Tuesday, September 15, 2020

Mayron v. Google (Cal. Ct. App. - Sept. 9, 2020)

It's good to be Google.  Because you get opinions like this one.

With which I couldn't agree less.

Section 17602 of the Business and Professions Code places strict limits on "automatic renewals" -- subscriptions, monthly fees, etc.  That's a good law.  We all know full well sleazy companies put things like this in small print and you find yourself charged $19.95 a month forever even though you had no idea that's what the contract you signed or box you clicked or whatever would make happen.

So Section 17602 says that if you're doing stuff like this the automatic renewal part has to be clear and conspicuous; that if you're getting a "free gift" (as you often do with these things) the monthly charge is listed near the gift and not someplace off on the corner of the screen; that the company has to clearly tell you how to cancel the damn thing, etc.  Hurrah.  I'm totally in favor.  The only companies this hurts are sleazeballs trying to trick you.  For them I cry not.  Everyone else can readily and easily comply.  The world would be a better place.

What happens if the company doesn't comply with these rules?  No biggie, really.  We don't throw 'em in jail or impose a statutory fine of $500 per violation or anything like that.  Section 17603 says that if they automatically renew stuff without complying with Section 17602, the consumer doesn't have to pay the renewal fees.  She can instead just treat the product or service or whatever as "as an unconditional gift."

Great.  Love it.  Seems like an entirely appropriate remedy.

Here, Eric Mayron says that Google doesn't follow any of these rules when it charges $1.99/month for additional storage space on Google Drive.  Personally, I have no idea if he's right.  I would expect (and hope) that Google's not an idiot and that it has good lawyers and that it's willing and able and desirous of following the rules.  You don't have to trick people for this stuff.  They'll happily pay.  Just let 'em know that they've actually gotta pay, and follow the rules.

But the Court of Appeal never decides whether Google breaks the law or not.  Because it holds that a consumer doesn't even have standing to raise this claim.  In an opinion that seems indisputably wrong to me both as a matter of doctrine as well as public policy.

Justice Grover says that there's no express private cause of action listed in Section 17602 and 17603.  I'm not sure that's right, since it expressly says you get to keep the stuff, and I feel like similar statutes have indeed been held to permit private enforcement.

But whatever.  Justice Grover says that the only way that individuals can possibly sue (since there's no private right of action under Sections 17602 and 17603 themselves) is to file a Section 17200 UCL claim, since that incorporates underlying statutory violations.  Plaintiff  here expressly does that.  So he's good to go, right?

Wrong.  Justice Grover says that he doesn't meet the standing requirement because he hasn't "suffered injury in fact and has lost money or property as a result of the unfair competition" as required by Section 17204.  To which Mr. Mayron responds:  "But I did lose money; they took my $1.99/month."  At which point Justice Grover says:  "But the loss has to be caused by the violation.  You never said you wouldn't have signed up for the service if they'd have made a more conspicuous disclosure etc.  There's no causal link, hence no standing."

Facially, that response makes sense.  But it's nonetheless wrong.

The causal loss flows from the statute.  The statute expressly makes the item a gift.  And when you take (or demand) money for a gift, that's a monetary harm -- hence standing.  Justice Grover analyzes the usual way we find causal links, to be sure:  by looking at the underlying statutory violation (e.g., the absence of conspicuous disclosure).  That's one way to establish causation, yes.  But it's not the only way.  When a statute grants a particular remedy -- as the statute here unquestionably does -- that remedy can be the link in the causal change.  Which, here, it is.

I'll use an example.  One that's not even far off from the present case.  Imagine that we have a social problems with people mailing unsolicited items to people and them billing them for what was sent.  We think that's deceptive; that people end up paying for the items out of guilt, or uncertainty ("Did I order that thing?"), or what have you.  We think it's a bad practice, and doesn't advance a truly competitive marketplace.  So we pass a law that says:  "If you mail a package to someone who didn't order it, and you know they didn't order it, it counts as an unconditional gift.  They don't have to pay for it."  (If you want, you can change the hypothetical to a law that says that anyone who receives a package at home on a Sunday gets to keep the package for free, as a way of making sure that homes are undisturbed on a day of rest; the principal is the same.)

Imagine that Amazon starts mailing tons of things to people they know didn't order the stuff, and bills for the things.  Someone (call him "Shaun") gets a package, sees a bill, has no idea whether he or his kids (or spouse) has ordered it, and pays the thing.  Then he realizes he's been scammed and sues.

But let's say he admits (truthfully) that he paid the bill not because the thing was "mailed" to him (the statute only covers things that are mailed), but simply because it was presented to him -- he'd have paid it if it was personally delivered, left on his doorstep, sent by carrier pigeon, whatever.  Under Justice Grover's reasoning, there'd be no "causation' and hence standing.  But that's not right.  The monetary injury was that I paid $30 bucks for a thing I didn't order.  And then Amazon didn't give me my money back, which is what they were required to do under the statute, since the thing was deemed to be an unconditional gift.  And, parenthetically, that's true even if I got a thing that's worth $30 (as I likely did).  I'm still injured.  To the tune of $30.  Because Amazon took $30 of my money for a gift.

That's injury.  Caused.  By the violation of the statute.

So too here.  When Google didn't follow the law, the statute made the extra months of service a gift.  When they nonetheless then continued to charge Mr. Mayron a monthly fee, they injured him.  And what transpired here is even worse than the hypothetical I gave because Google's actually affirmatively taking additional money, whereas Google was simply not giving it back. (You can do this same hypo with the "Can't deliver on Sunday" hypo if you'd like -- the fact that Shaun would have accepted or paid for the package even if delivered on a Saturday doesn't matter; it's still a gift, hence injury.)

Oh, and by the way, this is not a hypothetical.  (Well, the "Sunday" one is, but not the other.)  California has that exact statute.  It's Section 1584.5 of the Civil Code.  Which makes sending unsolicited stuff an unconditional gift.  (Ditto for federal law, by the way.)  Just like the statute here.   For the same reason you can bring a 17200 claim under that statute -- and have standing -- the same is true in the present case.  Even though the Court of Appeal concludes otherwise.

I admit that standing involves complicated doctrinal issues.  But when a statute makes something a gift, and when someone nonetheless bills you for it, you've lost money.  You've got standing.

Except not here, apparently.  Not when you're trying to sue Google.