Preview
Laura L. Ho (SBN 173179)
Tho@ gbdhlegal.com
James Kan (SBN 240749)
jkan@ gbdhlegal.com
Katharine L. Fisher (SBN 305413)
kfisher@ ghdhlegal.com
GOLDSTEIN, BORGEN, DARDARIAN & HO
Lakeside Drive, Suite 1000
Oakland, CA 94612
Tel: (510) 763 9800
Fax: (510) 835 1417
Julian Hammond (SBN 268489)
jhammond@ hammondlawpc.com
Ari Chemiak (SBN 290071)
achemiak@ hammondlawpc.com
Polina Brandler (SBN 269086)
pbrandler@ hammondlawpc.com
HAMMONDLAW, PC
1829 Reisterstown Road, Suite 410
Baltimore, MD 21208
Tel: (310) 601 6766
Fax: (310) 295 2385
Attomeys for laintiff and Putative Class
SUPERIOR COURT OF THE STATE OF CALIFORNIA
FOR THE COUNTY OF SANTA CLARA
ABDULLAH UZAIR, individually and on behalf of Case No. 18CV 328915
all others similarly situated
PLAINTIFF SMEMORANDUM OF POINTS
Plaintiff AND AUTHORITIES IN OPPOSITION TO
DEFENDANT’S DEMURRER TO
COMPLAINT
GOOGLE, LLC. a Califomia Limited Liability Date: December 7, 2018
Company, Time: 9:00 a.m.
Dept:
Defendant Before: Hon. Brian C. Walsh
Trial Date None Set
LAINTIFF OINTS, UTHORITIES PPOSITIONTO EMURRERTO OMPLAINT ASE 18CV 328915
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TABLE OF CONTENTS
Page
INTRODUCTION
IL BACKGROUND
A California’s Automatic Renewal Law
B Google Play
IL. ARGUMENT
A The ARL Provides a Private Right of Action.
B Plaintiff HasStanding UrUnder the UCL and
id Money HiHad and Received Pursuant to
the Gift Theory. ...
10
1 By Charging for Subscriptions that are “Unconditional Gifts” Due to
11 Google’s Violations of Section 17602, Google Has Harmed Plaintiff.
12 2 Plaintiff States a Claim for Money Had and Received.
13 3 Section 17603 Applies to Google Play Music and Other Products.
14 Plaintiff States a Claim Under the UCL and the CLRA Pursuant
to the Fraud
Theory. .... 10
15
1 Google’s Non-Disclosures are Actionable Under the UCL and CLRA 11
16
2 Plaintiff Paid More than He Would Have Had Google Complied with the
17 13
18 CONCLUSION 15
19
20
21
22
23
24
25
26
27
28
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TABLE OF AUTHORITIES
Page(s)
State Cases
Avidor v. Sutter’s Place, Inc.,
212 Cal. App. 4th 1439 (2013)
Cel-Tech Commce’ns, Inc. v. L.A. Cellular Tel. Co.,
20 Cal. 4th 163 (1999)...
Cisnerosv. U.D. Registry, Inc
39 Cal. App. 4th 548 (1995)
Daugherty v. Am. Honda Motor Co., Inc
144 Cal. App. 4th 824 (2006) 12
10
11 Engallav, Permanente Med. Grp., Inc
15 Cal. 4th 951 (1997) 14
12
Goehring v. Chapman Univ.
13 121 Cal. App. 4th 353 (2004)
14 Gutierrez v. Girardi
194 Cal. App. 4th 925 (2011)
15
16 Hacker v. Homeward Residential, Inc
26 Cal. App. Sth 270 (2018)
17
Hall v. Time Inc.
18 158 Cal. App. 4th 847 (2008) 14
19 Hansen v. Newegg.com Americas, Inc.
25 Cal. App. 5th 714 (2018) 14
20
Imperial Merch. Servs., Inc. v. Hunt,
21
47 Cal. 4th 381 (2009)
22
J.C. Peacock, Inc. v. Hasko
23 196 Cal. App. 2d 353 (1961)
24 Kwikset Corp. v. Superior Court
51 Cal. 4th 310 (2011) passim
25
Lazar v. Hertz Cor
26 69 Cal. App. 4th 1494 (1999)
27
Lu v. Hawaiian Garden Casino, Inc
28 50 Cal. 4th 592 (2010)
i
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Mabry v. Superior Court,
185 Cal. App. 4th 208 (2010)...
Mass. Mut. Life Ins. Co. v. Superior Court,
97 Cal. App. 4th 1282 (2002). Al
Mayron v. Google, Inc.,
No. 2015-1-CV-275940, 2016 Cal. Super. Lexis 173 (Cal. Super. Ct. Feb. 26, 2016).........4, 7, 9, 13
Mayron v Google Inc.,
No. 2015-1-CV-275940, 2016 WL 6822258 (Cal. Super. Ct. Oct. 14, 2016) 7,9
McAdams v. Monier, Inc.,
182 Cal. App. 4th 174 (2010)... 11
Medrazo v. Honda of N. Hollywood,
10 205 Cal. App. 4th 1 (2012)...
11 Nelson v. Pearson Ford Co.,
186 Cal. App. 4th 983 (2010)... 13
12
Peterson v. Cellco P’ship,
13 164 Cal. App. 4th 1583 (2008) 14
14 Schultz v. Harney,
15 27 Cal. App. 4th 1611 (1994).
16 Siciliano v. Apple, Inc.,
No. 2013-1-257676 (Super. Ct. Santa Clara Cty. Apr. 20, 2015)... siete 2, 13
17
Siciliano v. Apple, Inc.,
18 No. 2013-1-257676 (Super. Ct. Santa Clara Cty. Apr. 21, 2017) ww... seeeeeee DASSIM
19 Siciliano v. Apple, Inc.,
No. 2013-1-257676 (Super. Ct. Santa Clara Cty. Mar. 26, 2018)......0.... seeeeeee DASSIM
20
21 Siciliano v. Apple, Inc.,
No. 2013-1-CV-257676 (Super. Ct. Santa Clara Cty. Jan. 13, 2016) ............ sreedl, 13
22
Sisemore v. Master Fin., Inc.,
23 151 Cal. App. 4th 1386 (2007)
24 In re Tobacco Cases II,
240 Cal. 4th 779 (2015)... 15
25
In Re Tobacco II Cases,
26
46 Cal. 4th 298 (2009)... seeeeeee DASSIM
27
Young v. Gannon,
28 97 Cal. App. 4th 209 (2002)
ili
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Federal Cases
In re Adobe Sys.,
66 F. Supp. 3d (N.D. Cal. 2014).........0.. 15
Bureerong v. Uvawas,
922 F. Supp. 1450 (C.D. Cal. 1996)
Haskins v. Symantec Corp.,
No. 13-CV-01834-JST, 2013 WL 6234610 (N.D. Cal. Dec. 2, 2013) 10
Hinojos v. Kohl’s Corp.,
718 F.3d 1098 (9th Cir. 2013)............. 10, 14
Johnson v. Pluralsight, LLC,
728 F. App’x 674 (9th Cir. 2018)
10
Karczewski v. DCH Mission Valley LLC,
11 862 F.3d 1006 (9th Cir. 2017)... 10
12 Kissel v. Code 42 Software, Inc.,
No. SACV151936JLSKESX, 2016 WL 7647691 (C.D. Cal. Apr. 14, 2016)
13
Lopez v. Stages of Beauty, LLC,
14 307 F. Supp. 3d 1058 (S.D. Cal. 2018) ............. 6,11
15
Roz v. Nestle Waters N. Am., Inc.,
16 2017 WL 132853 (C.D. Cal. Jan. 11, 2017) 6, 7,8
17 Warner v. Tinder Inc.,
105 F. Supp. 3d 1083 (C.D. Cal. 2015)...
18
State Statutes
19
Cal. Civ. Proc. Code
20 § 430.30(a).....eeosee 9
21
Califomia’s Automatic Renewal Law, Bus. & Prof. Code, §§ 17600 et seq. ..... passim
22
Consumer Legal Remedies Act, Cal. Civ. Code §§ 1761 et seq. ............. passim
23
False Advertising Law, Bus. & Prof. Code, §§ 17500, et seq... sewed, 4
24
Unfair Competition Law, Bus. & Prof. Code, §§ 17200 et. seq........... passim
25
Other Authorities
26
Black’s Law Dictionary (10th ed. 2014)... 10
27
Webster’s Third Int’! Dictionary (1981) ..... 10
28
iv
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I INTRODUCTION
Plaintiff Abdullah Uzair is a Califomia consumer who has been harmed because Defendant Google
failed to comply with California’s Automatic Renewal Law (the “ARL”), Business and Professions Code!
sections 17600, et seq. Plaintiff alleges that Defendant’s violation of the ARL’s disclosure and consent
requirements meant the subscriptions should have been “unconditional gift[s],” yet Google unlawfully
charged and continues to charge Plaintiff for his Google Play subscription. Plaintiff challenges
Defendant’s violations of the ARL under the ARL itself; the Unfair Competition Law (“UCL”), sections
17200, et seq.; the Consumer Legal Remedies Act (“CLRA”), Civil Code sections 1761, et seq.; and the
common count of money had and received. As this Court is well aware, this kind of challenge is well
suited to move beyond the pleading stage and onto the merits. See Siciliano v. Apple, No. 2013-1-CV-
257676 (Super. Ct. Santa Clara Cty. Jan. 13, 2016).
10
Google’s demurrer should be overruled because: (1) The ARL has a private right of action; (2)
11
Plaintiff states a claim under the UCL and money had and received pursuant to his “gift theory,” i.e. that
12
Google’s violation of the ARL rendered his subscription an unconditional gift, so Google should not have
13 charged him for those subscriptions; and (3) Plaintiff states a claim under both the UCL and the CLRA
14 pursuant to his “fraud theory,” i.e. that Plaintiff would not have subscribed to Google Play Music if Google
15 had made all the required disclosures consistent with the ARL’s requirements.
16 I. BACKGROUND
17 A California’s Automatic Renewal Law
18 In 2009, the California Legislature enacted the ARL to close the “gap in the law” that failed to
“address automatic renewal clauses or provisions in subscriptions or purchasing agreements.” See
19
Plaintiff's Request for Judicial Notice in Opposition to Defendant’s Demurrer (“RJN”), Ex. A at 128. The
20
legislature recognized that existing law, including the UCL and FAL, which generally prohibited unfair
21 competition and misleading advertisements, did not sufficiently protect consumers from businesses that
22 solicited automatically renewing subscriptions with “agreements enumerated in the ‘fine print oo resulting in
23 the “onus fall[ing] on the consumer.” Id. at 131.
24 Califomia decided the way to protect consumers was to require businesses to (1) make certain
25
26 | References to code sections herein refer to the California Business and Professions Code unless
specified otherwise.
27
2 For the Court’s convenience, the Court’s orders from Siciliano cited herein are attached as Exhibits 1
to 4 of the Decl. of Katharine Fisher in Sup. of Pl.’s Opp’n to Def.’s Dem. to Compl. (“Fisher Decl.”),
28
submitted herewith.
1
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specific disclosures “in a clear and conspicuous manner before the subscription or purchasing agreement is
fulfilled and in visual proximity . . . to the request for consent to the offer,” see section 17602(a)(1); (2) to
“obtain[] the consumer’s affirmative consent to the agreement containing” the terms, prior to charging
them, see section 17602(a)(2); and (3) to provide an “acknowledgement” containing the terms that the
consumer could retain after the purchase, see section 17602(a)(3). The legislature further provided that
such violations of the ARL meant the subscription was “deemed an unconditional gift to the consumer.”
§ 17603.
Of the five material terms enumerated by the Legislature, Plaintiff alleges Defendant failed to
disclose three, both when requesting Plaintiffs consent and in the post-purchase acknowledgment sent to
Plaintiff: (1) that the subscription will continue automatically until cancelled; (2) the description of the
cancellation policy that applies to the offer; and (3) the minimum purchase obligation, if any.? See §
10
17601(b)(1)-(2), (5); Class Action Complaint (““Compl.”) 9 38-42, 48-50.
11
B. Google Play
12
Google offers consumers its own and third-parties’ digital products on an automatically-renewing
13 basis through its Google Play Store. Compl. 20, 23. Consumers can download software “applications”
14 (or “apps”) which they can then use to download and view digital products, including, but not limited to,
15 songs, movies, television shows, newspapers, periodicals, and other digital products. Id. 22, 23.
16 In order to make a purchase from the Google Play store, consumers must have a Google Account
with a Google ID and password, which requires that they set up a Google Payments account and provide
17
their payment method. Id. 26. When consumers first sign up for the Google A ccount and set up the
18
Payments account, Google requires consumers to acknowledge its Google Play Terms of Service (“Play
19 TOS”) and the Google Payments Terms of Service (“Payments TOS”), in addition to various other legal
20 agreements. Id. 25. Both the Play and Payments TOSs are lengthy legal documents that, toward the
21 second-half of the document in an inconspicuous manner, describe general features of subscriptions
22 purchased through Google Play. See id. {1 28-32, & Exs. A.1-B.2. The TOSs mention that purchased
subscriptions are “recurring billing transaction[s]” and continue until cancelled. See id. 1131-32, 41. They
23
describe Google’s Cancellation Policy by instructing consumers that they cannot cancel an ongoing
24
subscription fora refund. See Compl. {31 (Payments TOS state “the cancellation will not become
25
26
3 Defendant’s argument that its terms of service should suffice as “the agreement containing the
automatic renewal offer terms” fails because the terms of service do not contain information relating to
27
“the recurring charges that will be charged” or the “length of the automatic renewal term” as required
by section 17601(b)(3), (4). See Compl. at 1 44-46; cf. Google’s MPA in Supp. of Dem. to Pl.’s
28
Compl. (“Dem. MPA”) at 17 (arguing disclosures made in terms of service sufficient).
2
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effective until the end of the current billing period. Y ou will not receive a refund for the current billing
period. Y ou will continue to be able to access the relevant subscription for the remainder of the current
billing period.”); see also id. | 32 (Play TOS state “Cancellations, Y ou may cancel a subscription at any
time . . . and the cancellation will apply to the next period. . . . Y ou will not receive a refund for the current
billing period.” (emphasis original)). Neither TOS identifies that the consumer must still purchase, after a
cancellation, the ongoing subscription. See id. 44. Nor does either TOS contain details specific to an
individual auto-renewal subscription offer; they do not state the recurring charge or describe the length of
the term or that the subscription is continuous. Id.
The TOSs are not updated or adapted to contain the terms relating to each automatically renewing
subscription offered by Google. See generally id. 27-28. In fact, Google does not present the Terms to
consumers prior to each and every purchase as part of the “subscription flow,” i.e. the process by which
10
consumers are presented with and then accept the auto-renewal offer. See id. §30, 41. Thus, Plaintiff
11
alleges that the TOSs cannot be said to be “the agreement containing the automatic renewal offer terms”
12 and that any disclosures within them are not clear and conspicuous or in visual proximity to Google’s
13 request for consent to the offer. See id. 9144-46; see also § 17602(a)(1)-(2)
14 Rather, Google’s request for consent appears in the “subscription flow.” See Compl. 35-41.
15 Either through the Google Play store directly or from within an app, the consumer expresses their interest in
purchasing an automatically renewing subscription by pressing a button that says “subscribe.” Id. 1 35-36.
16
After consumers press the first subscribe button, Google presents consumers with a Purchase Options “‘pop-
17
up” screen, which displays only the lengths and prices of the subscriptions offered. Id. 137. Once the
18 consumer selects a term length and price point, Google then presents consumers with another screen
19 summarizing other terms applicable to the subscription. Id. 138. The consumer can then press a second
20 “subscribe” button to accept the offer. Id.
21 Google fails to disclose the necessary automatic renewal offer terms on any of the screens
presented to the consumer in the subscription flow — the Purchase Options screen, the first screen
22
summarizing the offer, or even an expanded summary screen unlocked by a nondescript down arrow. See
23
id. 937-38, 40. The screens do not describe that the subscription will be automatically renewed until
24
cancelled; do not disclose Google’s Cancellation Policy that applies to the offer; and do not inform
25 consumers that they are required to purchase, at a minimum, their first and current subscription. See id.
26 As a result of Google’s violations of the ARL, Plaintiff lost money because he paid for a product
27 that should have been an unconditional gift and because he would not have subscribed at the time he did so
28
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had Google complied with the ARL. See id. 99, 49. Thus, Plaintiff’s complaint adequately states a basis
for relief, and Google’s demurrer should be denied.
Tl. ARGUMENT
A The ARL Provides a Private Right of Action.
No California appellate authority exists regarding whether the California Legislature created a
private right of action in the ARL itself. While trial courts have disagreed on this issue, the better reading is
that there is a private right of action, as the court found in Kissel v. Code 42 Software, Inc., No.
SACV151936JLSKESX, 2016 WL 7647691, at*6 (C.D. Cal. Apr. 14, 2016) (finding private right of
action) — decided after the Mayron I decision cited by Defendant. See Mayron v. Google, Inc., No. 2015-1-
CV-275940, 2016 Cal. Super. Lexis 173 (Cal. Super. Ct. Feb. 26, 2016) (“Mayron I”).
10 As the court in Code 42 Software, Inc. found, the ARL contains “clear, understandable, [and]
11 unmistakable terms” that reflect legislative intent to create a private right of action.” See 2016 WL
7647691, at*6. Section 17604 of the ARL provides that “[nJotwithstanding Section 17534, a violation of
12
[the ARL] shall not be a crime. However, all available civil remedies that apply to a violation of this
13
article may be employed.” See id. (emphasis added by court). One such available remedy is Section
14 17535, which provides that private plaintiffs may seek injunctive relief and restitution for violations of “this
15 chapter,” which includes the ARL. Id. “The California Legislature intentionally placed the ARL within the
16 same chapter as § 17535,” which “clearly reflects a legislative intent to create a private right of action.” Id.
17 (holding “pursuant to § 17535, injunctive relief and restitution are civil remedies that apply to a violation of
the ARL”).
18
Consumers are not limited, though, to actions under section 17535, or the UCL, in their pursuit of
19
all available civil remedies. Section 17604(a) should be read to authorize an action directly under the
20 ARL. A plaintiff suffering economic injury as a result of an ARL violation would be able to bring a claim
21 under the UCL or section 17535 even if the ARL made no reference to remedies at all. If the Legislature
22 had intended for consumers affected by an ARL violation to be limited to actions under those statutes,
23 “there would have been no need to include a provision” specifying that those causes of action were
available. See Imperial Merch. Servs., Inc. v. Hunt, 47 Cal. 4th 381, 390 (2009); accord Mabry v. Superior
24
Court, 185 Cal. App. 4th 208, 218 (2010) (noting that “California courts, quite naturally, do not favor
25
constructions of statutes that render them advisory only, or a dead letter” and finding that statute created
26
private right of action). Instead, the civil remedies provision in section 17604(a) must mean that a plaintiff
27 can sue under the ARL when the law’s requirements are violated, and that in such a suit “all available civil
28 remedies that apply to a violation of this article’—i.e., as appropriate to the facts of the case, legal and
4
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equitable remedies such as restitution, injunctive relief, disgorgement, or damages—“may be employed” to
remedy the violation. See§ 17604; Goehringv. Chapman Univ., 121 Cal. App. 4th 353, 377 (2004)
(finding a private cause of action denoted by reference to a remedy)
Additionally, that the Legislature placed a refund remedy in the ARL itself “explicitly denotes a
private right of action” under section 17603. Lu v. Hawaiian Garden Casino, Inc., 50 Cal. 4th 592, 603 n.8
(2010) (quoting G oehring, 121 Cal. App. 4th at 377 (concluding that a provision creating a refund remedy
for violations of the State Bar Act disclosure requirements applicable to law schools indicated intent to
create a private right of action)). In enacting the ARL, the Legislature declared its intent to “end the
practice of ongoing charging” of consumers without their “explicit consent,” see section 17600. The ARL
accomplishes this purpose by first imposing specific notice and consent requirements on businesses
offering consumers automatically renewing subscriptions, see section 17602, and then providing consumers
10
the unconditional gift remedy whereby a business’s violation of the ARL’s notice and consent requirements
11
frees consumers from “any obligation whatsoever” to the business. See § 17603. “[OJne such obligation
12 [that consumers no longer owe to noncompliant businesses] is the recurring charge to a consumer’s credit
13 card itself—the main problem that the ARL intended to address.” Siciliano v. Apple Order
A fter Hearing
14 on Mar. 26, 2018 (“Siciliano MSA Order”) denying Summary Adjudication, Fisher Decl. Ex. 4, at 14. A
15 consumer that has been charged for a product that should have been deemed an unconditional gift is
entitled to a restitutionary refund of monies paid, and the ARL thereby “explicitly denotes a private right of
16
action.” Lu, 50 Cal.4th at 603 n.8 (quoting Goehring, 121 Cal. App. 4th at 377)
17
The ARL provides a private right of action, and Plaintiff's allegations are sufficient to state an ARL
18 claim
19 B. Plaintiff Has Standing Under the UCL and Money Had and Received Pursuant to the Gift
Theory.
20
Private plaintiffs meet the UCL’s standing requirement, Section 17204, if they plead that (1) they
21
lost “money or property sufficient to qualify as injury in fact, i.e. economic injury, and (2) that economic
22
injury was the result of, i.e., caused by, the unfair business practice Kwikset Corp. v. Superior Court, 51
23 Cal. 4th 310, 322 (2011) (emphasis original). Causation requires actual reliance only if the claim is
24 predicated on a fraud theory “ See In Re Tobacco II Cases, 46 Cal. 4th 298, 326-27 (2009); accord Cel
25
26
“ Indeed, there are hundreds, if not thousands, of UCL cases that have no required element of reliance
27 because they are not based on deception. See e.g. Cisneros v. U.D. Registry, Inc., 39 Cal. App. 4th
548, 564 (1995) (UCL claims upheld in a case based on violations of credit reporting laws, such as
28 failing to following credit verification procedures); Bureeron
te v.eralUvawas, 922F. Supp. 1450, 1477
(C.D. Cal. 1996) (UCL claims upheld based on violations of and state labor laws); Sisemore v.
5
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Tech Commce’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (“By proscribing any unlawful
business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that
the unfair competition law makes independently actionable.”) (internal citations omitted).
1 Bye harain
ng or Sune oS
Sth are “Unconditional gilts” Due to Google’s
Plaintiff's complaint alleges that Google collected his and consumers’ money despite its lack of
compliance with the ARL (the “gift theory”). See Compl. 49. Because Plaintiff has paid money that
Google was not rightfully owed, he has been “deprived of money . . . to which he . . . has a cognizable
claim.” See Kwikset, 51 Cal. 4th at 323; Medrazo v. Honda of N. Hollywood, 205 Cal. App. 4th 1, 13
(2012); Lopez v. Stages of Beauty, LLC, 307 F. Supp. 3d 1058, 1070 (S.D. Cal. 2018) (holding plaintiff
adequately pled injury in fact with allegation that “when a product is delivered to a consumer in violation of
10
the ARL, it is not considered a product that has been sold, but is considered a gift,” such that, “when the
11 Defendant collected money for that gift, it injured Plaintiff.”). The money he lost is sufficient to establish
12 an economic injury caused by unfair competition under the UCL. See Kwikset, 51 Cal. 4th at 323.
13 Plaintiff need not plead actual reliance to establish causation under the gift theory because Section
17603 does not rely on Plaintiff or other consumers having been deceived by the practice. See § 17603
14
(subscription becomes unconditional gift if business does not “first obtain[] the consumer’s affirmative
15
consent as described in Section 17602”); see also RJN, Ex. A at 161 (Assembly Judiciary Committee
16
Worksheet describing 17603 as “new section making products sent to the consumer which were not
17 actually ordered or requested by the recipient in a manner consistent with the provisions of this article an
18 unconditional gift to the consumer”) (emphasis added); accord Medrazo, 205 Cal. App. 4th at 12 (Where
19 claim not predicated on fraud, plaintiff “must simply show that the alleged violation caused or resulted in
the loss of money or property”); Tobacco II, 46 Cal. 4th at 325 n.17 (envisioning “many types of unfair
20
business practices in which the concept of reliance . . . has no application”). “When [Google] collected
21
money from [Plaintiff] that it was not owed by charging [his] debit or credit cards, [Plaintiff was]
22
undoubtedly injured and lost money as the result of the Defendant’s actions. Being forced to pay money for
23 what should be considered a gift must qualify as an injury.” Roz v. Nestle Waters N. Am., Inc., No. 2:16-
24 cv-04418-SVW-JEM, 2017 WL 132853, at *8 (C.D. Cal. Jan. 11, 2017) (noting the “statute specifically
25 places no conditions on these gifts, meaning that the product is considered a gift whether or not the
26 Plaintiffs can show they did not actually want the product”); see also Siciliano Order
A fter Hearings on
27
Master Fin., Inc., 151 Cal. App. 4th 1386, 1426 (2007) (UCL claims upheld based on discrimination
28
under the Fair Employment and Housing Act).
6
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Apr. 14, 2017 (“Class Cert. Order”), Fisher Decl. Ex. 3, at 12 (citing Roz, 2017 WL 132853, at *7-8
[a]ssuming that the ‘gift’ theory has merit, plaintiffs certainly have standing to assert it”)
Under Section 17603, Google’s non-compliance with the ARL converted Plaintiff's purchases into
gifts. See § 17603. Thus, Google’s unfair competition caused Plaintiff to lose money by paying for what
should have been a gift, and Plaintiff has standing to seek restitution of monies “which may have been
acquired by means of such unfair competition.” See § 17203; see also Roz, 2017 WL 132853, at *7 (“Any
money that is obtained as the result of unfair competition, regardless of whether the consumer wanted the
product she received, can properly form the basis of a claim for restitution.”). Interpreting Section 17603 to
impose strict liability “allows precisely that right [to seek restitution], and it provides the protection to
consumers and the disincentive to business that were clearly contemplated by [the ARL].” Roz, 2017 WL
132853, at *8.
10
Google’s cited cases are inapposite because they do not involve violations akin to the ARL’
11
unconditional gift provision,’ where the Legislature has defined the money lost in the statute. See Roz, 2017
12 WL 132853, at *6-8 (rejecting similar argument, based on Hall, 158 Cal. App. 4th at 855, that “[s]ince the
13 Plaintiffs do no allege that they did not want the [product], the [product] was unsatisfactory, or the
14 [product] was worth less than they paid forit, they have not been injured because they received the benefit
15 of the bargain”). In Roz, the court found that the ARL “presents a different situation than mere payments
for a bargained- for product or service” because
16
[t]he clear meaning of [the unconditional gift] provision is that when a business violates
17 the requirements of the [ARL] that consumer has no obligation to pay the business
for the product because it is deemed a gift. The statute specifically places no
18
° See Dem. MPA at 10-12 (citing Hall v. Time Inc., 158 Cal. App. 4th 847, 853-54 (2008) (false
19
advertising case where plaintiff charged for book during “free preview period” was not injured
because he paid money and received a book in exchange and did not allege that “the book was worth
20
less than what he paid for it”); Medina v. Safe-Guard Prods., Inte’l, Inc., 164 Cal. App. 4th 105, 115
(2008) (fact that unlicensed insurer sold plaintiff auto service contract which was worth the same
21
despite unlicensed status did not “cause[] him to part with the money he paid for the tire and wheel
22 contract” (emphasis original)); Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583, 1591 (2008)
(plaintiff did not allege thati a s unlicensed status caused him to pay more for insurance, and thus
23 did not establish economic i: ; Kisselv. Omega Nat. Sci., Inc., No. CV 16-2770- GW(SKX), 2016
WL 9019613, at *3 (C.D. C meAug. 22, 2016) (no Article III injury in fact where Plaintiff did not
allege that the“ Maced lack of a proper acknowledgement affected her in any way”); Deveroux v.
24
Apple Inc., No. 1-14-CV-271773, 2015 Cal. Super. LEXIS 2668 (Cal. Super. Ct. Dec. 11, 2015)
25 (plaintiff did not detrimentally rely on business’ failure to disclose that it would collect her personally
identifying information where she specifically alleged that she was not charged for product until after
26 she provided the information)). In Warner v. Tinder Inc., the plaintiff lacked standing because he did
not allege that he was charged any money to download the free mobile dating application, but merel
27 that the free version lacked features of the paid subscription. Warner, 105 F. Supp. 3d 1083, 1093
(C.D. Cal. 2015). Finally, Mayron expressly found that the ARL’s unconditional gift theory did not
ae
28 to the facts in that case. Mayronv Google Inc., No. 2015-1-CV-275940, 2016 WL 6822258, at
al. Super. Ct. Oct. 14, 2016)
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conditions on these gifts, meaning that the product is considered a gift whether or not
the Plaintiffs can show they did not actually want the product. ... When the Defendant
collected money from the Plaintiffs that it was not owed by charging their debit or
credit cards, the Plaintiffs were undoubtedly injured and lost money as the result of the
Defendant’s actions.
2017 WL 132853, at *8; accord Siciliano Class Cert. Order, Fisher Decl. Ex. 3, at 12 (citing Roz, 2017 WL
132853, at *7-8 (“[a]ssuming that the gift theory has merit, Plaintiffs certainly have standing to assert it.”)).
Because Section 17603 rendered Plaintiffs subscription an unconditional gift, he was injured when he paid
for it, and the injuries identified by Google are not required to state a gift theory claim. Cf. Dem. MPA at
12.
2 Plaintiff States a Claim for Money Had and Received.
The Gift Theory also forms the basis for Plaintiff's claim under the common count of money had
10 and received. A cause of action for money had and received is stated if it is alleged that the defendant
is
11 indebted to the plaintiff fora certain sum of money had and received by the defendant for the use of the
12 plaintiff. Avidor v. Sutter’s Place, Inc., 212 Cal. App. 4th 1439, 1454 (2013); see, e.g., Schultz v. Harney,
13 27 Cal. App. 4th 1611 (1994) (holding cause of action for money had and received available where plaintiff
has paid money to defendant pursuant to contract which is void for illegality). The claim is viable
14
whenever the defendant has received money that belonged to the plaintiff, and which “in equity and good
15
conscience should be paid to the latter.” Gutierrez v. Girardi, 194 Cal. App. 4th 925, 937 (2011) (quoting
16 Weiss v. Marcus, 51 Cal. App. 3d 590, 599 (1975)). Plaintiffs can pursue a claim “where an undue
17 advantage was taken of plaintiffs’ situation whereby money was exacted to which the defendant had no
18 legal right.” J.C. Peacock, Inc. v. Hasko, 196 Cal. App. 2d 353, 361 (1961) (internal citations omitted).
19 Because Section 17603 deems any subscription made in violation of the ARL “an unconditional
gift,’ Google had no legal right to the monies it took from Plaintiff and the putative class for subscriptions
20
made in violation of the ARL. Google took Plaintiff's money without obtaining his affirmative consent, so
21
equity and good conscious entitles Plaintiff and putative Class Members to restitution under the common
22 count for money had and received.® This Court found the common count of money had and received to be
23 derivative to the gift theory claim, and certified the claim to proceed to trial on a class basis in Siciliano.
24 See Class. Cert. Order, Fisher Decl. Ex. 3 at 25; see also MSA Order, Fisher Decl. Ex. 4 at 15.
25
26
® Stated differently, Google took Plaintiffs money in exchange for an automatically renewing
27
subscription, i.e. to be used for his benefit; however, the money was not used for his benefit because
28 Google charged Plaintiff for what should have been an unconditional gift; and Google has not returned
the money to Plaintiff. Cf. Dem. MPA at 19 (citing CACI No. 370).
8
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3 Section 17603 Applies to Google Play Music and Other Products.
Recognizing that section 17603 provides a basis for the “gift theory” unlike in other UCL cases
where there is no unconditional gift provision, Google invites this Court to make the same mistake that the
Mayron court did in deciding at the pleading stage a mixed issue of fact and law — i.e. the Mayron court
ruled, without an evidentiary record, that Google Drive is an “intangible service” not covered by section
17603. Mayron, 2016 WL 6822258, at *3. Plaintiff has specifically carved Google Drive out of this case
so it is not at issue here, see Compl. § 51, but nonetheless Google urges this Court to find on demurrer that
Google Play Music is an “intangible service” not covered by section 17603. See Dem. MPA at 15 n.3. The
Court should decline to make such a finding on demurrer for several reasons.
First, a demurrer is not the appropriate means for determining the truth of the disputed facts. A
10 demuzrrer tests the pleading alone, and not the evidence or the facts alleged. Cal. Civ. Proc. Code
§ 430.30(a). It tests whether the plaintiff's complaint, along with matters that may be judicially noticed,
11
states facts sufficient to constitute a cause of action upon which relief may be based. Young v. Gannon, 97
12
Cal. App. 4th 209, 220 (2002). At the demurrer stage, courts must take the allegations as true. See
13 Kwikset, 51 Cal. 4th at 327 n.11; see also Hacker v. Homeward Residential, Inc., 26 Cal. App. 5th 270
14 (2018) (noting factual allegations deemed to be true, “however improbable they may be”) (intemal citation
15 omitted). The court must also assume the truth of the facts that may be implied or inferred from those
16 expressly alleged. Lazar v. Hertz Corp., 69 Cal. App. 4th 1494, 1501 (1999). Here, the Complaint alleges
that Google offers subscriptions to digital products “including, but not limited to, songs, movies, television
17
shows, magazines, newspapers, periodicals, and other digital products” on an automatically renewing basis.
18
bringing it within the coverage of the ARL. See Compl. |23. The digital products are “‘deliver[ed]” to the
19 consumers via software applications, and “all products offered through Defendant’s in-app subscriptions
20 are capable of being downloaded, stored, printed, or otherwise introduced into the physical world.” See id.
21 99 20-24. Taking these factual allegations as true, Plaintiff sufficiently alleges that Google sends “goods,
22 wares, merchandise, or products” to consumers and is thereby subject to Section 17603’s coverage.
Second, Google is wrong in its assertion that Google Play is an “intangible service” not covered by
23
Section 17603. Section 17603 applies to “goods, wares, merchandise, or products” sent to consumers
24
without affirmative consent as defined by the ARL. As this Court found in Siciliano v. Apple, in-app
25
subscription content like that offered by Google Play Music may be covered by Section 17603. See MSA
26 Order, Fisher Decl. Ex. 4, at 13-14. Google Play’s product offerings — “including, but not limited to, songs
27 movies, television shows, magazines, newspapers, periodicals, and other digital products” are all “capable
28 of being downloaded or otherwise introduced into the physical world,” id. § 23. See Johnson v.
9
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Pluralsight, LLC, 728 F. App'x 674, 677 (9th Cir. 2018) (consumers’ ability to download course materials
in addition to accessing online training videos brought the subscriptions within the coverage of Section
17603); cf. Siciliano MSA Order, Fisher Decl. Ex. 4, at 15 (rejecting Apple’s argument that “all In-A pp
Subscriptions are ‘services’ beyond the scope of section 17603”). Here, for example, the songs that
Plaintiff listens to on Google Play Music could be downloaded to his computer or recorded onto a disc and
so have physical presence and are “products.” Cf. Haskins v. Symantec Corp., No. 13-CV-01834-JST,
2013 WL 6234610, at *8-10 (N.D. Cal. Dec. 2, 2013) (holding antivimis software downloaded from the
intemet to be a tangible good under the CLRA).
Third, setting aside the ability to download Google Play content, Google Play’s product offerings
fall within the plain meaning of section 17603’s terms because they are items produced and offered for sale
to consumers. See Compl. 23. “Goods” is broadly understood to mean “something manufactured or
10
produced for sale.” See Karczewski v. DCH Mission Valley LLC, 862 F.3d 1006, 1013 (9th Cir. 2017)
11
(citing Merriam-W ebster Dictionary, https://www.merriam-webster.com/dictionary/goods (visited June 30,
12 2017)). Similarly, “wares” are “manufactured articles, products of art or craft, or farm produce offered for
13 99 6c
sale; item[s] offered for sale;” or “intangible item[s] (as a service or a literary product) that [are] a
14 marketable commodity.” Webster’s Third Int’! Dictionary (1981). “Merchandise” means “the
15 commodities or goods that are bought or sold in business; the wares of commerce.” Id. Finally, “products”
are “something produced by physical labor or intellectual effort: the result of work or thought.” Id.; accord
16
Black’s Law Dictionary (10th ed. 2014) (defining “‘consumer product” as “[a]n item of personal property
17
that is distributed in commerce” and “product” as “[s]omething that is distributed commerci