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Gubala v. Time Warner Cable Inc.

United States District Court, E.D. Wisconsin

June 17, 2016

DEREK GUBALA, Plaintiff,


          HON. PAMELA PEPPER United States District Judge


         On September 3, 2015, the plaintiff filed a complaint on his own behalf, and on behalf of putative class members. Dkt. No. 1. The complaint alleged that the defendant, a cable services provider, collected personal information- names, addresses, Social Security numbers, phone numbers, etc.-from “tens of millions of consumers across the country.” Id. at 1. The complaint further alleged that when after customers terminate their services with the defendant, the defendant “continues to maintain personally identifiable information on all of its previous customers indefinitely.” Id. at 1-2. The complaint alleged that this practice violated 47 U.S.C. §551(e) (subsection e of the Cable Communications Policy Act, or “CCPA”), which requires cable operators to destroy personally identifiable information “[i]f the information is no longer necessary for the purpose for which it was collected and there are no pending requests or orders for access to such information under subsection (d) of this section or pursuant to a court order.” Id.; 47 U.S.C. §551(e).

         In the original complaint’s prayer for relief, the plaintiff sought class certification; an order enjoining the defendant from “the unlawful practices and statutory violations asserted herein;” actual, liquidated and punitive damages as provided by the CCPA; and attorneys’ costs and fees as provided by the CCPA. Id. at 14.

         On October 5, 2015, the defendant filed in lieu of an answer a motion asking the court to compel arbitration, and to stay the proceedings. Dkt. No. 6. The motion alleged that the plaintiff had entered into a Residential Services Subscriber Agreement with the defendant, and that by entering into that agreement, the plaintiff had agrees to resolve his claim via arbitration. Id. The brief in support of the motion laid out, verbatim, the arbitration provision in the subscriber agreement. Dkt. No. 6-1 at 7.[1] The pertinent part of the agreement states that, “[e]xcept for claims for injunctive relief . . ., any past, present or future controversy or claim arising out of or related to this agreement shall be resolved by binding arbitration . . . .” Id. In other words, the subscriber agreement provided that claims for money damages had to be resolved through binding arbitration, not litigation.

         Three weeks later, rather than filing a response to the motion to stay proceedings and compel arbitration, the plaintiff filed an amended complaint. Dkt. No. 9. The only significant change from the original complaint to the amended one appeared in the prayer for relief; in the October 26, 2015 amended complaint, the plaintiff deleted his request for damages, costs and fees. Id. at 13. Despite removing his request for monetary damages, costs and fees, however, the plaintiff left in the amended complaint an extensive discussion regarding the economic value consumers place on the protection of personally identifiable information. Id. at 6-9.

         Less than two weeks later, the parties filed a joint motion asking the court to grant the plaintiff leave to file a second amended complaint. Dkt. No. 10. The motion indicated that the defendant believed that the amended complaint, like the original, sought money damages, which meant that the claim had to be submitted to arbitration pursuant to the subscriber agreement. Id. at 1. While the plaintiff “disagree[d], ” he sought to file a second amended complaint seeking only injunctive relief. Id. In an attempt to avoid filing another motion to compel arbitration, the defendant joined the motion. Id. The court granted leave to amend on November 10, 2015.

         The plaintiff filed the second amended complaint on November 20, 2015. Dkt. No. 12. On December 23, 2015, the defendant filed this motion to dismiss the second amended complaint. Dkt. No. 17. The defendant sought dismissal of this complaint because the plaintiff had failed to plead the elements of a claim for injunctive relief, and because the request for injunctive relief was allegedly vague. Id. at 2. The court heard oral argument on the motion on May 16, 2016, after the parties had fully briefed it. Dkt. No. 34. On the day that the court heard oral argument, the United States Supreme Court issued its decision in Spokeo v. Robins, __U.S. __, 136 S.Ct. 1540 (May 24, 2016). The parties asked the court to allow them to submit simultaneous briefs regarding whether Spokeo had any impact on the case; the court granted that request, and the parties filed their supplemental briefs on June 6, 2016. Dkt. Nos. 35, 36.


         In order to have Article III standing to pursue a claim that a plaintiff has suffered harm under a statute where “Congress plainly sought to curb the dissemination of false information by adopting procedures designed to decrease that risk, ” the plaintiff “cannot satisfy the demands of Article III by alleging a bare procedural violation.” Spokeo, 136 S.Ct. at 1550. The plaintiff must demonstrate that the procedural violation resulted in “concrete harm.” Id.

         Assuming that a plaintiff has standing, that plaintiff must provide a “short and plain statement of the claim showing that [he] is entitled to relief” to survive a motion to dismiss under Fed.R.Civ.P. 12(b)(6). Fed.R.Civ.P. 8(a)(2). A plaintiff does not need to plead specific facts, and his statement need only “give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957)). However, a complaint that offers “labels and conclusions” or “formulaic recitation of the elements of a cause of action will not do.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 555). To state a claim, a complaint must contain sufficient factual matter, accepted as true, “that is plausible on its face.” Id. (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. (citing Twombly, 550 U.S. at 556). The complaint allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555 (citation omitted).

         In considering whether a complaint states a claim, courts follow the principles set forth in Twombly. First, they must “identify[] pleadings that, because they are no more than conclusions, are not entitled to the assumption of truth.” Iqbal, 556 U.S. at 679. A plaintiff must support legal conclusions with factual allegations. Id. Second, if there are well-pleaded factual allegations, courts must “assume their veracity and then determine whether they plausibly give rise to an entitlement to relief.” Id.

         “The basis of injunctive relief in the federal courts has always been irreparable harm and inadequacy of legal remedies.” Beacon Theatres, Inc. v. Westover, 359 U.S. 500, 506-507 (1959). Injunctive relief is appropriate, then, when, among other things, the moving party can “demonstrate that (1) no adequate remedy at law exists; [and] (2) it will suffer irreparable harm absent injunctive relief . . . .” U.S. v. Rural Elec. Convenience Co-op. Co., 922 F.2d 429, 432 (7th Cir. 1991) (citations omitted). “It is well settled that the availability of an adequate remedy at law renders injunctive relief inappropriate.” Id. (citing, e.g. Northern Cal. Power Agency v. Grace Geothermal Corp., 469 U.S. 1306 (1984) and Beacon Theatres, Inc., 359 U.S. at 509).

         III. ANALYSIS

         The defendant has asked the court to dismiss the second amended complaint. Dkt. No. 12. The prayer for relief in the second amended complaint asks the court to enter an order “A. [d]eclaring that this action may be maintained as a class action, and certifying the Class as requested herein; B. [e]njoining TWC from the unlawful practices and statutory violations asserted herein; and C. [g]ranting such other and further relief as may be just and proper.” Id. at 13. As the defendant has argued, the plaintiff now ...

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