United States District Court, N.D. California, San Jose Division
DENNIS DUNKEL, CY STAPLETON, COLLETTE TAPIA and EUGENE KRICHMAR, on behalf of themselves and all others similarly situated and on behalf of the general public of the United States Plaintiffs,
EBAY INC., Defendant.
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [Re: Docket Nos. 53, 54, 57, 64]
EDWARD J. DAVILA, District Judge
Presently before the court is Defendant Ebay Inc.'s ("Defendant") Motion to Dismiss Plaintiffs' Dennis Dunkel, Cy Stapleton, Collette Tapia, and Eugene Krichmar's (collectively, "Plaintiffs") Second Amended Complaint. The court has subject matter jurisdiction pursuant to 28 U.S.C. § 1332(d)(2) and personal jurisdiction and venue are proper because Defendant is a corporation with headquarters in Santa Clara County. The court found these matters suitable for decision without oral argument pursuant to Civil Local Rule 7-1(b) and previously vacated the hearing. After carefully reviewing the parties' briefing, and for the following reasons, the court GRANTS Defendant's Motion to Dismiss without leave to amend.
a. Factual Background
This case arises out of Defendant's alleged suspension of Plaintiffs' eBay accounts for failure to meet Defendant's Seller Performance Standards. Defendant eBay is "the world's largest and most popular person-to-person trading community on the internet." Second Amended Complaint ("SAC") at ¶ 15, Docket Item No. 53. The users of Defendant's site must agree to the terms of its User Agreement, which "define[s] the rights and obligations of eBay and each respective customer." Id. at ¶¶ 134-136, Dkt. No. 53. In November 2008, Defendant implemented its Detailed Seller Rating Policy. Id. at ¶ 17. These Detailed Seller Ratings ("DSR") are feedback forms that buyers on eBay can fill out to rate the performance of eBay sellers on a one to five scale based on the following criteria: (1) item described; (2) communication (customer service); (3) shipping time; and (4) shipping and handling charges. Id. at ¶ 17. In April 2010, Defendant also enacted the "Seller Performance Standards, " which lists the "minimum performances standards that all sellers are required to meet to sell on eBay." Id. at ¶ 18. The Seller Performance Standards require, inter alia, that the number of 1 and 2 ratings that eBay sellers receive on their DSRs from U.S. buyers not exceed a certain percentage of their total transactions. Id. at ¶ 19. Ebay sellers are also expected to minimize the amount of negative and neutral feedback they receive. Id. at ¶ 21. Defendant warned that failure to comply with the Seller Performance Standards policy could result in the suspension of the seller's account. Id. at ¶ 22. Defendant also has a "Top-Rated Seller Benefits" program, which gives sellers certain benefits when ratings of 1 or 2 do not exceed a percentage of 0.50. Id. at ¶¶ 25-27. The User Agreement gives Defendant the right to suspend user accounts under certain conditions. Id. at ¶ 39. Plaintiffs allege that, contrary to these policies, Defendant indiscriminately suspends sellers' accounts for "its own policy reasons" and "to reach fixed quota goals." Id. at ¶¶ 36, 40.
b. Procedural Background
Plaintiffs Dennis Dunkel and Cy Stapleton filed this purported class action on March 22, 2012 asserting claims of breach of contract, breach of implied covenant of good faith and fair dealing, unfair competition in violation of Cal. Bus & Prof. Code § 17200 et seq., money had and received, unjust enrichment, and fraud. Plaintiffs' Class Action Complaint ("Compl.") at ¶¶ 31-125, Docket Item No. 1. Through this original Complaint, the named plaintiffs sought to represent a class defined as:
[a]ll companies and individuals who are unable to sell and/or list its [sic] products on eBay's website because their accounts were closed or limited by eBay and who are interested in pursuing this lawsuit.
Compl. at ¶¶ 1, 22, Dkt. No. 1.
Defendant filed its first Motion to Dismiss on May 16, 2012. See Defendant's Motion to Dismiss ("MTD"), Docket Item No. 17. Plaintiffs did not file an opposition to Defendant's motion, but instead, on June 18, 2012, filed their First Amended Complaint. See First Amended Complaint ("FAC"), Docket Item No. 22. In the FAC, Plaintiffs added Colette Tapia and Eugene Krichmar as plaintiffs and alleged that Defendant, by manipulating DSRs, improperly terminated Plaintiffs' accounts. See id. The purported class definition and the causes of action remained the same.
Defendant filed its Motion to Dismiss Plaintiff's FAC on July 2, 2012. Docket Item No. 23. Again, Plaintiffs did not file an opposition. Instead, more than a week after the deadline for such an opposition, Plaintiffs filed their Motion for Leave to File a Second Amended Complaint. See Motion for Leave to File a Second Amended Complaint ("MLSAC"), Docket Item No. 30. In the proposed Second Amended Complaint, Plaintiffs did not change any of the allegations or the causes of action against Defendant. Rather, Plaintiffs added Amy and Fred Rickel as plaintiffs and asserted twelve new causes of action against PayPal, though Plaintiffs did not formally add PayPal as a defendant. Plaintiffs also purported to represent a second class, defined as:
[a]ll PayPal, Inc. account holders whose funds have been held by Paypal [sic] or whose accounts were closed, suspended, or limited by PayPal.
Dkt. No. 30-3 at ¶ 116.
On January 31, 2013, this court denied Plaintiffs' MLSAC on the grounds that it was likely brought in bad faith, stood to prejudice Defendant, and would likely impede judicial economy. See Order Denying Plaintiffs' Motion For Leave to File A Second Complaint ("Order"), Docket Item No. 52. In that Order, the court also granted Defendant's pending Motion to Dismiss Plaintiffs' FAC. Order at 19: 4-8, Dkt. No. 52. The court dismissed with prejudice Plaintiffs' unjust enrichment claim and dismissed with leave to amend Plaintiffs' breach of contract, breach of the implied covenant of good faith and fair dealing, UCL, money had and received, and fraud claims. Id.
Plaintiffs filed their SAC on March 4, 2013. See SAC, Dkt. No. 53. In this SAC, Plaintiffs remove the unjust enrichment cause of action. However, the other allegations or causes of action against Defendant remain largely the same: breach of contract, breach of the implied covenant of good faith and fair dealing, violations of the UCL, money had and received, and fraud. See id. Further, despite the court's denial of Plaintiffs' MLSAC, Plaintiffs again assert causes of action against PayPal but do not ...