George v. eBay, Inc.

• Decision Date: 12 November 2021
• Docket Number: A162129
• Citation: 71 Cal.App.5th 620,286 Cal.Rptr.3d 492
• Parties: Gary GEORGE et al., Plaintiffs and Appellants, v. EBAY, INC., Defendant and Respondent.
• Court: California Court of Appeals Court of Appeals

71 Cal.App.5th 620

286 Cal.Rptr.3d 492

Gary GEORGE et al., Plaintiffs and Appellants,

v.EBAY, INC., Defendant and Respondent.

A162129

Court of Appeal, First District, Division 2, California.

Filed November 12, 2021

Franklin & Franklin APC, J. David Franklin, La Jolla; Law Offices of Anthony A. Ferrigno, Anthony A. Ferrigno, David Franklin, for Plaintiffs and Appellants Gary George et al.

McDermott Will & Emery LLP, William P. Donovan, Jr., Los Angeles; Irene Y. Le, Los Angeles; Cooley LLP, Matthew D. Brown, Kristine Forderer, San Francisco, for Defendant and Respondent eBay, Inc.

Richman, Acting P.J. Appellants Gary George and Nicole Pitteloud were two of a group of plaintiffs who sued eBay, Inc. and PayPal, Inc., challenging various provisions in their respective user agreements. Plaintiffs’ operative second amended complaint alleged 23 causes of action, 13 against eBay alone, seven against PayPal alone, and three against both defendants. Both defendants demurred to the second amended complaint, and the trial court sustained the demurrers without leave to amend as to 20 of the causes of action, including to 14 of the 16 causes of action alleged against eBay. The court thus allowed three causes of action to proceed, two of which were against eBay—the first, for breach of contract (against both defendants), and the 17th for violation of the covenant of good faith and fair dealing.

Some three and one-half years later, appellants opted out of the case that was proceeding against eBay, and voluntarily dismissed the two causes of action against it. Judgment of dismissal was entered against them, from which appellants appeal, contending the trial court got it wrong as to 11 of the causes of action as to which the trial court sustained the demurrer without leave to amend. We reject the contention, concluding the trial court properly sustained the demurrer and did not abuse its discretion in doing so without leave to amend. We thus affirm the judgment.

BACKGROUND

The General Overview

This is the third appeal to come before us in this case, a case that began in August 2015, when a group of plaintiffs—current (or former) sellers on eBay who had listings on eBay's website—filed their original complaint. It named as defendants eBay, a global e-commerce platform alleged by plaintiffs to have well over 100,000,000 active users, and PayPal, the entity that provided online payment services for individuals and businesses. In November 2015, the case was removed to the Federal District Court, and four months later remanded to superior court.

In October 2016, plaintiffs filed a first amended complaint (FAC), a putative class action against eBay and PayPal seeking "damages, restitution, injunctive and declaratory relief, and accounting." Both defendants filed demurrers, and on April 13, 2017, the Honorable George Hernandez, a most experienced superior court judge, issued a comprehensive, four-page single-spaced, tentative ruling that, analyzing the FAC cause of action by cause of action, sustained the demurrer in its entirety, but granted leave to amend. And in the course of his ruling, Judge Hernandez expressed his overarching concern that plaintiffs had merely stated "general policy grievances" and that "[w]ithout additional factual detail, the complaint amounts to a general attack on unfavorable contract provisions and/or policies and fails to state a claim by any individual plaintiff."

Plaintiffs did not contest the tentative ruling, and it became the order of the court.

The Second Amended Complaint

In May 2017, 10 plaintiffs, including appellants, filed a second amended complaint (SAC). As noted, the SAC alleged 23 causes of action, 16 of which were against eBay: 13 against eBay alone and three against both defendants. The SAC is a massive document, over 250 pages long with its attachments. The SAC has 79 pages of allegations containing 258 paragraphs, and has attached to it 32 exhibits, including the user agreements of the two defendants and 26 separate eBay policies incorporated into its user agreement.

eBay and PayPal demurred again. Again Judge Hernandez issued a comprehensive tentative ruling. This time plaintiffs contested and, following argument, Judge Hernandez issued separate orders on the demurrers, sustaining them without leave to amend as to 20 of the 23 causes of action alleged. As specifically applicable here, the claims against eBay, Judge Hernandez sustained the demurrer without leave to amend as to 14 of the 16 claims, leaving extant only two—the first, for breach of contract (alleged against both defendants) and the 17th, for violation of the covenant of good faith and fair dealing.

Plaintiffs petitioned for a writ of mandate, which we summarily denied.

In short, as to eBay two claims remained, two claims that continue to this day.¹

The First Appeal: The Case Against PayPal

As noted, PayPal also filed a demurrer. As also noted, as to the claims alleged against PayPal, Judge Hernandez sustained the demurrer as to most of those causes of action without leave to amend, leaving only two—the first, for breach of contract (against both defendants) and the 23rd, for an accounting.

In July 2019, plaintiffs moved to dismiss the first and 23rd causes of action against PayPal. The trial court granted the motion, and pursuant to a stipulated request entered judgment for PayPal. Plaintiffs appealed, and on March 2, 2021, we filed our published opinion affirming the judgment: Chen v. PayPal, Inc. (2021) 61 Cal.App.5th 559, 275 Cal.Rptr.3d 767 ( PayPal ). So, PayPal is no longer a party in the case.

The Second Appeal: Denial of Class Certification

In May 2019, plaintiffs filed a motion for class certification, seeking certification of classes for the first and 17th causes of action. The trial court denied certification for both classes. Plaintiffs appealed, and on August 24, 2021, we filed our unpublished opinion affirming the trial court: Chen v. eBay (Aug. 24, 2021, A158417, 2021 WL 3732121 [nonpub. opn.]).²

In short, the case continues against eBay, as individual claims by individual plaintiffs on two causes of action. But not appellants.

In early 2021, appellants dismissed with prejudice the first and 17th causes of action, thus abandoning the two claims that had been proceeding on their behalf. Judgment of dismissal was entered, from which appellants filed this appeal.

DISCUSSION

The Standard of Review

The standard of review governing an appeal from a demurrer sustained without leave to amend is well established, summarized, for example, by us in Chiatello v. City and County of San Francisco (2010) 189 Cal.App.4th 472, 480, 117 Cal.Rptr.3d 169 ( Chiatello ): " ‘Because this case comes to us on a demurrer for failure to state a cause of action, we accept as true the well-pleaded allegations in plaintiffs’ [second] amended complaint. " ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. [Citation.] We also consider matters which may be judicially noticed.’ [Citation.] Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context. [Citation.]" ’ [Citation.] We likewise accept facts that are reasonably implied or may be inferred from the complaint's express allegations. [Citations.] ‘ " ‘A demurrer tests the legal sufficiency of the complaint ....’ [Citations.] On appeal from a dismissal after an order sustaining a demurrer, we review the order de novo, exercising our independent judgment about whether the complaint states a cause of action as a matter of law. [Citations.] When the trial court sustains a demurrer without leave to amend, we must also consider whether the complaint might state a cause of action if a defect could reasonably be cured by amendment. If the defect can be cured, then the judgment of dismissal must be reversed to allow the plaintiff an opportunity to do so. The plaintiff bears the burden of demonstrating a reasonable possibility to cure any defect by amendment." ’ " (Accord, O'Grady v. Merchant Exchange Productions, Inc. (2019) 41 Cal.App.5th 771, 776–777, 254 Cal.Rptr.3d 494.)

We also assume the attachments to the complaint are true, and they take precedence over any conflicting allegations in the SAC. ( Brakke v. Economic Concepts, Inc. (2013) 213 Cal.App.4th 761, 767–768, 153 Cal.Rptr.3d 1.)

Finally, we "will affirm if there is any ground on which the demurrer can properly be sustained, whether or not the trial court relied on proper grounds or the defendant asserted a proper ground in the trial court proceedings." ( Martin v. Bridgeport Community Assn., Inc. (2009) 173 Cal.App.4th 1024, 1031, 93 Cal.Rptr.3d 405 ; see Chiatello , supra , 189 Cal.App.4th at p. 480, 117 Cal.Rptr.3d 169.)

Summary of Appellants’ Appeal

As indicated above, appellants appeal the ruling on 11 causes of action, the second, seventh, eighth, ninth, 12th, 13th, 14th, 15th, 16th, 19th, and 20th. Fundamental to appellants’ argument on four of the causes of action—the second, ninth, 15th, and 20th—is the contention that the provisions attacked in these causes of action are unconscionable. Appellants’ brief lumps these four causes of action together in its discussion, and so will we.

In addition, the 12th, 13th, and 14th causes of action are all based on the fundamental premise that eBay hides listings, "secretly," "completely," and on a "regularly recurring basis." And as appellants’ brief acknowledges, these three causes of action are related, their brief describing the 13th cause of action as "similar" to the 12th, and the 12th and 13th as "highly relevant" to the 14th. We will also address these three causes of action together.

Against that background, we analyze the SAC, and conclude that the demurrer was properly sustained as to all of the challenged causes of action, as they all fail to state a claim.

None of the Eleven Causes of Action States a Claim The Second, Ninth, 15th, and 20th Causes of...