United States District Court, D. Alaska
ORDER RE MOTION FOR PARTIAL SUMMARY JUDGMENT LIMITING
POTENTIAL DAMAGES AND MOTION TO STRIKE OR FOR LEAVE TO FILE
SURREPLY
Sharon
L. Gleason UNITED STATES DISTRICT JUDGE
Before
the Court are two motions. At Docket 199 is Defendant Gene by
Gene, Ltd.'s (“Gene by Gene”) Motion for
Partial Summary Judgment Limiting Potential Damages.
Plaintiff Michael Cole filed a redacted response in
opposition at Docket 203 and an unredacted version at Docket
206-1. Gene by Gene filed a reply at Docket 210.
At
Docket 211 is Mr. Cole's Motion to Strike or for Leave to
File Surreply. Gene by Gene filed a response in opposition at
Docket 212. Mr. Cole filed a reply at Docket 213.
Oral
argument was not requested for either of these motions and
was not necessary to the Court's determinations.
BACKGROUND
The
parties are familiar with the facts of this
case.[2] The Court sets forth only the facts that
are relevant to this order, presented in the light most
favorable to Mr. Cole for purposes of the motion for partial
summary judgment. On June 27, 2013, Mr. Cole purchased a DNA
testing kit from Gene by Gene, a commercial genealogy
company.[3] Gene by Gene encouraged Mr. Cole to join
surname affinity groups, known as “projects.” Mr.
Cole joined projects both before and after receiving his test
results.[4] Mr. Cole “did not understand that,
by joining a project, project administrators would need [his]
relevant DNA results to connect [him] with others in the
project[.]”[5] Prior to receiving his test results, Mr.
Cole discovered that information including his name, DNA test
kit number, and grandmother's maiden name appeared on a
website called Rootsweb, which is not connected to Gene by
Gene.[6] His information was removed from Rootsweb
on January 31, 2014.[7]
On May
13, 2014, Mr. Cole filed his Complaint in this Court, in
which he alleged on his own behalf and on behalf of a
proposed class a violation of Alaska's Genetic Privacy
Act (“the Act”).[8] On June 30, 2017, the Court
denied Gene by Gene's Motion to Dismiss Pursuant to Rule
12(b)(1) and 12(h)(3).[9] On July 28, 2017, the Court denied Gene by
Gene's Motion for Summary Judgment, which had asserted
that the Act's statutory damages violate Alaska's
punitive damages statute and the U.S.
Constitution.[10] On the same day, the Court denied Mr.
Cole's Motion for Class Certification.[11] On October
12, 2017, the Ninth Circuit granted Mr. Cole's petition
to file an interlocutory appeal of the class certification
denial.[12]On February 8, 2018, this Court granted
the parties' Joint Motion to Vacate Trial Date and Stay
Proceedings Pending Appeal.[13] On August 21, 2018, the Ninth
Circuit affirmed the class certification
denial.[14] On October 10, 2018, the Ninth
Circuit's judgment took effect.[15] On December 21, 2018,
Gene by Gene filed the instant motion for partial summary
judgment.[16]
LEGAL
STANDARD
The
Court set forth the summary judgment standard in its previous
summary judgment order:
Federal Rule of Civil Procedure 56(a) directs a court to
“grant summary judgment if the movant shows that there
is no genuine dispute as to any material fact and the movant
is entitled to judgment as a matter of law.” The burden
of showing the absence of a genuine dispute of material fact
lies with the moving party. [Celotex Corp. v.
Catrett, 477 U.S. 317, 325 (1986).] When considering a
motion for summary judgment, a court must accept as true all
evidence presented by the non-moving party, and draw
“all justifiable inferences” in the non-moving
party's favor. [Anderson v. Liberty Lobby, Inc.,
477 U.S. 242, 255 (1986) (citing Adickes v. S.H. Kress
& Co., 398 U.S. 144, 158-59 (1970)).] To reach the
level of a genuine dispute, the evidence must be such
“that a reasonable jury could return a verdict for the
non-moving party.” [Id. at 248.] If the
evidence provided by the non-moving party is “merely
colorable” or “not significantly probative,
” summary judgment is appropriate. [Id. at
249.][17]
DISCUSSION
I.
Plaintiff's Motion to Strike
Mr.
Cole seeks to strike Section II.A of Gene by Gene's reply
in support of its motion for partial summary
judgment.[18] That section is titled: “Plaintiff
has not proven that Cole's information was disclosed to
Barton/ Worldfamilies.”[19] Mr. Cole maintains that
“Gene by Gene did not present that issue-which goes to
Defendant's liability, rather than the amount of
statutory damages at play-in its motion [for partial summary
judgment].”[20] Gene by Gene responds that its reply
included “no new argument” and “[n]o new
evidence.” Rather, Gene by Gene asserts, it
“argued in opening that Plaintiff cannot establish a
disclosure that resulted in a profit.”[21] Gene by Gene
also maintains that Mr. Cole raised the disclosure argument
in his opposition to Gene by Gene's motion.[22]
“An
argument first raised in a reply brief need not be
considered.”[23] Local Civil Rule 7.1(c) restricts reply
memoranda “to rebuttal of factual and legal arguments
raised in the opposition.”[24] “The rule [against
introducing new facts or arguments on reply] exists to guard
against unfairness and surprise.”[25] The Court may
strike materials filed in violation of the local
rules.[26]
Gene by
Gene's partial summary judgment motion indicates at
several points that it is focused solely on the question of
potential damages. The motion is titled as seeking
“Partial Summary Judgment Limiting Potential
Damages.” The introduction only alleges that Mr. Cole
has failed “to meet his burden in establishing that the
alleged disclosure resulted in profit.” Therefore, Gene
by Gene seeks to limit Mr. Cole's potential damages
“to a maximum of $5, 000 . . . if he is able to prove
liability.” In presenting the issues, Gene by Gene
considers only whether the alleged violations were
“done for, or resulted in, profit to Gene by
Gene.”[27]
In his
opposition, Mr. Cole was explicit as to his understanding of
the scope of Gene by Gene's motion:
Gene by Gene seeks partial summary judgment only on the issue
of “profit.” It does not seek any finding as to
whether it disclosed Plaintiff's “DNA
analysis” as contemplated by the Act (whether in terms
of the public posting made by Ralph Taylor, or its
disclosures to Group Administrators.) Nor does it ask the
Court to decide whether any alleged or proven disclosure
violated the Act.[28]
One
paragraph of Section III of the Factual Background portion of
Mr. Cole's opposition does address the disclosure issue.
That section is titled: “Gene by Gene disclosed Mr.
Cole's DNA test results to group administrators, which
resulted in benefits for the company.”[29] However, no
aspect of Mr. Cole's ensuing argument relies on this
section's brief disclosure discussion; the argument is
devoted to the question of whether Gene by Gene
profited.[30]
Unlike
the disclosure discussion in Mr. Cole's opposition,
Section II.A of Gene by Gene's reply argues that
“Plaintiff cannot produce evidence that Cole's
genetic information was actually disclosed through this
path.”[31] Gene by Gene's reply thus raises a
new liability argument, rather than a “rebuttal of
factual and legal arguments raised in the opposition”
on the damages issue.[32] Accordingly, in order to avoid
“unfairness and surprise” to Mr. Cole, the Court
will grant Mr. Cole's motion to strike this portion of
the reply and will focus solely on the damages
issue.[33]
II.
Gene by Gene's Motion for Partial Summary
Judgment
The Act
provides for the following damages: “In addition to the
actual damages suffered by the person, a person violating
this chapter shall be liable to the person for damages in the
amount of $5, 000 or, if the violation resulted in profit or
monetary gain to the violator, $100,
000.”[34]
Gene by
Gene maintains that it is entitled to summary judgment as to
its potential $100, 000 liability. It asserts that no
reasonable jury could find that Gene by Gene profited from
the alleged disclosure of Mr. Cole's information. Gene by
Gene makes two arguments to support its claim that it
“did not profit from the Rootsweb
disclosure.”[35] First, Gene by Gene maintains that Mr.
“Cole can only speculate as to whether any profit
occurred from the unidentified
disclosure.”[36]Second, Gene by Gene argues that Mr. Cole
“cannot produce evidence from which a jury could
determine the amount of profits generated from such
disclosure.”[37]
Although
Gene by Gene is correct that a litigant cannot survive
summary judgment by “speculating about the potential
intersection of multiple possibilities, ” Mr. Cole is
not obligated at this stage to “prov[e]” that
Gene by Gene profited from the alleged disclosure. He must
merely produce evidence “such ‘that a reasonable
jury could return a verdict'” in his favor as to
that issue.[38] Furthermore, “profit” is not
the only means by which a violator may face $100, 000
liability. The Act provides such liability for a violator
that has received “profit or monetary
gain.”[39]
Gene by
Gene maintains that Mr. “Cole can only speculate as to
whether any profit occurred from the unidentified
disclosure.”[40] However, Gene by Gene stated in its
response to Interrogatory No. 12:
[Gene by Gene] benefits from a network effect associated with
its customers' voluntary participation in the comparative
databases or the family project groups. As these projects
grow in popularity, they can attract additional people who
are interested in genealogy and ancestry research. Likewise,
as the project databases become larger, a prospective
customer may be more interested in purchasing a DNA test kit
and joining the project because there is a greater likelihood
that the prospective customer would be able to successfully
perform genealogical research. In addition, project members
or family project group administrators may seek out and
encourage prospective customers to purchase a DNA test kit
and join a project in order to further research that
project's ancestral lineage. [Gene by Gene] does not
track or quantify the indirect benefits that it
receives.[41]
The
Court has previously quoted the deposition testimony of
Bennett Greenspan, Gene by Gene's Founder and President.
Mr. Greenspan “testified that when customers join
projects, Gene by Gene ‘increases [its] ability to
reach out to other potential test
takers.'”[42] Nir Leibovich, another Gene by Gene
executive, characterized project administrators' outreach
to potential customers as “basically like [] organic
viral marketing[.]”[43] Data suggest that the project
tied to the alleged disclosure of Mr. Cole's information
is no exception to this phenomenon.[44]
Gene by
Gene relies on two inapposite cases to support its claim that
Mr. Cole's profit assertion is speculative. First, it
cites to the Alaska Supreme Court's opinion in Mahan
v. Arctic Catering, Inc. for the proposition that
“Alaska state law [] condemns permitting a case to go
to a jury on mere speculation.”[45] The
Mahan court upheld summary judgment for an employer
because the employee, in asserting her wrongful termination
claim, “offered neither direct nor strong
circumstantial evidence suggesting that [the employer]
actually fired her for retaliatory reasons. At most, she
presented a theory of retaliation based on subjective belief
and an attenuated circumstantial chain of
events.”[46] The plaintiff in Mahan was
required to overcome a heightened showing of proof at summary
judgment due to the “three-part
[burden-shifting]” analysis distinctive to employment
discrimination claims.[47]
Second,
Gene by Gene relies on Conam Alaska v. Bell Lavalin,
Inc., a case in which the Alaska Supreme Court reversed
a judgment after finding that the evidence was insufficient
to support an award of damages.[48] Unlike here, the Alaska
Supreme Court's ...