eOnline Global, Inc et al v. Google Inc.

Filing 40

ORDER granting 15 Motion to Dismiss with leave to amend; amended complaint due 9/18/2017. Signed by Judge Edward J. Davila on 8/18/2017. (ejdlc3, COURT STAFF) (Filed on 8/18/2017)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN JOSE DIVISION

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EONLINE GLOBAL, INC, et al.,

Case No. 5:16-cv-05822-EJD

Plaintiffs,
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ORDER GRANTING DEFENDANT'S
MOTION TO DISMISS

v.
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Re: Dkt. No. 15

GOOGLE INC.,

United States District Court
Northern District of California

Defendant.
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Defendant’s motion to dismiss is granted as unopposed as to the third and fourth causes of

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action (“Unjust Enrichment” and “Quantum Meruit,” respectively). The third and fourth causes of

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action are DISMISSED WITH PREJUDICE.

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Defendant’s motion to dismiss is GRANTED WITH LEAVE TO AMEND as to the

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second cause of action for Breach of the Implied Covenant of Good Faith and Fair Dealing.

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“Under California law, a claim for breach of the covenant of good faith and fair dealing requires that a

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contract exists between the parties, that the plaintiff performed his contractual duties or was excused

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from nonperformance, that the defendant deprived the plaintiff of a benefit conferred by the contract in

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violation of the parties' expectations at the time of contracting, and that the plaintiff's damages resulted

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from the defendant's actions.” Avila v. Countrywide Home Loans, No. 10-CV-05485-LHK, 2010 WL

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5071714, at *5 (N.D. Cal. Dec. 7, 2010).

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In its opposition to the motion to dismiss, Plaintiffs clarify the basis of the claim, stating:

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“Google breached the implied covenant through its failure to act in good faith in making its

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various discretionary determinations – whether to confiscate all of the fund, even if one or another

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of plaintiffs’ hundreds of websites did not meet Google’s standards” (id. ¶49), and its

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Case No.: 5:16-cv-05822-EJD
ORDER GRANTING MOTION TO DISMISS
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unconsidered rejection of Plaintiffs’ appeal.” Plaintiffs’ first theory of liability fails to state a

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claim upon which relief may be granted because it is inconsistent with the Terms of Service.

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Paragraph 10 of the Terms of Service gives Google a right to terminate the agreement and

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“withhold unpaid amounts.” See McNeary-Calloway v. JP Morgan Chase Bank, N.A., 863

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F.Supp.2d 928, 957 (N.D. Cal. 2012) (“implied terms should never be read to vary express

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terms”).

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Plaintiffs’ second theory of liability has merit. Paragraph Five of the Terms of Service

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provides: “If you dispute any payment made or withheld relating to the Services, you must notify

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Google in writing within 30 days of any such payment.” Liu Decl., Ex. 1 ¶5. Plaintiffs alleges in
the complaint that Defendants denied them their right to appeal by “[f]orcing Plaintiffs to limit

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United States District Court
Northern District of California

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their appeal to 1,000 characters” and by denying Plaintiffs’ a “human” review. Although the

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Terms of Service does not specifically use the term “appeal,” Paragraph 5 invites the contracting

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party to submit a complaint, which implies that the complaint will be reviewed by someone and

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that the review will be conducted in a reasonable manner. At the pleading stage, these allegations

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are sufficient to state a claim for breach of the implied covenant of good faith and fair dealing.

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See McNeary-Calloway v. JP Morgan Chase Bank, N.A., 863 F.Supp.2d 928, 956-57 (N.D. Cal.

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2012) (discretionary powers evaluated under the implied covenant to assure that the promises of

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the contract are effective and in accordance with the parties' legitimate expectations).

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Plaintiffs shall file and serve an amended complaint consistent with this Order no later than
September 18, 2017.
IT IS SO ORDERED.
Dated: August 18, 2017
______________________________________
EDWARD J. DAVILA
United States District Judge

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Case No.: 5:16-cv-05822-EJD
ORDER GRANTING MOTION TO DISMISS
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