C.W. v. Epic Games, Inc.

Background

The court had previously granted in part and denied in part Epic Games, Inc.’s motion to dismiss the first amended complaint filed by C.W., a minor, through his guardian Rebecca White. Epic then asked the court to certify two questions for immediate review by the Ninth Circuit under 28 U.S.C. § 1292(b) and Federal Rule of Appellate Procedure 5(a)(3). The questions concerned California Family Code § 6710: whether the statute allows minors to cancel “simple purchases,” and whether it permits cancellation when a minor has received and cannot return the benefits of the purchase.

An interlocutory appeal is an appeal before the case reaches a final judgment. Under § 1292(b), certification requires a controlling legal question, a substantial basis for disagreement about that question, and an immediate appeal that may materially advance the end of the litigation. Epic had the burden of showing that all three requirements were met.

Court’s Analysis

The court found that the proposed questions were not controlling legal questions because they depended on unresolved facts. The term “simple purchase” did not appear in the operative complaint, Epic’s motion-to-dismiss briefing, the earlier order, or the statute. The court said fact discovery was needed to determine the nature of the transactions, including how in-app purchases were made through Fortnite and the amount spent on actionable purchases.

The court likewise found that the question about consuming the benefits of a purchase could not be answered without more facts about Fortnite, including how players use V-Bucks, Battle Passes, and skins. The court also noted that § 6710 permits a minor to cancel a contract within a reasonable time, making the timing of C.W.’s attempt to cancel relevant. The court emphasized that its earlier ruling was limited to the pleaded facts and the motion-to-dismiss stage; it had not ruled that minors may always obtain refunds after using purchased goods or services.

The court separately held that Epic had not shown a substantial basis for disagreement about the proposed legal questions. Although the case law was limited, the court cited an earlier decision from the same district recognizing a minor’s right to cancel online purchases of virtual currency. Epic had not identified a conflicting case that supported a substantial disagreement, and the cases concerning cancellation after consuming contractual benefits either were very old or involved different types of contracts rather than software purchases.

Finally, the court concluded that an immediate appeal would not materially advance the litigation. Four claims remained. Two—declaratory judgment and the “unlawful” prong of California’s Unfair Competition Law—were based on the alleged cancellation rights. But the remaining negligent-misrepresentation and “unfair” and “fraudulent” Unfair Competition Law claims included a theory concerning alleged representations about the non-refundability of Battle Pass purchases and purchases older than 30 days. The court said that theory was independent of the cancellation-based claims and would proceed even if those claims ended. The court also found that an appeal would not materially reduce discovery because many of the same factual issues would remain.

Disposition

The court denied Epic’s motion to certify the questions for interlocutory appeal. The order terminated Docket Number 73. The opinion did not itself resolve the underlying claims or alter the earlier order’s statement that C.W.’s alleged cancellation was valid on the pleaded facts.