Court Grants Facebook’s Motion to Dismiss Counterclaims in Malicious Browser Extension Suit

On Friday, Chief Magistrate Judge Joseph C. Spero of the Northern District of California issued an order granting plaintiff Facebook’s motion to dismiss defendant BrandTotal Ltd. and Unimania’s (collectively, BrandTotal) counterclaims in a case concerning browser extensions that conducted unauthorized data collection.

Facebook originally sued the defendants in October for breach of contract over the malicious browser extensions. Specifically, Facebook claimed that the defendants collected data through the browser extensions, which the defendants purportedly then used to market and sell their services. Facebook contended that the defendants’ conduct violated its terms, and noted that it took various enforcement measures, including disabling the defendants’ accounts.

According to the order, BrandTotal asserted counterclaims “based on Facebook blocking its access to those products (Facebook and Instagram),” and the court “previously denied BrandTotal’s application for a temporary restraining order (‘TRO’).” BrandTotal alleged that “it collects information only after receiving ‘informed consent and deliberate opt-in’ from its users.” Moreover, BrandTotal asserted that “users must ‘confirm they have read the privacy policy which details the demographic and advertising…information BrandTotal collects,’ before they install the UpVoice browser extension.”

Specifically, BrandTotal averred that Facebook’s effort to “cut off BrandTotal’s access to Facebook products and block BrandTotal’s browser extensions from appearing in Google Chrome Web Store prevent BrandTotal from compiling advertising analytics for its customers, prevent BrandTotal from compiling advertising analytics for its customers, prevent BrandTotal’s users from logging in ‘to collect any rewards they have earned,’ and prevent BrandTotal from recruiting new participants.” In particular, BrandTotal proffered the following counterclaims: “(1) intentional interference with contract, based on contracts with its corporate customers”; “(2) intentional interference with prospective economic advantage”; “(3) unlawful, unfair, and fraudulent conduct in violation of the UCL”; and “(4) declaratory judgment that BrandTotal has not breached any contract with Facebook…” BrandTotal sought injunctive and compensatory relief.

Facebook contended that BrandTotal’s counterclaim for interference with contract should be dismissed; Facebook asserted that the defendants have not “alleged intent by Facebook to hinder BrandTotal’s performance of a contract, knowledge by Facebook that Google would remove the UpVoice browser extension from its store, or any actual breach or impairment of a contract with BrandTotal’s customers.” Moreover, Facebook claimed that any alleged interference “was justified by Facebook’s legitimate business interest in enforcing its terms of use and complying with an order of the Federal Trade Commission.” Facebook argued that the counterclaim for intentional interference with prospective economic advantage should be dismissed because the defendants have “not identified any specific relationship with a probability of economic advantage, knowledge by Facebook of any such relationship, or an independently wrongful act by Facebook.” Facebook also contended that the unlawful UCL counterclaim should be dismissed for the same reasons as the interference counterclaims; the “unfair” prong “for failure to allege elements of an antitrust claim,” and the “fraudulent” prong for “failure to allege any misinformation.” Lastly, Facebook alleged that Brand Total’s counterclaim for declaratory judgment should be dismissed “because BrandTotal’s allegations amount to admissions that it breached Facebook’s terms of use under the Court’s interpretations of those terms in the context of denying BrandTotal’s motion for a TRO.”

The court agreed with Facebook’s assertions, for example, that “BrandTotal’s opposition brief does not address any of those contentions” in its counterclaim for declaratory judgment. In regards to the other counterclaims, the court found that the defendants did not allege “any particular motive by Facebook” in their interference counterclaims. The court also dismissed the UCL claims.

In sum, the court granted Facebook’s motion, and BrandTotal’s counterclaims were dismissed with leave to amend certain counterclaims, including the counterclaims for intentional interference with contract, intentional interference with prospective economic advantage, and the “unlawful” and “unfair” prongs of the UCL.

Facebook is represented by Wilmer Cutler Pickering Hale and Dorr and Hunton Andrews Kurth. BrandTotal and Unimania are represented by Husch Blackwell as well as Kronenberger Rosenfeld.