Plaintiff sued eBay, Inc. (and a couple of international
eBay versions that were dismissed from the case) for breach of contract and
fraud related to “Featured Plus!” listings on eBay sites. It alleged that eBay uses entry points
including ebay.com, motors.ebay.com, stores.ebay.com, etc. These are interconnected, and a search for an
item on eBay Motors can begin from many pages, including ebay.com; consumers
can’t readily tell which subsite they’re using.
The eBay Motors fee schedule includes optional fees, including Featured
Plus!, which costs as much as $39.95 per listing. The description: “Your item appears in the
Featured Items section at the top of the search results list page.”
Plaintiff argued that the plain meaning of this was that any
Featured Plus! Item should appear in the Featured Items section at the top of any search list, whether the search was
conducted from eBay Motors, ebay.com, or some other subsite. But, plaintiff alleged, Featured Plus! didn’t
actually work that way; if a consumer searched from ebay.com no Featured Plus!
items would be shown at the top of the search list, even though eBay Motors
listings would be displaye, and if a search conducted from eBay Motors was for
products across all categories, the result was the same. Further, if an eBay Motors searcher chose to
view results by any criteria other than “Best Match,” no Featured Plus! entries
would be shown at the top. Plaintiff
also alleged that for certain periods, including the second half of 2011,
Feature Plus! didn’t work, but eBay continued to market it. Plaintiff filed a putative class action
alleging breach of contract, unfair competition/false advertising, and unjust
enrichment.
The court found the contract language ambiguous. The parties didn’t identify any provision of
the contract defining Featured Plus! or how it was supposed to operate. eBay’s argument that the contract didn’t
promise priority if consumers used ebay.com or sorted by anything other than
Best Match ignored that the terms did promise to list Featured Plus! items in a
“section at the top of the search results page” without any limitation or
description. True, this was part of the
“eBay Motors listing upgrades” and was included only on eBay Motors' Fees
Schedule, but that didn’t make the meaning of “Featured Items section at the
top of the search results page” unambiguous. Further factual development of the
objectively reasonable expectations of eBay sellers (and perhaps eBay consumers,
though I don’t see why) was required.
The court turned to the UCL/FAL/fraud claims. eBay argued that plaintiff couldn’t allege
justifiable reliance because of the plain terms of the contract—but the terms
were ambiguous. The UCL/FAL claims
survived, but not the common law fraud and deceit claims because plaintiff didn’t
identify any damage other than that caused by the alleged breach of contract,
which is just economic loss and not actionable in fraud. The unjust enrichment claim also failed
because such claims don’t work where a plaintiff alleges that there is a valid
and enforceable contract between the parties.
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