T.T. v. Supercell, Inc.

Background

T.T., identified as a minor, filed a putative class action against Supercell, Inc. He alleged that Supercell’s games—Clash of Clans, Clash Royale, and Brawl Stars—use virtual currency called “Gems,” which players can buy with real money. T.T. alleged that he made multiple purchases in Clash Royale using his own money, received no items with real value, regretted the purchases, and wanted a full refund.

T.T. alleged that Supercell’s Terms of Service said purchases were final and non-refundable and did not provide an exception for minors. He contended that this language misled him into believing he could not obtain a refund. His claims were for declaratory judgments concerning a minor’s ability to disaffirm contracts and contract for certain personal property, violation of California’s Unfair Competition Law, and restitution or unjust enrichment.

Rule 12(b)(6) Standard

Supercell moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(6), which allows dismissal when a complaint does not adequately state a legally recognized claim. The court was required at this stage to accept well-pleaded factual allegations as true and view them favorably to T.T., but not to accept conclusory allegations or unreasonable inferences.

Standing

The court denied the motion as to T.T.’s ability to assert claims concerning Clash of Clans and Brawl Stars, even though the complaint specifically alleged purchases only in Clash Royale. The court found sufficient similarity because the games used the same general type of in-game purchases and the same Terms of Service. It noted that any material differences could be addressed later, including at the class-certification stage.

The court also denied the motion based on Supercell’s argument that T.T. had not shown economic injury under California’s Unfair Competition Law. T.T. alleged that Supercell retained money that he was entitled to recover, and the court held that he did not need to request a refund outside the lawsuit to establish standing. The court also declined to resolve at this stage whether T.T. received a benefit from using the Gems.

The court granted the motion as to injunctive relief. T.T. alleged that he no longer played the games and would not play them in the future. The court held that his ongoing loss of a refund did not establish the required future risk of being harmed again, and it found no supporting authority for T.T.’s broader theory.

California Unfair Competition Law

The California Unfair Competition Law prohibits unlawful, unfair, or fraudulent business practices. T.T. conceded the fraud-based theory, and the court granted the motion as to that part of the claim. The court considered the unlawful and unfair theories.

Both theories were based on T.T.’s allegations that Supercell violated California Family Code sections 6701 and 6710 by denying minors the ability to obtain refunds for in-game purchases. Section 6701 concerns a minor’s ability to contract for personal property not in the minor’s immediate possession or control. Section 6710 concerns a minor’s right to disaffirm certain contracts.

The court denied the motion as to the unlawful and unfair theories. It held that T.T. had adequately alleged that Supercell’s conduct was unlawful and unfair, but expressly stated that it was not deciding whether sections 6701 or 6710 ultimately applied. The court found that Supercell’s arguments depended on factual questions about the nature of the purchases and the parties’ control over them. Those questions were better addressed on a fuller record, such as at summary judgment.

Restitution or Unjust Enrichment

The court denied the motion as to restitution or unjust enrichment. Although California law does not recognize unjust enrichment as a standalone cause of action, a court may treat such a claim as a quasi-contract claim seeking restitution. T.T. alleged that Supercell was unjustly enriched by retaining money from minors through a no-refund policy and misleading Terms of Service. The court found those allegations sufficient at the pleading stage.

Disposition

Judge Haywood S. Gilliam, Jr. granted in part and denied in part Supercell’s motion to dismiss. The court granted the motion as to the Unfair Competition Law’s fraud-based prong and as to T.T.’s request for injunctive relief, but otherwise denied the motion. T.T. may file an amended complaint within 21 days of the order. The court also denied the parties’ requests for judicial notice as moot because it did not rely on the attached documents.