Mason v. Mach. Zone, Inc.

Decision Date17 March 2017
Docket NumberNo. 15-2469,15-2469
Citation851 F.3d 315
Parties Mia MASON, individually, and on behalf of all others similarly situated, Plaintiff-Appellant, v. MACHINE ZONE, INC., a Delaware corporation, Defendant-Appellee.
CourtU.S. Court of Appeals — Fourth Circuit

ARGUED: Alexander Glenn Tievsky, EDELSON PC, Chicago, Illinois, for Appellant. Michael Anthony Berta, Jr., ARNOLD & PORTER LLP, San Francisco, California, for Appellee. ON BRIEF: Ryan D. Andrews, Roger Perlstadt, EDELSON PC, Chicago, Illinois, for Appellant. Sean Morris, Los Angeles, California, Allyson Himelfarb, ARNOLD & PORTER LLP, Washington, D.C., for Appellee.

Before AGEE, KEENAN, and THACKER, Circuit Judges.

Affirmed by published opinion. Judge Keenan wrote the opinion, in which Judge Agee and Judge Thacker joined.

BARBARA MILANO KEENAN, Circuit Judge:

Mia Mason, a Maryland resident, filed a class action complaint against Machine Zone, Inc. (Machine Zone), the developer of a mobile video game entitled "Game of War: Fire Age" (Game of War), pursuant to Federal Rule of Civil Procedure 23(b)(3). In her complaint, Mason asserted a claim under Maryland's gambling loss recovery statute (the Loss Recovery Statute), Md. Code Ann., Crim. Law § 12-110.

According to Mason, she and thousands of similarly situated individuals lost money participating in an unlawful "gaming device," a component of Game of War that allows players to "spin" a virtual1 wheel to win virtual prizes for use within that video game. Mason sought recovery of alleged gambling losses that she claims she and each member of the putative class incurred as a result of "spinning" the virtual wheel. She also asserted claims on her own behalf and for the alleged class under the California Penal Code, and the California Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et seq. , as well as a common law claim of unjust enrichment.

The district court dismissed Mason's complaint under Federal Rule of Civil Procedure 12(b)(6). The court concluded that Mason did not "lose money" when she "spun" the virtual wheel and that, therefore, she had failed to state a claim under the Loss Recovery Statute. The court similarly dismissed Mason's claims under the California Penal Code and the UCL, as well as her claim of unjust enrichment. Mason appeals only from the court's dismissal of her claim under the Loss Recovery Statute. Upon our review, we affirm the district court's judgment.

I.

Machine Zone developed and operates Game of War, a popular video game that can be "downloaded" without charge on various mobile devices.2 Game of War is a game of strategy in which players build virtual towns and armies, and "battle" each other in "real time" in a virtual world. Players train their virtual armies, build their "empires," and join in alliances with other players, in an attempt to "conquer" the virtual world. While no payment is required to play Game of War, individuals engaged in playing the game can purchase virtual "gold," at prices ranging from $4.99 for 1,200 pieces of virtual gold, to $99.99 for 20,000 pieces of virtual gold. Players can use the virtual gold they have accumulated "to improve their virtual towns" and to progress more quickly in the game.

Players also can use their virtual gold to obtain virtual "chips" for use during one facet of the game called the Game of War casino (virtual casino, or Game of War casino). The virtual casino is a game of chance in which players can use their virtual chips for an opportunity to obtain virtual prizes for use within Game of War, by "spinning" a virtual wheel. When a player interacts with the virtual casino for the first time, she is entitled to one free spin of the virtual wheel. However, after the player uses her first free spin, she must use at least 5,000 virtual chips for each additional spin. If a player does not have enough virtual chips to spin the virtual wheel, the player must use virtual gold to obtain additional virtual chips.

When a player spins the virtual wheel, an "animated light" rotates around the wheel and, after a few seconds, the light stops on a picture of a virtual prize. The virtual prizes include virtual "resources" such as "wood" or "stone," which players can use to advance their position in the game, as well as additional virtual chips or virtual gold. Virtual prizes also sometimes include an opportunity to play another game of chance within Game of War. For example, one virtual prize available from the virtual wheel is an opportunity for the player to select one of three virtual "treasure chests." The selected chest reveals either virtual chips, gold, or other resources.

Players who spin the virtual wheel have no control over the outcome of the spin and, thus, no skill on the part of the player influences what virtual prize the player will receive. Instead, the outcome of any given spin is determined by the factors that Machine Zone has programmed into the computer software governing the virtual casino. Machine Zone has "programmed the odds" of the virtual wheel to make it more likely that a player will receive "basic items," such as virtual resources, rather than virtual treasure chests, gold, and chips.

A player who accumulates a substantial number of the most coveted virtual prizes, such as virtual gold, can list her Game of War account for sale on a "secondary market." The number and desirability of virtual prizes a player has acquired influence the cash value of the player's account on the secondary market. Players sell their accounts on eBay, Facebook, and other websites for hundreds, and sometimes thousands, of dollars. However, under Machine Zone's terms of service governing the use of Game of War, "Virtual Currency and Virtual Goods may never be redeemed for ‘real world’ money, goods or other items of monetary value from Machine Zone or any other person."

Mason began playing Game of War on her mobile device in early 2014. After using complimentary virtual chips for a chance to win a virtual prize at the Game of War casino, Mason began purchasing virtual gold in order to obtain more chips to continue interacting with the casino function. Between early 2014 and January 2015, Mason paid over $100 to participate in the virtual casino.

In seeking damages under the Loss Recovery Statute, Mason alleged that she lost money playing an unlawful "gaming device," namely, the Game of War casino, and sought "full disgorgement and restitution of any money [Machine Zone] has won" from Mason and from other Maryland residents who have lost money playing in the virtual casino. The district court concluded that Mason had failed to state a claim under the Loss Recovery Statute because "she did not lose money" in the virtual casino. The court similarly rejected Mason's assertion that her complaint stated claims under the California Penal Code, the UCL, and the theory of unjust enrichment. The court accordingly dismissed Mason's complaint in its entirety.

II.

Mason argues that the district court erred in dismissing pursuant to Rule 12(b)(6) her claim under the Loss Recovery Statute. She contends that she lost money while playing in the virtual casino, which she asserts is an unlawful "gaming device" within the meaning of the Loss Recovery Statute. Mason maintains that she lost money in the virtual casino because, after paying money to "spin" the virtual wheel, she " ‘won’ prizes that were worth less than the amount of money she spent to spin the wheel." Therefore, according to Mason, she is entitled to recover the difference between the amount of money she paid to spin the virtual wheel, and the monetary value of the virtual prizes she won. We disagree with Mason's arguments.

We review de novo the district court's dismissal of the complaint under Rule 12(b)(6), accepting Mason's well-pleaded allegations as true and drawing all reasonable inferences in her favor. See Belmora LLC v. Bayer Consumer Care AG , 819 F.3d 697, 705 (4th Cir. 2016). Under Maryland's Loss Recovery Statute, "[a] person who loses money at a [prohibited] gaming device ... may recover the money as if it were a common debt." Md. Code Ann., Crim. Law § 12-110(a). A "gaming device" is defined as "a game or device at which money or any other thing or consideration of value is bet, wagered, or gambled," and includes a "wheel of fortune." Id. § 12-101(d)(1)(ii), (d)(2).

As directed by the Maryland legislature, our review of a claim under the Loss Recovery Statute requires us to interpret Maryland's gambling statutes in a manner that "give[s] validity not only to the word, but to the spirit of the law." F.A.C.E. Trading, Inc. v. Todd , 393 Md. 364, 903 A.2d 348, 355 (2006) (quoting Gaither v. Cate , 156 Md. 254, 144 A. 239, 240 (1929) ) (citing Md. Code Ann., Crim. Law § 12-113 ). Thus, we must construe liberally the Maryland statutes addressing various gambling activities to prevent the unlawful conduct that the Maryland legislature intended to proscribe. Id. at 356 (citation omitted).

For purposes of this appeal, we assume, without deciding, that the virtual casino is a prohibited "gaming device." See Md. Code Ann., Crim. Law § 12-101(d). We agree with the district court's conclusion that Mason did not "lose[ ] money"...

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