Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—S.D. Cal.: Consumer claims against social network proceed, (Apr 29, 2016)

By Michael Menzhuber, J.D., LL.M.

A former subscriber adequately alleged that a social network violated California’s Dating Service Contracts Act (DSCA) and Unfair Competition Law (UCL), the federal district court in San Diego has ruled. However, the former subscriber’s False Advertising Law (FAL) claim was dismissed (Howell v. Grindr, LLC, April 27, 2016, Curiel, G.).

In 2013, Mark Howell joined Grindr Xtra, Grindr, LLC’s premium service for its all-male location-based social network. Grindr’s contract with Howell required payment of a monthly fee and explicitly stated that his subscription would remain active until the end of his subscription period following his cancellation of the contract. The contract did not, however, include a three-day cancellation period or a name and address to which the cancellation notice should be mailed, as required by the DSCA.

The following year, Howell expressed, via email, his desire to cancel his account and, after numerous email exchanges, Grindr cancelled his account. Grindr, however, did not refund the unused portion of Howell’s contract within ten days. Howell then filed a complaint against Grindr, alleging violations of California’s DSCA, UCL, and FAL.

First, the court found that the allegations in Howell’s complaint were based on violations of the DSCA, not fraud. Therefore, Howell was not required to plead facts with particularity concerning the alleged fraudulent conduct in the UCL cause of action.

Grindr argued that Howell lacked standing to file suit under the DSCA because he had not alleged an injury caused by the violation. The court disagreed, determining that Howell sufficiently alleged that Grindr violated the DSCA and, as a direct result, suffered economic injury.

The court also disagreed with Grindr that Howell was required to plead reliance on all three prongs of the UCL in order to have standing. Because Howell’s UCL claim was based on violations of the DSCA, rather than fraud, he was not required to plead reliance. The court further determined that Howell satisfied the requirements for standing because he sufficiently alleged an injury in fact as a result of Grindr’s violation of the DSCA.

However, the court dismissed Howell’s FAL claim because Howell failed to allege any allegations as to the FAL claim and he did not oppose Grindr’s arguments regarding the FAL claim.

The case is No. 15cv1337-GPC (NLS).

Attorneys: Abbas Kazerounian (Kazerounian Law Group, APC) for Mark Howell. Mazda K. Antia (Cooley Godward Kronish) for Grindr, LLC.

Companies: Grindr, LLC

Cases: Advertising StateUnfairTradePractices CaliforniaNews