Shipley v. Platforms

Background

Plaintiffs brought a putative class action concerning Meta’s Portal smart display and video-calling devices. Meta launched Portal in 2018 with features including video calling, music and video streaming, and voice commands. In November 2022, Meta announced that it would discontinue the devices. Beginning in mid-2023, Meta removed applications and voice functionality in waves, effectively through early 2025. Plaintiffs alleged that these changes made the devices significantly less functional and largely obsolete, and that some consumers received no notice.

Meta moved to dismiss the First Amended Complaint for inadequate pleading. The court considered the complaint’s factual allegations as true for purposes of the motion, but applied heightened requirements under Federal Rule of Civil Procedure 9(b) to claims sounding in fraud.

Judicial Notice

The court granted Meta’s request for judicial notice of the existence and contents of its Supplemental Terms of Service. The court did not infer that plaintiffs actually saw or agreed to those terms when they purchased their devices. The court noted that the parties disputed how the terms were presented, but did not appear to dispute their authenticity or accuracy.

Consumer-Protection Claims

The court dismissed the claims under California’s Consumer Legal Remedies Act and New York’s General Business Law. Plaintiffs alleged that Meta’s advertising misrepresented the Portal’s features and that Meta failed to disclose that it might later remove those features.

The court held that the alleged affirmative statements were not plausibly misleading because the advertised features existed when the named plaintiffs purchased their devices and continued until approximately January 2025. The complaint also did not plausibly allege that Meta knew, when plaintiffs bought their Portals, that it would later remove the features.

The court separately found that the complaint did not plead reliance and causation with the required particularity. It did not identify the advertisements that Plaintiff Shipley viewed or explain what she relied on. Although the complaint identified a time frame for Plaintiff Herod’s exposure to advertisements, it did not specifically show reliance on them. The claim under section (a)(9) of the Consumer Legal Remedies Act also failed because the complaint did not show that Meta intended to deceive plaintiffs when they purchased their devices.

The court also granted Meta’s motion as to the California False Advertising Law claim. The complaint did not adequately plead a false or misleading affirmative statement or an affirmative statement made misleading by an omitted material fact.

Unfair Competition Law

California’s Unfair Competition Law prohibits unlawful, unfair, or fraudulent business practices. Plaintiffs pursued all three theories, but did not respond to Meta’s argument concerning the fraudulent theory, so the court treated that argument as forfeited.

The court held that plaintiffs plausibly pleaded the unfair theory under the balancing test. Plaintiffs alleged that Meta charged a premium for Portal software features, later discontinued access to those features, caused them substantial injury, and provided no countervailing consumer or competitive benefits that outweighed the harm. Taken together, those allegations plausibly described conduct that was immoral, unethical, oppressive, unscrupulous, or substantially injurious.

The court rejected plaintiffs’ separate tether-test theory because the complaint did not explain how Meta’s conduct was comparable to a legal violation or significantly threatened competition. The unlawful theory also failed because it depended on the inadequately pleaded violations of the Consumer Legal Remedies Act, New York’s General Business Law, and the False Advertising Law.

Implied-Warranty Claims

The court granted Meta’s motion concerning both implied-warranty claims. For the Song-Beverly Consumer Warranty Act claim, the court noted that the complaint indicated the Portals were functional when purchased and during the one-year warranty period. Plaintiffs alleged that the loss of functionality occurred later, but did not allege a defect existing at the time of sale as required by the authorities they cited.

The court also granted the motion concerning the California Commercial Code warranty claim. Meta’s warranty limited coverage to one year, and the products were functional during that period. The warranty and Supplemental Terms of Service also appeared to reserve Meta’s ability to change, suspend, eliminate, or restrict certain Portal features. The court concluded that plaintiffs’ claim was not plausible as currently pleaded.

Computer Fraud and Abuse Act Claim

The court dismissed the claim under the Computer Fraud and Abuse Act, with leave to amend. Plaintiffs alleged that Meta removed Portal features without authorization and thereby damaged the devices. The court found that the Supplemental Terms of Service disclosed that Meta could suspend, eliminate, change, or update certain features and restrict access to portions or all of the Portal.

The court therefore found the claim insufficient as currently pleaded and allowed plaintiffs to provide more facts suggesting that Meta intentionally caused damage to their devices.

Trespass to Chattels Claim

The court granted Meta’s motion as to the trespass-to-chattels claim. Plaintiffs alleged that Meta accessed their Portal devices without authorization to limit their functionality. The court concluded that the Supplemental Terms of Service could have placed plaintiffs on notice that Meta could interfere with or adjust certain existing features. On that basis, the complaint did not plausibly allege unauthorized access.

Unjust-Enrichment Claim

The court treated plaintiffs’ unjust-enrichment claim as a quasi-contract claim rather than deciding that it was an independent cause of action. Plaintiffs alleged that Meta induced them to buy Portals through misrepresentations and omissions and was unjustly enriched as a result.

Because the court found that the alleged misrepresentations and omissions were inadequately pleaded, it dismissed the unjust-enrichment claim with leave to amend.

Disposition

The court denied Meta’s motion regarding the UCL claim under the unfair theory and granted Meta’s motion with respect to all other causes of action. Plaintiffs were given leave to amend the complaint by January 16, 2026.