Reeves v. Niantic, Inc.

Background

Jarrett Reeves alleged that he purchased PokeCoins in the Pokémon virtual world while he was a minor. Shortly after turning 18, he filed the lawsuit and disaffirmed several purchases made before his 18th birthday. According to the complaint, Niantic had not refunded those purchases.

Rulings on the claims

The court granted in part and denied in part Niantic’s motion to dismiss.

- California Unfair Competition Law (UCL)—unlawful and unfair practices: The court held that Reeves stated a claim. California law allows a person who made a contract while a minor to disaffirm it before turning 18 or within a reasonable time afterward. The court concluded that Reeves plausibly alleged that Niantic violated that law by not refunding the purchases he disaffirmed. - UCL—fraud: The court held that Reeves did not state a fraud-based UCL claim. He alleged that he did not learn about Niantic’s non-refundability policy until after making the purchases, so he could not have relied on that statement when purchasing the PokeCoins. The court also concluded that the complaint did not adequately allege reliance on an omission or on a statement about his ability to disaffirm the contracts after turning 18. - Declaratory judgment: The court held that Reeves stated a claim seeking a declaration about his right, and the rights of other minors, to disaffirm contracts and receive refunds for purchases made before turning 18. The court rejected arguments that the claim was improper because Reeves had become an adult, had not first requested a refund directly from Niantic, or because Niantic did not directly control the issuance of refunds. The court noted that declaratory relief might become unnecessary if Reeves prevailed on his other claims, but that possibility did not bar the claim at this stage. - California Consumers Legal Remedies Act (CLRA): The court held that Reeves did not state a CLRA claim. The statute covers transactions involving “goods” or “services.” The court concluded that PokeCoins were intangible goods rather than the tangible goods covered by the statute, and that buying a virtual certificate for virtual goods did not constitute buying a service under the CLRA. - Restitution and unjust enrichment: The court held that Reeves failed to state these claims because he did not allege that equitable relief was necessary due to the lack of an adequate legal remedy. The court also noted that it was setting aside whether these theories are standalone claims under California law. - Negligent misrepresentation: The court held that Reeves failed to state this claim for the same reason he failed to state his fraud-based UCL claim.

Disposition

The court dismissed the CLRA claim without leave to amend because further amendment would be futile. Reeves was given leave to amend the other claims dismissed by the order. He had 21 days to file an amended complaint attempting to reassert those claims. Alternatively, if discovery on the claims that remained allowed revealed supporting evidence, he could later seek permission to amend. The court denied the request for judicial notice as moot because it did not consider the attached documents.