Roley v. Google LLC, No. 5:2018cv07537 - Document 43 (N.D. Cal. 2019)
Court Description: ORDER DENYING 24 MOTION TO DISMISS; LIFTING DISCOVERY STAY. Signed by Judge Beth Labson Freeman on 4/23/2019.(blflc2S, COURT STAFF) (Filed on 4/23/2019)
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1 2 3 UNITED STATES DISTRICT COURT 4 NORTHERN DISTRICT OF CALIFORNIA 5 SAN JOSE DIVISION 6 7 ANDREW ROLEY, Plaintiff, 8 v. 9 10 GOOGLE LLC, Defendant. 11 United States District Court Northern District of California Case No. 18-cv-07537-BLF ORDER DENYING MOTION TO DISMISS; LIFTING DISCOVERY STAY [Re: ECF 24] 12 Before the Court is Defendant Google LLC’s (“Google”) motion to dismiss Plaintiff 13 14 Andrew Roley’s (“Roley”) First Amended Complaint in this consumer class action case. Mot., 15 ECF 24. The Court held a hearing on the motion on April 17, 2019. For the reasons stated on the 16 record and as discussed below, Google’s motion is DENIED. 17 I. BACKGROUND1 In early 2015, Google created its “Local Guides” program to improve its Google Maps and 18 19 Google Earth products. First Am. Compl. (“FAC”) ¶¶ 1–3, ECF 18. Individuals who sign up to 20 be local guides share photographs, comments, reviews, and the like about various establishments 21 and locations in their communities, which benefits Google through increased page views and 22 advertising revenue. FAC ¶ 3. In return for these benefits and to encourage enrollment in and 23 participation in the program, Google offers local guides various benefits for their participation. 24 FAC ¶ 4. One such benefit Google offered was a free terabyte of data storage for those local 25 guides who achieved “Level 4 status” in the program. FAC ¶ 5. 26 On April 4, 2016, Roley, who had previously uploaded pictures to Google, received an 27 28 Plaintiff’s well-pled factual allegations are accepted as true for purposes of the motion to dismiss. See Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). 1 1 email from Google inviting him to join the Local Guides program. FAC ¶ 14. Specifically, the 2 email provided, in part: 3 4 5 6 7 8 9 10 United States District Court Northern District of California 11 12 FAC ¶ 15. Relying on the perceived promise of a terabyte of free data storage, Roley joined the 13 Local Guides Program and thereafter received an email acknowledging his enrollment. FAC ¶ 16. In order to enroll, Roley had to agree to the program’s rules—the Local Guides Program 14 15 Terms and Conditions (“Terms”).2 See Slabin Decl. ISO Mot. ¶¶ 2–4, ECF 24-1; Slabin Decl., Ex. 16 A, ECF 24-2. The Terms state that “[b]y signing up to be a member of the Local Guides 17 Program . . . you agree to be bound” by the Terms. Id., Ex. B, ECF 24-3. As is relevant here, the 18 Terms purport to give Google wide discretion with respect to providing benefits to local guides. 19 Specifically, the Terms state the following: (1) “Level requirements and descriptions are subject to 20 change, at Google’s sole discretion;” (2) “Benefits are offered at the discretion of Google and its 21 affiliates;” and (3) “Benefits are subject to change.” Id. 22 23 24 25 26 27 28 2 Google requests the Court take judicial notice of the Local Guides sign-up page and the Terms. See Mot. at 13–16. Plaintiff opposes this request. Opp. at 21–22, ECF 32. The request is GRANTED. As to the Terms, Plaintiff specifically incorporates them by reference into the FAC. See FAC ¶ 89; Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994), overruled on other grounds by Galbraith v. Cty. of Santa Clara, 307 F.3d 1119 (9th Cir. 2002) (“[D]ocuments whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the pleading, may be considered in ruling on a Rule 12(b)(6) motion to dismiss.”). As to the sign-up page, the Court takes notice of the appearance of the sign-up page, which “can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b); see Craigslist, Inc. v. DealerCMO, Inc., No. 16-CV-01451-VC, 2017 WL 6334142, at *3 n.3 (N.D. Cal. Apr. 11, 2017). 2 Throughout the next several months, Roley uploaded photos, business information, and United States District Court Northern District of California 1 2 other content to Google as part of the Local Guides program. FAC ¶ 17. During this time, Google 3 sent several emails to Roley, who started as a Level 3 local guide, encouraging him to continue to 4 post photos and reviews through Local Guides and, at least on one occasion, to “[l]evel up now 5 and get more exclusive benefits.” FAC ¶¶ 18–24. On July 7, 2016, Google emailed Roley stating 6 that it would be “adjust[ing] [its] Level 4 benefit to 100 GB of free Google Drive storage,” but that 7 “Local Guides who reach Level 4 in the next 2 weeks can still unlock the original offer of 1TB of 8 free Drive storage.” FAC ¶ 23. On July 14, 2016, within the two-week time frame Google 9 provided, Roley achieved Level 4 status, and Google notified him that he could redeem his Google 10 Drive storage. FAC ¶ 26. Roley alleges that Google believes that at the time Roley claimed his 11 free storage, Google informed him that his free storage would last only two years, but Roley 12 alleges this is not true. FAC ¶¶ 27–28. Two years later, in April 2018, Google notified Roley that his free Drive storage was 13 14 expiring and that he would have to begin paying monthly for his terabyte of storage. FAC ¶ 30. 15 Roley was surprised to learn that his free storage was ending because none of the offers or 16 information he had received relating to the terabyte of storage ever included a time limitation. 17 FAC ¶¶ 32–34. Roley alleges that through these actions Google “convert[ed] the offer of a ‘free 18 terabyte’ of data to a service that cost $10/month.” FAC ¶ 50. Roley was then forced to either 19 delete some of his data or pay $10/month to continue using the terabyte of storage. FAC ¶¶ 35– 20 37. He ultimately was shut out of some Google services until he deleted some of his data. FAC ¶ 21 37. 22 Roley alleges that no reasonable consumer would have understood that the offer of free 23 storage was time-limited to two years. FAC ¶¶ 7, 50. And he alleges that Google intentionally 24 failed to disclose this time limit (and thus misrepresented the benefit) in an effort to induce Roley 25 and members of the putative class to sign up for Local Guides to the benefit of Google. FAC ¶¶ 26 7–8. Based on these alleged actions, Roley brings the following claims against Google: (1) unfair 27 business practices, in violation of California’s Unfair Competition Law (“UCL”), Cal. Bus. & 28 Prof. Code § 17200, et seq.; (2) breach of contract; (3) fraud; (4) conversion; and (5) violations of 3 1 the California Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750, et seq. FAC ¶¶ 2 45–99. The breach of contract claim is premised on the allegation that Google “promised Plaintiff United States District Court Northern District of California 3 4 and Class members a free terabyte of data storage if they achieved ‘Level 4’ status as a Local 5 Guide” in exchange for Roley’s and the class’s performance of certain services for Google, like 6 uploading photos and reviews. FAC ¶ 61. Roley alleges that he “accepted the terms of the 7 contract through performance.” FAC ¶ 62. The fraud claim is based on Google’s 8 “misrepresentation of a material fact and/or a material and misleading omission to Plaintiff” by 9 which Google intended to deceive average consumers into believing that the storage would last 10 indefinitely, all the while knowing that the free storage would end after two years. FAC ¶¶ 68–74. 11 Plaintiff brings his claims on behalf of a putative class of individuals “residing in the United States 12 who attained ‘Level 4’ as a Google Local Guide after having been offered one free terabyte of 13 Google Drive storage space without a time limitation in the offer, and who claimed their terabyte 14 of data storage space, but whose free use of the terabyte was terminated after two years of having 15 been given the terabyte.” FAC ¶¶ 38–43. 16 17 II. LEGAL STANDARD “A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a 18 claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation 19 Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d 20 729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts 21 as true all well-pled factual allegations and construes them in the light most favorable to the 22 plaintiff. Reese v. BP Exploration (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the 23 Court need not “accept as true allegations that contradict matters properly subject to judicial 24 notice” or “allegations that are merely conclusory, unwarranted deductions of fact, or 25 unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) 26 (internal quotation marks and citations omitted). While a complaint need not contain detailed 27 factual allegations, it “must contain sufficient factual matter, accepted as true, to ‘state a claim to 28 relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. 4 1 Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A claim is facially plausible when it “allows the 2 court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. 3 On a motion to dismiss, the Court’s review is limited to the face of the complaint and matters 4 judicially noticeable. MGIC Indem. Corp. v. Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star 5 Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir. 1983). In deciding whether to grant leave to amend, the Court must consider the factors set forth United States District Court Northern District of California 6 7 by the Supreme Court in Foman v. Davis, 371 U.S. 178 (1962), and discussed at length by the 8 Ninth Circuit in Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048 (9th Cir. 2009). A district 9 court ordinarily must grant leave to amend unless one or more of the Foman factors is present: (1) 10 undue delay, (2) bad faith or dilatory motive, (3) repeated failure to cure deficiencies by 11 amendment, (4) undue prejudice to the opposing party, or (5) futility of amendment. Eminence 12 Capital, 316 F.3d at 1052. “[I]t is the consideration of prejudice to the opposing party that carries 13 the greatest weight.” Id. However, a strong showing with respect to one of the other factors may 14 warrant denial of leave to amend. Id. 15 III. 16 17 DISCUSSION Google moves to dismiss all of Roley’s claims. The Court discusses each claim in turn by category, first discussing the breach of contract claim and then the remaining four claims. 18 A. 19 Roley alleges that he entered into a unilateral contract with Google. Read in the light most Breach of Contract 20 favorable to Roley, Roley alleges that Google’s emails to Roley beginning in April 2016 and 21 continuing through July 7, 2016 constituted a binding offer for a free terabyte of storage if Roley 22 reached Level 4 status. FAC ¶¶ 23, 61. Roley alleges he accepted this offer by fully 23 performing—that is, by reaching Level 4 status. FAC ¶ 62; see also Opp. at 4–8 & n.2. 24 Recognizing that Roley’s allegations are somewhat imprecise with respect to whether the 25 April 2016 email alone or in tandem with the subsequent emails through July 7, 2016 constitutes 26 the alleged binding offer, see Mot. at 7–8 n.3, Google argues that the April email was not a 27 binding offer because (1) it did not include essential terms necessary to tell the recipients how they 28 could accept the offer through performance, including how many points were needed to earn the 5 1 terabyte benefit; (2) recipients were required to take additional steps before they could start 2 performing as local guides, including clicking “Get Started” and enrolling in the program; and (3) 3 the Terms, to which Roley agreed, expressly allowed Google to change the free storage benefit. 4 See Mot. at 7–10. Indeed, Google argues that the Terms, not the “advertising” email, constitutes 5 the relevant contract here. See id. at 9–10. 6 7 8 United States District Court Northern District of California 9 The Court agrees with Roley that on the facts alleged, he states a valid claim for breach of contract. The Ninth Circuit decision in Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777 (9th Cir. 2012), relied on by both parties, is instructive. In Sateriale, the Ninth Circuit held that the 10 cigarette company R.J. Reynolds Tobacco Company (“RJR”) made an offer for customers to enter 11 into a unilateral contract through its Camel Cash customer loyalty program. See id. at 785–89. 12 RJR represented to consumers on product packaging, in the media, and on the certificates 13 themselves, that consumers could collect Camel Cash certificates and exchange them for 14 merchandise according to the terms provided in a separate catalog. Id. at 783. To participate, 15 consumers had to fill out and submit separate registration forms to RJR, after which RJR sent 16 them an enrollment number and a catalog containing the redeemable merchandise. Some of the 17 catalogs stated that RJR could terminate the program at any time without notice. Id. In October 18 2006, RJR announced the program would end in March 2007. Despite this representation, RJR 19 ceased accepting certificates immediately, and consumers were left with unredeemable certificates 20 before March 2007. The plaintiffs sued for breach of contract, promissory estoppel, and UCL and 21 CLRA violations. 22 In their breach of contract claim, the plaintiffs did not dispute that RJR had the right to 23 terminate the program in March 2007, but they claimed that RJR had breached its contract by 24 failing to perform between October 2006 and March 2007. Id. at 784. The Ninth Circuit agreed. 25 The court first held RJR’s representations on the certificates represented a binding offer to enter 26 into a unilateral contract. Id. at 785–88. The court noted that the common law rule that 27 advertisements generally do not constitute offers to sell “includes an exception for offers of a 28 reward, including offers of a reward for the redemption of coupons.” Id. at 786. The key question 6 United States District Court Northern District of California 1 was simply “whether the advertiser, in clear and positive terms, promised to render performance in 2 exchange for something requested by the advertiser, and whether the recipient of the 3 advertisement reasonably might have concluded that by acting in accordance with the request a 4 contract would be formed.” Id. at 787. 5 Looking to the “totality of the circumstances,” the Ninth Circuit concluded the offer was 6 binding because of “the repeated use of the word ‘offer’ in the [certificates]; the absence of any 7 language disclaiming the intent to be bound; the inclusion of specific restrictions in the 8 [certificates] . . . the formal enrollment process, through which consumers submitted registration 9 forms and RJR issued enrollment numbers; and the substantial reliance expected from 10 consumers,” id. at 787–88, including that “consumers were expected to purchase Camel cigarettes 11 and accumulate Camel Cash certificates for a period of weeks, months or even years” before 12 redeeming merchandise, id. at 788 n.3. Based on these facts, the Ninth Circuit held that the 13 “alleged offer invited the performance of specific acts (saving [certificates] and redeeming them 14 for rewards in accordance with the catalog) without further communication, and leaving nothing 15 for negotiation.” Id. at 788. Importantly, the court rejected RJR’s argument that “the offer left 16 aspects of RJR’s performance to RJR’s discretion,” such as how many certificates would be 17 required to purchased merchandise and what items could be purchased, because the plaintiffs had 18 not alleged that “these were essential terms.” Id. Similarly, the court rejected RJR’s argument 19 that the offer was too indefinite to enforce as a contract. Id. at 789–90. 20 Finally, the court rejected RJR’s argument that the contract lacked mutuality of obligation 21 because RJR had “an unrestricted right to terminate the Camel Cash program at will, and without 22 notice.” Id. at 790. The court first held that mutuality of obligation does not apply to unilateral 23 contracts. Id. at 791. But it also recognized that a “reservation of an unrestricted right to 24 terminate could have precluded RJR’s communications from constituting an offer” and that “an 25 enforceable termination clause that gives a promisor an unrestricted power to terminate a contract 26 at any time, without notice, renders the promise illusory and unenforceable, at least so long as the 27 purported contract remains wholly executory.” Id. But because plaintiff had alleged that only 28 some of the catalogs reserved the right to terminate at will and because RJR “waived the right to 7 1 terminate without notice” when it announced it would maintain the program until March 2007, the 2 court held that dismissal was not warranted. Id. at 791–92. 3 4 dismiss stage, the offer here was a binding offer that Roley accepted through full performance. As 5 an initial matter, the Court takes as true Roley’s allegation that Google’s offer was for storage for 6 an indefinite period of time and that Google changed the benefit to a two-year time-limited benefit 7 after Roley fully performed (i.e., reached Level 4). On the facts alleged, the question of whether 8 the offer was for storage that would last forever or that was implicitly time-limited is a question of 9 fact not appropriate for resolution on a motion to dismiss. 10 United States District Court Northern District of California Comparing the facts of Sateriale to this case, the Court concludes that, at the motion to Here, Google offered Roley a free terabyte of storage in exchange for his earning points 11 through the Local Guides program. FAC ¶¶ 15, 61–62. Once Roley enrolled in the program, 12 Google continued to encourage his performance, specifically encouraging him toward the benefit 13 of one terabyte of storage. FAC ¶¶ 18–24. Indeed, on July 7, 2016, Google promised Roley that 14 if he reached Level 4 status within two weeks, he would receive one terabyte of free storage. FAC 15 ¶ 23. Roley fully performed in accordance with Google’s terms. As such, the “totality of the 16 circumstances” demonstrate that Google “in clear and positive terms, promised to render 17 performance”—provision of a terabyte of storage—“in exchange for something requested by the 18 advertiser”—achievement of Level 4 status—and that Roley “reasonably might have concluded 19 that by acting in accordance with the request a contract would be formed.” Sateriale, 697 F.3d at 20 787. As in Sateriale, that Roley had to enroll in the program does not render the offer non- 21 binding. And contrary to Google’s argument, at least as of the July 7 email, the essential terms of 22 the agreement were set—Google promised the terabyte of data in exchange for Level 4 status if 23 reached within two weeks. See Donovan v. RRL Corp., 26 Cal. 4th 261, 272 (2001), as modified 24 (Sept. 12, 2001) (“[C]ertain advertisements have been held to constitute offers where they invite 25 the performance of a specific act without further communication and leave nothing for 26 negotiation.”). 27 28 For these reasons, Google’s reliance on Frezza v. Google Inc., No. 12-CV-0237, 2013 WL 1736788 (N.D. Cal. Apr. 22, 2013), is misplaced. There, the court rejected the plaintiffs’ 8 United States District Court Northern District of California 1 argument that Google had made a binding offer of a free 30-day trial period for a new program 2 because (1) the alleged offer directed the consumer to a signup page “for more details,” (2) the 3 sign-up page required the consumer to provide credit card information, which was not made clear 4 in the advertisement, (3) and the plaintiffs alleged the contract was formed at the time of 5 enrollment, but they had not included the terms and conditions presented during the enrollment 6 process. Id. at *3–*4. Moreover, the terms and conditions expressly provided for the fee that the 7 plaintiffs were challenging. Id. at *1. None of these facts is present here. The April 4 email 8 directed Roley to “start now” but did not indicate that Roley would be required to take additional 9 steps (such as providing credit card information) beyond mere enrollment in the program (as in 10 Sateriale). Likewise, the Terms here do not expressly provide for a time-limited storage benefit, 11 whereas the Frezza terms expressly provided for the fee that the plaintiffs believed the contract did 12 not contemplate. Moreover, though the FAC is not entirely clear as to when the binding offer was 13 made (be it April or July 7, 2016, or otherwise), Roley clearly does not allege that the contract was 14 formed at the time of enrollment. 15 Roley’s agreement to the Terms does not change this conclusion. Google is correct that 16 just like RJR’s termination rights included in the catalogs in Sateriale, the Terms can be 17 considered part of the offer and contract here. But these provisions do not help Google because 18 Roley alleges that Google promised as late as July 7, 2016 to provide the terabyte of storage for 19 the next two weeks. As in Sateriale, where RJR promised to keep the rewards program open until 20 March 2007 but ended it early, Google did not live up to this promise. Moreover, by this point 21 Roley had fully performed—he had reached Level 4 status. Though the court in Sateriale 22 recognized that a clause giving the “promisor an unrestricted power to terminate a contract at any 23 time, without notice, renders the promise illusory and unenforceable,” it noted that this applies 24 where “the contract remains wholly executory.” Here, because Roley had fully performed, the 25 contract was no longer wholly executory. See Contract, Black’s Law Dictionary (10th ed. 2014) 26 (defining executory contract as “contract that remains wholly unperformed or for which there 27 remains something still to be done on both sides”). 28 Perhaps most importantly, unlike Sateriale, where some of the catalogs stated that RJR had 9 United States District Court Northern District of California 1 the discretion to terminate the program “without notice,” the Terms here do not give Google such 2 blanket discretion. They say only that Google has the discretion to change level requirements and 3 offer benefits; they do not say it can terminate the offer of benefits without any notice whatsoever 4 to individuals who have fully performed. Absent an express provision to the contrary, the Court 5 cannot read the contract to give Google such broad discretion. Indeed, reading such broad 6 discretion into the contract could render the contract illusory. If Google could simply choose not 7 to confer promised benefits after full performance by the consumer, it would have no duty to 8 perform under the contract. “A construction making a contract illusory is not favored and [courts] 9 will not accept it if there is a reasonable alternative.” LaRussa v. NMTC, Inc., No. CV 05-751- 10 TUC-FRZ, 2007 WL 9724933, at *3 (D. Ariz. Mar. 30, 2007) (quoting J.C. Millett Co. v. 11 Distillers Distibuting Corp., 258 F.2d 139, 142 (9th Cir. 1958)); see also Sateriale, 697 F.3d at 12 790 (citation omitted) (“[I]f one party has greatly benefited by part performance or if one party has 13 relied extensively on the agreement, the court should go to great lengths to find a construction of 14 the agreement that will salvage it.”). At this stage, on these facts, the Court interprets Google’s 15 discretion to be limited at least by the implied duty of good faith and fair dealing. See LaRussa, 16 2007 WL 9724933, at *3 (listing cases in which courts applied the duty of good faith and fair 17 dealing to avoid rendering a contract illusory); Serpa v. California Sur. Investigations, Inc., 215 18 Cal. App. 4th 695, 708 (2013). Especially in light of the fact that Google allegedly continued to 19 promise that Roley could earn the terabyte by performing, there is a question of fact as to how to 20 interpret the discretionary provision of the Terms. 21 Thus, on the facts as alleged in the FAC, Roley has successfully alleged the existence of a 22 binding offer from Google that Roley fully accepted through performance, such that Google 23 allegedly breached by failing to satisfy said offer. 24 B. 25 As to the remaining claims, Google argues that because the Terms gave Google discretion Fraud, Conversion, UCL, and CLRA 26 to change the benefits, Roley’s claims fail as a matter of law. See Mot. at 10–13. It does not 27 argue that the FAC fails to meet the particularity requirements of Federal Rule of Civil Procedure 28 9(b). The Court discusses each claim in turn, considering the UCL and CLRA claims together. 10 1 1. Fraud Google argues that Roley’s fraud claim cannot stand because Roley’s belief that he would 2 receive free storage for life was unreasonable because the Terms allowed Google to change the 3 benefits at its discretion and none of the marketing materials indicated that the benefit would last 4 indefinitely. See Mot. at 10–11. Put another way, Google argues that Roley could not have 5 justifiably relied on Google’s disclosures, as would be necessary to sustain a claim for fraud. See 6 Davis v. HSBC Bank Nevada, N.A., 691 F.3d 1152, 1163 (9th Cir. 2012). 7 The Court concludes that Google asks it to make factual determinations inappropriate at 8 the motion to dismiss stage. See id. (“[W]hether reliance [on a misrepresentation] was reasonable 9 is a question of fact for the jury, and may be decided as a matter of law only if the facts permit 10 United States District Court Northern District of California 11 12 13 reasonable minds to come to just one conclusion.” (citation omitted) (second alteration in original)). To determine as a matter of law that Roley did not justifiably rely on Google’s representations, the Court would have to find that Roley’s reliance in “light of his own intelligence and information was manifestly unreasonable.” Id. To establish manifest unreasonableness, “[i]t 14 must appear that [plaintiff] put faith in representations that were preposterous or shown by facts 15 within his observation to be so patently and obviously false that he must have closed his eyes to 16 17 avoid discovery of the truth.” Id. (alterations in original). On the facts alleged, the Court cannot hold that Roley’s reliance was manifestly 18 unreasonable. Roley alleges that Google never told him before he finished performing that the 19 free storage would be time-limited. This fact alone distinguishes most of the cases Google cites, 20 wherein the contracts at issue included unambiguous provisions that allowed the defendants to act 21 in the ways the plaintiffs subsequently challenged. For example, in Davis, 691 F.3d at 1163, the 22 court dismissed the plaintiff’s claim that the defendants fraudulently concealed the existence of an 23 annual fee in its advertising and marketing because the fee was disclosed in terms to which 24 plaintiff agreed. See also Circle Click Media LLC v. Regus Mgmt. Grp. LLC, No. 12-CV-4000, 25 2013 WL 57861, at *10–*11 (N.D. Cal. Jan. 3, 2013) (same). In Guerard v. CNA Financial 26 Corp., the plaintiffs brought multiple claims against an insurer for its failure to provide benefits to 27 the insured for at-home health services provided to the insured by her children. No. 09-CV-1801, 28 11 1 2009 WL 3152055, at *4–*5 (N.D. Cal. Sept. 23, 2009). The court dismissed plaintiffs’ fraud 2 claim based on these allegations because the insurance policy “unambiguous[ly]” excluded 3 insurance coverage for services rendered by family members. Id.; see also Hackethal v. Nat’l Cas. 4 Co., 189 Cal. App. 3d 1102, 1111 (1987) (dismissing fraud claim because insurance policy 5 unambiguously excluded coverage for the types of action at issue). In this case, Google did not 6 expressly provide that the terabyte of data would be limited to two years. United States District Court Northern District of California 7 Nevertheless, Google argues that the contract did expressly allow it to act as it did because 8 the Terms give Google wide discretion to change the benefits. However, as discussed above, the 9 contract’s discretionary provisions are ambiguous. For this reason, the decision in Baird v. 10 Samsung Electronics America, Inc., No. 17-CV-06407-JSW, 2018 WL 4191542 (N.D. Cal. July 11 20, 2018), is distinguishable. In that case, the plaintiffs claimed in part that the defendant had 12 defrauded consumers by misrepresenting that its TVs would have unlimited access to YouTube, 13 though the TVs did not have such access. Id. at *5–*6. The court held that the plaintiffs could not 14 have justifiably relied on any of defendant’s representations because disclaimers in the TV 15 manuals stated that “services provided are subject to change . . . without notice.” Id. at *6 16 (emphasis added). Here, as discussed above, Google did not unambiguously reserve the right to 17 change the benefits without any notice to Roley. 18 Thus, as alleged, the FAC presents a question of fact as to whether Roley justifiably relied 19 on Google’s representations because the scope of Google’s discretion under the Terms was 20 ambiguous. As such, Google’s motion to dismiss Roley’s fraud claim on this ground is DENIED. 21 22 2. Conversion As with the breach of contract claim, Google argues that Roley’s conversion claim cannot 23 stand because the Terms gave Google the right to revoke benefits at will. See Mot. at 11–12. This 24 amounts to an argument that the allegations do not establish that Roley “had a right to ownership 25 or possession” of the terabyte of data storage after two years. Appling v. Wachovia Mortg., FSB, 26 745 F. Supp. 2d 961, 974 (N.D. Cal. 2010). Because as discussed above, the scope of Google’s 27 discretion to modify the benefits is a question of fact, the Court cannot say that Roley consented to 28 Google’s actions, and thus cannot dismiss the conversion claim on this ground. Roley alleges that 12 1 under the parties’ contract, read in his favor, he had a right to the terabyte of data storage 2 indefinitely and Google converted the storage by forcing Roley to pay for it. For these reasons, Google’s motion to dismiss Roley’s conversion claim is DENIED. 3 4 3. UCL and CLRA Finally, Google seeks to dismiss Roley’s UCL and CLRA claims in part because they rely 5 6 on Roley’s fraud claim and related allegations, and Google believes it has demonstrated that Roley 7 could not have justifiably relied on Google’s representations. See Mot. at 12–13. Because the Court has held that Roley has plausibly alleged justifiable reliance and thus United States District Court Northern District of California 8 9 will not dismiss the fraud claim at this stage, Roley’s UCL and CLRA claims survive as well. See 10 Cal. Bus. & Prof. Code § 17200 (barring unfair competition including “fraudulent business act[s] 11 or practice[s]”); Sateriale, 697 F.3d at 794 (allowing CLRA claims based on fraud theories if the 12 plaintiff alleges “actual reliance on the misrepresentation”); Daniel v. Ford Motor Co., 806 F.3d 13 1217, 1225 (9th Cir. 2015) (discussing how UCL and CLRA claims can be supported by theories 14 of fraud). Thus, Google’s motion to dismiss Roley’s UCL and CLRA claims is DENIED. 15 16 17 18 IV. ORDER Based on the foregoing, Google’s motion to dismiss Roley’s FAC is DENIED. The temporary stay of discovery imposed at the case management conference is hereby LIFTED. 19 20 IT IS SO ORDERED. 21 22 23 24 Dated: April 23, 2019 ______________________________________ BETH LABSON FREEMAN United States District Judge 25 26 27 28 13
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