Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—N.D. Cal.: Online seller failed to state claims against eBay and PayPal under California law, (Sep 9, 2013)

By Jody Coultas, J.D.

The federal district court in Oakland has granted a motion filed by eBay, Inc. and PayPal, Inc. to dismiss a seller’s California Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA) claims for failure to allege damages or standing (Campbell v. eBay, Inc., September 5, 2013, Rogers, Y.).

The seller, who operated a business in California selling bicycles and bicycle parts through eBay, sought to represent a class of all sellers of goods and services from California who have user agreements with eBay and PayPal and who have utilized and are utilizing the services provided by the companies. eBay and PayPal allegedly had several policies and practices that violated the UCL and CLRA.

Because the seller failed to allege either damages or standing, the court dismissed the claims for lack of standing. Although the seller specified what policies and practices applied to sellers, such as herself, there were no allegations of how the policies or practices affected her. The seller had not actually been affected by any of the policies.

The UCL claim failed for failure to allege which prongs of the statute were at issue or any facts to establish those prongs, according to the court. The UCL prohibits unlawful, unfair, or fraudulent business act or practice, and each prong is a separate and distinct theory of liability. The seller failed to identify any predicate offenses to form an unlawful claim. The seller’s vague argument that the companies falsely represented that buyers and sellers could expect for the fees they paid was unsupported and did not state an unfair or fraudulent claim.

The seller also failed to state a CLRA claim, according to the court. Although the seller alleged that eBay manipulate sellers to get them to add the cost of shipping into the selling price so that they could conceal the fact that buyers were actually being charged for shipping, the claim failed for failure to allege that the seller was subject to this practice or was injured by it.

The case is No. 13-CV-2632 YGR.

Attorneys: J. David Franklin (Franklin & Franklin) for Maggie Campbell. Heather Annette Dunn Navarro (Cooley LLP) for eBay, Inc.

Companies: eBay, Inc.; PayPay, Inc.

Cases: StateUnfairTradePractices CaliforniaNews