Morales v. SportsEngine

Background

Christine Morales, Vanessa Williams, and Carly Charalambou sued SportsEngine, Inc. They alleged that SportsEngine required parents or guardians registering children for youth sports to use its platform and that the platform displayed the sports-registration price through most of the process but added an online processing fee near the end. The plaintiffs alleged that the fee was not included in the earlier displayed price and that they might have chosen differently or asked the leagues about other registration methods if they had known about it earlier.

The complaint asserted claims under New York General Business Law sections 349 and 350, California’s unfair-competition and false-advertising laws, the California Consumer Legal Remedies Act as referenced in the court’s discussion, and the Arkansas Deceptive Trade Practices Act. It also asserted breach of contract and unjust enrichment. SportsEngine moved to dismiss under Federal Rule of Civil Procedure 12(b)(6), which tests whether a complaint adequately states a claim, and moved to strike the proposed Arkansas class claims under Rule 12(f).

Choice of Law and Statutory Claims

The Terms of Use stated that New York law governed the terms, any agreement, and the relationship between the plaintiffs and SportsEngine. The court held that this language covered all claims arising from that relationship. As a result, the court dismissed the claims under California and Arkansas law because New York law governed the action.

The court also granted the motion to dismiss the New York General Business Law claims. It reasoned that the plaintiffs’ allegations showed the online processing fee was specifically disclosed as a line item before the purchase was completed. Because consumers had an opportunity not to complete the transaction after seeing the fee, the court held that the complaint did not plausibly allege that the fee’s addition was materially misleading.

Common-Law Claims

The court granted the motion to dismiss the breach-of-contract claim. Although the plaintiffs argued that SportsEngine breached the Terms of Use by charging a fee that the agreement did not expressly authorize, the court held that the plaintiffs identified no contract provision that SportsEngine violated or that prohibited the fee.

The court also granted the motion to dismiss the unjust-enrichment claim. The plaintiffs relied on the same allegations as their other claims and did not provide an independent basis for unjust enrichment. The court held that unjust enrichment could not operate as a catchall claim to address defects in the other claims.

Disposition

The court granted SportsEngine’s motion to dismiss, dismissed all of the plaintiffs’ claims, and denied SportsEngine’s motion to strike the proposed Arkansas class claims as moot. The court declined to grant the plaintiffs leave to amend again because they had already amended once and the court found that better pleading would not cure most of the problems. The court stated that the request for injunctive relief was moot, directed the clerk to terminate the motion, and closed the case.