Rosado v. Ebay Inc.
2014 U.S. Dist. LEXIS 89863
N.D. Cal.2014Background
- Plaintiff Luis Rosado, an eBay Motors seller, paid insertion fees for fixed-price listings with a "Buy It Now" option; a buyer clicked Buy It Now but did not pay, delisting the listing before the prepaid duration expired. Rosado paid additional fees to relist and sought a refund for unused listing time; eBay issued only a small credit.
- Rosado filed a putative class action alleging FAL, CLRA, UCL (fraud/unlawful/unfair), breach of the covenant of good faith and fair dealing, quasi-contract/unjust enrichment, and declaratory relief based on eBay’s representations/omissions about what happens to prepaid listing time when Buy It Now is clicked but payment is not completed.
- eBay moved to dismiss, arguing the User Agreement and Fees Schedules unambiguously governed and permitted its conduct, Plaintiff’s fraud-based claims failed Rule 9(b), UCL unlawful/unfair prongs were deficient, quasi-contract is precluded by an express contract, and declaratory relief duplicated other claims.
- The Court took judicial notice of eBay’s User Agreement, Fees Schedules, and related web pages as they existed on the relevant dates but found ambiguity in what eBay’s materials communicated about delisting without completed payment and the effect on prepaid listing duration.
- The Court denied the motion to dismiss in full, holding Plaintiff adequately pleaded fraud-based claims under Rule 9(b), sufficiently alleged UCL/CLRA/FAL claims (including reliance and likely deception of a reasonable consumer), and stated viable claims for breach of the implied covenant, unjust enrichment as an alternative, and declaratory relief.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether eBay’s User Agreement and fees schedules foreclose Plaintiff’s claims by clearly authorizing the conduct | Rosado argues eBay’s disclosures were ambiguous/misleading about what happens to prepaid listing time when Buy It Now is clicked but sale not completed | eBay contends its express terms (nonrefundable insertion fees; listings end when buyer commits) control and preclude fraud/other claims | Court: Terms are not unambiguously dispositive; plausibly misleading omissions survive dismissal |
| Whether fraud-based claims meet Rule 9(b) particularity and reliance requirements | Rosado alleges unified course of conduct, omissions likely to deceive reasonable consumers, and that he relied on eBay’s representations when choosing listing | eBay says plaintiff failed to identify specific misrepresentations/omissions or plausible reliance | Court: Plaintiff met Rule 9(b) and alleged actual and reasonable reliance; fraud-based claims survive |
| Whether UCL/CLRA/FAL claims fail as a matter of law (fraudulent, unfair, unlawful prongs; reliance) | Rosado contends omissions/deceptive statements likely to mislead and caused economic injury (lost benefit of paid listing time) | eBay argues no cognizable injury (no legal right to refund or relisting) and plaintiff could have used Immediate Payment option | Court: Economic injury adequately alleged; UCL fraudulent/unlawful/unfair and CLRA/FAL claims survive dismissal |
| Whether quasi-contract/unjust enrichment and declaratory relief are duplicative or precluded by contract | Rosado seeks unjust enrichment as alternative and declaratory relief to clarify seller rights | eBay argues express contract bars quasi-contract and declaratory relief duplicates claims for past misconduct | Court: Unjust enrichment may be pleaded in the alternative; declaratory relief may resolve ongoing uncertainty—both survive at pleading stage |
Key Cases Cited
- Bell Atl. Corp. v. Twombly, 550 U.S. 544 (establishes plausibility standard for Rule 8)
- Ashcroft v. Iqbal, 556 U.S. 662 (pleading standards; accept well-pleaded facts but not legal conclusions)
- Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (Rule 9(b) governs fraud-based claims and unified course of fraudulent conduct)
- Swartz v. KPMG LLP, 476 F.3d 756 (Rule 9(b) requires who, what, when, where, how for fraud allegations)
- In re Tobacco II Cases, 46 Cal.4th 298 (California requires actual reliance for private UCL fraud claims)
- Williams v. Gerber Prods. Co., 552 F.3d 934 (reasonable consumer standard for deception under California consumer laws)
- Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097 (12(b)(6) dismissal appropriate only when no cognizable theory or insufficient facts)