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Carlsen v. GameStop, Inc.

United States Court of Appeals, Eighth Circuit

August 16, 2016

Matthew Carlsen, individually and on behalf of all others similarly situated Plaintiff - Appellant
v.
GameStop, Inc., a Minnesota corporation; Sunrise Publications, Inc., doing business as Game Informer, a Minnesota corporation Defendants-Appellees

          Submitted: March 15, 2016

         Appeal from United States District Court for the District of Minnesota - Minneapolis

          Before MURPHY, BEAM, and GRUENDER, Circuit Judges.

          GRUENDER, Circuit Judge.

         Matthew Carlsen, individually and purportedly on behalf of others similarly situated, brought claims against GameStop, Inc. and Sunrise Publications, Inc. (collectively, "GameStop") for breach of contract, unjust enrichment, money had and received, and violation of Minnesota's Consumer Fraud Act (CFA), Minn. Stat. §§ 325F.68, et seq., for GameStop's alleged disclosure of personal information to a third party in violation of an express agreement not to do so. GameStop filed a motion to dismiss Carlsen's complaint for lack of subject-matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) and failure to state a claim under Rule 12(b)(6). The district court[1] granted the motion to dismiss for lack of subject-matter jurisdiction, finding that Carlsen lacked standing. We affirm the district court on the basis that Carlsen's complaint failed to state a claim upon which relief can be granted.

         I.

         Matthew Carlsen is a user of print and online materials published by GameStop, including Game Informer Magazine. Game Informer Magazine offers news, reviews, and commentary about the video-game industry. Registered subscribers can access digital versions of the magazine through a website, www.gameinformer.com, where they also can manage their subscriptions and access enhanced content and message boards. Carlsen paid a one-year subscription fee of $14.99 for access to the magazine and enhanced content. The terms of service for the online subscription include Game Informer's privacy policy. The policy, in turn, includes a provision stating that, with certain exceptions, "Game Informer does not share personal information with anyone." According to Carlsen, a user must agree to the terms of service and, thus, the privacy policy, in order to purchase subscription access.

         In his complaint, Carlsen alleged that GameStop shared his personally identifiable information ("PII") with Facebook in violation of the privacy policy. He alleged that GameStop shared this information through the Game Informer website, which includes features that allow Game Informer users to log in to the website using their Facebook accounts and to use Facebook's "Like, " "Share, " and "Comment" functions through the Game Informer site. Game Informer provides these features by adding a Facebook Software Development Kit ("SDK") to the source code on the Game Informer website. Carlsen alleged that this SDK transmitted a user's unique Facebook ID and Game Informer browsing history to Facebook if the user previously had opted to stay logged in to Facebook.

         Carlsen further alleged that GameStop breached a term of the privacy policy by disclosing his Facebook ID and browsing information. He also claimed that this disclosure constituted a material misrepresentation about Game Informer subscriptions because he believed his PII would not be disclosed and because part of his subscription fee paid for the protection of that PII. He alleged that, had he known about the disclosures, he either would not have paid for the subscription or would have refrained from accessing the online content for which he paid.

         Based on these allegations, Carlsen's amended complaint sought class certification and asserted four claims: (1) breach of contract; (2) unjust enrichment; (3) money had and received; and (4) violation of Minnesota's CFA, Minn. Stat. §§ 325F.68, et seq. GameStop filed a motion to dismiss for lack of subject matter jurisdiction and for failure to state a claim. The district court granted the motion to dismiss for lack of subject-matter jurisdiction, finding that Carlsen lacked standing for failure to allege an injury in fact with respect to his overpayment and would-not-have-shopped theories because his allegations were based on the Game Informer privacy policy, which applied equally to both paid and non-paid Game Informer subscriptions.

          II.

         A.

         "The existence of subject-matter jurisdiction is a question of law that this court reviews de novo." ABF Freight Sys., Inc. v. Int'l Bhd. of Teamsters, 645 F.3d 954, 958 (8th Cir. 2011). "A court deciding a motion under Rule 12(b)(1) must distinguish between a 'facial attack' and a 'factual attack'" on jurisdiction. Osborn v. United States, 918 F.2d 724, 729 n.6 (8th Cir. 1990). In a facial attack, "the court restricts itself to the face of the pleadings, and the non-moving party receives the same protections as it would defending against a motion brought under Rule 12(b)(6)." Id. (internal citations omitted). "In a factual attack, the court considers matters outside the pleadings, and the non-moving party does not have the benefit of 12(b)(6) safeguards." Id. (internal citation omitted). The method in which the district court resolves a Rule 12(b)(1) motion-that is, whether the district court treats the motion as a facial attack or a factual attack-obliges us to follow the same approach. BP Chemicals Ltd. v. Jiangsu Sopo Corp., 285 F.3d 677, 680 (8th Cir. 2002).

         Here, the district court discussed both standards but did not state which approach it followed. Toward the end of its opinion, however, the court stated that it was "accepting as true all of Plaintiff's allegations and construing all reasonable inferences in Plaintiff's favor"- i.e., that it was following the Rule 12(b)(6) standard used for a facial attack. We thus examine the Rule 12(b)(1) motion as a facial attack on jurisdiction, affording Carlsen's complaint Rule 12(b)(6) protection by "accepting as true all facts alleged in the complaint." See Trooien v. Mansour, 608 F.3d 1020, 1026 (8th Cir. 2010). As such, we "consider[] only the materials that are 'necessarily embraced by the pleadings and exhibits attached to the complaint.'" Cox v. Mortgage Elec. Registration Sys., Inc., 685 F.3d 663, 668 (8th Cir. 2012) (quoting Mattes v. ABC Plastics, Inc., 323 F.3d 695, 697 n.4 (8th Cir. 2003)).

         We begin by addressing the sufficiency of the complaint with respect to Carlsen's standing. "Federal jurisdiction is limited by Article III of the Constitution to cases or controversies; if a plaintiff lacks standing to sue, the district court has no subject-matter jurisdiction." ABF, 645 F.3d at 958. "The 'irreducible constitutional minimum of standing' is that a plaintiff show (1) an 'injury-in-fact' that (2) is 'fairly . . . trace[able] to the challenged action of the defendant' and (3) is 'likely . . . [to] be redressed by a favorable decision' in court." Id. (alterations in original) (quoting Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-61 (1992)). A plaintiff has suffered an injury-in-fact if he has experienced "an invasion of a legally protected interest which is (a) concrete and particularized and (b) actual or imminent, not conjectural or hypothetical." Lujan, 504 U.S. at 560 (internal citations and quotation marks omitted). Further, "[a] 'legally protected interest' requires only a 'judicially cognizable interest.'" ABF, 645 F.3d at 959.

         The district court addressed the standing issue by evaluating Carlsen's theories of damages. The court first discussed whether Carlsen's alleged monetary damages based on a theory of "overpayment" constituted a cognizable injury in fact. Under this theory, Carlsen alleged that he would not have paid as much as he did for his Game Informer subscription had he known GameStop would violate the terms of the privacy policy by disclosing his PII. The court, analogizing to identity-theft and data-breach cases, found this overpayment theory insufficient to establish injury because Carlsen had failed to allege that he paid any specific amount for the privacy policy or that he bargained for additional data privacy over that received by non-paying Game Informer visitors. The court next discussed Carlsen's alleged injury based on a "would-not-have-shopped" theory. Under this theory, Carlsen alleged that he would not have purchased the Game Informer subscription if he had known his data would be shared. The court likewise found this theory insufficient to establish an injury in fact because the privacy policy stated that it applied equally to paid and non-paid Game Informer ...


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