Marshall Block v. Ebay, Inc.
2014 U.S. App. LEXIS 5995
| 9th Cir. | 2014Background
- Marshall Block, an eBay seller, sued on behalf of similarly situated sellers alleging eBay’s Automatic Bidding system breached two clauses of the eBay User Agreement, violated California’s Unfair Competition Law (UCL), and tortiously interfered with prospective economic advantage.
- eBay’s Automatic Bidding allows a bidder to submit a confidential maximum bid; eBay’s software automatically places incremented bids up to that maximum.
- The challenged User Agreement provisions: (1) “We are not involved in the actual transaction between buyers and sellers” (Limitation of Liability section), and (2) “No agency…relationship is intended or created by this Agreement.”
- The district court dismissed Block’s complaint under Fed. R. Civ. P. 12(b)(6) with leave to amend for some claims; Block did not amend and appealed.
- The Ninth Circuit reviewed de novo and affirmed dismissal, holding the two provisions are not enforceable promises and that Block failed to plead UCL and intentional-interference claims adequately.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Breach of contract: do the two User Agreement clauses create enforceable promises? | Block: Clauses promise eBay will not be involved and will not be an agent, so eBay breached by using Automatic Bidding. | eBay: Clauses are descriptive/relational disclaimers, not promissory commitments, and other contract language shows explicit promises where intended. | Court: Clauses are not enforceable promises; breach claim dismissed. |
| UCL (unlawful/fraudulent/unfair business practices) — did eBay’s statements cause actionable deception? | Block: Statements misrepresent eBay as a mere neutral venue; sellers relied on them, so UCL and false-advertising claims follow. | eBay: Automatic Bidding and disclosures were publicly described; Block did not plausibly allege actual reliance or material deception; fraud pleading deficient. | Court: No plausible actual reliance or material misrepresentation; UCL claim fails. |
| Intentional interference with prospective economic advantage — was there an independently wrongful act? | Block: eBay’s breach of contract and UCL violation are independently wrongful acts supporting interference claim. | eBay: Underlying breach and UCL claims fail, so no independently wrongful act alleged. | Court: Because those predicate claims fail, intentional-interference claim fails. |
| Pleading standard — sufficiency under Rule 12(b)(6) and Rule 9(b) for fraud-based UCL claims? | Block: Allegations suffice and reliance may be presumed because the statements were material. | eBay: Complaints lack plausible factual allegations of reliance, materiality, and particularized fraud as required by Rule 9(b). | Court: Complaint does not meet Rule 8 plausibility and Rule 9(b) where applicable; dismissal affirmed. |
Key Cases Cited
- Zadrozny v. Bank of N.Y. Mellon, 720 F.3d 1163 (9th Cir. 2013) (standard of review for Rule 12(b)(6) dismissal)
- Salameh v. Tarsadia Hotel, 726 F.3d 1124 (9th Cir. 2013) (plausibility pleading standard)
- Reilly v. Inquest Tech., Inc., 160 Cal. Rptr. 3d 236 (Cal. Ct. App. 2013) (contract interpretation under California law)
- Korea Supply Co. v. Lockheed Martin Corp., 63 P.3d 937 (Cal. 2003) (requirement of an independently wrongful act for intentional interference)
- In re Tobacco II Cases, 207 P.3d 20 (Cal. 2009) (fraud-based UCL claims require proof of reliance; materiality and presumption of reliance discussion)
- Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) (Rule 9(b) applies to fraud-based UCL claims)