United States District Court, N.D. California
GREGORY INGALLS and TONY HONG, individually and on behalf of all others similarly situated, Plaintiffs,
SPOTIFY USA, INC., a Delaware corporation, and DOES 1-10, inclusive, Defendants.
ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
WILLIAM ALSUP UNITED STATES DISTRICT JUDGE
unfair competition suit alleging violations of
California's Automatic Renewal Law (“ARL”),
defendant moves for summary judgment. Plaintiff opposes.
provides both free and paid online music streaming services.
The paid services are offered on a monthly subscription
basis, and automatically renew each month unless the
subscriber cancels. To encourage new members to sign up for
the paid service, Spotify offers a free 30-day trial. After
the trial expires, customers are automatically charged the
full amount, $9.99, for the next month, and every month
thereafter if they do not cancel.
Gregory Ingalls signed up to use the free version of
Spotify's music streaming service in November 2012. In
June 2013, Ingalls registered for a 30-day free trial of the
premium service (Ingalls Dep. 102:3-17). In order to register
for this plan, Spotify's website directed him to log in
to his existing Spotify account, and once he had done so, to
choose a method of payment. Text on the screen on which he
chose his method of payment explained “[i]f you
don't wish to continue enjoying Spotify Premium after
your trial, simply cancel before the trial ends and no
charges will apply” (Whitehead Decl. ¶¶
selecting a payment method, Ingalls was directed to another
page on which he was required to enter his payment
information. Immediately above a “confirm
payment” button on that page, text read:
If you do not cancel your subscription before the end of the
free trial the credit card you provide will automatically be
charged the Spotify Premium subscription fee of U.S. $9.99
(plus applicable taxes) per month, until you cancel. You can
cancel at any time by logging into your Spotify account and
follow the cancellation instructions. No refunds or credits
for partial monthly subscription period. For complete terms
and conditions, please see our Terms of service.
text was set apart from the rest of the screen in a
yellow-hued box (id. ¶ 7). There was no
separate mechanism on this page (for example, a check box) by
which Ingalls could consent to the terms of the free trial
(Dkt. 25-3 at 6).
deposition, Ingalls admitted that, had he read the
disclosure, he would have understood it (Ingalls Dep.
114:22-116:7), but that he “must not have” read
it (id. 116:15-20). He testified that the contrast
of the larger and more brightly-colored confirm payment
button drew attention away from the disclosure, and so he
might have “skimmed past it” (id
Ingalls confirmed his Spotify free-trial sign-up, the website
displayed a receipt on the screen (Whitehead Decl. ¶ 8).
Spotify also sent Ingalls an email receipt, which contained a
link to Spotify's 30-day free trial terms and conditions
(Ingalls Dep. 128:12-18; Commerson Decl. Exh. 8).
first two weeks of the free trial, Ingalls used Spotify
premium between three and eight hours per day, but he stopped
using it after those two weeks (Ingalls Dep. 131:10-132:14).
Ingalls did not, however, cancel the service, and so was
charged $9.99 each month from the expiration of his trial
until three months later when he eventually discovered the
charges on his credit card bill and cancelled (id.
on the foregoing, Ingalls alleges that Spotify failed to
comply with California's Automatic Renewal Law
(“ARL”) in three ways. First, it
allegedly failed to present automatic renewal terms in a
clear and conspicuous manner in visual proximity to the
request for consent to the offer as required by Section
17602(a)(1) of the California Business and Professions
Code. Second, it allegedly failed to
obtain consumers' affirmative consent for automatic
renewal as required by Section 17602(a)(2). Third,
it allegedly failed to provide an acknowledgment that
included its automatic renewal terms in a manner capable of
being retained by the consumer as required by Section
17602(a)(3). Ingalls brings these claims both directly under
the ARL and as a violation of the unlawful prong of Section
17200. He argues that he is entitled to both monetary and
judgment is proper when the pleadings and the evidence in the
record “show that there is no genuine dispute as to any
material fact and that the moving party is entitled to
judgment as a matter of law.” FRCP 56(a). A dispute is
genuine only if there is sufficient evidence for a reasonable
fact-finder to find for the non-moving party, and material
only if the fact may affect the outcome of the case. Once the
moving party has made a threshold showing, the burden shifts
to the nonmoving party to prove the existence of a triable
issue. Anderson v. Liberty Lobby, Inc., 477 U.S.
242, 248-49 (1986). In this analysis, all reasonable
inferences must be drawn in the light most favorable to
Ingalls. See Johnson v. Rancho Santiago Cmty. Coll.
Dist., 623 F.3d 1011, 1018 (9th Cir. 2010).
moves for summary judgment on three grounds: (1) the ARL
confers no private right of action, so Ingalls' ARL claim
fails as a matter of law; (2) Ingalls lacks both Article III
and statutory standing because he suffered no injury, and
even if he did, the injury was not caused by ARL
violations; and (3) Ingalls lacks standing to seek injunctive
relief. Each is analyzed in turn.
Private Right of Action Under The ARL.
parties dispute whether there is a private right of action
arising directly under the ARL. The section of the ARL
dealing with remedies states that “a violation of this
article shall not be a crime. However, all available civil
remedies that apply to a violation of this article may be
employed.” Cal. Bus. & Prof. Code Section 17604. In
other words, criminal liability (under state law) is
expressly precluded under Section 17604, but parties can
redress violations of the ARL by suing under one of the
sections of Article 9 that provides a civil remedy.
itself does not provide a civil remedy. Nothing in its
language or legislative history suggests otherwise. See
Johnson v. Pluralsight, LLC, __F.Supp.3d __, 2017 WL
661953 (E.D. Cal. Feb. 17, 2017) (Judge Morrison England,
Jr.); Roz v. Nestle Waters N. Am., Inc., No.
2:16-cv-04418-SVM-JEM, 2017 WL 132853 (C.D. Cal. Jan. 11,