NOT FOR PUBLICATION FILED
UNITED STATES COURT OF APPEALS DEC 21 2017
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
HELENE CAHEN and MERRILL NISAM, No. 16-15496
individually and on behalf of all others
similarly situated D.C. No. 3:15-cv-01104-WHO
Plaintiffs-Appellants,
MEMORANDUM*
v.
TOYOTA MOTOR CORP.; et al.,
Defendants-Appellees.
Appeal from the United States District Court
for the Northern District of California
William Horsley Orrick, District Judge, Presiding
Argued and Submitted November 15, 2017
San Francisco, California
Before: BERZON and FRIEDLAND, Circuit Judges, and SESSIONS,** District
Judge.
Helene Cahen and Merrill Nisam (“plaintiffs”) appeal the district court’s
dismissal of their claims for violations of California’s Unfair Competition Law
*
This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
**
The Honorable William K. Sessions III, United States District Judge
for the District of Vermont, sitting by designation.
(“UCL”) (Count I), Consumers Legal Remedies Act (“CLRA”) (Count II), and
False Advertising Law (“FAL”) (Count III), as well as for Breach of Implied
Warranty of Merchantability (Count IV), Breach of Contract/Common Law
Warranty (Count V), Fraud by Concealment (Count VI), Violation of Song-
Beverly Consumer Warranty Act (Count VII), and Invasion of Privacy under
Article I of the California Constitution (Count VIII). We conclude that the district
court correctly found that plaintiffs failed to establish Article III standing for all of
their claims.
1. We review the district court’s dismissal for lack of Article III standing de
novo. Nat’l Council of La Raza v. Cegavske, 800 F.3d 1032, 1039 (9th Cir. 2015);
Vaughn v. Bay Envtl. Mgmt, Inc., 567 F.3d 1021, 1024 (9th Cir. 2009). Standing
has three elements: “The plaintiff must have (1) suffered an injury in fact, (2) that
is fairly traceable to the challenged conduct of the defendant, and (3) that is likely
to be redressed by a favorable judicial decision.” Spokeo, Inc. v. Robins, 136 S. Ct.
1540, 1547 (2016) (citing Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61 (1992);
Friends of the Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–
81 (2000)). The plaintiff bears the burden of establishing these elements, and
when “a case is at the pleading stage, the plaintiff must ‘clearly . . . allege facts
demonstrating’ each element.” Id. (quoting Warth v. Seldin, 422 U.S. 490, 518
(1975)). “To establish injury in fact, a plaintiff must show that he or she suffered
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an invasion of a legally protected interest that is concrete and particularized and
actual or imminent, not conjectural or hypothetical.” Friends of the Earth, Inc.,
528 U.S. at 1548 (quoting Lujan, 504 U.S. at 560); see also Clapper v. Amnesty
Int’l USA, 568 U.S. 398, 409 (2013).
2. Plaintiffs claim that their vehicles are vulnerable to being hacked because
their vehicles’ computer systems lack security. Plaintiffs allege that “[a]s a result
of Defendants’ unfair, deceptive, and/or fraudulent business practices, and their
failure to disclose the highly material fact that their vehicles are susceptible to
hacking and neither secure nor safe, owners and/or lessees of Defendants’ vehicles
are currently at risk of theft, damage, serious physical injury, or death as a result of
hacking, and they will continue to face this risk until they are notified of the
dangers associated with their vehicles and are given funds and guidance by
Defendants as to how to correct the security defects, or until Defendants correct
them.” Plaintiffs also allege that they have been injured because their vehicles are
worth less than what they paid for them due to these hacking vulnerabilities and
allege that their privacy is invaded due to defendants’ collection of vehicle data.
3. Plaintiffs have failed to sufficiently allege an injury due to the risk of
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hacking itself.1 For their Breach of Implied Warranty of Merchantability, Breach
of Contract/Common Law Warranty, Fraud by Concealment, and Violation of
Song-Beverly Consumer Warranty Act claims, plaintiffs allege that the risk of
hacking itself is the source of their injury.
Plaintiffs do not allege that any of their vehicles have actually been hacked.
More importantly, they do not allege that they are aware of any vehicles that have
been hacked outside of controlled environments. Even though no hacking has
occurred, plaintiffs allege that hacking is an “imminent eventuality,” that
defendants have known for a long time about these security vulnerabilities, and
that defendants have nonetheless marketed their vehicles as safe. These alleged
risks and defects are speculative. Article III standing requires a concrete and
particularized injury to plaintiffs’ interests that is simply not alleged in the First
Amended Complaint.
4. Plaintiffs have failed to sufficiently allege an injury due to overpaying for
their vehicles. For their UCL, CLRA, and FAL claims, plaintiffs allege that they
suffered an injury because they either would not have purchased their vehicles or
would have paid less for them had they known about these hacking risks. This
1
We note that on appeal, plaintiffs seem to have abandoned their arguments
relating to injuries from the risk of hacking itself. Plaintiffs’ Opening Brief
focuses solely on their economic loss theory.
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economic loss theory is not credible, as the allegations that the vehicles are worth
less are conclusory and unsupported by any facts. The district court was correct in
noting that “plaintiffs have not, for example, alleged a demonstrable effect on the
market for their specific vehicles based on documented recalls or declining Kelley
Bluebook values . . . [n]or have they alleged a risk so immediate that they were
forced to replace or discontinue using their vehicles, thus incurring out-of-pocket
damages.” Additionally, “[n]early 100% of cars on the market include wireless
technologies that could pose vulnerabilities to hacking or privacy intrusions.”
Thus, plaintiffs have only made conclusory allegations that their cars are worth less
and have not alleged sufficient facts to establish Article III standing.
5. Finally, Plaintiffs have failed to sufficiently allege an injury due to
invasion of their privacy. Plaintiffs claim that defendants collect data from their
vehicles and share the data with third parties. However, there are no specific
allegations as to why this data is sensitive or individually identifiable to particular
drivers, cf. Eichenberger v. ESPN, Inc., 2017 WL 5762817, at *4 (9th Cir. Nov. 29,
2017). Plaintiffs have not pleaded sufficient facts demonstrating how the
aggregate collection and storage of non-individually identifiable driving history
and vehicle performance data cause an actual injury. See Lujan, 504 U.S. at 560.
The district court’s decision is AFFIRMED.
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