T. et al v. OpenAI LP et al, 3:23-cv-04557, No. 59 (N.D.Cal. Mar. 7, 2024) (2024)

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 2 of 45
`
`
`
`TABLE OF CONTENTS
`INTRODUCTION ..................................................................................................................1
`I.
`II. BACKGROUND ....................................................................................................................2
`III. ARGUMENT ..........................................................................................................................5
`A. Plaintiffs’ Complaint Satisfies Rule 8 ......................................................................5
`B. Plaintiffs Have Adequately Alleged Violations of the ECPA ..................................7
`C. Plaintiffs Have Adequately Alleged Violations of the CIPA ...................................9
`D. Plaintiffs Have Adequately Alleged Violations of the CDAFA .............................12
`E. Plaintiffs Have Adequately Alleged Violations of the UCL ..................................13
`1. Plaintiffs have standing under the UCL and sufficiently plead an
`entitlement to restitution .........................................................................14
`2. Plaintiffs state a claim for unlawful business practices under the UCL .15
`3. Plaintiffs state a claim for unfair violations under the UCL ...................15
`F. Plaintiffs Have Adequately Alleged Violations BIPA ............................................16
`1. Choice of Law .........................................................................................16
`2. Extraterritoriality.....................................................................................18
`3. Plaintiff Roberts States a Cause of Action under BIPA ..........................19
`G. Plaintiffs Have Adequately Alleged Their Negligence Claim ...............................22
`1. Defendant owed a duty to Plaintiffs and Class Members .......................22
`2. Plaintiffs have pleaded cognizable damages ...........................................25
`H. Plaintiffs Have Properly Alleged Invasion of Privacy ...........................................26
`I. Plaintiffs Have Sufficiently Stated Their Claim for Conversion ...........................30
`J. Plaintiffs’ Claim for Unjust Enrichment is Adequately Pleaded ............................32
`K. Plaintiffs’ UCL and Common Law Claims Are Not Superseded by California’s
`Uniform Trade Secrets Act.....................................................................................33
`IV. CONCLUSION .....................................................................................................................35
`
`
`
`
`i
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 3 of 45
`
`
`
`TABLE OF AUTHORITIES
`
`Ashcroft v. Iqbal,
`556 U.S. 662 (2009) .............................................................................................................5
`Archey v. Osmose Utility Services, Inc.
`2022 WL 3543469 (N.D. Ill. Aug. 18, 2020) .....................................................................19
`Avery v. State Farm Mut. Auto Ins. Co.,
`216 Ill.2d 100, 835 N.E.2d 801 (Ill. 2005) ........................................................................18
`Barnett v. Apple, Inc.,
`225 N.E.3d 602 (Ill. Ct. App. 2022) ..................................................................................20
`Bass v. Facebook, Inc.,
`394 F. Supp. 3d 1024 (N.D. Cal. 2019) .................................................................22, 23, 24
`Bell Atlantic Corp. v. Twombly,
`550 U.S. 544 (2007) .............................................................................................................5
`Brown v. Google LLC,
`525 F. Supp. 3d 1049 (N.D. Cal. 2021) ................................................................. 11, 13, 26
`Brown v. USA Taekwondo (“USAT”),
`11 Cal.5th 204 (2021) ........................................................................................................22
`Calhoun v. Google LLC,
`2021 WL 1056532 (N.D. Cal. March 17, 2021) ....................................................14, 15, 31
`Callaway Golf Co. v. Dunlop Slazenger Grp. Ams., Inc.,
`318 F. Supp. 2d 216 (D. Del. 2004) .....................................................................................0
`Campbell v. Facebook Inc.,
`77 F. Supp. 3d 836 (N.D. Cal. 2014) ........................................................................... 10, 11
`Carpenter v. McDonald’s Corporation,
`580 F. Supp. 3d 512 (N.D. Ill. 2022) .................................................................................20
`Castillo v. Seagate Tech., LLC,
`2016 WL 9280242 (N.D. Cal. Sept. 14, 2016) ..................................................................23
`ii
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 4 of 45
`
`
`
`City of Los Angeles v. Wells Fargo & Co.,
`22 F. Supp. 3d 1047 (C.D. Cal. 2014) ..............................................................................5, 6
`Colombo v. YouTube, LLC
`2023 WL 4240226 (N.D. Cal. 2023)............................................................................18, 19
`Corales v. Bennett,
`567 F.3d 554 (9th Cir. 2009) ..............................................................................................22
`Cottle v. Plaid Inc.
`536 F. Supp. 3d 461 (N.D. Cal. 2021) ...............................................................................13
`CTC Real Estate Servs. v. Lepe,
`140 Cal.App.4th 856 (2006) ..............................................................................................31
`Daichendt v. CVS Pharmacy, Inc.,
`2023 WL 3559669 (N.D. Ill. May 4, 2023) .......................................................................20
`Davis v. HSBC Bank Nevada, N.A.,
`691 F.3d 1152 (9th Cir. 2012) ............................................................................................15
`Delgado v. Meta Platforms, Inc.,
`2024 WL 818344 (N.D. Cal. Feb. 27, 2024)..........................................................16, 17, 18
`Digital Enjoy, Inc. v. Google, Inc.,
`370 F. Supp. 2d 1025 (N.D. Cal. 2005) .............................................................................35
`Doe v. FullStory, Inc.,
`F. Supp. 3d 2024 WL 188101 (N.D. Cal. Jan. 17, 2024) ................................................... 11
`Downing v. Mun. Court,
`88 Cal.App.2d 345 (1948) .................................................................................................30
`Erhart v. Bofi Holding, Inc.,
`612 F. Supp. 3d 1062 (S.D. Cal. 2020) ..............................................................................33
`Farmers Ins. Exchange v. Steele Ins. Agency, Inc.,
`2013 WL 3872950 (E.D. Cal. July 25, 2013) ....................................................................35
`
`
`
`iii
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 5 of 45
`
`
`
`Flanagan v. Flanagan,
`27 Cal.4th 776 .................................................................................................................... 11
`Fraley v. Facebook, Inc.,
`830 F. Supp. 2d 785 (N.D. Cal. 2011)................................................................................31
`Glam and Glits Nail Design, Inc. v. #NotPolish, Inc.,
`2021 WL 2317410 (S.D. Cal. June 7, 2021) ......................................................................35
`Graham v. Noom, Inc.,
`2021 WL 3602215 (N.D. Cal. Aug. 13, 2021) ................................................................... 11
`Greenley v. Kochava, Inc.,
`2023 WL 4833466 (S.D. Cal. July 27, 2023).....................................................................33
`Griffith v. TikTok, Inc.,
`2023 WL 7107262 (C.D. Cal. Oct. 6, 2023) ......................................................................31
`G.S. Rasmussen & Assocs., Inc. v. Kalitta Flying Serv., Inc.,
`958 F.2d 896 (9th Cir.1992) ...............................................................................................30
`Heller v. Cepia, L.L.C.,
`2012 WL 13572 (N.D. Cal. Jan. 4, 2012) ..........................................................................35
`Hodsdon v. Mars, Inc.,
`891 F.3d 857 (9th Cir. 2018) ..............................................................................................15
`Huynh v. Quora, Inc.,
`508 F. Supp. 3d 633 (N.D. Cal. 2020) ...............................................................................25
`International Equipment Trading, Ltd. v. Illumina, Inc.,
`312 F. Supp. 3d 725 (N.D. Ill. 2018) .................................................................................19
`In re Accellion, Inc. Data Breach Litig.,
`2024 WL 333893 (N.D. Cal. Jan. 29, 2024) ................................................................22, 23
`In re Anthem Inc. Data Breach Litig.,
`2016 WL 3029783 (N.D. Cal. May 17, 2016) .......................................................14, 16, 31
`
`
`
`iv
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 6 of 45
`
`
`
`In re Bailey,
`197 F.3d 997 (9th Cir.1999) ...............................................................................................30
`In re Carrier IQ,
`78 F. Supp. 3d 1051 (N.D. Cal. 2015) ...............................................................................12
`In re Facebook Biometric Info. Privacy Litig.,
`185 F. Supp. 3d 1155 (N.D. Cal. 2016) ..................................................................17, 18, 19
`In re Facebook, Inc. Internet Tracking Litig.,
`956 F.3d 589 (9th Cir. 2020) ........................................................................................13, 26
`In re Facebook Privacy Litig.,
`572 F. 494 (9th Cir. 2014) ............................................................................................14, 31
`In re Google Inc. Cookie Placement Consumer Priv. Litig.,
`806 F.3d 125 (3d Cir. 2015) ...............................................................................................28
`In re Google Inc. Cookie Placement Consumer Privacy Litig.,
`934 F.3d 316 (3rd Cir. 2019) ..............................................................................................28
`In re iPhone Application Litig.,
`844 F. Supp. 2d 1040 (N.D. Cal. 2012) .............................................................................30
`In re Marriott Int’l, Inc., Cust. Data Sec. Breach Litig.,
`440 F. Supp. 3d 4471 (D. Md. 2020) .................................................................................14
`In re Nickelodeon Cons. Priv. Litig.,
`827 F.3d 262 (3d Cir. 2016) ...............................................................................................28
`In re Yahoo! Inc. Cust. Data Sec. Breach Litig.,
`2017 WL 3727318 (N.D. Cal. Aug. 30, 2017) .............................................................14, 31
`In re Yahoo! Inc. Customer Data Sec. Breach Litig.,
`313 F. Supp. 3d 1113 (N.D. Cal. 2018) ..............................................................................25
`K.C. Multimedia, Inc. v. Bank of Am. Tech. & Operations, Inc.,
`171 Cal.App.4th 939 (2009) ........................................................................................33, 35
`
`
`
`v
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 7 of 45
`
`
`
`Kight v. CashCall, Inc.,
`200 Cal.App.4th 1377 (2011) ............................................................................................ 11
`Konop v. Hawaiian Airlines, Inc.,
`302 F.3d 868 (9th Cir. 2002) ................................................................................................8
`Kremen v. Cohen,
`337 F.3d 1024 (9th Cir. 2003) ............................................................................................30
`Kukovec v. Estee Lauder Cos., Inc.,
`2022 WL 16744196 (N.D. Ill. Nov. 7, 2022) .....................................................................21
`Kwikset Corp. v. Superior Court,
`51 Cal.4th 310 (2011) ........................................................................................................14
`Low v. LinkedIn Corp.,
`900 F. Supp. 2d 1010 (N.D. Cal. 2012) .............................................................................30
`Lozano v. AT&T Wireless Servs., Inc.,
`504 F.3d 718 (9th Cir. 2007) ..............................................................................................16
`Manzarek v. St. Paul Fire & Marine Ins. Co.,
`519 F.3d 1025 (9th Cir. 2008) ..............................................................................................5
`Martin v. Sephora USA, Inc.,
`2023 WL 2717636 (E.D. Cal. March 30, 2023).................................................................10
`Mattel, Inc. v. MGA Ent., Inc.,
`782 F. Supp. 2d 911 (C.D. Cal. 2011) ................................................................................35
`McGoveran v. Amazon Web Servs., Inc.,
`2021 WL 4502089 (D. Del. Sept. 30, 2021) ......................................................................18
`MedImpact Healthcare Sys., Inc. v. IQVIA Inc.,
`2020 WL 5064253 (S.D. Cal. Aug. 27, 2020)....................................................................35
`Mehta v. Robinhood Financial LLC,
`2021 WL 6882377 (N.D. Cal. May 6, 2021) ...............................................................15, 26
`
`
`
`vi
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 8 of 45
`
`
`
`Melzer v. Johnson & Johnson Consumer Inc.,
`2023 WL 3098633 (D.N.J. Apr. 26, 2023) .........................................................................21
`Mirkarimi v. Nevada Prop. 1 LLC,
`2013 WL 3761530 (S.D. Cal. July 15, 2013)............................................................... 10, 11
`Minx Int’l, Inc. v. M.R.R. Fabric,
`2015 WL 12645752 (C.D. Cal. Feb. 11, 2015) ..................................................................33
`NetApp, Inc. v. Nimble Storage, Inc.,
`41 F. Supp. 3d 816 (N.D. Cal. 2014) .................................................................................35
`New Show Studios LLC v. Needle,
`2014 WL 2988271 (C.D. Cal. June 30, 2014) ...................................................................35
`Noel v. Hall,
`568 F.3d 743 (9th Cir. 2009) ................................................................................................9
`Planned Parenthood Fed’n of Am., Inc. v. Ctr. For Med. Progress,
`214 F. Supp. 3d 808 (N.D. Cal. 2016) .................................................................................7
`Pratt v. Higgins,
`2023 WL 4564551 (N.D. Cal. July 17, 2023) ....................................................................13
`Pruitt v. Par-A-Dice Hotel Casino,
`2020 WL 5118035 (C.D. Ill. Aug. 31, 2020) .....................................................................21
`Race Winning Brands, Inc. v. Gearhart,
`2023 WL 4681539 (C.D. Cal. Apr. 21, 2023) ....................................................................35
`Regents of Univ. of California v. Superior Ct.,
`4 Cal.5th 607 (Cal. 2018) ...................................................................................................22
`Revitch v. New Moosejaw, LLC,
`2019 WL 5485330 (N.D. Cal. Oct. 23, 2019) ....................................................................10
`Rowland v. Christian,
`69 Cal. 2d 108 (Cal. 1968) .................................................................................................23
`
`
`
`vii
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 9 of 45
`
`
`
`Shulman v. Group W. Prods., Inc.,
`18 Cal.4th 200 (Cal. 1998) .................................................................................................26
`Silvaco Data Sys. v. Intel Corp.,
`184 Cal.App.4th 210 (2010) ..............................................................................................35
`Stasi v. Inmediata Health Grp. Corp.,
`501 F. Supp. 3d 898 (S.D. Cal. 2020) ................................................................................23
`Stauffer v. Innovative Heights Fairview Heights, LLC
`2022 WL 3139507 (S.D. Ill. Aug. 5, 2022)........................................................................20
`Thakkar v. ProctorU Inc.
`642 F. Supp. 3d 1304 (N.D. Ala. 2022) .......................................................................17, 18
`Thane Int’l, Inc. v. 9472541 Canada Inc.,
`2020 WL 7416171 (C.D. Cal. Nov. 16, 2020) ...................................................................32
`United States v. Christensen,
`828 F. 3d 763 (9th Cir. 2015) .............................................................................................12
`United States v. Smith,
`155 F.3d 1051 (9th Cir. 1998) ..............................................................................................8
`Valenzuela v. Nationwide Mut. Ins. Co.,
`No. 2:22-cv-06177-MEMF-SK,
`2023 U.S. Dist LEXIS 1438232 (C.D. Cal Aug. 14, 2023) .................................................8
`Yockey v. Salesforce, Inc.,
`F. Supp. 3d, 2023 WL 5519323 (N.D. Cal. Aug. 25, 2023) ............................................... 11
`Yunker v. Pandora Media, Inc.,
`2013 WL 1282980 (N.D. Cal. Mar. 26, 2013) ...................................................................30
`Rules & Statutes
`Cal. Civ. Code, § 1714(a) ...............................................................................................................22
`Cal. Pen. Code, § 502(c)(2) ...........................................................................................................12
`Cal. Pen. Code, § 502(b)(8) ...........................................................................................................12
`viii
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 10 of 45
`
`
`
`
`
`INTRODUCTION
`I.
`OpenAI’s motion begins by touting the virtues of Artificial Intelligence. Plaintiffs’
`Complaint, too, acknowledges the potential benefits to humanity. But that does not grant Big Tech
`a license to violate the law. Instead, two things can be true: we can invest in life-altering
`technologies—and not trample on individual’s rights in the process. That is especially true here,
`where established legal protocols for the collection and subsequent commercial use of data already
`exist: notice, consent, and compensation. OpenAI disregarded all three.
`OpenAI gave no notice to the world that, for years, it was secretly harvesting from the
`internet everything ever created and shared online, anywhere, by hundreds of millions of
`Americans. That, for a decade plus, every consumer’s use of the internet thus operated as a
`gratuitous donation to OpenAI: of our insights, talents, artwork, personally identifiable
`information, copyrighted works, photographs of our families and children, and all other
`expressions of our personhood—for products that stand to concentrate the country’s wealth in even
`fewer corporate behemoths, displace jobs at scale, and risk the future of mission-critical industries
`like art, music, and journalism, while creating dangerous new industries like the high-speed
`spawning of child p*rnography. It is no wonder the public is outraged by the largest-ever theft of
`data—to which no one consented.
`OpenAI chastises Plaintiffs, their counsel, and by extension all the concerned everyday
`citizens featured in the Complaint, for being too alarmist. OpenAI’s leaders, however, have raised
`the exact same concerns, repeatedly. But for purposes of litigation, the story is apparently different.
`It’s all so disingenuous. And it’s also not the only sign OpenAI cares nothing about the individual
`victims of its theft, fraud, and privacy invasions. If it did, OpenAI would be seeking to right the
`wrong by offering compensation, as it is now doing on its nationwide post-theft tour across the
`boardrooms of other large and powerful companies, agreeing to pay millions of dollars for content
`the law required it to license in the first place.
`
`1
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 11 of 45
`
`
`
`But what of all the user-generated content at issue in this litigation? To that, OpenAI’s
`answer is reflected in its request to this Court: dismiss the people’s claims outright and “with
`prejudice,” i.e., forever. But the law as laid out below, compels a different result. And good thing.
`Otherwise, large companies would continue to have a seat at OpenAI’s negotiating table, due to
`their wealth and privilege, while the individuals who were also stolen from would not. Fair
`compensation in the new AI economy should not depend on status and power. After all, the act of
`theft was the same—and the invasion of privacy even worse. OpenAI’s motion should be denied
`in its entirety.
`
`II.
`
`BACKGROUND
`
`To develop its machine learning AI products, Defendants flagrantly violated established
`
`privacy and property rights, and put the entirety of the internet community at immense risk by
`
`secretly harvesting massive amounts of users’ personal information. FAC at ¶¶ 3-6. Regardless of
`
`whether Defendants started their technological venture with good intentions in the name of
`
`“progress,” they have become a profit-driven technology empire with an insatiable thirst for
`
`individuals’ data and a conspicuous disregard for privacy, security, and ethics. Id. at ¶¶ 5-6. To
`
`create their AI products, including ChatGPT-3.5, ChatGPT-4.0, Dall-E, and Vall-E, Defendants
`
`willfully pilfered the internet, stealing personal data from millions of consumers worldwide,
`
`without their knowledge or consent, and without offering anything in exchange for their valuable
`
`data. Id. at ¶¶ 3, 6-7, 180-81. Through its wide-scale theft, Defendants have collected sensitive
`
`medical information, confidential financial information, information from private, password
`
`protected websites, users’ social media interactions, and even users’ private conversations. Id. at
`
`¶¶ 6, 148-49, 182-83, 152-54, 197, 210-214, 374. To make matters worse, Defendants have also
`
`integrated their AI products into hundreds of other applications and platforms, which has allowed
`
`Defendants to surreptitiously track and intercept users’ personal information, browser data, log-in
`
`2
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 12 of 45
`
`
`
`data, keystrokes, cookies, analytics, and more. Id. at ¶¶ 16, 232-33, 310, 614-625, 623-633, 633-
`
`643.
`
`Plaintiffs all used Defendants’ AI products, which unbeknownst to them, were secretly
`
`collecting all the data they inputted. Id. at ¶¶ 20, 30, 41, 53, 62, 72, 82, 92, 101, 106, 115, 120,
`
`129. Plaintiffs also each used a variety of the thousands of websites Defendants scraped without
`
`permission. Id. at ¶¶ 184-84 (websites Defendants scraped); id. at ¶¶ 21-24 (Plaintiff Cousart); id.
`
`at ¶¶ 31-35 (Plaintiff Guilak); id. at ¶¶ 42-46 (Plaintiff Martin); id. at ¶¶ 54-57 (Plaintiff Roberts);
`
`id. at ¶¶ 63-67 (Plaintiff Barcos); id. at ¶¶ 73-77 (Plaintiff Paz); id. at ¶¶ 83-87 (Plaintiff De La
`
`Torre); id. at ¶¶ 93-96 (Plaintiff Vassilev); id. at ¶¶ 102-103 (Plaintiff Johnson); id. at ¶¶ 107-109
`
`(Plaintiff McNeal); id. at ¶¶ 116-118 (Minor Plaintiff N.B.); id. at ¶¶ 121-124 (Plaintiff Martinez);
`
`id. at ¶¶ 130-132 (Plaintiff Hagan). Further, several Plaintiffs also frequently used websites that
`
`were integrated with ChatGPT API, which tracked and intercepted their personal information. Id.
`
`at ¶¶ 23, 33, 43, 56, 76, 85, 96, 123, 131 (Spotify); id. at ¶¶ 35, 66, 124 (Microsoft Teams); id. at
`
`¶¶ 35, 46 (Bing). Plaintiffs did not expect that any of the information they shared with these
`
`websites would be intercepted and compiled by a third-party looking to harvest their data and
`
`repackage it for commercial purposes. Id. at ¶¶ 26, 37, 49, 57, 68, 78, 89, 97, 104, 110, 118, 125,
`
`133, 197-209, 298-301. Plaintiffs also did not consent to Defendants’ extensive data collection,
`
`nor could they have, since they were unaware of Defendants’ predatory conduct. Id. at ¶ 461.
`
`
`
`Defendants’ unjust, unfair, and unlawful collection of data allowed them to realize billions
`
`of dollars in value. Id. at ¶ 127 (OpenAI’s valuation); Id. at ¶ 144 (OpenAI’s impact on Microsoft’s
`
`top line). Despite their tremendous financial success, Defendants did not pay a dime to Plaintiffs
`
`or other internet users, even though doing so would have been in line with the fair business
`
`practices of competitors, who pay for data. Id. at ¶¶ 414-417. Indeed, Plaintiffs allege that there
`
`3
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 13 of 45
`
`
`
`are active market exchanges where internet users can monetize their own personal data. Id. at ¶
`
`411. Defendants’ law-abiding competitors’ business practices demonstrate the value of personal
`
`data and prove that machine learning AI can be developed and trained in a responsible and fair
`
`way. Id. at ¶¶ 407-412 (the value of data); Id. at ¶¶ 414-416 (fair data collection practices). By
`
`stealing Plaintiffs’ data, Defendants impeded Plaintiffs’ right to “possess, control, use, profit, sell,
`
`and exclude others from accessing or exploiting [their] information without consent or
`
`renumeration.” Id. at ¶ 406. They also obtained an unfair competitive advantage over good
`
`corporate citizens operating in the legitimate market for training data.
`
` The present-day harms and imminent future risks resulting from Defendants’ theft and
`
`grossly negligent business practices are as varied as they are serious. Id. at ¶¶ 241-249 (injection
`
`and extraction attacks); Id. at ¶¶ 250-274 (risks presented by attacks); Id. at ¶¶ 315-328 (other
`
`risks); Id. at ¶¶ 487-493 (risks to children). For example, due to Defendants’ failure to implement
`
`adequate safeguards to protect the hordes of personal information they stole, adversaries can use
`
`machine learning cyberattacks to steal Plaintiffs’ sensitive personal information. Id. at ¶¶ 240, 243-
`
`244. Aside from these extreme privacy concerns, OpenAI also creates the potential for a myriad
`
`of other risks, such as the creation of misinformation, deepfakes, clones, scams, blackmail, child
`
`p*rnography, hate and bias, hypercharged malware, and autonomous weapons, to name a few. Id.
`
`at ¶¶ 315-328, 329-335, 336-339. Defendants were aware of and contemplated these risks, and
`
`nonetheless proceeded with their dangerous practices and widespread commercialization—in
`
`blatant violation of their duties to Plaintiffs, the law, and society at large. Id. at ¶¶ 235-239, 728-
`
`730.
`
` To this day, Defendants admit that even they do not fully understand how the Products
`
`are working or what they might evolve, on their own, to “learn” or do next. Thus, by collecting
`
`4
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 14 of 45
`
`
`
`previously obscure and personal data of millions and permanently entangling it with the Products,
`
`Defendants knowingly put Plaintiffs and the Classes in a zone of risk that is incalculable—but
`
`unacceptable, by any measure of responsible data protection and use.
`
`III. ARGUMENT
`
`A motion to dismiss must be denied if the complaint “state[s] a claim to relief that is
`
`plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atlantic Corp. v.
`
`Twombly, 550 U.S. 544, 570 (2007)). “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. The Court must “accept factual allegations in the complex as true
`
`and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St.
`
`Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).
`
`A.
`
`Plaintiffs’ Complaint Satisfies Rule 8
`
`Plaintiffs’ well-pled allegations are sufficient to put all defendants on notice of their
`
`potential liability for the conduct complained of in the FAC, which is “all that is required under
`
`the liberal pleading standard of Rule 8(a).” City of Los Angeles v. Wells Fargo & Co., 22 F. Supp.
`
`3d 1047, 1062 (C.D. Cal. 2014). Defendants’ argument that they will be left guessing what
`
`personal information that was scraped or intercepted, when and how that was done, whether it was
`
`done with adequate disclosures, or any other details of the well-pled FAC falls flat.
`
`In the opening pages of the FAC, Plaintiffs describe the types of information that
`
`Defendants—together—began to take from myriad internet sources to begin developing artificial
`
`intelligence products, including “private information and private conversations, medical data,
`
`[and] information about children—essentially every piece of data exchanged on the internet it
`
`could take[.]” FAC at ¶ 6. This data was used to train and develop Defendants’ Products, which
`
`5
`PLAINTIFFS’ OPPOSITION TO DEFENDANT OPENAI’S MOTION TO DISMISS FIRST
`AMENDED CLASS ACTION COMPLAINT
`Case No.: 23-cv-04557-VC
`
`

`

`Case 3:23-cv-04557-VC Document 59 Filed 03/07/24 Page 15 of 45
`
`
`
`include ChatGPT, Dall-E, and Vall-E, “to analyze and generate human-like language that can be
`
`used for a wide range of applications, includ