[00:00:01] Speaker 01: Good morning. [00:00:01] Speaker 01: May it please the Court, Mark Wallenstein, for the Plaintiffs, and with me at Council Tables, Glenn Summers. [00:00:07] Speaker 01: I'm from Corrie and Tillery, and Glenn is from Bartlett Beck. [00:00:11] Speaker 01: The District Court committed reversible error when it held categorically that the benefits of contractual rights cannot be property capable of conversion as a matter of law. [00:00:21] Speaker 01: the California Supreme Court has held the opposite, not once, but twice, in two binding decisions that Google and the district court completely ignore. [00:00:32] Speaker 01: In Yuba River, the California Supreme Court held that property, quote, is supposed to embrace those rights which lie in contract, end quote. [00:00:41] Speaker 01: And the California Supreme Court further held in Yuba River that property extends to every species of right and interest upon which it is practicable to place a money value. [00:00:52] Speaker 01: Google and the district court also ignore Payne v. Elliott, the leading California Supreme Court case on the topic, which held that intangible rights that are the subject of contract and sale can be property. [00:01:04] Speaker 01: These cases foreclose the district court's decision, and if there was any doubt about that issue, Google also fails to respond to this court's binding decision in Kremen v. Cohen. [00:01:16] Speaker 01: access to a domain name which the court held was a service in which was created by contract qualified as property subject to conversion. [00:01:25] Speaker 01: No response to any of these cases from Google. [00:01:29] Speaker 01: This brings us to injury. [00:01:32] Speaker 01: Nothing more clearly qualifies as injury than the taking of valuable property that has been bought and paid for. [00:01:39] Speaker 01: Plaintiffs pay dearly for their cellular data, and part of what they buy is the right to exclude. [00:01:46] Speaker 01: Plaintiffs alone have the right to decide who may and may not consume cellular data under their accounts. [00:01:52] Speaker 01: That's why their cellular data is their property. [00:01:55] Speaker 02: But there's no allegation that the seem like very small amounts of data. [00:02:03] Speaker 02: The amount of data that was alleged to have been used by Google to send information back and forth to the devices, that the plaintiffs were required to purchase additional data, that they ran out of data under their plan in a month, that they were throttled, that they had penalties, that anything happened. [00:02:22] Speaker 02: Why does that make it an injury to them? [00:02:25] Speaker 01: Thank you for asking that question, Your Honor. [00:02:27] Speaker 01: I draw your attention to plaintiff Nelson. [00:02:30] Speaker 01: So she purchases one gigabyte at a time. [00:02:34] Speaker 01: The complaint alleges that Google consumes 8.8 megabytes per day. [00:02:39] Speaker 01: Over the course of a month, that would be 26 percent of her one gigabyte that she purchases. [00:02:44] Speaker 01: So, respectfully, I would disagree that it's an insignificant amount of data. [00:02:49] Speaker 01: And the complaint expressly alleges that she, in fact, has had to purchase additional gigabytes of data from time to time. [00:02:56] Speaker 01: The complaint further alleges that Google's misconduct is constant. [00:03:00] Speaker 01: Google's constantly sending your location to itself when your phone's in your pocket, whenever you're walking around, whenever you get in a car. [00:03:07] Speaker 01: So Google's consumption of her cellular data is part of the reason she exceeded her threshold and had to pay more in the months that she did. [00:03:18] Speaker 03: So that obviously that would be that would make the injury I think easier and so let's assume with me for a second that that it were true and I'm not saying that you would notice but it were true that they never ran up against their limit or Got throttled or something like that. [00:03:35] Speaker 03: So it's your honor then it seems to me I was trying to think about our is there an injury and it first you're like Well, there's an injury like somebody's stealing data that you're never gonna use if that's the case, but I don't know I guess [00:03:47] Speaker 03: If you have an annuity, and every month you get a payment, and then they, at the end of the month, every month you get a pool of money, and at the end of the month they take your money away from you, right? [00:03:58] Speaker 03: Whatever's left in there. [00:03:59] Speaker 03: I guess you still have injury if somebody's skimming money out of that, even if you never run up against, you know, you never spend your $5,000 a month that you get, or whatever, you only spend $3,000 of it, and somebody's taking $500 every month, I guess you still have injury [00:04:16] Speaker 03: Absolutely, Your Honor. [00:04:17] Speaker 01: The taking of valuable property is injury. [00:04:21] Speaker 01: That's been the law before the founding of our nation. [00:04:26] Speaker 01: It's one of the most fundamental common law rights, individual common law rights, that the law protects. [00:04:33] Speaker 01: And California in particular, among all states, has a broad conception of what property is. [00:04:39] Speaker 01: It can be intangible. [00:04:41] Speaker 01: It does not have there's no physical property requirement that the district court seemed to have trouble with the notion that there isn't some Separate properties and Google uses the word some separate commodity that you're buying when you buy your cellular data plan But in California, that's not a problem and California's property is not completely unbounded you still have to have the right to exclude others from your property for it to qualify as property and [00:05:06] Speaker 01: And here that's exactly what plaintiffs have. [00:05:08] Speaker 01: Their contracts with their cellular carriers state that only they get to decide who can consume cellular data under their accounts. [00:05:17] Speaker 01: And when an interloper, and they do that by deciding what devices and people are authorized users and which people they don't want to add under their accounts. [00:05:25] Speaker 01: So they can add people or not add people and that's their right to exclude. [00:05:28] Speaker 01: So when an interloper comes in and consumes cellular data under their accounts, they are taking their valuable property. [00:05:34] Speaker 01: And it doesn't matter that there's no consequential injury. [00:05:37] Speaker 01: If somebody comes in your attic and takes some junk in a box that you didn't even know was there, that you're never planning to sell, that still states a claim for conversion in California. [00:05:47] Speaker 01: Because California, there's no consequential injury requirement. [00:05:49] Speaker 01: California doesn't want people coming in your house and stealing things. [00:05:52] Speaker 02: So you're addressing the conversion claim, but the [00:05:58] Speaker 02: Your allegation is that this was surreptitious, that Google was taking the data without the user's knowledge or consent. [00:06:05] Speaker 02: So that seems to undermine your quantum Marowit claim, because there was no agreement from the users to provide services to Google. [00:06:14] Speaker 02: So I don't understand how you get around just the definitional problems with a quantum Marowit claim. [00:06:22] Speaker 01: Quantum marriott exists when there isn't an agreement. [00:06:24] Speaker 01: So there's contract law and quantum marriott law. [00:06:27] Speaker 01: If the party's agreement's reduced to writing, the contract controls. [00:06:31] Speaker 01: If there isn't an agreement about a particular topic, and there isn't an agreement about this topic, it's not discussed in the terms of service. [00:06:38] Speaker 01: There's no allegation that the parties have a meeting of the mind on this subject. [00:06:43] Speaker 01: Where there's the co-opting of a service, the taking of a service, that states a claim for quantum marriott. [00:06:50] Speaker 02: Okay, so there's the Huskinson case from the Supreme Court, California Supreme Court that says quantum merit requires a showing of circumstances that the services were rendered under some understanding or expectation of both parties that compensation therefore was to be made. [00:07:08] Speaker 02: So there doesn't seem to have been any expectation or agreement because by your allegations the users had no knowledge that this was happening. [00:07:18] Speaker 01: Yes, Your Honor. [00:07:18] Speaker 01: So, Hoskinson involved two law firms that agreed to share fees but didn't show their fee-sharing agreement to their client and get written approval, so it was not legally enforceable. [00:07:29] Speaker 01: The issue was just whether one law firm sued the other, and the issue was a dispute over the law firm's fees. [00:07:37] Speaker 01: Because the expectation of payment was not actually an issue in Hoskinson, its statement about that is dictated. [00:07:43] Speaker 01: There's no dispute that there was an expectation of compensation. [00:07:46] Speaker 01: whether that's an element or not of quantum merit was not an issue in the case at all. [00:07:51] Speaker 01: And Google relies on Huskinson to say that it overrules the pre-existing rule. [00:07:57] Speaker 01: It didn't. [00:07:57] Speaker 01: It didn't address that at all, just recited the elements. [00:08:00] Speaker 01: The case that controls is Miller, which post-states Huskinson. [00:08:03] Speaker 01: and makes clear that all that plaintiffs have to prove is that they didn't gratuitously intend to kind of give away the service for free. [00:08:10] Speaker 01: And that's kind of the other side of what in contract law we call consideration. [00:08:18] Speaker 01: And the reason for both those rules is the law doesn't enforce gifts. [00:08:21] Speaker 01: There has to be consideration in contract, and you can't be gratuitous under quantum meruit. [00:08:27] Speaker 01: Here we're dealing with secret conduct. [00:08:31] Speaker 01: Google has the standard completely flipped around. [00:08:33] Speaker 01: If you don't even know that you're being stolen from there's no expectation of compensation or gratuitousness issue at all. [00:08:42] Speaker 01: If you know about it [00:08:43] Speaker 01: and it was gratuitous, then sure, you can't bring a quantum merit claim. [00:08:47] Speaker 01: But Google has it completely backwards. [00:08:49] Speaker 01: And the reason for that is quantum merit is a flexible doctrine based on equitable principles that focuses on the defendant's wrongdoing and the benefits that the defendant retained from that wrongdoing. [00:09:01] Speaker 01: It doesn't focus on the subjective mental state of the plaintiff. [00:09:05] Speaker 01: And I'd submit that, objectively speaking, consumers reasonably believe that their cellular data that they pay dearly for each month is not going to be hijacked by an interloper. [00:09:17] Speaker 01: So I think we've amply satisfied whatever requirement applies in a case like this. [00:09:23] Speaker 03: My intuition is that you either would have a quantum merit or you would have a conversion claim. [00:09:30] Speaker 03: It seems a little bit odd that you would have both, right? [00:09:33] Speaker 03: Otherwise somebody just comes and steals your car in the, in the stereotypical, you know, they just. [00:09:38] Speaker 03: you park your car and you come and it's gone and somebody's a total random stranger just stole your car. [00:09:43] Speaker 03: Do you also have a quantum merit claim against that person for having what most people think of as a conversion claim for stealing your car? [00:09:50] Speaker 01: So I'm not sure about the car hypothetical, and I don't mean to fight the hypothetical, but in this case, I think we absolutely do have both. [00:09:57] Speaker 01: Though I would settle for one or the other, Your Honor. [00:10:00] Speaker 02: What difference does it make? [00:10:01] Speaker 02: Are there different damages? [00:10:02] Speaker 02: I mean, is there some reason why you need both? [00:10:04] Speaker 02: It seemed the district court thought they were duplicative. [00:10:06] Speaker 01: So the district court initially thought they were duplicative, and then in its second dismissal order, acknowledged that they have different elements that are satisfied by different facts. [00:10:16] Speaker 01: And at this time in the case, they are seeking the same damages. [00:10:20] Speaker 01: But we wouldn't double recover. [00:10:21] Speaker 01: If we won both, we would just recover once. [00:10:24] Speaker 01: I'd also argue, Your Honor, that quantum merit can recover the benefits that Google retains. [00:10:29] Speaker 01: So there are different damages it could recover. [00:10:31] Speaker 03: Is your reason why this is different than my car hypothetical? [00:10:35] Speaker 03: You know, there is some relationship between the plaintiffs here and Google. [00:10:40] Speaker 03: I mean, Google let them in, the plaintiffs let them in the garage. [00:10:43] Speaker 03: So they wouldn't be able to steal this data if they didn't have a relationship already with plaintiffs. [00:10:51] Speaker 03: Is that why you're... I'm trying to figure out, ordinarily you don't think of somebody just stealing something as also having a quantum arrow claim. [00:10:59] Speaker 01: I acknowledge that we're taking long-standing common law principles and applying them to new technology. [00:11:05] Speaker 03: I don't think that that means that... Well, for me, it's not so much a technology thing. [00:11:09] Speaker 03: That's why I'm using a hypothetical that's cars, right? [00:11:12] Speaker 03: Normally, you don't think of the two. [00:11:17] Speaker 03: One happens in the case of a service. [00:11:20] Speaker 03: You come and you do something, do work on my house or something like that. [00:11:25] Speaker 03: That's why there's this expectation. [00:11:28] Speaker 03: even if we never actually got a contract, there was some expectation of, that's very different than you just walking up and stealing my rake out of my yard or something like that. [00:11:35] Speaker 01: Your Honor, Google spends 35 pages of its brief arguing, the first 35 pages, arguing that cellular data is a service. [00:11:44] Speaker 01: So if it's a service, quantum merit is the cause of action to address the benefits retained from a service that's not paid for. [00:11:52] Speaker 01: So if Google's right about that, I'd submit it states a claim for quantum merit. [00:11:56] Speaker 01: And for the reasons I've discussed before, I think that there's a right to exclude and with respect to cellular data that gets us to a property right as well. [00:12:05] Speaker 01: And I'd love to reserve a little bit of time. [00:12:08] Speaker 04: We'll make sure you get enough time. [00:12:09] Speaker 04: But can I go back to whether there's a property interest arising from this contractual right to a service? [00:12:16] Speaker 04: So suppose I hire somebody to come and weed my garden and I pay him in advance. [00:12:22] Speaker 04: And when he shows up, I'm not there, but my next door neighbor is. [00:12:26] Speaker 04: And the neighbor says, oh, no, no, this is the house you're supposed to weed. [00:12:31] Speaker 04: And so the neighbor tricks the guy into weeding his yard. [00:12:34] Speaker 04: And so I don't get the benefit of the weeding. [00:12:36] Speaker 04: Do I have a conversion claim against the neighbor? [00:12:39] Speaker 01: It, uh, against the neighbor? [00:12:41] Speaker 01: Yeah, I mean, it depends on your relationship with the service provider. [00:12:45] Speaker 01: It depends on the details. [00:12:46] Speaker 01: If you have an exclusive right to that person's, um, trimming of your lawn at that time. [00:12:51] Speaker 04: I paid him for a service, right, and then the service was diverted to somebody else. [00:12:56] Speaker 04: Yeah, I think under California law, you probably would. [00:12:59] Speaker 04: And what's the best case that says that? [00:13:02] Speaker 01: Your Honor, I haven't done the legal research on the lawn mowing to find the perfect case. [00:13:09] Speaker 01: But I would draw your attention to California's express statutes. [00:13:14] Speaker 01: So California says the express statute is California Civil Code 654. [00:13:26] Speaker 01: Property is the right of one or more persons to possess and use a thing to the exclusion of others. [00:13:32] Speaker 01: So if you bought that person's lawn mowing services and you exclusively possessed them, I think they would qualify as property. [00:13:41] Speaker 04: I mean, the word possess connotes something that sort of begs the question of is a service the sort of thing that you can possess in the relevant sense? [00:13:53] Speaker 04: And so why do we think the answer is yes? [00:13:57] Speaker 01: Well, if you, like I said, it depends on the agreement you have with the person mowing lawn. [00:14:02] Speaker 01: If the agreement is, on this day, at this time, in exchange for $50, you will mow my lawn, and you will mow no one else's lawn, and your neighbor co-ops that right, I think that's sufficiently [00:14:18] Speaker 01: well-defined, you have a right to exclude that person from providing services to someone else, and you've suffered damages. [00:14:26] Speaker 01: And those are the elements of property in California. [00:14:29] Speaker 03: I know we're almost out of time, but this is, but it actually kind of, I'm not sure that's helping you. [00:14:34] Speaker 03: I wonder if you're arguing against, because the thing that's, and it seems like what the district court relied on is you don't really have an exclusive right to have this person mow your yard, to use the, to make the hypothetical or the analogy match to our [00:14:49] Speaker 03: You have. [00:14:50] Speaker 03: I mean, this is like a stream or something, and you have a bunch of people that have a right to get water from the stream, but no precise, I mean, this is what the district court really relied on, if I understood, is that no precise droplet of water, actually, do you have a right, and you just have a right to get 10 cups of water, and you have a cup sitting there with your name on it, and it seems to me your claim is that Google walked in, grabbed your cup, and took a cup of water, right? [00:15:15] Speaker 03: And that water wasn't your water, all that data isn't your data, [00:15:19] Speaker 03: until that goes in the cup with your name on it. [00:15:22] Speaker 03: And my understanding is the technology here, Google is basically taking data, but that data has a little identifier on it that is put on it because it was because of the way the chips work or whatever. [00:15:33] Speaker 03: And it has not Google's name, but your name. [00:15:35] Speaker 03: And so you're being charged for that. [00:15:36] Speaker 03: So the hypothetical is a little bit, because it's not true that you're hiring somebody to mow your yard during the hours of such and such. [00:15:45] Speaker 03: So it's not really yours until it's in that cup to mix the metaphors. [00:15:49] Speaker 01: I really appreciate the water hypothetical. [00:15:52] Speaker 01: And I think it really is apt here. [00:15:54] Speaker 01: So the district court had trouble because you buy the property right at one time. [00:15:59] Speaker 01: You pay for your cellular data plan. [00:16:02] Speaker 01: And then at a later time, the property springs into existence when it's consumed. [00:16:07] Speaker 01: So it's not quite that Google got my cup and went into the stream and took some of it. [00:16:12] Speaker 01: It's that I have my cup. [00:16:14] Speaker 01: My cup is goes into the stream. [00:16:16] Speaker 01: It takes the water and Google then takes the water that I've taken when Google consumes cellular data under your account. [00:16:23] Speaker 01: It's taking cellular. [00:16:25] Speaker 01: It's taking your cellular data. [00:16:26] Speaker 01: It's not just any water that's marked and marked to you because they're getting it in there either. [00:16:31] Speaker 03: They're either getting it in your cup. [00:16:35] Speaker 03: with your name on it. [00:16:36] Speaker 03: And so that's how Verizon's keeping track of how much or you're getting it in your cup and they're dipping a little bit out of your cup or something. [00:16:45] Speaker 03: So it does make sense that, but it's just different than the weeding or the lawn mowing where you were saying you bought this allocated hour or half hour of the person's time. [00:16:57] Speaker 03: That's what makes it kind of complicated here because it's more like you have this [00:17:01] Speaker 03: mowing is just going on and you bring your lawn to the person and get it mowed or something like that. [00:17:07] Speaker 01: Your Honors, if lawn mowing is over the line, it's a step too far for property, I think that our cellular data is far below that line. [00:17:17] Speaker 01: When Google takes my cup, even on your terms, let's say, Google takes my cup and goes into the stream, I only have 50 draws on that cup. [00:17:26] Speaker 01: I have a max of 50. [00:17:27] Speaker 01: And when Google takes one of them, it doesn't matter whether I was going to use the other 49 or not. [00:17:32] Speaker 01: That's my cup draw from the water that Google has taken. [00:17:36] Speaker 01: It's precisely defined. [00:17:38] Speaker 01: It's mine. [00:17:39] Speaker 01: And I have the right to exclude Google from doing that pursuant to the contracts with the cellular carriers. [00:17:44] Speaker 04: Thank you, Mr. Wallenstein, and we'll give you two minutes for rebuttal. [00:17:50] Speaker 04: Ms. [00:17:50] Speaker 04: Hartnett. [00:17:52] Speaker 00: Good morning. [00:17:53] Speaker 00: Excuse me. [00:17:54] Speaker 00: Good morning, Your Honors, and may it please the Court. [00:17:56] Speaker 00: I would actually just pick up where the hypo left off, because I think it is helpful. [00:18:00] Speaker 00: I think the concession that a right to have someone come and weed-whack your yard for an hour could turn into a property claim is exactly what the Supreme Court of California has contemplated and disallowed. [00:18:12] Speaker 00: in cases such as the Vorus case. [00:18:14] Speaker 00: And so I would direct the court's attention. [00:18:16] Speaker 00: That's a 2019 case. [00:18:17] Speaker 00: That was a case involving unpaid wage claim that the plaintiff there sought to turn into a conversion claim. [00:18:24] Speaker 00: And the Supreme Court of California made clear in language that is apt here that the conversion tort was not the right fit for that wrong. [00:18:31] Speaker 00: It observed that the tort of conversion cannot be allowed to swallow the significant category of contract claims that are based on the failure to satisfy mere contractual rights. [00:18:41] Speaker 00: In that case, it was a contractual right to payment for wages. [00:18:44] Speaker 00: In this case, the contractual right is access to a network. [00:18:47] Speaker 00: In the hypothetical, the issue is a contractual right to weed whacking. [00:18:50] Speaker 00: And I think the right answer to the hypo there would be that the person would have a breach of contract claim, potentially an implied contract with the weed whacker who performed the services for the wrong person and potentially a quantum Marowick claim against the neighbor that took the services that were intended for the person who didn't get the weed whacking. [00:19:08] Speaker 00: But the point is, I think that only shows why this is not the right case for these claims. [00:19:13] Speaker 00: And I think it's an important thing to note to frame this case, which is the plaintiffs made a deliberate choice to plead this as property conversion and quantum merit two times. [00:19:22] Speaker 00: And they made that choice potentially to take advantage of the different damages measures allowed for those claims or for class certification, but they do have to kind of [00:19:30] Speaker 00: right of fall with the claims that they've brought and the consequence is dismissal. [00:19:34] Speaker 00: I do think that there's just two points that were made that I wanted to correct the record. [00:19:38] Speaker 00: There was some, my colleague made the point that there had been an allegation of injury related to the passive data transfers. [00:19:46] Speaker 00: That's not accurate. [00:19:47] Speaker 00: The district court at pages 10 to 11 of its opinion made clear, sorry, ER 10 and 11, made clear that the plaintiffs had actually not alleged any sort of a loss directly related to the passive data transfers and included a site to the complaint as well as statements of oral argument saying that they had not actually alleged that. [00:20:08] Speaker 00: So I think it's important to note that that's not alleged here. [00:20:11] Speaker 00: The only other correction I guess I would make from the beginning of the argument was that [00:20:15] Speaker 00: The district court did not actually hold that there's not an identical nature between the quantum Marrowitt claim and the conversion claim on the facts alleged that it is in fact a common count. [00:20:25] Speaker 00: What the district court did the second time around was just assume for the sake of argument that it was not a common count as it had found the first time and then went on to explain why quantum Marrowitt did not apply here. [00:20:36] Speaker 04: And what about the cases involving utilities like electricity, right? [00:20:40] Speaker 04: So somebody taps into their neighbor's wires after the meter and power runs their lights or whatever from the neighbor's electricity. [00:20:55] Speaker 04: Is there a conversion claim for that? [00:20:58] Speaker 00: The important thing about the utility cases is that they actually distinguish between the transmission, the right to the transmission on the lines, [00:21:05] Speaker 00: versus the actual utility that's being transmitted that can be stored, collected. [00:21:09] Speaker 00: You can take the electricity and put it in your charger at home. [00:21:12] Speaker 00: You can take the water and put it in your basement for the, you know, for when there's going to be a power outage. [00:21:17] Speaker 00: And I think that this is really important to look at. [00:21:19] Speaker 00: I think paragraph 70 of the complaint, this is ER 47, the plaintiffs themselves distinguished by saying access to the utility network may be unlimited and is non-exclusive. [00:21:30] Speaker 00: It's the commodity provided by the utility that is the thing that's being consumed and is exclusive. [00:21:35] Speaker 00: And I think here it is the contractual right pursuant to the plaintiff's own construction of the contractual right that they're describing is the right of access to a network. [00:21:44] Speaker 00: And so I think that when you look at the utility cases, what they're actually alleging to try to own here as property is actually what the utility cases are not finding to be the property. [00:21:52] Speaker 00: The property there is the water that comes into your house. [00:21:56] Speaker 00: It's the electricity that you can actually possess, store, transmit. [00:22:02] Speaker 04: Now I suppose people have home batteries and the like, but for most of the history of the development of the law of electric utilities, electricity is not really something that you can store. [00:22:14] Speaker 04: And it obviously doesn't have, doesn't exactly have tangible form either. [00:22:24] Speaker 04: So why isn't it as the sort of intangible right that [00:22:31] Speaker 04: As a practical matter, you sort of consume when it's there and can't store it. [00:22:36] Speaker 04: That seems a lot like the ability to transmit data over a cellular network. [00:22:41] Speaker 04: So what's the distinction there? [00:22:42] Speaker 00: Well, I appreciate your point. [00:22:45] Speaker 00: I think the water and gas are obviously more concrete in the sense of that there are an obvious substance that can be transmitting through a pipe. [00:22:53] Speaker 00: I think here what we're talking about is access to a pipe, not the stuff that's in the pipe themselves. [00:22:57] Speaker 00: And the reason why is important. [00:22:58] Speaker 00: And the same thing with the electricity. [00:22:59] Speaker 00: I agree that it is a force, a force that can be stored and transmitted. [00:23:03] Speaker 00: I think that's what the case law actually has recognized when they've tried to explain or understand that, because I do appreciate the point that the property cases are not [00:23:11] Speaker 00: all in a straight line. [00:23:12] Speaker 00: There are different scenarios where the courts have tried their best to understand is this situation, one, involving something that is akin to property, or is it more properly considered by another area of the law? [00:23:23] Speaker 00: And I think that's our point in this case, which is that to the extent that, and I think that's reflected in plaintiff's complaint itself as they had to acknowledge that the pipes, the lines, are not, the access to those is not what is something that's property. [00:23:35] Speaker 00: What's property is the thing that's coming through the lines that you can get. [00:23:40] Speaker 00: And I think importantly here, [00:23:41] Speaker 00: They frame the property interest not as those individual bytes of data with their tags attached. [00:23:46] Speaker 00: They're not claiming that those themselves were converted because they can't do that. [00:23:50] Speaker 00: What they're actually alleging conversion of is the right of access to the network for a period of time. [00:23:56] Speaker 00: And I think another important point to make that didn't come out as much so far in the argument, in addition to the absence of a property interest, you also have the lack of substantial interference. [00:24:04] Speaker 00: And the reason why, among other things, is because of the way they've wanted to frame the right. [00:24:08] Speaker 00: If the right is of access to a network [00:24:10] Speaker 00: None of them have alleged any interference with that at all, let alone a substantial interference. [00:24:15] Speaker 00: And in fact, they've claimed that the cases don't require a showing of substantial interference. [00:24:19] Speaker 00: They do. [00:24:20] Speaker 00: The cases stand for that. [00:24:22] Speaker 00: The standard jury instruction for conversion requires substantial interference. [00:24:26] Speaker 00: The reason's important. [00:24:27] Speaker 03: It doesn't. [00:24:27] Speaker 03: That kind of goes to some of the back and forth that I would have for. [00:24:32] Speaker 03: It doesn't seem to be right that if you have, whether you're using electricity and you have some contractual right [00:24:39] Speaker 03: to get so much access to this electricity during a given month, if you use it or lose it, sort of type of, which is what you have here. [00:24:51] Speaker 03: If you don't, aren't going to, are you saying that if you have that and you never use all of the electricity and somebody comes in and plugs in and steals some of your electricity, I mean, you'd have the same argument. [00:25:04] Speaker 03: You'd say they're not substantially interfering with your, [00:25:07] Speaker 03: But their response is, yeah, but you have the right to exclude. [00:25:11] Speaker 03: Like, I mean, if you buy, you know, so many kilowatts of electricity, an allocation off of a, that's why the electricity example is kind of pretty good, because you kind of just have this current that's kind of going all the time, and you have this ability to exclude. [00:25:27] Speaker 03: then even if you're not going to use it, I think we normally would say if somebody was siphoning off, you know, if they plugged in and was siphoning off, we wouldn't make them prove in order to have a conversion claim, you wouldn't make them prove that while you were going to use your entire amount. [00:25:42] Speaker 03: So how does your substantial interference argument kind of interplay with that? [00:25:47] Speaker 00: Thank you for the question, Your Honor. [00:25:48] Speaker 00: I do think that that is an element that maybe doesn't get addressed in all of these cases because there's either a full taking, you've taken my belongings and you're keeping them, you haven't returned them, that's clearly a substantial interference, or it's at the edges. [00:26:00] Speaker 03: I think the reason it doesn't get addressed in the vast majority cases, I've done some thinking about this because the case is different, is that you don't usually have a situation where somebody's got an annuity, they're getting $5,000 a month and they just never spend their $5,000. [00:26:13] Speaker 03: And it's, again, a use or lose it. [00:26:15] Speaker 03: Whatever's left in it at the given month gets swept away. [00:26:18] Speaker 03: And so you only use, say, $3,000 a month. [00:26:21] Speaker 03: You never go up. [00:26:22] Speaker 03: And somebody else has just taken $500 or literally taken out $500 every month. [00:26:27] Speaker 03: There's no substantial interference, but there's no question, I think, that we'd all say you have a conversion claim against that person for stealing your $500 of your $5,000 every month. [00:26:37] Speaker 00: Don't want to that would be an important to look at the actual facts there to figure that out I'm not saying that that does sound like theft on the other hand whether that's a Substantial interference with the person that's being stolen from if they don't even notice that someone's taking the extra corn off the property I think that would be a question. [00:26:52] Speaker 00: There's there is an element. [00:26:52] Speaker 00: It's Casey 2100 I would direct your attention to the conversion jury instruction because it does require that to get to that thing and then damage too so if there's no actual damage the person [00:27:03] Speaker 00: hasn't suffered a damage. [00:27:04] Speaker 00: Maybe the question would be defrauding the insurer. [00:27:06] Speaker 00: There might be another claim there, but whether that's actually a conversion of someone's property when they haven't actually had an interference with their property, I think that's a harder hypo. [00:27:14] Speaker 00: I think the important thing for this case and why we want to make sure we're not asking the court to reach anything it doesn't need to reach is that even if you kind of want to debate the property interest, which we think is clearly not one, [00:27:24] Speaker 00: the substantial interference must fail because they have a right to access a network of, you know, unlimited nature for all of them except for one which hasn't actually alleged that they've had any harm. [00:27:35] Speaker 00: And yet, there's been no alleged interference with that right. [00:27:38] Speaker 00: And they don't have a real response to that point other than in their brief to say that substantial interference isn't a requirement. [00:27:44] Speaker 00: And I respectfully submit that's just not true. [00:27:47] Speaker 00: We've cited the cases that do establish that, the case that they... Well, I mean, one could argue that [00:27:53] Speaker 03: Substantial enter I think if you were forced just to a good old-fashioned case that involves something other than electricity or dad or something like that But something that like your your You know every every month you get five gold coins, right? [00:28:06] Speaker 03: But at the end of the month if you open the drawer the five gold coins are gone With five new gold coins, right? [00:28:12] Speaker 03: You can you any sort of type of thing like this where you get an allocation use or lose it? [00:28:16] Speaker 03: If in the old fashion, they would say it was, I think that logic of the courts would be that there was a substantial interference because you have the right to spend those coins if you want to, but you also have the right to just tell the world, I'm going to keep my little coins and you can't touch my coins. [00:28:33] Speaker 03: And then at the end of the month, your coins disappear and you get new coins. [00:28:38] Speaker 03: And that would be considered, I can guarantee you the courts would say, [00:28:43] Speaker 03: That that that would be substantial first because now instead of being able to exclude you from my coins You've come in and taken taken one. [00:28:50] Speaker 00: I and I think you don't need to reach that question here Your honor partially because that actually I think it also does two parts of our points about conversion are interrelated that those are coins Those are something that's a concrete property where it's well understood and established. [00:29:01] Speaker 03: I think you're right That's why I'm not I think once unless you unless you say this isn't property which is sort of unless you went on that I'm not sure I'm not sure [00:29:10] Speaker 03: Once it's property, I'm not sure it works to say, well, we haven't substantially interfered, because it's hard to think of any type of traditional property where, just because it's a use it or lose it, that you can't take my stuff. [00:29:23] Speaker 00: I would direct you to our cases that we cite at pages 42 and 43 in our brief, including there's a fax machine case where someone has burdened someone's faxes with an advertisement that covers part of the fax page. [00:29:37] Speaker 00: And there was an argument there that that was a substantial interference with the fax machine. [00:29:41] Speaker 00: And in the end of the day, it was not, because you still were able to enjoy most of the property that you needed, aside from this part that was kind of a claim was staked to the bottom of the facts page. [00:29:50] Speaker 00: Likewise, there's other cases. [00:29:51] Speaker 00: I think it's important also the distinction between a substantial interference, which is what is required for conversion, and mere intermeddling or use, which is required for trespass. [00:30:00] Speaker 00: And so I think the concept has evolved to figure out [00:30:02] Speaker 00: is the invasion that's being proffered something that's actually disrupting the person's enjoyment of their property or not? [00:30:08] Speaker 00: I'm sorry. [00:30:10] Speaker 02: You're talking so fast. [00:30:11] Speaker 00: I'm sorry. [00:30:12] Speaker 02: I've been trying to get the word in edgewise for a while. [00:30:14] Speaker 02: Oh, please, please, Your Honor. [00:30:15] Speaker 02: So don't these users, these people who purchase these salary daily or plans have sort of a reasonable expectation that they have a right to this? [00:30:25] Speaker 02: this thing, whatever it is, this access that they've purchased so that Google hasn't disclosed to them, by the way, you're paying for X amount of cellular data a month, but we are going to use a certain part of it, just so you know, that's how it is. [00:30:42] Speaker 02: I mean, you haven't disclosed that to them or given them some additional time to make up for the time that you're taking. [00:30:47] Speaker 02: So it seems like it violates their expectation under the contract for what they purchased. [00:30:52] Speaker 00: Your Honor, we do have a consent defense in this case that's not the subject of the order on review, but we actually have in the privacy policy and other of the terms, there are disclosures about Google's transfers of data between the... But you lost that in the district court and you didn't appeal it here, right? [00:31:08] Speaker 02: So it's not really before us. [00:31:10] Speaker 00: No, just to the point of whether that's actually... I mean, to the extent there are atmospherics here about the practices and what they're... But you're right, to the extent you're talking about reasonable privacy-backed expectations, [00:31:19] Speaker 00: sorry, investment-backed expectations. [00:31:21] Speaker 00: I think that only shows here why there's not a property claim. [00:31:24] Speaker 00: And I think looking at the Ninth Circuit's rulings in Kremen and Rasmussen, the idea was we're gonna extend this rationale where there's someone who's worked to kind of create some sort of a good that's being taken, a URL. [00:31:37] Speaker 02: But in Rasmussen, the court focused on whether it was capable of being defined or definition, and it certainly seems that this cellular data plan, it's capable of definition and it is tagged to a particular user. [00:31:49] Speaker 00: Your Honor, I think we would disagree because you don't have any right to any particular bytes or parts of the system out there. [00:31:55] Speaker 02: You have basically- But when I purchase electricity for my home, I don't have a right to any particular electricity, right? [00:32:01] Speaker 02: I mean, I'm not saying I want this particular kilowatt to come to my house. [00:32:04] Speaker 02: This is what I've purchased. [00:32:05] Speaker 02: I'm purchasing access to this electricity. [00:32:07] Speaker 02: I'm not buying the lines that it runs on or the hydroelectric power plant, none of that. [00:32:12] Speaker 02: I'm not buying any of that. [00:32:13] Speaker 02: I'm buying the electricity, which I get, even if I don't get to select which piece of the electricity I get. [00:32:19] Speaker 00: I think that's a critical point, Your Honor. [00:32:20] Speaker 00: In the electricity case, you are buying the force, not the access to the lines. [00:32:25] Speaker 02: You're not buying access to Google's infrastructure, the lines, or however the cellular towers work. [00:32:32] Speaker 02: You're buying the right to transmit data, right? [00:32:37] Speaker 02: It seems like it's like electricity. [00:32:39] Speaker 02: You buy a certain amount of it. [00:32:41] Speaker 00: You're buying that right from the carrier. [00:32:43] Speaker 00: And with Google, you have a right to have certain services provided. [00:32:45] Speaker 00: And I would just respectfully submit that this is why this case sounds in contract and not property, if anything. [00:32:50] Speaker 00: There could be a potential claim against Google. [00:32:52] Speaker 00: They have a contractual relationship with these plaintiffs for some sort of a breach of the promises or contract there. [00:32:57] Speaker 00: There could be a claim related to the interference with the contract with the cell providers. [00:33:01] Speaker 00: I think this is an in-app situation to try to transform this into property. [00:33:05] Speaker 00: And I think that the logic of the vorus reasoning in this California Supreme Court, that's 2019, saying that we shouldn't try to turn what could easily, this is a case about access to a network, the next case is gonna be weed whacking. [00:33:17] Speaker 00: We have to be careful about making sure that property is property, and when there are claims that properly sound in a different body of law, such as here, which is contract, that the plaintiffs chose not to pursue, that's not the right place to create new property. [00:33:30] Speaker 03: I make sure I understood what I think you were saying earlier. [00:33:32] Speaker 03: Any claims about the fact that the contractual agreement has notified and gotten permission for Google to [00:33:45] Speaker 03: actually access that data. [00:33:47] Speaker 03: That's obviously not before us. [00:33:49] Speaker 03: Is that something that's already been decided and won't be appealed? [00:33:52] Speaker 03: Is that something that's coming next if you were to lose on these claims? [00:33:57] Speaker 03: I'm trying to figure out where those kind of claims stand. [00:33:59] Speaker 00: Consent is a defense to the claims at issue here. [00:34:02] Speaker 03: That just wasn't raised already by Google. [00:34:06] Speaker 03: I'm just trying to think procedurally why it's not. [00:34:08] Speaker 00: It could have been. [00:34:09] Speaker 00: I think the question is, [00:34:10] Speaker 00: We believe these other arguments are very clean-cut ways to win on a class-wide basis. [00:34:15] Speaker 03: So is that gone? [00:34:16] Speaker 03: Is the consent argument gone now in this case? [00:34:19] Speaker 00: No, it will remain in the case. [00:34:20] Speaker 03: Oh, okay. [00:34:21] Speaker 03: That issue would possibly be down the road if this case were to continue on. [00:34:25] Speaker 00: Correct. [00:34:26] Speaker 00: But I think it also just doesn't really, at the end of the day, have bearing on the core question of whether or not there's been a property interest here or not. [00:34:32] Speaker 00: I think the point that we're trying to make here is that the fact that a contract exists only [00:34:36] Speaker 00: confirms that the right way to think about this case is a breach of a contract, potentially interference with a contract, but not that somehow the plaintiffs obtained a right to some property of a metaphysical nature by entering into contracts with these two businesses. [00:34:52] Speaker 04: Thank you. [00:34:52] Speaker 04: Thank you, Ms. [00:34:52] Speaker 04: Hartnett. [00:34:57] Speaker 04: Wallenstein. [00:34:59] Speaker 01: Thank you, Your Honors. [00:35:01] Speaker 01: Cellular data has become an article of commerce akin to a commodity. [00:35:06] Speaker 01: You can buy it. [00:35:08] Speaker 01: You can sell it. [00:35:09] Speaker 01: You have a right to exclude other people from consuming it. [00:35:12] Speaker 01: And under Yuba River and Payne, authorities that Google doesn't respond to at all, it's property. [00:35:21] Speaker 01: A few of the individual points that were discussed. [00:35:24] Speaker 01: Plaintiffs allege at paragraph 16 of the complaint that Jennifer Nelson exceeds her one gigabyte from time to time. [00:35:32] Speaker 01: And plaintiffs allege throughout the complaint that Google's transfers occur all the time. [00:35:38] Speaker 01: So they are part of what caused her to exceed her one gigabyte and pay for another gigabyte. [00:35:45] Speaker 01: With respect to substantial interference, all of the substantial interference cases involve physical property that was moved but not used. [00:35:54] Speaker 01: It was furniture in an apartment that got stored by the landlord because they had to rent out the apartment. [00:35:59] Speaker 01: It's not a standard that applies to intangible property. [00:36:03] Speaker 01: And in any event, the intangible property in this case has been totally consumed. [00:36:07] Speaker 01: Google has consumed the cellular data that it used. [00:36:10] Speaker 01: It hasn't merely put it in a storage unit. [00:36:13] Speaker 04: Is there a reason you didn't or that you couldn't bring this as a interference with contract claim? [00:36:22] Speaker 01: Yes, Your Honor. [00:36:23] Speaker 01: And I just note, in the briefing, Google says and the district court says there's all these other causes of action you could have brought, but they don't name any of them. [00:36:32] Speaker 01: And we point that out, and they still don't name any of them, until just now. [00:36:37] Speaker 01: They say you could have brought a contract action. [00:36:39] Speaker 01: Let me tell you why you can't. [00:36:41] Speaker 01: Because there's no meeting of the minds between Android users and Google about the consumption of their cellular data. [00:36:48] Speaker 04: Okay, but you have a contract with Verizon, right? [00:36:50] Speaker 04: And there is a tort to... [00:36:54] Speaker 04: sort of a third party interference with the contractual relationship. [00:37:00] Speaker 01: Google hasn't interfered with that to satisfy the elements of torsious interference with contract. [00:37:05] Speaker 01: What's happened is the consumers have purchased the right to consume a particular amount of data. [00:37:11] Speaker 01: They've purchased that contractual right to a service from Verizon or AT&T. [00:37:17] Speaker 01: And then Google has taken that property or co-opted that service, depending on how you look at it. [00:37:23] Speaker 01: And that means it's plaintiffs who have the cause of action. [00:37:27] Speaker 01: That's a case called American Hawaiian Engineering cited in the opening brief and the reply brief, not responded to by Google. [00:37:34] Speaker 01: You don't have to be the entity that provided the service in order to have the cause of action. [00:37:39] Speaker 01: If we waited on carriers to bring a cause of action, nothing would happen because they've been fully paid. [00:37:44] Speaker 01: There hasn't been torsion interference with respect to that. [00:37:48] Speaker 03: The same question I can ask at the very end on the other side. [00:37:50] Speaker 03: So that's your honor. [00:37:51] Speaker 03: So I mean, do you think that Google's answer? [00:37:53] Speaker 03: Google would have some something that said we're going to use your data or something. [00:37:57] Speaker 03: So that issue of consent or whatever you want to call it, I was kind of just surprised not to see it here. [00:38:02] Speaker 03: Can you tell me why it wasn't involved here? [00:38:04] Speaker 03: And is it is an issue that's dead or is it an issue that could become live later? [00:38:09] Speaker 01: So your honor, the reason it's not here is we're at the motion to dismiss stage. [00:38:11] Speaker 01: Consent's not susceptible to resolution on a motion to dismiss. [00:38:16] Speaker 01: It will absolutely be the subject of summary judgment motions if we're fortunate enough to have the case remanded. [00:38:22] Speaker 01: And Google can make all those arguments. [00:38:24] Speaker 01: And we think it's the opposite. [00:38:26] Speaker 01: We'll move to summary judgment saying it's a matter of law, there's not been consent. [00:38:29] Speaker 01: You don't disclose, because you only disclose the use of cellular data with respect to updates and using your phone, not secretly sending your location. [00:38:37] Speaker 01: in full dispute, and we should have an opportunity to have that dispute. [00:38:41] Speaker 01: Google doesn't cite a single case, a single California state case that has granted a demurrer for failure to allege damages or injury, and we can't find one. [00:38:51] Speaker 01: Our state case [00:38:53] Speaker 01: We have a parallel state case in state court on behalf of consumers in California. [00:38:59] Speaker 01: The demurrer was denied on exactly these reasons, and after hard-fought discovery, a class was recently certified and a trial date has been set for later this year. [00:39:07] Speaker 01: It raises federalism concerns when a state court applying state law allows a case to survive a motion to dismiss, and a federal court in diverse sitting and diversity applying that exact same state law does not. [00:39:19] Speaker 04: Thank you very much. [00:39:21] Speaker 04: Thank both counsel for their arguments in this case and the case is submitted.