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Raden v. Martha Stewart Living Omnimedia, Inc.

United States District Court, E.D. Michigan, Southern Division

July 20, 2017

ALICE RADEN and BOBBIE MOORE, individually and on behalf of all others similarly situated, Plaintiffs,
v.
MARTHA STEWART LIVING OMNIMEDIA, INC., a Delaware Corporation, and MEREDITH CORPORATION, an Iowa Corporation, Defendants.

          OPINION AND ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS PURSUANT TO RULES 12(B)(1) AND 12(B)(6) [ECF NO. 11]

          LINDA V. PARKER UNITED STATES DISTRICT JUDGE

         Plaintiffs Alice Raden and Bobbie Moore (collectively, “Plaintiffs”) filed this class action complaint alleging that Defendants Martha Stewart Living Omnimedia, Inc. (“Martha Stewart Living Omnimedia”) and Meredith Corporation (“Meredith”) (collectively, “Defendants”) violated Michigan's Personal Privacy Protection Act, M.C.L. § 445.1712[1] (“PPPA”) and were unjustly enriched by disclosing sensitive and statutorily protected information to third parties. In particular, Plaintiffs allege that Defendants disclosed their personal reading information to data mining companies in violation of the PPPA. (ECF. No. 1 ¶ 27.) Plaintiffs also contend that Defendants sold “highly detailed customer lists” including sensitive information about them to interested third parties. (Id. ¶ 28.)

         Presently before the court is Defendants' motion to dismiss, filed pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) on September 26, 2016. (ECF No. 11.) The motion has been fully briefed. Finding the facts and legal arguments sufficiently presented in the parties' pleadings, the Court is dispensing with oral argument pursuant to Eastern District of Michigan Local Rule 7.1(f). For the reasons that follow, the Court grants in part and denies in part Defendants' motion.

         I. Applicable Standards

         Federal Rule of Civil Procedure 12(b)(1) allows for motions asserting lack of jurisdiction of the subject matter. Fed.R.Civ.P. 12(b)(1). Where a Rule 12(b)(1) motion contains a factual attack, the court need not construe the allegations in the non-moving party's favor because the burden of proving jurisdiction is on the party asserting it. Moreover, it is recognized that a party faced with a Rule 12(b)(1) motion to dismiss may not rest on the truth of the facts asserted in its pleadings. See Ohio Nat'l Life Ins. Co. v. United States, 922 F.2d 320, 325 (6th Cir.1990) (“[W]hen a court reviews a complaint under a factual attack [on jurisdiction], ... no presumptive truthfulness applies to the factual allegations.”); Exchange Nat'l Bank of Chicago v. Touch Ross & Co., 544 F.2d 1126, 1131 (2d Cir.1976) (“[A] party opposing a Rule 12(b)(1) motion cannot rest on the mere assertion that factual issues may exist.”).

         “When a defendant moves for a motion to dismiss under both Rule 12(b)(1) and (b)(6), the court should consider the 12(b)(1) motion first because the 12(b)(6) motion is moot if subject matter jurisdiction does not exist.” Taylor v. Dep't of Human Servs. of Michigan, No. 09-CV-14639, 2010 WL 1257347, at *1-2 (E.D.Mich. Mar. 30, 2010) (quoting Moir v. Greater Cleveland Reg'l Transit Auth., 895 F.2d 266, 269 (6th Cir.1990)).

         A motion to dismiss pursuant to Rule 12(b)(6) tests the legal sufficiency of the complaint. RMI Titanium Co. v. Westinghouse Elec. Corp., 78 F.3d 1125, 1134 (6th Cir. 1996). Under Federal Rule of Civil Procedure 8(a)(2), a pleading must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” To survive a motion to dismiss, a complaint need not contain “detailed factual allegations, ” but it must contain more than “labels and conclusions” or “a formulaic recitation of the elements of a cause of action . . ..” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). A complaint does not “suffice if it tenders ‘naked assertions' devoid of ‘further factual enhancement.' ” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 557).

         As the Supreme Court provided in Iqbal and Twombly, “[t]o survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief 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 plausibility standard “does not impose a probability requirement at the pleading stage; it simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of illegal [conduct].” Twombly, 550 U.S. at 556.

         In deciding whether the plaintiff has set forth a “plausible” claim, the court must accept the factual allegations in the complaint as true. Erickson v. Pardus, 551 U.S. 89, 94 (2007). This presumption is not applicable to legal conclusions, however. Iqbal, 556 U.S. at 668. Therefore, “[t]hreadbare recitals of the elements of a cause of action, supported by mere conclusory statements, do not suffice.” Id. (citing Twombly, 550 U.S. at 555).

         Ordinarily, the court may not consider matters outside the pleadings when deciding a Rule 12(b)(6) motion to dismiss. Weiner v. Klais & Co., Inc., 108 F.3d 86, 88 (6th Cir. 1997) (citing Hammond v. Baldwin, 866 F.2d 172, 175 (6th Cir. 1989)). A court that considers such matters must first convert the motion to dismiss to one for summary judgment. See Fed. R. Civ. P 12(d). However, “[w]hen a court is presented with a Rule 12(b)(6) motion, it may consider the [c]omplaint and any exhibits attached thereto, public records, items appearing in the record of the case and exhibits attached to [the] defendant's motion to dismiss, so long as they are referred to in the [c]omplaint and are central to the claims contained therein.” Bassett v. Nat'l Collegiate Athletic Ass'n, 528 F.3d 426, 430 (6th Cir. 2008).

         II. Background

         Plaintiffs Raden and Moore are prior subscribers to Martha Stewart Living, a magazine owned and operated by Defendants. Raden purchased her one-year subscription to the magazine in September 2013. (ECF No. 1 ¶ 32.) Moore purchased her most recent subscription to Martha Stewart Living from Defendants in May 2015. (Id. ¶ 42.) Both Raden and Moore did not give Defendants permission or prior notice that their personal reading information would be disclosed to data mining companies or unrelated third party companies. (Id. ¶¶ 34, 35, 46, 47.)

         Plaintiffs contend that this disclosure of information violates their rights under the PPPA. (Id. ¶¶ 38, 48.) Further, Plaintiffs allege that Defendants profited from the disclosures of their personal reading information by selling their information to third parties. (Id. ¶¶ 40, 49.) On July 31, 2016, Plaintiffs filed a class action complaint on behalf of “[a]ll Michigan residents who purchased a subscription to Martha Stewart Living magazine.” (Id. ¶ 51.)

         In response, Defendants filed a motion to dismiss on September 26, 2016. (ECF No. 11.) Defendants' motion makes two arguments: (1) Plaintiffs lack standing to make a claim because they have suffered no actual injury and (2) Plaintiffs' unjust enrichment claim fails because they ...


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