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Friday, March 1, 2024


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Cellular Data Is Property for Purposes of Conversion Claim, Ninth Circuit Holds

Panel Reinstates Putative Class Action Against Google


By a MetNews Staff Writer


The Ninth U.S. Circuit Court of Appeals has vacated an order by a District Court magistrate judge dismissing a conversion claim in a putative class action suit against Google, LLC arising from its alleged passive data transfers from the plaintiffs’ mobile devices using Google’s Android operating system, finding that cellular data can qualify as property.

Google’s alleged use would be inconsistent with, and cause injury to, the plaintiffs’ property interests, a three-judge panel held Wednesday in a memorandum opinion.

The appellate court did agree, however, with Magistrate Judge Virginia Kay DeMarchi of the Northern District of California that dismissal of a quantum meruit claim was warranted because there was no showing of an expectation by the parties that compensation would be received.

Plaintiffs Joseph Taylor, Edward Mlakar, Mick Cleary, and Eugene Alvis allege that the data transfers occur without their knowledge or consent and happen when the mobile devices are idle and all applications are closed. No compensation is made to plaintiffs for the alleged transfer of the data.

They maintain that Google “has programmed the Android operating system to secretly send and receive a large amount of information to and from Google using Plaintiffs’ cellular data.”

The panel quoted the 2007 opinion by this district’s Court of Appeal in Fremont Indemnity Company v. Fremont General Corporation that the elements of a conversion claim in California, writing that the elements are:

“(1) the plaintiff owns or has a right to possess the personal property; (2) the defendant disposes ‘of the property in a manner that is inconsistent with the plaintiff’s property rights; and (3) resulting damages.’ ”’

DeMarchi’s View

DeMarchi ruled that the plaintiffs did not sufficiently allege that cellular data constitutes property or that Google’s use of the data causes injury. She declared:

“[T]here is nothing that customers possess that is separate and apart from their use of a particular or unlimited quantum of access to the network, which is measured in these bytes of data—i.e., a right of access that is entirely defined by their respective contracts with their cellular carriers.”

She additionally found that the plaintiffs failed to allege any injury given that they were not asked to pay more money for data or suffered any degradation of service because of the data transfers.

The panel acknowledged that in order to adequately plead the first element of conversion, the plaintiffs must show that a property right is implicated. In order to establish that right, they must show that the interest is capable of precise definition, it must be capable of exclusive possession or control, and the owner must have established a legitimate claim to exclusivity.

The judges wrote:

“Applying these criteria, we conclude that cellular data is capable of precise definition. Although intangible, cellular data serves the particular purpose of enabling access to the cellular network; it can be precisely limited by a user’s data plan; it can be measured when being used; and it can be attributed to a particular user based on that user’s unique identifier code.” They also found that “cellular data is capable of exclusive possession or control,” noting that it can be purchased, sold, transferred via mobile hotspots, and “the right to transmit cellular data over a cellular network is by its nature restricted to the user.”

The judges found the interest analogous to user’s interest in a utilities context, and said the plaintiffs’ “exclusive possession of control of cellular data vests” when the plaintiff uses the cellular network to make data transfers.

The panel added that “[p]laintiffs also have a legitimate claim to exclusivity in their cellular data,” explaining:

“Plaintiffs have purchased the right to transmit bytes of information over their carriers’ networks up to the amounts provided by the terms of the plans.”

Inconsistent, Injurious

The judges  also found that the second two elements of a conversion claim were adequately pleaded.

They determined that Google’s alleged use of the plaintiff’s cellular data was “inconsistent with their property interests,” saying:

“Carriers meter the cellular data consumed by every transmission to and from a mobile device. When Google transmits information from the user’s device to Google’s servers, the cellular data expended in that transmission is allocated to the user and treated by the carrier as data that the customer has consumed. Therefore, Google’s ‘unauthorized transfer’ of bytes using Plaintiffs’ data allotment necessarily prevents Plaintiffs from using all the data they purchase from their carrier.”

The panel also disagreed with DeMarchi that the alleged use of the plaintiffs’ data did not cause injury. The judges  said:

“Google’s alleged surreptitious use of the cellular network through Plaintiffs’ data plans causes Plaintiffs to experience an immediate, discrete loss of a specific sum of valuable cellular data, which is charged against their data plans. Thus, the value of the converted cellular data is the measure of Plaintiffs’ resulting damages.”

The case is Taylor v. Google, LLC, 22-16654.


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