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Imber-Gluck v. Google, Inc.

United States District Court, N.D. California, San Jose Division

July 21, 2014

ILANA IMBER-GLUCK, on Behalf of Herself and All Others Similarly Situated, Plaintiff,
v.
GOOGLE, INC., a Delaware Corporation. Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT GOOGLE, INC.'S MOTION TO DISMISS [Re: Docket No. 20]

RONALD M. WHYTE, District Judge.

Google, Inc. ("Google"), a Delaware corporation with its headquarters and principal place of business in California, is a leading seller of software applications ("Apps") users can download onto their mobile computing devices. See Plaintiff's Class Action Complaint ("Compl."), Dkt. No. 1, ¶¶ 2-3. Plaintiff Ilana Imber-Gluck brings the instant class action complaint "on behalf of herself and other parents and guardians whose minor children: (a) downloaded from [Google] a free or modestly priced [App]; and (b) then incurred charges for in-game-related voidable purchases that the minor was induced by Google to make, without the parents' and guardians' knowledge or authorization." Id. at ¶ 1.

Pursuant to Federal Rule of Civil Procedure 12(b)(6), Google moves to dismiss plaintiff's class action complaint. Motion to Dismiss ("MTD"), Dkt. No. 20. The court GRANTS in part and DENIES in part Google's motion to dismiss.

I. FACTUAL AND PROCEDURAL BACKGROUND

Plaintiff alleges the following:

Google operates a digital distribution platform known as "Google Play" that permits users to browse and download applications developed for the Android operating system. Compl. ¶¶ 2-3. Apps, which are often games, are available through Google Play either free-of-charge or for a fee. Id. Many of these gaming Apps are designed to allow purchases of what Google refers to as "In-App Purchases" or "In-App Content, " i.e., virtual supplies, cash, and content, which are designed to be used within the game itself ("Game Currency"). Id. at ¶ 3.

Prior to the purchase of content from Google Play, a user must establish a Google Play account. Compl. ¶ 18. Opening an account requires, among other things, creating a username and password, providing certain contact and personal information, and agreeing to Google's Terms of Service ("Terms of Service").[1] Id. In order to purchase content from Google Play, one typically supplies Google with a credit or debit card number or PayPal account through Google's "Google Wallet" function. Id. For each digital purchase, users who specify a credit, debit, or PayPal payment will have Google automatically draw funds from the account holder's specified credit or debit card or PayPal account. Id.

The purchase of an App or any Game Currency is a transaction completed directly between Google and the consumer. Compl. ¶ 17. Immediately prior to the purchase of content from Google Play, Google requires the account holder to enter her password. Id. at ¶ 19. Once the password is entered, the user is permitted to make subsequent purchases through her Google Play account for up to 30 minutes without reentering the password. Id.

In or around February 2012, plaintiff established a Google Play account utilizing her debit card and placed it on file to make future purchases of Google Play downloads and applications. Compl. ¶10. In February 2014, plaintiff downloaded the App Marvel Run Jump Smash ("Run Jump Smash") onto her Samsung Galaxy Tab 210.1. Id. Within 30 minutes of permitting the download, one of plaintiff's minor sons made subsequent In-App Purchases of virtual content without plaintiff's authorization. Id. Plaintiff received an email notification that her Google Play account had been charged $65.95 for the purchased virtual content. Id.

On March 6, 2014, plaintiff filed a class action complaint, individually and on behalf of all others similarly situated, seeking monetary, declaratory, and equitable relief under California's contract laws, Consumers Legal Remedies Act, Business and Professions Code § 17200, et seq., and/or for unjust enrichment. Compl. ¶ 5. The complaint asserts claims for: (1) declaratory judgment pursuant to 28 U.S.C. § 2201, et seq.; (2) violation of the California Consumers Legal Remedies Act; (3) violation of California's Unfair Competition Law; (4) unjust enrichment/restitution; and (5) breach of the duty of good faith and fair dealing. See Compl. In response, Google filed the instant motion to dismiss. See MTD.

II. ANALYSIS

A. Motions to Dismiss and Leave to Amend

To survive a motion to dismiss pursuant to Rule 12(b)(6), a complaint must make "factual allegations [that are sufficient] to raise a right to relief above a speculative level." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). On a motion to dismiss, a court must take all of the factual allegations in a complaint as true, but the court need not accept as true "[t]hreadbare recitals of the elements of a cause of action, " or legal conclusions presented as facts. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). A trial court may also dismiss a claim sua sponte under Rule 12(b)(6) if it determines a claimant clearly cannot win relief. Omar v. Sea-Land Service, Inc., 813 F.2d 986, 991 (9th Cir. 1987).

When an allegation involves fraud pursuant to Rule 9(b), a heightened pleading standard applies and a party must state with particularity the circumstances constituting fraud or mistake. Fed.R.Civ.P. 9(b). A motion to dismiss a complaint or claim grounded in fraud under Rule 9(b) for failure to plead with particularity is the functional equivalent of a motion to dismiss under Rule 12(b)(6) for failure to state a claim. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). "If dismissal is granted under either Rule 12(b)(6) or 9(b), leave to amend should be allowed unless the pleading could not possibly be cured by the allegation of other facts." In re Apple In-App Purchase Litig., 855 F.Supp.2d 1030, 1040 (N.D. Cal. 2012) (citing Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000) and Vess, 317 F.3d at 1108).

B. Declaratory Judgment

Plaintiff seeks a declaratory judgment by this court pursuant to 28 U.S.C. § 2201, et seq. that:

(a) this action may proceed and be maintained as a class action; (b) the contracts between [d]efendant and the [c]lass members relating to the purchase of Game Currency are voidable at the option of the respective [c]lass members on behalf of their minor children; (c) if the [c]lass members elect to void the contracts, they will be entitled to restitution; (d) an award of reasonable attorneys' fees and costs of suit to [p]laintiff and the [c]lass is appropriate; and (e) such other and further relief as is necessary and just may be appropriate as well.

Compl. ¶ 50. Plaintiff's declaratory judgment claim rests on plaintiff's allegations that each purchase of Game Currency is a contract between Google and minor children, which parents can disaffirm. Google moves to dismiss plaintiff's declaratory judgment claim on two alternative grounds: (1) if the contracts are with plaintiff's minor child, plaintiff does not have standing to disaffirm the contracts; and (2) that the contracts in question are with plaintiff and not plaintiff's minor child.

1. Standing of Plaintiff to Disaffirm the Contracts of a Minor Child

Plaintiff alleges California Family Code § 6710 provides that the contract of a minor is voidable by disaffirmance by the minor or a parent or guardian on behalf of a minor. Compl. ¶¶ 46-49. Google argues that if any contracts were made with plaintiff's minor child, as plaintiff alleges, this claim should be dismissed as a matter of law because plaintiff does not have standing to disaffirm the contracts of her minor child as she did not sue on behalf of her minor child. MTD 3-5.

Plaintiff acknowledges that under California Family Code § 6710, the contract of a minor may only be disaffirmed by the minor, but argues that § 6710 only refers to which party in the transaction can disaffirm, averring "it would be untenable to require the minors (some younger than four years old) to knowingly express disaffirmance." MTD 6-7 (citing Apple In-App Purchase Litig., 855 F.Supp.2d at 1036 n.4). However, plaintiff is incorrect in both her assumption that § 6710 requires the minor to "knowingly express disaffirmance" and that such a requirement would undermine the utility of § 6710. Id. at 7. As Google points out, express disaffirmance by the minor himself or herself is not required because a legal representative of the minor may bring the case on the minor's behalf. Google, Inc.'s Reply in Support of MTD ("Reply"), Dkt. No. 24, at 1.

The power to disaffirm a minor's contract does not extend to the minor's parents. See I.B. ex rel. Fife v. Facebook, Inc., 905 F.Supp.2d 989, 1004-05 (N.D. Cal. 2012) (dismissing the claims of plaintiffs who did not bring their claims on behalf of their minor children). Because plaintiff did not bring suit on behalf of her minor ...


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