Block v. eBay

In order to state a claim for violations under California’s False Advertising Law, a private plaintiff must prove actual, reasonable reliance on the misrepresentations, and those misrepresentations must be material.

Marshall Block sells items on eBay, and brought suit alleging eBay’s Automatic Bidding system violates provisions of the User Agreement. This system allows bidders using the online auction marketplace to set a maximum bid for an item, which is kept confidential, and the software automatically enters incremental bids until the auction is won or the limit is reached. Block alleges this system violates the “Limitation of Liability” section which states eBay is not involved in the actual transaction, and another provision stating no agency or other relationship is created by the User Agreement. The district court granted eBay’s motion to dismiss the complaint, but granted leave to amend. Block declined to amend, and appealed the judgment dismissing the complaint. The Ninth Circuit held the challenged provisions of the User Agreement does not constitute enforceable promises by eBay. The panel found the first provision to be a broad description of the marketplace explaining why liability is limited, and not a promise by eBay. As to the second provision, the panel found no promise by eBay to not enter into agency relationships. Thus, the breach of contract claim was properly dismissed. The panel also found Block did not adequately plead violations of California’s Unfair Competition Law (“UCL”), for breach of contract and intentional interference with prospective economic advantage. Block also alleged violations of California’s False Advertising Law and eBay’s involvement in a fraudulent business act or practice. To prevail on these claims, a private plaintiff must prove actual reliance on the material misrepresentations. The panel held Block had not plausibly alleged reliance, nor could it be material because no reasonable person could have relied on the representation. Thus, because Block did not state a claim for breach of contract or violation of the UCL, he did not state a claim for intentional interference with prospective economic advantage. AFFIRMED