Archives for posts with tag: internet

Kids use their parents credit card on Facebook and rack up unauthorized debts. Users’-parents file for a class action, to absolve those debts. In particular, regarding credits purchased for the game “Ninja Saga”

I.B., by and through his Guardian ad Litem BRYAN FIFE, et al., Plaintiffs,
v.
FACEBOOK, INC., Defendant.

No. C 12-1894 CW

UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF CALIFORNIA

Decided, October 25, 2012 by Opinion of Judge Claudia Wilken

Below are the facts from the Opinion (citations to complaint removed):

Facebook operates the largest online social network in the world and provides a payment system, Facebook Credits, for users to make purchases within the Facebook website. Facebook permits minors to register on its website and use its service

In October 2011, Plaintiff I.B., a minor, asked his mother, Plaintiff Glynnis Bohannon, for permission to spend twenty dollars on his Facebook account using Bohannon’s Wells Fargo Master Card, in exchange for twenty dollars in cash I.B. purchased Facebook Credits from Facebook for use in “Ninja Saga.” Subsequently, without any notice that his mother’s credit card information had been stored by Facebook and the Facebook Credits system, or that his mother’s credit card information was being used again after the initial twenty dollar purchase, I.B. made in-game purchases for which he thought he was spending virtual, in-game currency. As a result, Bohannon’s credit card was charged repeatedly and without her consent, and the charges totaled several hundred dollars. Upon discovering the transactions, Bohannon tried to obtain a refund from Facebook by leaving a phone message at a phone number listed for Facebook but received no response.

This opinion is on motions to dismiss,

Facebook moves to dismiss the 2AC for failure to state a claim and to strike the class allegations. Plaintiffs oppose the motions.

As to requests for Judicial notice:

Facebook asks the Court to take judicial notice of screen shots of webpages from Facebook’s website on the grounds that they were specifically referred to in the 2AC or illustrate the allegations in the amended complaint. These include Facebook’s Statement of Rights and Responsibilities, Payment Terms, Help Center pages and payment screens in the game Ninja Saga. Plaintiffs object to these exhibits. Facebook’s manager of Payment Operations, Bill Richardson, provides a supporting declaration concerning the public availability of these webpages. However, Mr. Richardson states that the screen shots were viewed and printed between April 13, 2012 and May 10, 2012, and his declaration does not indicate whether these webpages were in effect or available at the time of the events alleged in the 2AC. Richardson Decl. at 2-4 nn.1-6. In support of Facebook’s reply, Mr. Richardson states that Facebook did not “materially alter” the Ninja Saga payment pages between October 2011 and May 2012. Suppl. Richardson Decl. 3. However, whether the minor Plaintiffs I.B. and J.W. would have viewed these particular payment pages is subject to reasonable dispute. Facebook’s request for judicial notice is therefore denied. See In re Easysaver Rewards Litig., 737 F. Supp. 2d 1159, 1168 (S.D. Cal. 2010) (denying request for judicial notice where “[t]he Court finds that whether these are the webpages Plaintiffs would have viewed during their online transactions is subject to ‘reasonable dispute.'”) (citing Fed. R. Evid. 201).

Then discussing applicable law regarding minors in contracts, subheadings: “2. Contracts Voidable Under Family Code Section 6710” and “a. Minors May Disaffirm Contracts Even After Receiving Benefits”:

Facebook contends that minor Plaintiff I.B. cannot disaffirm his contract because he has already received the full benefit of the Facebook Credits that he purchased by using the Credits to make in-game purchases in “Ninja Saga.

Facebook contends that the ruling in E.K.D. on the enforceability of the forum selection clause is directly applicable here because minor Plaintiff I.B. has already accepted the benefits of the contract to purchase Facebook Credits, as demonstrated by his concession that he used the Credits to make “in-game purchases” in the Ninja Saga game. Mot. at 10-11 (citing 2AC 25). Although Plaintiffs do not allege what Plaintiff J.W. did with the Credits that he purchased, Facebook infers that he also spent the Credits online and argues that allowing the minor Plaintiffs to disaffirm their contracts would result in “an unfair windfall to the minor.”

The court goes on to address claims of violations of Electronic Fund Transfer Act, 15 U.S.C. § 1693 et seq. (EFTA) to which

Facebook contends that it is not a “financial institution”

But

Plaintiffs do not contend that Facebook is a financial institution but rather assert a claim under HN22Go to this Headnote in the case.15 U.S.C. § 1693m, which provides for civil liability against persons other than financial institutions.”

And

Plaintiffs do not sufficiently allege which provision of the EFTA has been violated … motion to dismiss the EFTA claim is granted with leave to amend

Then the Consumer Legal Remedies Act, California’s Unfair Competition Law and the Money Transmission Act.

In conclusion a mixed decision of dismissals, some with leave to amend, and some denied. The claims under the California Family Code remain.

Affiliate web sales subjects defendant to personal jurisdiction and venue in retailers’ state.

MuscleDriver USA, LLC, Plaintiff,
vs.
Robert Chandler Smith and Web Ninjas, LLC, Defendants.

C/A No. 0:11-1777-MBS-PJG

UNITED STATES DISTRICT COURT FOR THE DISTRICT OF SOUTH CAROLINA, ROCK HILL DIVISION

2012 U.S. Dist. LEXIS 69446

May 17, 2012, Decided

Opinion by Chief United States District Judge Margaret B. Seymour:

On July 22, 2011, Plaintiff MuscleDriver USA, LLC, filed an action against Defendants Robert Chandler Smith (“Smith”) and Web Ninjas, LLC (“Web Ninjas”). On September 19, 2011, default was entered against Web Ninjas. Because Smith is represented pro se, this action was referred to United States Magistrate Judge Paige J. Gossett for pretrial handling pursuant to 28 U.S.C. § 636(b) and Local Rule 73.02(B)(2), D.S.C.

On October 11, 2011, Smith filed a motion to dismiss for lack of personal jurisdiction and for improper venue, or, in the alternative, to transfer the action to the Western District of Texas. On April 17, 2012, the Magistrate Judge issued a Report and Recommendation recommending that Smith’s motion be denied. … The court adopts the Report and Recommendation and incorporates it herein by reference.

According to that April 17 report by Magistrate Judge Paige J. Gossett, this case is about:

The Plaintiff, MuscleDriver USA, LLC (“MuscleDriver”) filed this action against Defendant Robert Chandler Smith (“Smith”), who is self-represented, and Defendant Web Ninjas, LLC (“Web Ninjas”), alleging false designation of origin and unfair competition in violation of the Lanham Act, § 43(a), 15 U.S.C. § 1125(a), as well as state law claims for unfair trade practices under S.C. Code Ann. §§ 39-5-10, et seq., common law unfair competition, and injunction.

and

This case arises out of an internet business relationship gone bad. At some point prior to 2009, Smith, who attests that he has never been to South Carolina, created and began operating a website at the domain www.buyweightliftingshoes.com. (Smith Decl. ¶¶ 3, 20, ECF No. 14-2 at 1, 2.) Smith states that on the website, “I drafted and posted reviews of various weightlifting shoes. The site also contained ‘affiliate’ links to the sellers of the reviewed shoes through the sellers’ affiliate programs.” (Id. at ¶ 21, ECF No. 14-2 at 2.) Under affiliate programs, a party seeking to become an affiliate generally signs up with a retailer online, is given a tracking code, and collects a commission from the retailer on “click-through” sales that flow from the affiliate site. (Id. at ¶ 22, ECF No. 14-2 at 2.) In November 2009, Smith contacted MuscleDriver by e-mail, and the parties exchanged information about the MuscleDriver affiliate program. (ECF No. 18-1 at 8, 9.) Thereafter, Smith states that “I entered into an affiliate agreement with plaintiff . . . by signing up online then by agreeing to [MuscleDriver]’s Affiliate Terms and Conditions by clicking a check-box at the bottom of the page.” (Smith Decl. ¶ 23, ECF No. 14-2 at 3.) Although MuscleDriver’s location and address is identified on its website that Smith visited to establish the affiliate agreement, Smith states that he “only learned that [MuscleDriver] was in South Carolina after receiving his first commission check,” which was mailed from the MuscleDriver headquarters. (Id. at ¶ 25, ECF No. 14-2 at 3.) He had periodic communications with MuscleDriver and received monthly commission checks. (Id. at ¶ 11, ECF No. 14-2 at 2.) In 2010, Smith initiated a second, separate wholesale agreement with MuscleDriver in which he received commissions for advertising and selling MuscleDriver products from a different website, www.musclesandcurves.com. In March 2011, a dispute arose between the parties over a product review posted on http://www.buyweightliftingshoes.com, and MuscleDriver terminated its relationship with Smith. (Id. at ¶¶ 28-30, ECF No. 14-2 at 3.) In response to the termination and communications about the dispute, Smith removed some content from http://www.buyweightliftingshoes.com, but continued to post other content related to MuscleDriver and its products on the site, as well as the disputed review. (Id. at ¶ 32, ECF No. 14-2 at 4.) He also then formed Web Ninjas, LLC on March 16, 2011. (Id. at ¶ 33, ECF No. 14-2 at 4.) Five months later, on August 15, 2011, Smith took http://www.buyweightliftingshoes.com offline. (Id. at ¶ 34, ECF No. 14-2 at 4.) During the eighteen-month relationship between the parties, Smith’s websites generated more than $100,000 in sales of MuscleDriver’s products, all for products that shipped from MuscleDriver’s facility in South Carolina. Some of the sales through Smith’s websites were to customers in South Carolina. (Hess Decl. ¶¶ 5, 7-8, ECF No. 18-1 at 4; Invoices, ECF No. 18-1 at 15-26.) MuscleDriver majority owner and president Brad Hess further attests that all of its witnesses and documents related to this case are in South Carolina. (Hess Decl. ¶¶ 14-16, ECF No. 18-1 at 5-6.)