Ridder v. Roblox Corporation

Background

The plaintiffs are children who allegedly gambled away Robux on RBLXWild.com, a now-defunct third-party website created by Boris Said, Jr. RBLXWild offered games including coin flips, blackjack, and plinko. Users could link their Roblox accounts to the site and spend Robux on its games. RBLXWild participated in Roblox’s Developer Exchange Program, which allowed it to exchange Robux for cash.

The plaintiffs brought a proposed class action against Roblox and others. Their claims against Said included claims under California’s Unfair Competition Law (UCL), as well as common-law negligence and unjust enrichment. Said moved to dismiss the claims addressed in this order, arguing that his conduct was not unlawful because Robux were not “things of value” under the California Penal Code’s gambling provisions.

Legal Analysis

The UCL prohibits unlawful, unfair, or fraudulent business practices. A claim under its unlawful prong must be based on a violation of another law. The plaintiffs alleged that Said violated California Penal Code sections 330a, 330b, 330.1, and 337j, along with two federal gambling statutes. The federal statutes could serve as predicates for the UCL claim if the alleged conduct was already illegal under California law.

The court recognized that California’s gambling provisions use “thing of value” inconsistently and are difficult to interpret. The court concluded, however, that Robux fall within that phrase under any reasonable interpretation. Users purchase Robux with money and use them to obtain gameplay across the Roblox platform. The court compared Robux to arcade tokens, reasoning that both can be used to obtain a desired product or experience and that taking either would deprive a user of something valuable.

The court also relied on the fact that RBLXWild and other participating developers could exchange Robux for real currency through the Developer Exchange Program. It distinguished cases involving loot boxes because loot-box items could be used only within a particular game, while Robux could be used for games and experiences across the Roblox platform and on third-party websites.

The court expressed concern that the California Penal Code provisions may be unconstitutionally vague because they do not clearly tell ordinary people what conduct is prohibited. It nevertheless stated that a reasonably narrow interpretation could exclude some items, such as loot boxes or extended gameplay, but could not reasonably exclude Robux.

Ruling

The court held that the plaintiffs adequately alleged that Said violated California Penal Code section 337j by operating a controlled game without the required licenses. Judge Vince Chhabria therefore denied Said’s motion to dismiss the claims under the UCL’s unlawful prong. Because Said relied on the same lawfulness argument to challenge the UCL unfair-prong claims and the negligence and unjust enrichment claims, the court denied the motion with respect to those claims as well.

The court stated that Said’s other arguments for dismissal would be addressed in a separate, unpublished ruling.