Docket: Related Case Nos. 3:17-cv-06866-WHO; 3:17-cv-06867-WHO
Court: District Court, N.D. California; June 28, 2018; Federal District Court
Emma Cline, author of "The Girls," was romantically involved with writer Chaz Reetz-Laiolo from 2009 to 2012. Cline accuses Reetz-Laiolo of domestic abuse, while he counters with accusations of her stealing his work and accessing his and others' email and bank accounts. After unsuccessful attempts to settle their dispute, both parties filed separate lawsuits that were later consolidated. Cline, along with her literary agency and publisher, seeks a declaratory judgment to affirm non-infringement and to preempt Reetz-Laiolo's claims of conversion and civil theft. Additionally, Cline claims certain statutes of limitations and asserts charges including conversion, domestic violence, intentional infliction of emotional distress, and tortious interference with economic advantage. Reetz-Laiolo claims copyright infringement, conversion, trespass to chattels, civil theft, and emotional distress. Co-plaintiffs Bernard and Kiesel join Reetz-Laiolo in claims under various federal and state privacy and computer crime statutes, as well as for intrusion upon seclusion. The order addresses the motions to dismiss filed by both parties.
In June 2009, Cline, a 20-year-old college student, began a romantic relationship with 33-year-old Reetz-Laiolo, a writer and lecturer. Cline moved in with him in December 2009 and lived together until fall 2011, when she moved to New York for a Masters in Fine Arts program. Their relationship continued intermittently until February 2012, but they maintained contact and shared writing drafts. By September 2014, Cline had completed a draft of her novel, *The Girls*, which sold to Penguin Random House for $2 million.
Reetz-Laiolo expressed concerns about potential plagiarism after Cline mentioned using an online plagiarism detector. He requested to see specific passages from her manuscript, which Cline provided. In November 2015, he accused her of plagiarism and sent a demand letter in January 2016 detailing 36 instances of infringement, leading Cline to agree to remove the identified snippets. Reetz-Laiolo claimed material was copied from a draft screenplay he had previously shared with her.
*The Girls* was published on June 14, 2016, receiving critical acclaim and achieving significant commercial success. In February 2017, Reetz-Laiolo's new counsel sent a demand letter outlining copyright infringement theories, followed by a tolling agreement and a draft complaint. Subsequent drafts of the screenplay were provided to Cline and Random House, indicating that the disputed material originated from specific drafts dated June 17, 2013, December 26, 2013, and June 24, 2014.
In 2008, Emma Cline wrote three short stories that laid the foundation for her novel, The Girls, exploring themes of adolescent female relationships, a 1960s Sonoma County commune, and the violence associated with the Manson Family. Cline drew on personal experiences, particularly those from her relationship with Reetz-Laiolo. She completed a draft of The Girls in September 2014, which her literary agency marketed with a vivid description of the protagonist, 14-year-old Evie, who navigates a tumultuous summer, forming a dangerous bond with an older drifter and confronting a violent commune.
Reetz-Laiolo claims Cline plagiarized elements from his manuscript, All Sea, citing specific narrative parallels involving a teenage protagonist's interactions with his mother and criminal activities. He alleges that Cline accessed his work through unauthorized access to his Yahoo account.
Cline counters by detailing Reetz-Laiolo's infidelity and abusive behavior during their relationship. She describes how he frequently violated her privacy by reading her personal communications and journals. Cline discovered in March 2010 that he had been unfaithful with an ex-girlfriend, "Ms. K," who had informed him of a sexually transmitted disease. Despite this, Reetz-Laiolo continued to engage in unprotected sex with Cline without disclosing the potential exposure, and he denied ongoing contact with Ms. K when confronted.
In September 2010, Cline installed a keylogger program from Refog on her computer to monitor Reetz-Laiolo's activities due to concerns about privacy and potential health risks. This software recorded keystrokes and screenshots, capturing instances where Reetz-Laiolo emailed himself her personal journal. After Reetz-Laiolo promised fidelity in February 2011, Cline uninstalled the software and ceased monitoring his email. However, in December 2011, after Reetz-Laiolo revealed STD symptoms, Cline reinstalled a trial version of Refog's software. In February 2012, she discovered he had stolen her journal, and despite his assurance to delete it, he retained possession.
Following their breakup, during a July 2012 visit, Reetz-Laiolo violently choked Cline over perceived flirtatious texts and threatened to expose her personal information. In December 2012, he asked to buy her laptop for $300, agreeing she would wipe the hard drive but requesting to keep the applications intact. In January 2013, while transferring her files, Cline was unaware that the Refog software, which had logged her activities from September 2010 to January 2013, remained on the laptop. This data included sensitive correspondence, journal entries, and personal photographs. Cline has repeatedly requested the return of her records, asserting they do not belong to Reetz-Laiolo.
On October 22, 2014, following the sale of rights for *The Girls* to Random House, Reetz-Laiolo suggested to Cline that her literary success might attract interest in nude photographs of her. He also mentioned plans to write a tell-all article about her, which he later dismissed as a joke after upsetting her. By February 2015, he informed Cline that data from the Refog software remained on a computer she had sold him and questioned her about remotely accessing it, to which she responded negatively. In October 2015, after reading an outdated manuscript, he accused her of plagiarism and discouraged her from publishing the book.
As he recognized the weaknesses in his copyright claims against Cline, Reetz-Laiolo developed a scheme to exploit her for financial gain using the Refog records, falsely alleging she had accessed the computer remotely. This theory was crucial because any legitimate claims he had regarding her use of the software were barred by statute of limitations. He incorporated these allegations into a complaint against her and included unfounded claims of plagiarism from her MFA program, aware that these would damage her reputation despite knowing they were baseless.
Cline experienced significant personal and professional harm due to this situation, suffering from weight loss and insomnia, necessitating medical and psychological treatment. She canceled an international book tour and numerous engagements, refrained from pursuing film rights for *The Girls*, and struggled to focus on new projects.
Reetz-Laiolo characterized their past relationship as loving but not strictly monogamous. Cline had expressed a desire to rekindle their relationship even after it ended in January 2012, and he remained involved in her social life until 2015. Cline and Reetz-Laiolo had traveled together in 2010, during which a mutual friend, Kari Bernard, occasionally used Cline's computer with her permission. Another individual, Kristin Kiesel, had a prior romantic relationship with Reetz-Laiolo, which continued as a friendship after their breakup.
Cline installed the Refog software on her computer prior to a 2010 trip to Italy, engaging in a covert operation to spy on the plaintiffs. Refog's Keylogger program operates undetectably, logging keystrokes, capturing screen snapshots, and monitoring online communications. Although marketed for parental use, its legality hinges on application; Cline used it unlawfully to capture passwords from Reetz-Laiolo, Bernard, and Kiesel, allowing her unauthorized access to their accounts for years, without their knowledge or consent. Cline intercepted emails, chat messages, and other sensitive information, accessing Reetz-Laiolo’s accounts even after their separation, and reviewed extensive historical communications. She employed VTunnel, an online tool to conceal her IP address during hacking, though she did not need it while living with Reetz-Laiolo. Cline’s intrusion extended beyond Reetz-Laiolo, as she accessed Bernard’s and Kiesel’s emails and sometimes viewed message previews. She continued accessing these accounts until shortly before selling her computer to Reetz-Laiolo in January 2013, during which she misrepresented that she had wiped the computer yet left Refog running. In 2017, forensic specialists revealed that Cline had remotely monitored Reetz-Laiolo's computer activity from 2013 to 2015.
In 2015, Reetz-Laiolo uncovered the Refog software and a significant number of screen-capture files after seeking help from a computer specialist due to performance issues with his computer. This discovery revealed extensive intrusions into his private life by Cline, leading to severe negative effects on his mental health, including paranoia, panic attacks, and sleep disorders. By March 2016, Reetz-Laiolo shared this information with Bernard, who was visibly upset upon learning about the invasions of privacy, and later with Kiesel, who also reacted with shock and distress.
The Refog software documented Cline's activities, which included searching for messages between Reetz-Laiolo and his editors, downloading and modifying his drafts, and incorporating significant portions of other authors' works into her own writing, while deleting her browsing history to cover her tracks. Cline accessed Reetz-Laiolo's computer and email to steal unique passages and scenes from his works, including three key scenes from his unpublished manuscript, The Girls. Notably, in April 2016, Cline's legal counsel disclosed that she had a copy of Reetz-Laiolo's manuscript for All Sea, which had never been published or shared with her.
Reetz-Laiolo accused Random House of falsely claiming that snippets Cline provided were added after acquiring the manuscript and asserted that the publisher did not return his manuscripts after being informed of the unauthorized possession. Instead, Random House allegedly colluded with Cline to conceal their misconduct and pressured Reetz-Laiolo into a non-disclosure agreement by threatening to expose personal information and fabricate damaging narratives about him. He refused the agreement, and Random House proceeded to publish The Girls, including the stolen content.
On November 29, 2017, Cline, The Clegg Agency, and Random House initiated a lawsuit against Reetz-Laiolo, seeking declaratory relief, damages, and attorney's fees. The first three counts of the complaint request declaratory judgments affirming that Reetz-Laiolo's claims regarding infringement, conversion, and civil theft are invalid or preempted, and that his claims concerning Cline's use of Refog software are time-barred. Counts IV through VII, filed solely by Cline, allege conversion, domestic violence under California law, intentional infliction of emotional distress, and tortious interference with economic advantage. On the same day, Reetz-Laiolo, along with Kari Bernard and Kristin Kiesel, filed a separate complaint against Cline, Random House, and Scott Rudin Productions, Inc. On December 13, 2017, the two cases were consolidated, and on December 15, they were assigned to the presiding judge. Reetz-Laiolo voluntarily dismissed his claims against Scott Rudin Productions on December 22, 2017.
Subsequently, Cline and Random House filed a motion to dismiss on January 29, 2018, while Reetz-Laiolo moved to dismiss counts IV through VII and Cline's attorney fees claim on February 5, 2018. An amended complaint from Reetz-Laiolo and co-plaintiffs was filed on February 20, 2018, which included various claims under federal and California law, including violations of the Stored Communications Act, the Federal Wiretap Act, and copyright infringement, among others. Cline and Random House responded with another motion to dismiss the amended complaint on March 5, 2018. Following oral arguments on April 11, 2018, Reetz-Laiolo and his co-plaintiffs sought permission to file a second amended complaint to introduce additional claims related to litigation communications. They cited potential issues with statutes of limitations and the lack of a tolling agreement as reasons for the urgency, while expressing willingness to defer resolution of this motion until rulings on the pending motions to dismiss were made.
Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint that fails to state a plausible claim for relief. A claim is plausible when the plaintiff presents sufficient facts that allow for a reasonable inference of the defendant's liability, surpassing mere speculative assertions. Courts will accept the plaintiff's allegations as true, drawing all reasonable inferences in their favor, but will reject conclusory statements and unfounded deductions. If a complaint is dismissed, leave to amend should generally be granted unless it is impossible to cure the deficiencies, considering factors like undue delay, bad faith, and potential prejudice to the opposing party.
Reetz-Laiolo's motion argues that Cline's conversion claim is time-barred and that she lacks a legal interest in the Refog records she alleges were converted. He also asserts that her claims of domestic violence, intentional infliction of emotional distress, and tortious interference qualify as a Strategic Lawsuit Against Public Participation (SLAPP), as they arise from litigation-related activities and are thus constitutionally protected. Additionally, he claims her request for attorney fees is legally flawed since it is contingent on her domestic violence claim, which he argues fails.
For the conversion claim, the elements required are the plaintiff's ownership or right to possess personal property, the defendant's improper handling of that property, and resultant damages. California law imposes a three-year statute of limitations on conversion claims. Cline alleges that Reetz-Laiolo took possession of her Refog records and personal journal without consent, discovering the alleged theft on February 5, 2012. She sold the computer to him in January 2013, which Reetz-Laiolo argues indicates the claim is untimely, as it exceeds the three-year limit following her awareness of the alleged conversion.
Cline asserts that her conversion claim regarding the Refog records is timely because the statute of limitations commenced when she requested the return of the property, which Reetz-Laiolo refused. Cline argues that Reetz-Laiolo was merely "entrusted" with the records under an involuntary bailment or constructive trust theory. An involuntary bailment occurs when personal property is unintentionally left with another without the owner's negligence. The case indicates that the cause of action for conversion started when the defendant used the property, not upon refusal to return it. Reetz-Laiolo disputes the existence of an involuntary bailment, claiming Cline was negligent in leaving the records on the computer. The court agrees, noting Cline's forgetfulness about the Refog software after transferring documents does not satisfy the non-negligence requirement for a bailment.
Cline's argument for a constructive trust is more favorable. This remedy is dependent on an underlying wrongful act and is governed by the statute of limitations applicable to that act. If property is obtained by fraud or mistake, the fraud statute applies, starting the limitations period upon the discovery of the fraud. Cline's action based on mistake began in February 2015 when she learned the records remained on the computer, thereby making her conversion claim timely.
Regarding her personal journal, Cline claims her conversion claim is tolled due to Reetz-Laiolo’s false promise to delete his copy of the journal. A statute of limitations can be tolled if fraudulent concealment prevents a plaintiff from discovering their claim. Cline must demonstrate that Reetz-Laiolo misled her and that she lacked knowledge of the claim despite her diligence. However, Cline’s allegations are deemed insufficient, as they do not provide the necessary specifics about the concealment or her efforts to uncover the facts.
Cline's allegation that Reetz-Laiolo misled her in 2012 by stating he would delete her journal does not sufficiently demonstrate her diligence in discovering this misrepresentation. As of 2012, she was on inquiry notice of her claim and had a duty to investigate, which means her conversion claim regarding her personal diary is untimely. However, she is granted leave to amend her claim. Regarding her alleged property rights in the Refog records, Reetz-Laiolo contends that Cline has not shown any retained property rights after selling the computer and has not established a right to possess screenshots containing private information of others. Cline claims her right is based on her activity logs on her own computer. Although Reetz-Laiolo interprets her claim as a concession that she lacks legal possession of the sensitive information, the court finds that Cline's claim is not precluded by this interpretation. Reetz-Laiolo's arguments—that Cline relinquished her rights by selling the computer, abandoned her rights by intending to destroy the records, and cannot reclaim evidence of illegal behavior—are noted but not seen as sufficient to dismiss her conversion claim concerning her own computer activity. Therefore, Reetz-Laiolo's motion to dismiss the conversion claim is denied.
Reetz-Laiolo argues that Cline’s claims of domestic violence, intentional infliction of emotional distress, and tortious interference are barred by California's Anti-SLAPP statute and protected by litigation privilege, as they stem from pre-suit litigation activities, including settlement negotiations. A choice-of-law analysis is required, following California's three-step governmental interest approach. This involves determining whether the laws of California and New York differ on the issue, assessing each jurisdiction's interest in applying its law, and if a true conflict exists, evaluating which state's interest is more significantly impaired. The parties agree that California's anti-SLAPP law protects prelitigation conduct, while New York's does not. Cline asserts a stronger interest in New York law due to her residency, the location of relevant conduct, and the impact of injuries sustained there. In contrast, Reetz-Laiolo maintains that California law should apply, emphasizing the importance of the defendant's residence and California's intent to uphold the First Amendment rights of its residents.
California lacks a governmental interest in applying its laws since the plaintiffs, rather than the defendants, reside there, and the litigation was filed in California, which Cline argues is irrelevant to the choice-of-law analysis. New York, however, has a significant interest in addressing tortious conduct by a New York attorney related to litigation in New York. Although Cline's suit was initiated in California, she presents strong arguments for applying New York’s laws because the acts and harm primarily occurred in New York. New York's anti-SLAPP statute does not cover prelitigation conduct, leading to the denial of Reetz-Laiolo's motion to strike based on that ground.
Cline contends that state law privileges should not apply in federal cases involving both federal and state claims, citing Ninth Circuit precedents. However, these cases focus on evidence admissibility rather than the applicability of privileges. In specific instances, federal privilege law governs when federal claims are involved, and state privileges are recognized only when state law provides the rule of decision. Reetz-Laiolo's assertion of the litigation privilege as a total defense to Cline's state law claims is subject to federal court rules that apply state law under similar circumstances.
Cline argues that if any litigation privilege is applicable, it should be New York's, which does not cover prelitigation conduct. Nevertheless, the conclusion that New York's litigation privilege applies aligns with the earlier finding regarding the applicability of New York's anti-SLAPP regime. New York's litigation privilege does extend to prelitigation activities, but only for statements made in good faith in anticipation of litigation.
Attorneys are not protected by privilege when engaging in unethical conduct aimed at intimidating adversaries through baseless claims. Cline argues that Reetz-Laiolo's removal of certain allegations from the complaint, including explicit materials, indicates their irrelevance to the case. In contrast, Reetz-Laiolo claims that Cline's sexual history is pertinent to her accusations of him infecting her with HPV, and that the materials are relevant to his copyright claims. Cline counters that any explicit communications after their relationship have no bearing on the case. The court finds that whether New York's qualified privilege applies to prelitigation communications is a factual issue to be resolved later, denying Reetz-Laiolo’s motion to dismiss based on absolute litigation privilege.
Regarding Cline's claim for intentional infliction of emotional distress (IIED), the two-year statute of limitations applies. If Cline's claim is not tied to litigation-related activities, it is likely untimely. For her domestic violence claim, Cline cites incidents including theft, choking, and threats involving nude photos. Under California law, domestic violence requires proof of injury from abuse by someone in a defined relationship with the plaintiff. Reetz-Laiolo asserts that threats and demands do not meet the definition of "bodily injury," although he acknowledges that some allegations from their cohabitation period do qualify as domestic violence.
Cline asserts that her domestic violence claim is valid despite the defendant's argument that the acts are beyond the statute of limitations, which allows filing within three years of the last act of domestic violence (Cal. Civ. Proc. Code § 340.15(a)). The definition of "domestic violence" refers to abuse against specific individuals, including cohabitants, as outlined in the Family Code (Cal. Fam. Code § 6211). Cline argues that additional acts of abuse occurred within three years prior to a tolling agreement, extending the statute of limitations. The Family Code defines abuse broadly, encompassing behaviors like threatening or harassing, which can be enjoined by the court (Cal. Fam. Code § 6320).
Reetz-Laiolo counters that no acts of domestic violence are alleged within the three-year period, thus the claim is not preserved by any acts of "abuse." Cline references *Pugliese v. Superior Court*, where the California Court of Appeal determined that the statute allows recovery for all acts of domestic violence during marriage if a continuing course of abuse is established, provided the suit is filed within three years from the last act. The court noted that the limitations period starts upon the last act essential to the claim, and in cases of continuing wrongs, does not commence until the last injury or cessation of tortious acts. Legislative history indicates recognition of domestic violence as a series of acts, allowing victims to seek damages not only for the last act but for prior acts as well.
Domestic violence litigants can seek recovery for all acts of domestic abuse that occurred during the relationship if they can demonstrate a continuing course of abusive conduct. The case of Pugliese is referenced, which addressed a plaintiff's ability to recover damages for acts outside the limitations period, indicating that a plaintiff must show continual domestic abuse and a tortious act within the statutory period to recover for earlier conduct. Cline's case is distinguished from Pugliese as she has not alleged a continuous pattern of abuse; her claims involve isolated incidents occurring in 2012 and 2014, and demands beginning in 2016, without establishing a continuing course of abusive conduct. Cline has not shown that any domestic violence occurred within the limitations period, nor has she substantiated a claim under the continuing tort theory. Consequently, Reetz-Laiolo's motion to dismiss Cline's domestic violence claim is granted.
Additionally, to establish a claim for tortious interference with prospective economic advantage, a plaintiff must demonstrate the existence of a prospective business relationship, the defendant's knowledge of that relationship, intentional acts to disrupt it, actual causation, and resulting damages. Cline has not alleged that Reetz-Laiolo engaged in any independently wrongful act necessary to support her claim for tortious interference.
Cline has not sufficiently pleaded that Reetz-Laiolo's actions proximately caused her injury. An independently wrongful act, as defined by legal standards, includes any unlawful act. Cline claims that Reetz-Laiolo interfered with her relationships with Random House, The Clegg Agency, and Scott Rudin Productions by making unfounded allegations against her. In her opposition, she argues that Reetz-Laiolo's extortionate threats qualify as independently wrongful acts. If the litigation privilege does not protect his conduct, Cline has adequately pleaded a claim for intentional interference with prospective economic advantage, demonstrating a likelihood of future economic benefits.
To establish an economic relationship, it must be reasonably probable that the prospective advantage would have been realized without the defendant's interference. Relationships based solely on speculative expectancies or potential customers are insufficient. Cline’s claims about lost proceeds from book sales on an international tour are deemed speculative. However, the cancellation of scheduled paid speaking engagements is not speculative, as it is reasonably probable that she would have received those benefits. Cline asserts that Reetz-Laiolo's conduct led to her canceling these engagements, claiming she would not have done so "but-for" his interference, thus plausibly pleading her claim for tortious interference.
Reetz-Laiolo's motion to dismiss this claim is denied. Regarding Cline's demand for attorneys' fees, Reetz-Laiolo contends it should be stricken since her domestic violence claim is inadequately pleaded. Cline argues that her declaratory copyright claim allows for fee-shifting under the Copyright Act, which permits courts to award reasonable attorney's fees to the prevailing party.
The rule regarding declaratory relief under the Copyright Act applies to claims like those in Shloss v. Sweeney, where fees were awarded to an author seeking declaratory judgment. Reetz-Laiolo argues that Cline’s claim for declaratory relief is akin to her affirmative copyright claims, suggesting that Cline will not incur separate fees. However, since fees can be awarded to either party in copyright claims, there is no basis to strike Cline's fee demand, as it does not fail as a matter of law.
Reetz-Laiolo has filed two copyright infringement claims: one concerning Cline’s draft manuscript shared with Random House and Scott Rudin Productions, and the other related to the publication of The Girls. The defendants’ motion to dismiss focuses solely on the published version. To establish copyright infringement, two elements must be proven: ownership of a valid copyright and copying of original elements of the work. Reetz-Laiolo's copyright registrations are pending for his drafts, confirming ownership.
The second element requires distinguishing between “copying” and “unlawful appropriation.” The Ninth Circuit emphasizes that proof of unlawful appropriation necessitates showing substantial similarity involving protected elements of the plaintiff's work. The Copyright Act does not protect ideas or concepts, meaning liability arises only if enough of the expression is copied to render the works substantially similar. The term “substantial similarity” can refer to different standards in the contexts of proof of copying and proof of unlawful appropriation, with the former requiring less extensive similarities.
Reetz-Laiolo has effectively alleged the "copying" aspect required for a copyright infringement claim, asserting that he shared a draft of the All Sea manuscript with Cline, who admits to possessing at least one version of it. This establishes Cline's access to Reetz-Laiolo's screenplay, and the presence of similarities in scenes and phrases creates a presumption of copying over independent creation.
Reetz-Laiolo's complaint also includes claims of intermediate copying, specifically that Cline downloaded the All Sea manuscript and incorporated parts into her work, The Girls. Under these circumstances, substantial similarity does not need to be proven. The Ninth Circuit's ruling in Sega Enterprises Ltd. v. Accolade, Inc. clarifies that the Copyright Act does not differentiate between unauthorized copies based on the stage of the alleged infringer's work and acknowledges that even preliminary versions can infringe copyright rights.
Reetz-Laiolo emphasizes that downloading the screenplay constitutes a literal copy, constituting a copyright violation. However, the amended complaint appears to focus more on the two versions of The Girls rather than directly addressing Cline's possession of the All Sea manuscript. Intermediate copying claims are often associated with software cases, but the legal precedent indicates that such copying can infringe the copyright owner's exclusive rights, regardless of whether the final product also infringes those rights. The overarching legal framework supports liability for intermediate copying, and it was deemed erroneous to grant summary judgment based on a minimal infringement argument related to Cline's download of the manuscript.
The Ninth Circuit in Sega dismissed the defendant's claim that intermediate copying is lawful, noting that the cited cases primarily involved literary works, which did not change the precedent established in Walker, as those cases focused only on the final works in question. Similarly, Reetz-Laiolo's amended complaint alleges infringement solely concerning Cline's final work. The court indicated that Reetz-Laiolo may further amend his complaint if he can plausibly allege copyright infringement related to Cline's alleged improper download of his manuscript.
On the issue of substantial similarity, the court highlighted that when both the copyrighted work and the alleged infringing work are available for examination, non-infringement can be determined at the motion to dismiss stage. The court referenced several cases supporting this position, including Christianson and Rentmeester, which affirmed that substantial similarity can be evaluated as a matter of law, akin to summary judgment. Although summary judgment is not favored in copyright cases regarding substantial similarity, it can still be resolved legally. The recent Rentmeester case illustrated this point, where the court upheld the dismissal of a copyright claim due to the plaintiff's failure to meet the "extrinsic test" for substantial similarity.
Reetz-Laiolo's arguments against dismissal were found to be flawed. He mistakenly claimed he did not need to demonstrate substantial similarity due to direct evidence of copying and improperly invoked the "inverse ratio" rule, which only pertains to proving copying rather than unlawful appropriation, the central issue in this case.
The inverse ratio rule does not apply to proving substantial similarity for unlawful appropriation, as it seeks to balance authors' rights with creative freedom. The Ninth Circuit employs a two-part analysis for substantial similarity: the extrinsic and intrinsic tests. The extrinsic test assesses objective similarities by filtering out unprotectable elements such as ideas, facts, public domain material, and standard expressions. The intrinsic test allows for a subjective comparison of the works' total concept and feel, reserved for jury determination. Before comparison, courts must exclude unprotectable elements including ideas versus expression, facts, borrowed elements, and standard expressions. Cline and her co-defendants argue that Reetz-Laiolo’s claims involve copying ideas rather than protectable expressions, cautioning against highlighting random similarities across works. Reetz-Laiolo contends that his claims are based on specific protectable sequences involving character interactions and narrative elements rather than unprotectable ideas.
A comparative analysis of two works reveals substantial similarities, primarily through a chart that highlights dialogue indicative of these similarities. The author disputes the defendants' claim that his work lacks character detail, arguing that this is a feature of the screenplay format and does not absolve potential infringement. The analysis will examine "articulable similarities" across plot, themes, dialogue, mood, setting, pace, characters, and sequence of events, referencing relevant case law.
The plot is defined as the sequence of events that convey the author's theme, which, if common to both works, could indicate substantial similarity. Although some undeniable similarities exist, they are confined to a few scenes and general plot ideas, which are not protected by copyright. Both narratives feature coming-of-age themes but differ significantly in detail and execution.
In "The Girls," the story alternates between 1969 and the present, focusing on Evie, a teenager drawn to an older girl, Suzanne, and a group under a charismatic leader, paralleling the Charles Manson cult story. Key plot points include Evie participating in a burglary, facing familial repercussions, and ultimately being saved from violence by Suzanne, concluding with her as an adult reflecting on her past.
Conversely, "All Sea" follows Gabe, another teenage protagonist, in a chronological format set in the 1990s. Gabe's narrative begins with a burglary that leads to his relocation to Oregon after his mother’s night out. Specific scenes identified as evidence of similarity include both protagonists being left alone during the summer and their uncomfortable interactions with their mothers upon their return from dates.
Both teenage protagonists are influenced by an older social group, leading them to participate in a burglary, where they are subsequently caught. Following this incident, both are placed with their father or father figure by their single mothers. They each experience an awkward conversation with their father during the car ride to their new home. However, there are notable differences in the depiction of these events across the two works. The timing of these scenes varies, occurring early in *All Sea* and later in *The Girls*, with distinct settings: Gabe’s scene unfolds in a sparsely furnished bedroom, while Evie’s takes place in a comfortable living room.
Reetz-Laiolo's analysis attempts to draw parallels between the stories, such as the themes of alienated youth and the consequences of crime, but these are presented as common literary tropes lacking copyright protection. The social groups in each narrative differ significantly; in *The Girls*, it is a close-knit "family" of young women, whereas in *All Sea*, it is an ambiguous group of older teens. Additionally, the nature of the "stealing" varies, as *The Girls* does not depict actual theft. The narratives diverge further in their outcomes: Evie returns home after two weeks, while Gabe remains with his uncle for the duration of his story.
Dialogue similarities are noted, particularly in the interactions between characters Ray and Carl regarding theft, but these short phrases are deemed insufficient to establish substantial similarity, as per Ninth Circuit precedents indicating that short expressions cannot be copyrighted. Lastly, while both protagonists are similar in age and live in nearby agricultural towns, their experiences and settings reflect different explorations of youth and sexuality.
Both teenage protagonists, Gabe and Evie, come from single-parent households, with their mothers exhibiting problematic behaviors, such as drunkenness and neglect. As the narrative unfolds, they become fascinated with an older social group and receive nicknames: "Little King" for Gabe and "Little Doll" for Evie. They are encouraged by these older figures to trespass into an unlocked home, resulting in Gabe getting caught while Evie manages to escape but is later identified. Their mothers react with anger towards their actions and subsequently send them to live with father figures. In both stories, the protagonists form bonds with a young woman living with these figures.
In assessing copyright protection, the Ninth Circuit requires characters to be "sufficiently delineated" and "especially distinctive," which the characters in "All Sea" do not meet. Gabe is portrayed as a sensitive youth seeking stability, while Evie is drawn to instability and the allure of her peers. Their mothers differ significantly in circumstances, with Gabe’s being protective yet struggling, and Evie’s being financially secure but emotionally distant. The characterizations of their father figures further emphasize their distinct narratives.
The themes diverge as well: "The Girls" focuses on female experiences, attention-seeking, and manipulation by men, whereas "All Sea" presents a male coming-of-age story centered on Gabe's maturation without a strong paternal influence. The court finds insufficient objective similarities between the two works to support Reetz-Laiolo's copyright claims, granting the defendants' motion to dismiss. However, Reetz-Laiolo may amend the complaint to include allegations of intermediate copying.
Regarding conversion and civil theft claims, the court notes that while these claims are not preempted by copyright law, they fail to demonstrate the necessary damages. For a state law claim to survive preemption, it must assert rights qualitatively different from those protected by copyright.
Reetz-Laiolo contends that his conversion claim is not preempted by copyright law due to the additional element of "the right to exclude others" from his private manuscripts. He asserts that conversion involves actions distinct from copyright violations, supported by Oddo v. Ries, and similarly, the civil theft claim, which pertains to personal property, has a different basis than copyright law. However, the court notes that Reetz-Laiolo has not alleged actual damages, which are necessary for both conversion and civil theft claims. To establish conversion, a plaintiff must demonstrate ownership, wrongful disposition, and damages, as stated in Kremen v. Cohen. Civil theft claims also require actual damages, allowing for treble damages under Cal. Penal Code 496(c).
The court also addresses Reetz-Laiolo's allegations under the Stored Communications Act (SCA), which allows for a private cause of action against unlawful access to stored communications. Reetz-Laiolo claims that Cline unlawfully accessed their stored communications, but Cline argues that the plaintiffs failed to specify that their emails were "in electronic storage" as defined by the SCA. According to the SCA and the Wiretap Act, "electronic storage" can mean either temporary, intermediate storage incidental to transmission or storage for backup purposes. The Ninth Circuit interprets this definition disjunctively, meaning either condition qualifies as electronic storage. The parties agree that the claim is based on Cline's unauthorized access to the plaintiffs' web-based email accounts.
Cline argues that the plaintiffs' claims should be dismissed because they fail to allege that she accessed their electronic communications while they were in "temporary, intermediate storage" or "for purposes of backup protection," as interpreted by courts. Cline references the Ninth Circuit's ruling in *Theofel*, which states that subsection (A) applies only to messages not yet delivered to the intended recipient. She supports her argument with various district court cases that similarly limit this definition. Since the emails in question were opened, Cline contends they do not qualify as being in temporary storage incidental to electronic transmission.
The plaintiffs, however, argue they have sufficiently alleged "electronic storage" under subsection (A) because Cline could access their emails while they were pending delivery and claim that she accessed their unopened emails. Yet, Cline points out that their complaint does not substantiate this claim, as it only mentions Cline accessing "previews" of emails without confirming whether those emails were unopened.
Several courts have previously held that a defendant can be liable under the Stored Communications Act (SCA) for unauthorized access to a plaintiff's emails, whether or not the emails were opened. The courts have indicated that the duration of storage and the status of the emails (opened or unopened) are irrelevant to establishing an SCA claim.
The definition of "electronic storage" under the Stored Communications Act (SCA) is narrower than commonly perceived, providing limited Fourth Amendment-like protections for computer networks rather than broadly safeguarding internet privacy. Specific to the case, the definition requires that emails were accessed while pending delivery to the intended recipient. The Reetz-Laiolo plaintiffs did not claim they used their web-based email for backup protection but argued that emails stored post-delivery on an ISP server constituted backup storage. Cline contends this assertion is incorrect, as established in Theofel, which differentiates between web-based and non-web-based email services, noting that emails may not be stored for backup if there are no alternative versions. Consequently, without allegations of using web-based accounts for backup purposes, subsection (B) of the SCA is deemed inapplicable.
Regarding damages, Cline argues that the plaintiffs cannot claim statutory damages without proving actual damages. Although some district courts have allowed for statutory damages absent actual damages, circuit courts have generally ruled that actual damages are a prerequisite for such claims. The SCA states that damages can include actual losses and violator profits, but a claimant cannot receive less than $1,000. Courts have consistently held that statutory damages cannot be awarded without actual damages or profits being established.
The Supreme Court has interpreted similar language in Section 2707(c) to require proof of actual damages for statutory damages recovery, while Congress has enacted statutes allowing statutory damages without such proof. However, Ninth Circuit courts have ruled that plaintiffs can obtain minimum statutory damages under Section 2707(c) without proving actual damages, rejecting the analogy between the Stored Communications Act (SCA) and the Privacy Act. They argue that the structural differences between the two statutes preclude applying the Supreme Court's interpretation from Doe v. Chao to the SCA. District courts in the Ninth Circuit have consistently concluded that actual damages are not necessary for statutory damages under the SCA, allowing for the possibility of multiplying the $1,000 minimum statutory award for multiple violations. The Court affirms that Section 2707 does not mandate proof of actual damages for statutory damages claims under the SCA.
Regarding Federal Wiretap Act claims, the Act prohibits the intentional interception of communications during transmission, not while in electronic storage. The Reetz-Laiolo plaintiffs assert claims based on the installation of Refog software, which captures screenshots rather than intercepts communications during transmission. This operation leads to the conclusion that the Refog software records communications in electronic storage, not contemporaneously with their transmission, making it implausible for the conduct to qualify as an interception under the Wiretap Act. The Court supports this interpretation, noting that the same conduct cannot simultaneously be an interception under the Wiretap Act and an accession under the SCA. The plaintiffs attempt to navigate around this conclusion in their arguments.
Refog software operated continuously while Cline accessed Plaintiffs' accounts, allowing it to intercept emails, chat messages, bank data, and other sensitive information by taking screenshots of these communications in transit. Plaintiffs argue that Refog's functionality constitutes interception under the Wiretap Act, contrasting with prior cases where keyloggers did not capture communications being transmitted beyond the device where they were installed. Cline references cases like *United States v. Barrington* and *Hernandez v. Path, Inc.*, which dismissed wiretap claims based on the lack of simultaneous transmission of intercepted communications. However, the Reetz-Laiolo plaintiffs assert their situation is distinct because Refog captured screenshots, unlike keyloggers that only log keystrokes. They cite *Shefts v. Petrakis*, where the court recognized the difference between keyloggers and software like SpectorPro, which captured all screen activity—including live communications—allowing defendants to view emails as they were sent or received. The court concluded that SpectorPro's simultaneous capture of communications during transmission differentiated it from keylogger cases, affirming that such actions fell under the scope of interception as defined by the Wiretap Act.
SpectorPro captured the Plaintiff's electronic communications under the ECPA, allowing Defendants to view these communications in real-time if they were at the monitoring station during the Plaintiff's use of his Yahoo! email account. The court in Krise v. SEI/Aaron's, Inc. examined a similar software, PC Rental Agent (PCRA), which had a "Detective Mode" feature that captured keystrokes and screen content at intervals (every two minutes) rather than continuously. The court highlighted a critical distinction: while SpectorPro was always capturing communications simultaneously with their transmission, Detective Mode's screenshots did not guarantee simultaneous capture during transmission. The court concluded that there was no evidence that the screenshots correlated with the actual communications, thus ruling that the Detective Mode did not intercept electronic communications under the ECPA.
Skepticism was expressed regarding the applicability of the Federal Wiretap Act to the situation, noting parallels between Refog software and the Detective Mode software from Krise, both of which were resolved via summary judgment. In a related case, Boudreau v. Lussier, the court ruled that the plaintiff could not demonstrate the timing of screenshots without expert testimony, emphasizing the necessity of a well-developed factual record. The court highlighted that until it could ascertain when and how Yahoo accessed users' emails, it must accept the Plaintiff's claims of interception during transmission as true, leading to the denial of Cline's motion to dismiss the claim. Additionally, the Computer Fraud and Abuse Act (CFAA) was referenced, which addresses unauthorized access to computers and related prohibited actions.
A plaintiff must demonstrate that a defendant violated specific provisions of the Computer Fraud and Abuse Act (CFAA), particularly under sections 1030(a)(2) and (a)(4), and that the violation involved certain factors outlined in 1030(a)(5)(B). To succeed under 18 U.S.C. 1030(g) for a violation of 1030(a)(2), the plaintiff must prove that the defendant intentionally accessed a protected computer without authorization, obtained information, and caused at least $5,000 in losses within a year. For a claim under 1030(a)(4), the plaintiff must show that the defendant accessed a protected computer without authorization or exceeded granted authorization with intent to defraud, resulting in similar loss criteria.
Cline argues for dismissal of the claims, asserting that the plaintiffs did not adequately allege the required losses or plausibly plead unauthorized access. Under the CFAA, "loss" encompasses any impairment to data integrity or availability, including costs associated with responding to offenses or restoring systems. Ninth Circuit courts have ruled that actual physical alteration of data is not necessary to establish damage; impairment is sufficient. Cline claims that the plaintiffs have not alleged any losses, and Reetz-Laiolo's mention of "computer performance issues" is inadequate. However, Reetz-Laiolo contends he has sufficiently alleged losses, asserting his computer was unusable for over a month, resulting in lost productivity, and required over ten hours of expert repair.
Bare allegations are deemed insufficient to prove a statutory minimum loss of $5,000 within a year. The parties are divided on whether unauthorized access, as defined by the statute, requires actual physical or merely remote access to a victim's computer. The Reetz-Laiolo plaintiffs argue that an invasion into systems holding their data suffices, but the cited cases do not support this broad interpretation. In *Facebook, Inc. v. Power Ventures, Inc.*, the Ninth Circuit addressed unauthorized access specifically related to Facebook's computers, while *United States v. Nosal* focused on unauthorized access to a confidential internal database, clarifying that the CFAA does not cover unauthorized use of information. The *NovelPoster v. Javitch Canfield Grp.* case acknowledged that online accounts were "protected computers," but the situation differs here as Cline contests any unauthorized access. The plaintiffs' claims regarding Cline's use of Refog software do not sufficiently establish unauthorized access, though the potential for remote access claims is closer to being substantiated due to allegations of Cline researching hidden modes and obtaining unauthorized copies of a manuscript. Further clarification awaits summary judgment or trial.
Under the California Invasion of Privacy Act (CIPA), a violation occurs when a person intercepts communications in transit. The legal analysis for CIPA violations parallels that of the federal Wiretap Act, requiring proof of interception of electronic communications.
The statute of limitations for the claim in question is one year, as per Cal. Code Civ. Pro. 340(a). Defendants argue that Reetz-Laiolo's claim under the California Invasion of Privacy Act (CIPA) is barred because he became aware of Cline's use of Refog software by 2015. Reetz-Laiolo contends that he needed years to fully understand the extent of the intrusions; however, this does not extend the limitations period. The discovery rule delays the start of the statute of limitations until the plaintiff discovers or should have discovered the cause of action. In this case, since Reetz-Laiolo had reason to suspect the basis of his CIPA claim upon discovering Refog records in 2015, his claim is considered time-barred.
Regarding the claims under CIPA section 632, a conversation is deemed confidential if a participant has a reasonable expectation that it is not being overheard or recorded. This includes communications that imply a desire for privacy but excludes those made in public or where there is an expectation of being overheard or recorded. Cline argues that the email communications in question are not confidential under CIPA, while the Reetz-Laiolo plaintiffs assert a reasonable expectation of privacy in their messages sent to trusted individuals, particularly involving sensitive information. However, they lack supporting case law, and Cline cites several precedents indicating that internet-based communications are generally not confidential under section 632, as they can easily be shared by recipients. Thus, the plaintiffs have not convincingly established that their email communications meet the confidentiality standard required under this section.
Reetz-Laiolo plaintiffs' claims under California's CIPA section 632 are dismissed due to lack of evidence supporting their theory that internet communications are "confidential." Their allegations against Cline under the California Computer Crime Law (CCCL) are viable since California Penal Code section 502(e)(1) allows individuals to seek damages for violations without a minimum loss threshold, unlike the CFAA. The plaintiffs' claims survive based on this lack of a minimum.
Regarding privacy claims, California’s constitutional right to privacy parallels the common law tort of intrusion. Plaintiffs must establish a "legally protected privacy interest" and a "reasonable expectation of privacy." The intrusion claim requires showing an intrusion into a private matter that is highly offensive. Generally, there is no inherent privacy in emails; however, the Reetz-Laiolo plaintiffs sufficiently allege specific content in emails concerning sensitive subjects like custody and finances, which supports their claims of right to privacy and intrusion upon seclusion.
The trespass to chattels claim hinges on Cline's alleged interference with Reetz-Laiolo's computer use through Refog software. California law necessitates a demonstration of measurable loss in the use of the computer. The plaintiffs claim that the interference rendered the computer nearly unusable for over a month, which meets the required standard for measurable loss.
For the claim of intentional infliction of emotional distress, the plaintiffs must allege extreme and outrageous conduct by Cline with intent or reckless disregard for causing emotional distress.
The plaintiff, Reetz-Laiolo, alleges that Cline's invasive actions, including accessing his intimate emails and misappropriating his written work, caused him severe emotional distress, manifesting as chronic insomnia, paranoia, and public crying episodes. Cline contends that the claim should be dismissed due to insufficient allegations of intent and the assertion that emotional distress claims are preempted by federal copyright law. However, the court found that Reetz-Laiolo sufficiently alleged a pattern of egregious conduct by Cline, indicating a reckless disregard for the emotional harm caused. As a result, Cline's motion to dismiss this claim was denied.
In the conclusion, the court granted in part and denied in part Cline's motions. Claims for conversion related to Refog records were allowed to proceed, while claims based on her personal diary were dismissed as untimely but allowed to be amended. Cline's claims for domestic violence were also dismissed with leave to amend. Reetz-Laiolo's claims for intentional or reckless infliction of emotional distress (related to activities not shielded by qualified privilege) and tortious interference were permitted to continue. Other claims, including violations of the SCA, Federal Wiretap Act, California Constitution privacy rights, and others, were upheld. Certain claims under the CFAA and CIPA were dismissed with leave to amend, while copyright infringement claims were dismissed without the possibility of amendment, except for those involving intermediate copying; amendments to any claims must be filed within 30 days of the order.
Reetz-Laiolo asserts that his relationship with Cline ended in January 2012 and expresses concerns about potential plagiarism after discovering unauthorized access to his online accounts. He initially cites 35 instances of alleged infringement but later increases this to 36 specific phrases and sentences. Cline acknowledges this increase as a concession aimed at resolving the dispute, while neither Random House nor Cline accepted that Reetz-Laiolo had prior rights to the material or that any actionable similarity existed between their works. Cline filed a motion to seal sensitive information in a draft complaint served during settlement negotiations, which the court granted due to compelling reasons that justified sealing to prevent misuse of the records. The document also notes that Reetz-Laiolo and co-plaintiffs allege Cline has a history of unauthorized access to others' online accounts. Although Cline contends that a motion for leave to amend should be denied on grounds of futility and bad faith, the court grants leave for Reetz-Laiolo and co-plaintiffs to amend their complaint, adhering to the principle that such leave should be freely given when justice requires. Cline’s failure to address certain claims does not constitute an admission of those allegations.
Filing a partial Rule 12(b) motion extends Nuance's deadline to respond to the complaint. Cline asserts that her claims are governed by New York law due to her residency and property return demands made in New York. However, she concedes that New York has a three-year statute of limitations and similar tort elements, suggesting that a choice-of-law analysis may be unnecessary. Cline presents arguments under both New York and California law, but without a challenge to the choice of law, the presumption is that California law applies to state law claims in federal question cases. Cline has not provided a compelling reason to apply New York law for her conversion claim, and thus, references to New York cases are deemed unnecessary.
Cline also invokes California law for her domestic violence claim related to the same allegations as her conversion claim. Reetz-Laiolo contends that Cline’s unclean hands may bar her from equitable relief, but this does not affect her ability to state a claim. Cline's declaration, which includes new allegations regarding past actions by Chaz, cannot be considered as it was not part of her original complaint. Reetz-Laiolo argues that even if this allegation were added, it would not remedy her claim because the events occurred in 2010, which is outside the relevant time frame for her claims. The court need not address this argument or the district court cases Cline cites concerning the application of federal common law in federal question cases with pendant state law claims, as those cases dealt with discovery issues unrelated to the current claims.
The privilege invoked does not relate to the relevance of specific evidence, as it is not being used to exclude evidence. The case Love highlights the impracticality of applying different privilege laws based on the relevance of evidence to federal versus state claims in the same lawsuit. Cline claims that her case is governed by New York law due to her residency, business operations, and where the alleged harm occurred, but acknowledges that the elements of tortious interference claims in New York and California are similar, negating the need for a choice-of-law analysis unless explicitly challenged. The presumption is that California law applies. Regarding her claimed loss from the inability to sell film rights to *The Girls*, it is noted that she has already been compensated for option rights sold and has not identified a specific buyer for the rights. Cline admits potential losses were not caused by Reetz-Laiolo due to her and Clegg's reluctance to engage a producing partner amidst harassment claims. Reetz-Laiolo argues that the distinct claims and damages may not affect each other. Cline seeks to strike his requests for statutory damages and attorney's fees under the Copyright Act, as the registrations are not yet issued, and such requests are deemed inappropriate under 17 U.S.C. § 412. Consequently, Reetz-Laiolo's requests will be struck. Additionally, a reference to the Stored Communications Act (SCA) notes the challenges of reconciling its provisions with modern email technology, contrasting the historical context of electronic storage with current web-based email services.
Web-based email users can download emails to their computers via email client programs, complicating legal interpretations. Under 18 U.S.C. § 1030(a)(5)(B)(i-v), several factors establish liability, including: (i) a loss of at least $5,000 over one year affecting one or more protected computers; (ii) impairment of medical examination or care; (iii) physical injury; (iv) threats to public health or safety; and (v) damage to government computer systems related to justice, national defense, or security. The claim involves a theory of liability based on unauthorized access to the email provider's computers. A referenced case, Ins. Safety Consultants LLC v. Nugent, highlights that the relevant computer is a server, not a personal device, and emphasizes that the email was hosted by Microsoft's service. The defendants argue that this theory of liability is not present in the original complaint.
