court held that allegations in a complaint or counterclaim may not simply recite the elements of a cause of action, but must contain sufficient allegations of underlying facts to give fair notice and to enable the opposing party to defend itself effectively . . . [and] plausibly suggest an entitlement to relief, such that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation. Id. If the Court decides to dismiss a complaint, it must also decide whether to grant leave to amend. A district court may deny a plaintiff leave to amend if it determines that allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency . . . or if the plaintiff had several opportunities to amend its complaint and
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

repeatedly failed to cure deficiencies. Telesaurus VPC, LLC v. Power, 623 F.3d at 998, 1003 (9th Cir. 2010); see also Jackson v. Carey, 353 F.3d 750, 758 (9th Cir. 2003). ANALYSIS Defendant moves to dismiss under Rule 12(b)(6). Defendant argues that Plaintiffs speculative pleading fails to allege sufficient facts to state a valid claim. The Court agrees. The Court will now address each Claim against Oracle. 1. CLAIM ONE: WILLFUL AND INTENTIONAL INTRUSION UPON LIBERI, BERG, AND OSTELLA'S SOLITUDE, SECLUSION AND PRIVATE AFFAIRS- INVASION OF PRIVACY, INCLUDING VIOLATIONS OF THE FIRST AND FOURTEENTH AMENDMENTS TO THE U.S. CONSTITUTION AND THE CALIFORNIA CONSTITUTION

Plaintiffs First Claim is for invasion of privacy, including violations of the First and Fourteenth Amendment and the California Constitution. The Court also reads Claim One to include an allegation under the common law theory of intrusion upon seclusion. The Court will address each theory. Turning first to the United States Constitution, knowledgeable constitutional analysis must recognize that the First and Fourteenth Amendments apply only to government actors. See Howard v. America Online Inc., 208 F.3d 741, 754 (9th Cir. 2000) (The general right to privacy, Fourteenth Amendment liberty, and the other elements of those more general rights are obviously not protected against private infringement.) (internal citations and quotations omitted); see also Bray v. Alexandria Womens Health Clinic, 506 U.S. 263, 278 (1993) (holding that only rights under the Thirteenth Amendment protect against private action). Those Amendments do not apply to private actors such as Oracle. Second, to allege a claim for invasion of privacy under the California Constitution the
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

plaintiff must establish each of the following: (1) a legally protected privacy interest; (2) a reasonable expectation of privacy in the circumstances; and (3) conduct by defendant constituting a serious invasion of privacy. Hill v. National Collegiate Athletic Assn., 7 Cal. 4th 1, 39-40 (1994). Plaintiffs FAC broadly alleges that Defendants, including Oracle, violated their privacy by intentionally [and] illegally accessing, disclosing, and distributing Plaintiffs private information. (FAC 197.) But there are insufficient allegations that Oracle ever accessed, disclosed, or distributed any of Plaintiffs information. In Plaintiffs Opposition, they clarify that Oracle should be held liable because its software flexibilities allowed for the intrusion into Plaintiffs [sic] private affairs. (Opp. at 11:16.) The fact that Oracles software may have included certain flexibilities that allowed third-parties to access Plaintiffs private information is not sufficient to charge Oracle with invasion of privacy, much less a serious invasion as required by the California Constitution. Finally, to allege a claim for invasion of privacy under a common law theory of intrusion upon seclusion, plaintiff must establish: (1) intrusion into a private place, conversation or matter, (2) in a manner highly offensive to a reasonable person. Shulman v. Group W Productions, Inc., 18 Cal. 4th 200, 232 (1998). Again, Plaintiffs fail to offer sufficient allegations showing that Oracle intruded into their private matters at all. The Court GRANTS the Defendants Motion to Dismiss the First Claim. 2.CLAIM TWO: PUBLIC DISCLOSURE OF PRIVATE FACTS Plaintiffs Second Claim alleges public disclosure of private facts, which requires proof of (1) public disclosure (2) of a private fact (3) which would be offensive and objectionable to the reasonable person and (4) which is not of legitimate public concern. Id., at 214 (citations and quotations omitted). Plaintiffs do not allege that Oracle publicly disclosed any of their private information. Instead, Plaintiffs allege that Oracle failed to address vulnerabilities in its architecture, thereby leading to the disclosure of their private information. This claim does not meet the pleading standard.
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

The Court GRANTS the Defendants Motion to Dismiss the Second Claim. 3. CLAIM THREE: FALSE LIGHT

Plaintiffs Third Claim is for false light, which requires proof of the following: (1) defendant disclosed information about plaintiff that actually false or created a false impression; (2) one or more persons found the information to state or imply something highly offensive that would have a tendency to injure plaintiff's reputation; (3) defendant acted with malice by clear and convincing evidence; and (4) plaintiff was damaged by the disclosure. Solano v. Playgirl, Inc., 292 F.3d 1078, 1082 (9th Cir. 2002). Plaintiffs allege that Defendantsincluding Oracleare liable for false light because they disseminated false, misleading and defamatory statements about Plaintiffs via various channels. (FAC 216.) But Plaintiffs do not allege that Oracle disseminated any of their information. Rather, Plaintiffs claim that third-parties used Oracles software to access Plaintiffs data. (See Opp. at 12:4-15:14.) Furthermore, Plaintiffs fail to allege that the accessed informationeven if incorrectwas highly offensive. The Court GRANTS the Defendants Motion to Dismiss the Third Claim. 4. CLAIM FIVE: VIOLATION OF THE CALIFORNIA INFORMATION PRIVACY ACT (IPA) CAL. CIV. CODE 1798.53

Plaintiffs Fifth Claim is for alleged violation of section 1798.53 of Californias Information Practices Act (IPA), which allows a claim against anyone who intentionally discloses information, not otherwise public, which they know or should reasonably know was obtained from personal information maintained by a state agency or from records within a system of records . . . maintained by a federal government agency . . . Cal. Civ. Code 1798.53. Again, Plaintiffs claim fails because they have not provided adequate allegations that Oracle ever intentionally disclosed any of Plaintiffs information. It is not sufficient to allege that Oracle allowed the illegal access of Plaintiffs [sic] private data. (Opp. at 16:23.) The Court GRANTS the Defendants Motion to Dismiss the Fifth Claim.
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title 5. SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. CLAIM SIX: VIOLATION OF CAL. IPA, CAL. CIV. CODE 1798.85 Date September 12, 2011

Plaintiffs Sixth Claim is for alleged violation of section 1798.85 of Californias Information Practices Act, which states that a person may not [p]ublicly post or publicly display in any manner an individuals social security number. Cal. Civ. Code 1798.85. Plaintiffs have not provided sufficient support for their claim that Oracle directly participated in the illegal access and distribution of Plaintiffs Liberis and Ostellas private confidential information. (FAC 255.) Plaintiffs allegation that Oracle allowed the illegal access of Plaintiffs [sic] private data is not evidence that Oracle itself publicly posted any of Plaintiffss information. (Opp. At 16:23.)

The Court GRANTS the Defendant's Motion to Dismiss the Sixth Claim. 6. CLAIM EIGHT: DEFAMATION PER SE, SLANDER, AND LIBEL PER SE

Plaintiffs Eighth Claim is for defamation per se, slander, and libel per se. To establish a claim for defamation, including slander and libel, the plaintiff must establish, among other things, that the defendant intentionally published a false statement of fact. Cal. Civ. Code 44-46. Plaintiffs here have not shown that Oracle published anything. The allegation that Mr. Taitz illegally accessed Plaintiffs [sic] information from these databases through Oracles vulnerabilities (Opp. At 18:1-2) is insufficient. No allegations do not support the claim. The Court GRANTS the Defendant's Motion to Dismiss the Eighth Claim. 7. CLAIM NINE: INTENTIONAL INFLICTION OF EMOTIONAL AND MENTAL DISTRESS

Plaintiffs Ninth Claim seeks relief for intentional infliction of emotional and mental distress. (FAC 301-314.) This tort consists of three elements: (1) extreme and outrageous conduct by the defendant with the intention of causing, or reckless disregard of the probability of causing, emotional distress; (2) the plaintiff suffered severe or
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

extreme emotional distress; and (3) the plaintiffs injuries were actually and proximately caused by the defendant's outrageous conduct. Cochran v. Cochran, 65 Cal. App. 4th 488, 494 (1998). Conduct is outrageous only if it exceed[s] all bounds of that usually tolerated in a civilized community. KOVR-TV, Inc. v. Super Ct., 31 Cal. App. 4th 1023, 1028 (1995) (citations and quotations omitted). Plaintiffs allege that Oracle integrated Daylight into Oracles own architecture. (FAC 176-179, 303.) They further allege that Taitz was able to use Daylight to gain top user access to any computer, server, or database using Oracle products, and then transfer information from those sources back to Taitzs designated servers. (FAC 180.) Because Reed and Intelius were Oracle customers, Taitz was supposedly able to access the Reed and Intelius consumer report databases and download Plaintiffs private identifying information. (FAC 303.) The preceding facts do not establish a claim for intentional infliction of emotional and mental distress against Oracle. Oracles alleged conduct was to distribute insecure software. This is far from extreme and outrageous conduct of the sort that exceeds all bounds of that usually tolerated in a civilized community. The Court GRANTS the Defendant's Motion to Dismiss the Ninth Claim. 8. CLAIM FOURTEEN: NEGLIGENCE AND NEGLIGENT NONCOMPLIANCE WITH FCRA 15 U.S.C. 1681b, 1681o

Plaintiffs Fourteenth Claim is for negligence and negligent non-compliance with the United States Fair Credit Reporting Act (FCRA), 15 U.S.C. 1681b, 1681o. (FAC 353-364.) Defendant challenges this claim on the grounds that those provisions of the FCRA are only applicable to consumer reporting agencies. Plaintiffs chose not to reply and thus waived this claim. In addition, the Court agrees with Defendant. The Court GRANTS the Defendants Motion to Dismiss the Fourteenth Claim. 9. CLAIM SEVENTEEN: VIOLATION OF CAL. IPA, CAL. CIV. CODE
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. 1798, ET SEQ. Plaintiffs Seventeenth Claim is for violation of the Information Practice Act, Cal. Civ Code 1798, et seq. The FAC cites the specific provisions of Section 1798 that Plaintiffs allege support their claim. The Court will address each one in turn. The FAC (FAC 382, 391-392) cites Cal. Civ. Code 1798.53 and 1798.85, which are the exact same provisions underlying Claims Five and Six. As already discussed, there is no merit to Plaintiffs Fifth and Sixth Claims against Oracle. Thus, Plaintiffs Seventeenth Claim also lacks merit to the extent that it duplicates those Claims. The FAC (FAC 385) also refers to Cal Civ. Code 1798.81 (A business shall take all reasonable steps to destroy . . . customer's records within its custody or control containing personal information . . . ). This provision does not apply to Oracle because it never had custody or control over Plaintiffs information. The FAC (FAC 387) also cites Cal. Civ. Code 1798.82 ((a)Any . . . business that conducts business in California, and that owns or licenses computerized data that includes personal information, shall disclose any breach of the security of the system following discovery or notification of the breach in the security of the data to any resident of California . . . and (b)Any person or business that maintains computerized data that includes personal information that the person or business does not own shall notify the owner or licensee of the information of any breach of the security of the data immediately following discovery . . .). This provision does not apply to Oracle because it never owned, licensed, or maintained the computerized data containing Plaintiffs personal information at issue here. Moreover, Plaintiffs are not residents of California. (FAC 4, 8.) Finally, the FAC (FAC 384) cites 1798.83 (if a business has an established business relationship with a customer and has within the immediately preceding calendar year disclosed personal information . . . to third parties). This provision does not apply to Oracle because it neither had an established business relationship with Plaintiffs, nor did it disclose their personal information to any third parties.
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Date

September 12, 2011

UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

The Court GRANTS the Defendant's Motion to Dismiss the Seventeenth Claim. 10. CLAIM EIGHTEEN: VIOLATION OF CAL. BUSINESS AND PROFESSIONS CODE 17200 et seq.

Plaintiffs Eighteenth Claim is for violation of the Cal. Business and Professions Code 17200 et seq. Section 17200 prohibits any unlawful, unfair or fraudulent business act or practice. The Defendant argues that the FAC does not identify what was supposedly fraudulent or unfair about Oracles conduct. (Mot. 15:19-20.) Plaintiffs did not respond, and thus waived this Claim. In addition, the Court agrees with the Defendant. Accordingly, the Court GRANTS the Defendant's Motion to Dismiss the Eighteenth Claim. 11. CLAIM NINETEEN: NEGLIGENT INFLICTION OF EMOTIONAL AND MENTAL DISTRESS

Plaintiffs Nineteenth Claim alleges negligent infliction of emotional and mental distress. To succeed, Plaintiff must plead the traditional elements of negligence, including duty, causation, and damages. See, e.g., Ess v. Eskaton Properties, 97 Cal. App. 4th 120, 126 (2002) ([n]egligent infliction of emotional distress is not an independent tort; it is the tort of negligence). The defendant only has a duty to prevent those harms that are reasonably foreseeable. Friedman v. Merck & Co., 107 Cal. App. 4th 454, 465 (2003). Injuries that are connected only distantly and indirectly to the defendant's negligent act are not foreseeable. Cabral v. Ralphs Grocery Co., 51 Cal. 764, 779 (2011). Injuries that arise out of an intervening act, resulting in a harm of a kind and degree so far beyond the [reasonable] risk are also not foreseeable. Perez v. VAS S.p.A., 188 Cal. App. 4th 658, 681 (2010). Plaintiffs argue that Oracle had a duty to design and develop secure software. (Opp. at 23:1-7.) Oracle allegedly violated this duty by integrating Daylight into Oracles own software, even though this product allowed remote applicational execution, cross site
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CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

scripting, remote interface, and injection attacks. (FAC 178.) Defendant Taitz was allegedly able to utilize these features to access Plaintiffs private information off of Oracle customers databases and servers. (FAC 176-179, 303.) Finally, Plaintiffs claim that Defendant Yosef Taitz gave this information to his wife, to enable her to carry out threats against Plaintiffs by publishing their private information, encouraging Defendants neighbors to threaten Plaintiffs, and various other intentionally malicious acts, thereby causing Defendants severe emotional distress. (FAC 408 - 411.) Oracle did not have a duty to prevent the harm suffered by Plaintiffs because it was not a foreseeable result of including the Daylight software into the Oracle platform. Those harms are a direct result of the unforeseeable intervening acts of Defendants Yosef and Orly Taitz, who utilized their specialized knowledge of the Daylight software to carry out a personal vendetta against Plaintiffs. Even if Oracle has a duty to prevent certain kinds of security risks and related injuries, it did not have a duty to prevent the vulnerabilities alleged here because it could not foresee that it would lead to harm of this kind and degree. The Court GRANTS the Defendant's Motion to Dismiss the Nineteenth Claim. 12. CLAIM TWENTY: RES IPSA LOQUITOR NEGLIGENCE

Plaintiffs Twentieth Claim alleges res ipsa loquitur negligence. This claim allows the plaintiff, in the absence of direct proof, to argue that the accident was of such a nature that the injury was more probably than not the result of the defendant's negligence. Moreno v. Sayre, 162 Cal. App. 3d 116, 123 (1984) (citations and quotations omitted). Res ipsa loquitur has three conditions: (1) the accident must be of a kind which ordinarily does not occur in the absence of someone's negligence; (2) it must be caused by an agency or instrumentality within the exclusive control of the defendant; (3) it must not have been due to any voluntary action or contribution on the part of the plaintiff. Id. at 123-124. There are no facts in the FAC that suggest Plaintiffs injury was caused by an agency or instrumentality within Oracles exclusive control. In fact, Plaintiffs pled that the private information was stored on databases managed by Defendants Reed and Intelius, which was accessed by Defendant Taitz. Because Plaintiffs fail to meet this element, the Court
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UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA

CIVIL MINUTES - GENERAL Case No. Title SACV 11-0485 AG (AJWx) LISA LIBERI et al. v. ORLY TAITZ et al. Date September 12, 2011

will not consider the other factors. Furthermore, the Court finds no merit to Plaintiffs request for discovery to bolster their claim. The Court GRANTS the Defendant's Motion to Dismiss the Twentieth Claim. DISPOSITION This litigation, with its 172 page FAC, threatens to spiral out of control. This Court must secure the just, speedy, and inexpensive determination of every action and proceeding. Fed. R. Civ. P. 1. With this in mind, after thorough review, the Court now finds there is no possible way for Plaintiffs to cure the deficiencies in their allegations against Oracle. Thus, the Court does not grant leave to amend. Telesaurus, 623 F.3d at 1003. As this case has improperly grown in size and complexity, the Court is eager to continue to focus the issues and resolve this matter.

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