I get it, I get it, I get it: the Court of Appeal is sick and tired of this long-running and oft-appealed serial litigation, and thinks that eBay should win. Moreover, there's a lot to that: the plaintiff does indeed seem to be mostly complaining merely about the nature of the contract to which it agreed.
Mind you, there's a lot for buyers to complain about there; e.g., the fact that eBay pretty much always refunds purchases if the buyer is unhappy for any reason, which very much helps fraudulent buyers and hurts the sellers. But that's largely a reason just to not sell on eBay, which is one's choice. There are other platforms and other ways to sell. The Court of Appeal, understandably, doesn't think that satisfies the legal standards for unconscionability. Moreover, it's tired of seeing this same litigation on behalf of various different eBay buyers again and again.
The thing is this, though: in the process of getting rid of what you think's a meritless lawsuit, you've got to be extra careful not to make bad law. Particularly on appeal.
My thought in this regard relates to how the panel gets rid of a couple of different causes of action -- a tiny fraction, mind you, of the twenty-plus causes of action that plaintiff pleads. Here's what Justice Richman says about those claims:
"The 12th, 13th, and 14th causes of action are styled respectively “Breach of Contract for Hiding Plaintiffs’ Listings,” “Intentional Interference With Prospective Economic Advantage re Hiding of Listings,” and “Deceptive Business Practices in Violation of Business and Professions Code section 17200.” As indicated, all are based on the fundamental premise that eBay hides listings, “secretly,” “completely,” and on a “regularly recurring basis.” As appellants’ brief puts it at one point, eBay allegedly makes certain “listings completely invisible and not capable of being seen by prospective buyers.” . . .
To begin with, at no place do appellants identify any listing on eBay that was made “completely invisible” or “completely hidden.” Their brief does make the conclusory assertions that “all” of their listings were hidden “for a substantial period of time,” and that they “had no chance of selling their items” through the eBay website. But while the SAC alleges “many” listings were hidden, it lacks any allegation regarding any specific listing that could not be found or when the hiding allegedly occurred. Instead, the SAC theorizes that because sales allegedly decreased, listings were hidden, ignoring the innumerable other reasons that would readily explain why their sales may have fluctuated. Such speculation cannot support a viable claim. (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219–1220.) Again, Judge Hernandez’s holding is spot on: “the ‘hidden listing’ allegations remain deficient . . . [w]ithout more specific factual allegations eBay cannot possibly determine whether any listings were actually not displayed (i.e., were ‘hidden’) or if so, why.”
Not only that, facts alleged elsewhere in the SAC undermine the existence of any such practice. For example, plaintiff Cobb alleges he was initially unable to find some of his listings but found them “several days later,” again rebutting plaintiffs’ claims of listings being “completely hidden.” Were all that not enough, appellants’ brief acknowledges that eBay has the “contractual right to downgrade visibility.”
On those bases, the Court of Appeal dismisses, inter alia, the claim for breach of contract.
Let's unpack the various different reasons the Court of Appeal gives for this dismissal.
First, the panel says that the complaint alternatively says that "many" of the listings were hidden, but elsewhere says that "all" of their listings were hidden "for a substantial period of time." Well, okay, that might be a little unclear, but those claims aren't totally contradictory; I presume what they mean is that sometimes, all of their listings were hidden, and that sometimes, only lots of them were hidden. I could easily see that being a breach of contract if true. Plus, last I checked, plaintiffs were permitted to plead in the alternative anyway.
Then Justice Richman says that there's a lack of detail, and that seems to be one of his bigger points: the complaint "lacks any allegation regarding any specific listing that could not be found or when the hiding allegedly occurred." Okay, maybe that's a reason to order a more definite statement, but that's not the basis for dismissing a complaint with prejudice. Plus, since when am I required in a complaint to list every date and item with particularity? If I say in a complaint: "Defendant repeatedly punched me in the face," that states a claim: I'm not required to say how many times, or on what days, or with what instrument, or on what part of my face. We're pretty much all about notice pleading here in the United States -- unlike those stinking English we kicked out back in the eighteenth century -- and rely on discovery to flesh out those details, not the pleadings. Defendant can deny the allegation, or deny it for lack of information and belief, and we move on. That on "omitted details" in this regard is fairly clear; or at least it was before this opinion, which sort of mucks it up in the service of the purportedly good cause of getting this particular case kicked.
Then the Court of Appeal says that claim is deficient because "the SAC theorizes that because sales allegedly decreased, listings were hidden, ignoring the innumerable other reasons that would readily explain why their sales may have fluctuated. Such speculation cannot support a viable claim." That's even an even more severe (and worse) pleading requirement than the Supreme Court created in Tombley and Iqbal -- and that the California courts have (tellingly) rejected. You don't at the pleading stage come up with defenses for the other side sua sponte and kick the complaint on that basis. If the complaint says "Defendant did X and it harmed my business," then that's a factual claim, and you accept it for purposes of a demurrer. Plus, it's WAY plausible that if you in fact hide someone's listings, their sales will go down. Indeed: Duh! Of course they will. If there's an alternative explanation, and eBay can prove that hiding the listings actually made sales go up, or that there's a different explanation, great, they can establish that in an MSJ or at trial. We don't bounce complaints on the pleadings simply because a judge thinks that the damage allegations of the plaintiff are perhaps overstated or come from an alternative source.
Then there's the fourth basis for dismissal: that the "facts alleged elsewhere in the SAC undermine the existence of any such practice. For example, plaintiff Cobb alleges he was initially unable to find some of his listings but found them “several days later,” again rebutting plaintiffs’ claims of listings being “completely hidden.” That's a good example of being perhaps way too one-sided. The complaint says that some listings were hidden for a while. Maybe the listings here were gone for only a couple days, but if that's true, and if the contract requires them to be always visible, then that's a breach -- and the fact that the hidden listings were visible several days later doesn't mean that plaintiff is wrong or has contradicted himself or that something like judicial estoppel or whatever the Court of Appeal thinks it's relying on here permits the dismissal of the complaint. No way.
Which leaves only the final sentence: "Were all that not enough, appellants’ brief acknowledges that eBay has the “contractual right to downgrade visibility.” Okay. Maybe that's a defense, right? But surely we need more than just this hint, no? Let's hear about the contract. Does it really allow eBay to totally hide the listings? If so, great, kick the thing. But we'd need to know the actual terms of the contract -- not merely a five-word snippet from a brief -- analyze how they interact with the other contractual terms, evaluate whether totally removing listings is actually a breach (does it merely "diminish visibility" or do something more serious?), etc.
I'm not saying that plaintiff's got a great breach of contract claim. Maybe it does, maybe it doesn't. But to figure it out, I'd definitely need more than what I have here. More importantly, I definitely don't want litigants or trial courts citing or relying on this case for the propositions for which it facially seems to stand; e.g., that your complaint gets dismissed if you don't provide dates or itemizations, that you get bounced if your complaint doesn't affirmatively negate any possible alternative explanations for how you were damaged, etc. That'd be much worse systemically then anything this tiny little case will ever do to anyone -- particularly if we can get it bounced on the actual merits because it's not a breach since the eBay contract allows this stuff. (Personally, if eBay did, in fact, totally hide someone's listings for absolutely zero reason, I can in fact see that as possibly being a breach -- though I suspect that's not what in fact happened, and that if listings were indeed hidden, it was probably for a reason spelled out in eBay's contract. But, again, that's a matter for discovery or the merits, not the pleadings.)
As they say, bad cases sometimes make bad law.
Especially if you're not careful.
