EBay Gets Fraud Claims Trimmed From Recurring Fee Suit (Law360)

By Erin Fuchs

A California federal judge on Monday tossed several claims based on alleged fraud from a proposed class action claiming eBay Inc. hid the automatically recurring nature of its listing fees, ruling the plaintiff hadn't provided sufficient details of eBay's alleged misrepresentations.

U.S. District Judge Edward J. Davila dismissed claims under California's Unfair Competition Law, its False Advertising Law and its Consumer Legal Remedies Act, as well as common-law fraud claims, all of which were based on claims that eBay made misrepresentations or omissions "grounded in fraud," according to the opinion.

The suit, filed in September, claims that eBay deliberately tricked customers into paying recurring fees for its "Good 'Til Canceled" listings, which automatically renew every 30 days until the seller cancels the listing or the item is sold. According to the plaintiff, Richard Noll, eBay suggested that this service came "at no extra cost" when fees are actually charged monthly.

But in making the claims based on fraud, Noll only stated that he had reviewed and relied on eBay's fee schedules, according to Judge Davila.

That statement failed to satisfy heightened pleading standards for fraud because it failed to specify the exact misrepresentation Noll relied on, or whether that statement induced him to use the listings, the judge ruled Monday. Noll also failed to demonstrate whether he would have acted differently without the alleged misrepresentation, the judge ruled.

However,Judge Davila kept several claims alive Monday, including a breach of contract claim. EBay contended that the contract claim should have been dismissed because the company disclosed the disputed fees in an August 2008 seller update and a Web page on eBay's help center. But the court can't determine at this juncture whether the update and help-center page were incorporated into Noll's original contract with eBay, Judge Davila ruled.

An attorney for the plaintiff could not immediately be reached for comment Tuesday, and a lawyer for eBay declined to comment.

The complaint proposes a class of anyone who posted Good 'Til Canceled listings on the auction site since September 2008 and were charged certain recurring fees. The complaint alleged breach of contract, unfair competition, false advertising, violation of the Consumer Legal Remedies Act, unjust enrichment and fraud.

In addition to at least $5 million in damages, the suit seeks a declaratory judgment finding that users should not be subject to many of the recurring fees eBay charges.

Noll is represented by Keith R. Verges, Parker D. Young and Raymond Earl Walker of Figari & Davenport LLP, the Law Office of Shawn T. Leuthold and Vera Brooks of Thompson & Brooks.

EBay is represented by John C. Dwyer of Cooley LLP.

The case is Noll v. eBay Inc. et al., case number 5:11-cv-04585, in U.S. District Court for the Northern District of California.

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Related Contacts
John C. Dwyer Partner in Charge – Palo Alto
Related Practices & Industries

Commercial Class Action Litigation