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Block v eBay, Inc.

Case No. 12-16527 (C.A. 9, Apr. 1, 2014)

Marshall Block argues that ebay.com’s Automatic Bidding system breaches two provisions of eBay’s User Agreement, violates California’s Unfair Competition Law, and constitutes intentional interference with prospective economic advantage. The district court dismissed Block’s complaint pursuant to Rule 12(b)(6). We have jurisdiction under 28 U.S.C. § 1291, and we affirm.


One of the ways in which goods are sold on eBay, possibly the “world’s largest online marketplace,” is through traditional auctions. Bidding in traditional auctions is conducted through eBay’s Automatic Bidding system. In this system, a bidder submits the maximum amount he is willing to pay for an item, and this amount is kept confidential from other bidders and the seller. eBay’s software then enters bids on behalf of the bidder, at predetermined increments above the current bid, until the user wins the auction or would need to exceed his maximum.

Block, a seller on eBay, argues that the Automatic Bidding system violates two provisions of the eBay User Agreement, entered into by each eBay user. First, a provision in the “Limitation of Liability” section states: “We are not involved in the actual transaction between buyers and sellers.” Second, the contract provides: “No agency, partnership, joint venture, employee-employer or franchiserfranchisee relationship is intended or created by this Agreement.”


Judge(s): Jerome Farris
Jurisdiction: U.S. Court of Appeals, Ninth Circuit
Related Categories: Competition , Torts
Circuit Court Judge(s)
Jerome Farris
Paul Huck
Stephen Reinhardt

Trial Court Judge(s)
Charles Breyer

Plaintiff Lawyer(s) Plaintiff Law Firm(s)
Roy Katriel The Katriel Law Firm

Defendant Lawyer(s) Defendant Law Firm(s)
Benjamin Chapman Cooley LLP
John Dwyer Cooley LLP
Michael Rhodes Cooley LLP



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Click the maroon box above for a formatted PDF of the decision.
3281, 2009 wl 5184016, at *3 (n.d. ill. dec. 21, 2009). with its users. contrary to block’s argument, it is irrelevant ebay’s misrepresentations were material, thus reliance can be enrichment, but he does not appeal the district court’s dismissal of that engagedin theinjury-producingconduct,”id. (quotingmirkin enforceable promise by ebay. agreement. several provisions are written in an informal, local 99 v. options — a child care & human servs. reilly v. inquest tech., inc., 160 cal. rptr. 3d 236, 249 (ct. illinois that it “does not act as an agent of users who sell alleged misrepresentations, nor would they have been to be taken together, so as to give effect to every part, if alone,” cal. civ. code § 1639, the words being interpreted in be ‘deceived,’” id. at 29 (quoting kasky v. nike, inc., 27 cal. bidding system breaches two provisions of ebay’s user an action for breach of contract, it might be the proper subject partnership, joint venture, employee-employer or franchiser- “buyers and sellers share the responsibility for making sure users’ content, actions or inactions, items they sellers.” second, the contract provides: “no agency, in an independently wrongful act,” understood as an act v. wasserman, 5 cal. 4th 1082, 1111 (1993) (kennard, j., manipulating auctions. we reject the argument. even if of a suit on other grounds. on block’s reading, any time the ability of sellers to sell items, the ability of block, a seller on ebay, argues that the automatic a. common law, or other determinable legal standard.” korea other.” id. § 1641; see also serv. employees int’l union, app’x 923 (9th cir. 2002), and multimatic, inc. v. faurecia although block cites lavi v. pelican investment corp., 36 f. california; michael g. rhodes and benjamin f. chapman, to exceed his maximum. district court for southern florida, sitting by designation. item . . . .”). that block failed to state a claim under california’s unfair seller will actually complete a transaction or 999 (9th cir. 2013)). (cal. 2003). block argues that ebay committed two system breached two provisions of ebay’s user agreement a general description of ebay’s services intended to focus the the first statement — “we are not involved in the actual with prospective economic advantage. neither of these defendant-appellee. for publication the language “is clear and explicit, and does not involve an transactions.” city of chicago, il v. ebay, inc., no. 08 c ebay, inc., designed to explain to ebay’s users why its liability is more in arguing that legal obligations can be created through the current bid, until the user wins the auction or would need and constitutes intentional interference with prospective to dismiss, a complaint must contain sufficient factualmatter, . . . it must be a contract in which the [defendant] promises to block v. ebay10 opinion by judge farris 12(b)(6) dismissal of marshall block’s diversity putative to give effect to the mutual intention of the parties as it tobacco ii cases, 207 p.3d 20, 29 & n.8 (cal. 2009), and 1 limited than that of a “traditional auctioneer.” just as the clear that the automatic bidding system will be used in all club v. newport beach country club, inc., 109 cal. app. 4th ii. 567 f.3d 1120, 1125 (9th cir. 2009). a claim for intentional interference under california law, a legality of items advertised, the truth or you will not hold ebay responsible for other provision to be unenforceable yields an absurd outcome, as contract. the second provision — “no agency . . . relationship is economic advantage.1 moreover, since a reasonable person in block’s position not plausibly alleged that he relied on this representation. independentlywrongful acts: breach of contract and violation promissory language. see souza v. westlands water dist., of the ucl. he fails to set forth a claim in either respect. he practice. these theories turn on the same analysis, see in re present-tense statements, these cases are distinguishable. see (quoting engalla v. permanente med. grp., inc., 938 p.2d in contrast to the provision in question, other clauses in which includes “any unlawful, unfair or fraudulent business relied on [these] representations and assurances.” block does system, a bidder submits the maximum amount he is willing simply a set of legally enforceable promises, but also an hassle-free.” competition law and failed to state a claim for intentional absurdity,” id. § 1638. finally, “[t]he whole of a contract is intended or created by this agreement” — purports only to v. block v. ebay 7 transaction between buyers and sellers” — contains no . . . unfair competition,” cal. bus. & prof. code § 17204, “proscribed by some constitutional, statutory, regulatory, charles r. breyer, senior district judge, presiding block v. ebay8 ascertainable and lawful.” cal. civ. code § 1636; see also secrets). return an item. claims, though block declined to amend. the district court in his complaint, block also asserted a cause of action for unjust appealed. agreement.” unintendedsoftwaredefect,ebaywouldviolatetheprovision. this statement is not part of the user agreement and is not each requires only that “members of the public are likely to exemption from a chicago tax, ebay certified to the state of through 1) breach of contract and 2) intentional interference the honorable paul c. huck, senior district judge for the u.s. bidders to the seller.” according to block, he “reasonably opinion he also alleged that ebay violated california’s false complaint. the court granted block leave to amend his provision, constitutes an enforceable promise by ebay. the their “ordinary and popular sense,” id. § 1644, provided that interference with prospective economic advantage. to state california, for plaintiff-appellant. district court granted ebay’s motion to dismiss block’s to interpretation of this provision that, to qualify for an (quoting founding members of the newport beach country of the pertinent page attached to the complaint, ebay makes injury-producing conduct . . . [such that] in its absence the buyers and sellers. while we may help under california law, “[a] contract must be so interpreted as there is a showing that a misrepresentation was material.” id. limit the relationships created by the agreement. it contains no promise by ebay not to enter into agency relationships appeal from the united states district court material. as the complaint concedes, the automatic bidding traditional auctions. block does not allege that, at the time he contract describing the sale of land in the present tense cooley llp, san diego, california, for defendant-appellee. 944, 956 (2003)). if a contract is reduced to writing, “the in the “limitation of liability” section states: “we are not class action, alleging that ebay.com’s automatic bidding block argues that interpreting the “not involved” himself and all others similarly the california’s unfair competition law authorizes suit opinion ebay platform functioned in a manner that was not purely to pay for an item, and this amount is kept confidential from block’s argument fails: he could not have relied on the “possesses” to cover both pre-existing and future trade laws . . . .”), and by ebay (e.g., “if we resolve a dispute in the abide by [that rule].”). rather, the statement is simply a * john charles dwyer (argued), cooley llp, palo alto, transaction in question.” id. (quoting engalla, 938 p.2d at alleged violations is adequately pled. promise by ebay to “allow anyone to offer, sell, and buy just complaint pursuant to rule 12(b)(6). we have jurisdiction items on its website, and acts only as a venue for user the provision is a broad description of the ebay marketplace traditional auctioneer. instead, our sites are lavi, 36 f. app’x at 924 (holding, in a context in which it marshall block, on behalf of neutral, whether through deliberate interference or an reliance,” id. at 39: that “the defendant’s misrepresentation or situated, communicate promises both by the user (e.g., “while using 720 f.3d 1163, 1167 (9th cir. 2013). “to survive a motion franchisee relationship is intended or created by this march 12, 2014—san francisco, california introduction to the ebay marketplace for new users. the presumed. agreement, violates california’s unfair competition law, the district court dismissed block’s facilitate the resolution of disputes through on behalf of the bidder, at predetermined increments above locations, such as stores, fixed price formats has not stated a claim for intentional interference. counsel the panel affirmed the district court’s fed. r. civ. p. 919). further, when a ucl claim rests on allegations of anywhere, in a variety of pricing formats and we review the dismissal of a complaint pursuant to rule block v. ebay 3 interference with prospective economic advantage. for the ninth circuit supply co. v. lockheed martin corp., 63 p.3d 937, 953–54 no. 12-16527 a basis of liability for the [defendant]’s violation of [a rule] not allege reliance with greater specificity, but argues that about anything, at any[]time, from anywhere,” the provision its face.” salameh v. tarsadia hotel, 726 f.3d 1124, 1129 accepted as true, to state a claim to relief that is plausible on system. thus, even if the user agreement had represented matters, but rather their “objective intent, as evidenced by the intended the property to be transferred in the future); neither the “not involved” provision, nor the “no agency” concurring in part and dissenting in part)). there is “a challenged provisions in the user agreement did not c. merely a neutral venue that is accurately transmitting bids for act or practice and unfair, deceptive, untrue or misleading block v. ebay 9 d. involved in the actual transaction between buyers and 12(b)(6) de novo. see zadrozny v. bank of n.y. mellon, in violation of california law. list or their destruction of allegedly fake claim. one of the ways in which goods are sold on ebay, agency, 133 cal. rptr. 3d 73, 79–80 (ct. app. 2011). ** interior systems usa, inc., 358 f. app’x 643 (6th cir. 2009), we conclude that the provision can be plausibly read only as filed suit on december 30, 2011. on may 7, 2012, the breach of contract because under california law the two marshall block argues that ebay.com’s automatic various programs, we have no control over block argues that ebay committed unlawful conduct roy a. katriel (argued), the katriel law firm, san diego, or nonexistence in determining his choice of action in the united states court of appeals nothing in the contract would prevent ebay from blatantly plaintiff must allege, inter alia, that “the defendant engaged (9th cir. 2013) (quoting zixiang li v. kerry, 710 f.3d 995, farris, senior circuit judge: 1. bring suit under the ucl, he must also allege “actual block argues that the automatic bidding system violates nondisclosure was ‘an immediate cause’ of the plaintiff’s the agreement contain explicit promissory language. these purchases facilitated by ebay are exciting, rewarding and confidentiality agreement protecting trade secrets each side block alleged that the “not involved” and “no agency” and do not guarantee the quality, safety or plaintiff ‘in all reasonable probability’ would not have before: jerome farris and stephen reinhardt, circuit ucl. district court properly dismissed block’s claim for breach of constitute enforceable promises byebay. the panel also held provisions fraudulently misrepresent that ebay “is acting as 903, 919 (cal. 1997)). a misrepresentation is material if “a agreement opens with, “welcome to ebay,” and later states: reasonably practicable, each clause helping to interpret the presumption, or at least an inference, of reliance . . . wherever was clear that the pertinent statements conveyed promises, a block v. ebay2 3:11-cv-06718- other bidders and the seller. ebay’s software then enters bids crb i. conversational style, indicating that the agreement is not district court ruled, neither provision constitutes an affirmed. the panel held that block failed to state a claim for by “a person who has suffered injury in fact . . . as a result of and auction-style formats. we are not intention of the parties is to be ascertained from the writing venues to allow anyone to offer, sell, and buy sentence before the provision could hardly be read as a words of the contract.” reilly, 160 cal. rptr. 3d at 249 traditional auctions. bidding in traditional auctions is summary** filed april 1, 2014 38 cal. rptr. 3d 78, 89 (ct. app. 2006) (“if a contract is to be made in a contractual context. app. 2013). it is not the parties’ subjective intent that advertising,” id. § 17200. conducted through ebay’s automatic bidding system. in this argued and submitted entered judgment on june 18, 2012, and block timely judges, and paul c. huck, senior district judge.* 2. been prepared by court staff for the convenience of the reader. block v. ebay 5 under 28 u.s.c. § 1291, and we affirm. complaint with regard to his intentional interferenceand ucl for the northern district of california user on the limitation of liability section. general description of how ebay’s auction system works. block v. ebay6 multimatic, 358 f. app’x at 647–48 (interpreting a system is described on ebay’s website. further, in a version items. you acknowledge that we are not a d.c. no. this is consistent with provisions elsewhere in the user on behalf of himself and similarly situated sellers, block reasonable [person] would attach importance to its existence plaintiff-appellant, existed at the time of contracting, so far as the same is accuracy of users’ content or listings, the that ebay would directly transmit bids to sellers, block has auction manipulation by ebay could not be remedied through possibly the “world’s largest online marketplace,” is through between buyers and sellers.” block v. ebay 11 is not a promise “not [to be] involved in the actual transaction finally, we consider block’s claim for intentional involved in the actual transaction between have been material. block fails to state a claim under the agreement, entered into byeach ebayuser. first, a provision this summary constitutes no part of the opinion of the court. it has ebay sites, services and tools, you will not . . . violate any buyers to pay for items, or that a buyer or 4th 939, 951 (2002)). however, for a private plaintiff to we begin with block’s claim for breach of contract. two provisions in the user agreement. however, as the advertising law and engaged in a fraudulent business act or just about anything, at any[]time, from bidding system violates two provisions of the ebay user fraud, it must satisfy rule 9(b). kearns v. ford motor co., executed the user agreement, these disclosures were the provision’s explanatory function is not confusing: could not have relied on such a representation, it would not block v. ebay4 california law buyer’s favor, we will refund the buyer for the full cost of the unavailable,or that he was unaware of the automatic bidding b.

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