Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 1 of 19
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`Peter R Afrasiabi (SBN 193336)
`pafrasiabi@onellp.com
`ONE LLP
`4000 MacArthur Blvd.
`East Tower, Suite 500
`Newport Beach, CA 92660
`Telephone: (949) 502-2870
`Facsimile: (949) 258-5081
`
`John E. Lord (SBN 216111)
`jlord@onellp.com
`ONE LLP
`9301 Wilshire Blvd.
`Penthouse Suite
`Beverly Hills, CA 90210
`Telephone: (310) 866-5157
`Facsimile: (310) 943-2085
`
`Samuel J. Salario, Jr. (pro hac vice)
`sam@bayadvocacy.com
`BAY ADVOCACY PLLC
`1700 South Mac Dill Avenue
`Suite 300
`Tampa, FL 33629
`Telephone: (813) 251-6262
`
`Attorneys for Plaintiffs,
`K.W., a minor through K.W.’s guardian, Jillian Williams,
`and Jillian Williams, individually, on behalf of themselves
`and all others similarly situated
`
`
`UNITED STATES DISTRICT COURT
`
`
`
`NORTHERN DISTRICT OF CALIFORINIA
`
`
`K.W., a minor and through K.W.’s guardian,
`Jillian Williams; and JILLIAN WILLIAMS,
`individually, on behalf of themselves and all
`others similarly situated,
`
`
`
`
`
`vs.
`
`Plaintiffs,
`
`EPIC GAMES, INC., a Maryland corporation,
`
` Case No. 3:21-cv-00976-CRB
`
`CLASS ACTION
`
`PLAINTIFFS’ OPPOSITION TO
`DEFENDANT’S MOTION TO DISMISS
`OR COMPEL ARBITRATION AND
`REQUEST FOR DISCOVERY
`
`Hearing Date: April 29, 2021
`Hearing Time: 10:00 AM
`
`Complaint Filed: February 8, 2021
`Trial Date: None Set
`
`Defendant.
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`PLAINTIFFS’ OPPOSITION TO DEFENDANT’S MOTION TO DISMISS/COMPEL
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 2 of 19
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`TABLE OF CONTENTS
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`INTRODUCTION ..............................................................................................................................1
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`FACTS ...............................................................................................................................................3
`
`ARGUMENT .....................................................................................................................................5
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`I.
`
`II.
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`Ninth Circuit Precedent Prohibits Epic Games’ Attempt to Moot Plaintiffs’ Claims ...........5
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`Plaintiffs Bought V-Bucks and Virtual Items from Epic Games ...........................................8
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`III.
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`Plaintiffs are Not Required to Arbitrate ................................................................................9
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`A.
`
`B.
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`Neither K.W. Nor Ms. Williams are Bound to Arbitrate ..........................................9
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`Epic Games Has Waived its Right to Non-Class Arbitration .................................12
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`IV.
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`Plaintiffs Request Discovery on Jurisdiction and Arbitration .............................................15
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`CONCLUSION ...............................................................................................................................15
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 3 of 19
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`
`
`Cases
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Aviation Data, Inc. v. American Express Travel Related Servs. Co.,
`62 Cal.Rptr.3d 396 (Cal. Ct. App. 2007) ................................................................................... 14
`
`Berg v. Traylor,
`56 Cal. Rptr.3d 140 (Cal. 2007) ................................................................................................... 7
`
`C.W. v. Epic Games, Inc.,
`Case No. 4:19-cv-03629-YGR (N.D. Cal.) ......................................................................... passim
`
`Campbell-Ewald v. Gomez,
`U.S. 136 S. Ct. 663 (2016) ........................................................................................................... 8
`
`Certain Underwriters at Lloyd’s of London v. Am. Safety Ins. Servs., Inc.,
`702 F. Supp. 2d 1169 (C.D. Cal. 2010) ...................................................................................... 11
`
`Chen v. Allstate Ins. Co.,
`819 F.3d 1136 (9th Cir. 2016) ...................................................................................................... 6
`
`Comedy Club, Inc. v. Omprov West Assocs.,
`553 F.3d 1277 (9th Cir. 2009) .................................................................................................... 11
`
`ConWest Res., Inc. v. Playtime Novelties, Inc.,
`2007 WL 1288349 (N.D. Cal. May 1, 2007) ............................................................................. 13
`
`Crafty Prods., Inc. v. Fuqing Sanzing Crafts Co. Ltd.,
`2016 WL 5720684 (S.D. Cal. Sept. 30, 2016) ........................................................................... 12
`
`Doctors Assocs., Inc. v. Distajo,
`107 F.3d 126 (2d Cir. 1997) ....................................................................................................... 15
`
`Doe v. Epic Games, Inc.,
`435 F. Supp. 3d 1024 (N.D. Cal. 2020) .............................................................................. passim
`
`Epic Games, Inc. v. Apple Inc.,
`Case No. 4:20-cv-5640 ............................................................................................................. 1, 3
`
`Hart v. Delta Air Lines, Inc.,
`2018 WL 1087846 (C.D. Cal. Feb. 22, 2018) ............................................................................ 10
`
`Heidbreder v. Epic Games, Inc.,
`438 F. Supp. 3d 591 (E.D.N.C. 2020) ........................................................................ 9, 10, 11, 12
`
`Hoffmann Const. Co. v. Active Erectors & Installers, Inc.,
`969 F.2d 796 (9th Cir. 1992) ...................................................................................................... 13
`
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`Hoffmann v. 162 North Wolfe LLC,
`175 Cal.Rptr.3d 820 (Cal. Ct. App. 2014) ................................................................................. 11
`
`I.C. v. Zynga Inc.,
`2021 WL 51718 (N.D. Cal. Jan. 6, 2021) .................................................................................. 15
`
`In re Larry’s Apt., L.L.C.,
`249 F.3d 832 (9th Cir. 2001) ........................................................................................................ 8
`
`Laub v. Dep’t, of Interior,
`342 F.3d 1080 (9th Cir. 2003) .................................................................................................... 15
`
`Martin v. Yasuda,
`829 F.3d 1118 (9th Cir. 2016) .................................................................................. 12, 13, 14, 15
`
`Mavris v. RSI Ent’s., Inc.,
`303 F.R.D. 561 (D. Ariz. 2014) ................................................................................................... 6
`
`McLaughlin v. Wells Fargo Bank, N.A.,
`2016 WL 3418337 (N.D. Cal. June 22, 2016) ............................................................................. 7
`
`Newirth v. Aegis Senior Communities., LLC,
`931 F.3d 935 (9th Cir. 2019) ...................................................................................................... 12
`
`Pitts v. Terrible Herbst, Inc.,
`653 F.3d 1081 (9th Cir. 2011) .............................................................................................. 5, 6, 8
`
`Prestige Cap. Corp. v. Shorebird Homeowners Ass’n,
`2013 WL 5947135 (N.D. Cal. Nov. 4, 2013) ............................................................................. 10
`
`R.A. v. Epic Games, Inc.,
`2020 WL 865420 (E.D.N.C. Feb. 20, 2020) .......................................................................... 8, 12
`
`Reynoso v. Bayside Mgt. Co., LLC,
`2013 WL 6173765 (N.D. Cal. Nov. 25, 2015) ........................................................................... 12
`
`T.K. v. Adobe Sys. Inc.,
`2018 WL 1812200 (N.D. Cal. April 17, 2018) ............................................................................ 7
`
`U.S. v. Park Place Assoc’s., Ltd.,
`563 F.3d 907 (9th Cir. 2009) ...................................................................................................... 12
`
`U.S. v. Wilson,
`631 F.2d 118 (9th Cir. 1980) ........................................................................................................ 1
`
`Statutes
`
`Federal Arbitration Act .................................................................................................................... 14
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 5 of 19
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`INTRODUCTION
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`If its arguments here reflect reality, the business success of Fortnite depends on Epic Games
`
`selling virtual stuff to millions of children and then pretending, like Captain Renault in Casablanca,
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`that it is “shocked, shocked” to find out it is selling virtual stuff to children. Class action claims first
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`filed here in C.W. v. Epic Games, Inc., Case No. 4:19-cv-03629-YGR, sought to assert legal rights
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`of children taken advantage of in Fortnite. As described in our opposition to the motion to stay,
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`Epic Games seeks to evade this Court’s jurisdiction over those class claims so that it might conclude
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`a settlement in North Carolina state court that would not get approved here. (See Dkt. 21 at 1-3).
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`In C.W., a minor Fortnite player no different from the plaintiff here brought class claims
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`seeking declaratory, injunctive, and monetary relief from Epic Games on causes of action founded
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`on a minor’s legal right to disaffirm purchases of virtual items made in Fortnite and related theories.
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`(See C.W. Dkt. 56 ¶¶ 57-61).1 Epic Games moved to compel arbitration arguing that C.W. accepted
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`license agreements containing arbitration provisions, including one that “required affirmative
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`acceptance by an adult.” (C.W. Dkt. 21 at 4). Judge Gonzalez Rogers denied the motion because
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`C.W. had disaffirmed those agreements, thus eliminating any contractual basis upon which he could
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`be made to arbitrate. See Doe v. Epic Games, Inc., 435 F. Supp. 3d 1024, 1038 (N.D. Cal. 2020).
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`
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`Epic Games later tried a motion to dismiss that argued that because C.W.’s Fortnite
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`purchases were concluded in the Apple (iTunes) and Sony (PlayStation) marketplaces, C.W. had no
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`disaffirmation claim directly against Epic Games. (C.W. Dkt. 59 at 11; 64 at 7-8). Judge Gonzales
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`Rogers rejected that argument as well, pointing out in the process that it was inconsistent with Epic
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`Games’ judicial admissions in Epic Games, Inc. v. Apple Inc., Case No. 4:20-cv-5640, in which it
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`said that the Apple marketplace was “a payment processing platform for selling digital in-app
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`content to consumers from which [Epic Games] collects 70 percent of the consumer’s payment.”
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`C.W. v. Epic Games, Inc., 2020 WL 5257572, at *1 (N.D. Cal. Sept. 3, 2020) (cleaned up).
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`
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`Having survived its motions, C.W. was the only class action against Epic Games that was
`
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`1 In this brief, we cite documents filed in the C.W. and Epic v. Apple cases in this court and
`accessible through CM/ECF. This court may take judicial notice of those records under Fed. R.
`Evid. 201, see U.S. v. Wilson, 631 F.2d 118, 119 (9th Cir. 1980), and we request that it do so.
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`moving ahead. But then one of C.W.’s lawyers left the firm that filed the case, settled C.W.’s claim
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`with Epic Games on an individual basis, voluntarily dismissed this case, and showed up without
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`C.W. in North Carolina state court in a sprawling, pre-packaged class settlement of virtually every
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`consumer claim Epic Games could ever face. (Dkt. 21 at 2-7).
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`This case is a continuation of C.W., filed one month after it was voluntarily dismissed. Like
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`C.W., the plaintiff here is a minor Fortnite player who brings class claims for declaratory, injunctive,
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`and monetary relief founded on a minor’s legal right to disaffirm purchases of virtual items in
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`Fortnite and related theories. (See Dkt. 1 ¶¶ 1-3). The minor class is defined in essentially the same
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`way as in C.W., and the claims are essentially the same as those in C.W. (Id. ¶ 56, Counts I, III-V).
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`For present purposes, the only significant difference between the two cases is that this one also
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`involves claims brought by the minor’s guardian on behalf of a class of California parents (id. ¶ 57,
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`Counts II-V), but nothing in the motion to dismiss or compel hinges on that difference.
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`Given what the C.W. opinions hold, Epic Games should not have filed its motion here. It
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`does not argue that Judge Gonzalez Rogers’ rulings were mistaken, so those are a given. And its
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`efforts to show that this case is different are either factually inaccurate or legally irrelevant.
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`First, Epic Games’ assertion that this case is moot because it offered a refund to K.W. (that
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`K.W. rejected) is foreclosed by Ninth Circuit precedent holding that a defendant cannot moot a class
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`action by satisfying the named plaintiff’s individual claim. Epic Games’ effort to characterize the
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`refund as its “acceptance” of a “proposal” K.W. made by disaffirming his contracts—and not an
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`attempt to moot the case by satisfying his individual claim—does not make sense.
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`Second, Epic Games’ assertion that K.W. lacks standing because K.W. did not make any
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`purchases from it is make-weight. K.W. completed at least one purchase entirely in Fortnite, which
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`even Epic Games would agree is a purchase from it. And, as in C.W., the record here shows that the
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`PlayStation and Xbox marketplaces are serving as payment processors. Although K.W. concluded
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`transactions on those platforms, the transactions were in-game purchases from Epic Games.
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`Third, Epic Games’ assertion that K.W. must arbitrate because he clicked agreements
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`requiring acceptance by an adult was rejected in C.W. Its argument that it believed K.W. was acting
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`as agent for an adult is wrong because, among other reasons, Epic Games knows that it is dealing
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 7 of 19
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`with children. Further, Epic Games has waived its right to arbitrate by affirmatively and through
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`dubious tactics seeking to channel Plaintiffs’ claims to a North Carolina state court for resolution.
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`Finally, Epic Games’ motion rests on multiple assertions of fact that are both disputed and
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`questionable. As described below, Plaintiffs should be granted leave to conduct discovery on the
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`questions of subject matter jurisdiction and arbitrability.
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`FACTS
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`
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`With respect to the proposed settlement in North Carolina, we rely upon our opposition to
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`Epic Games’ motion to stay. (Dkt. 21). We deal here with K.W.’s experience playing Fortnite.
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`Epic Games makes a spectacular amount of money on Fortnite—$2.4 billion in 2018 and
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`$1.9 billion in 2019. (Dkt. 1 ¶ 15). Eighty-three percent of that comes from Epic Games’ sale in
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`Fortnite of its virtual currency called V-Bucks. (Id.). Fortnite players use real money to buy V-
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`Bucks while in the game, which they exchange in-game for virtual items like outfits and dance
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`moves. (Id. ¶¶ 12-14). Epic Games’ CEO has testified that “[f]rom a business perspective” in-game
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`purchasing “is an important part of the Fortnite model” because “[i]f users had to leave the app to
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`purchase digital content, they would be much less likely to do so.” (Apple Dkt. 65 ¶ 7).
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`A huge number of Fortnite players are minors, a fact Epic Games does not dispute. (Dkt. 1
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`¶ 16). A survey conducted in late 2018 showed that 61% of all teenagers in the United States have
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`played the game (id.) and that 45% of parents with kids between the ages of eight and seventeen
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`have kids who play the game.2 The game is rated T for Teen by the Entertainment Software Ratings
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`Board, which means minors are in the game’s strike zone.3 Of the six top Fortnite players in the
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`world, five were minors as of August 2020. (Id.). It is thus clear that the business success of Fortnite
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`depends on minors making in-game purchases of V-Bucks.
`
`
`2 Common Sense Media, Fortnite Frenzy: New Survey of Parents and Teens Reveals
`Concerns About the Video Game Everyone Seems To Be Playing (Dec. 6, 2018), available at
`https://www.commonsensemedia.org/about-us/news/press-releases/fortnite-frenzy-new-survey-of-
`parents-and-teens-reveals-concerns-and (last accessed Apr. 5, 2021); Laura Wronski, Common
`Sense
`Media
`Survey
`Monkey
`Poll:
`Fortnite,
`available
`at
`https://www.surveymonkey.com/curiosity/common-sense-media-poll-fortnite/ (last accessed Apr.
`5, 2021).
`
` 3
`
` See https://www.esrb.org/ratings/37406/Fortnite/ (last accessed Apr. 5, 2021).
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` K.W. is a twelve-year-old who lives in California. (Declaration of K.W. (“K.W. Decl.”) at ¶
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`2). K.W. started playing Fortnite in 2018, at the age of nine or ten. (Id. ¶ 3). K.W. made multiple
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`in-game purchases of V-Bucks, the price of which were stated in the store in Fortnite. (See id. ¶¶
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`7-8). Because K.W. did not have a credit card or other way to pay electronically, K.W. used payment
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`information from a father and grandmother and, on one occasion, Plaintiff Jillian Williams.4 (Id.¶¶
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`at 9-10). K.W. normally went to the grandmother or father and told them what K.W. wanted to buy
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`and how much it cost in real dollars, paid them the real dollars the V-Bucks cost, and then used their
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`payment information to complete the purchase in Fortnite. (Id. ¶ 9).
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`K.W. made one purchase of V-Bucks when playing Fortnite on his personal computer using
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`the grandmother’s payment information. (Id. ¶¶ 7, 11). To do that, K.W. went to the virtual store
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`in Fortnite, picked the V-Buck package K.W. wanted to buy, put in the payment information, and
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`finished the purchase. (Id. ¶ 7). Fortnite can also be played on certain game consoles—such as
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`Sony PlayStation, Microsoft Xbox—and according to a 2019 review, as many as 78% of players do
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`so.5 K.W. played Fortnite on a PlayStation 4 and an Xbox and made multiple V-Bucks purchases
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`while doing that. (Id. ¶¶ 3, 8). For those purchases, K.W. went to the store in Fortnite and clicked
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`the desired package of V-Bucks. (Id.). From there, K.W. was automatically directed to the checkout
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`page of the PlayStation or Microsoft marketplaces, where K.W. would enter payment information
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`and finish the purchase. (See id.). As far as K.W. could tell, K.W. “was buying the V-Bucks from
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`Epic Games and just making the payment . . . in the PS4 or Microsoft store.” (Id.).
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`Epic Games’ effort to characterize V-Bucks buys completed in the Sony or Microsoft
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`marketplaces as being something other than in-game purchases from Epic Games is unconvincing.
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`In what may be a Freudian slip, Epic Games’ own declaration calls purchases made while playing
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`on Xbox and PlayStation “in-game purchases.” (Dkt. 23-3 ¶ 20). And Epic Games’ website
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`4Epic Games has stated that personal data of a woman whose credit card was used for in-
`game purchases (i.e., K.W.’s grandmother) was associated with the account. (Salario Decl. ¶ 3(b)).
`
`5Stijn Wernars, Newzoo’s Battle Royale Sentiment Study: Understanding the Phenomena and
`What Draws Players
`to Particular Franchises
`(Jul.
`11,
`2019),
`available
`at
`https://newzoo.com/insights/articles/newzoos-battle-royale-sentiment-study-understanding-the-
`phenomena-and-what-draws-players-to-particular-franchises/ (last accessed Apr. 4, 2021).
`
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`describes how players make in-game purchases of V-Bucks exactly the way K.W. does—the player
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`goes to the store in Fortnite, selects the V- Bucks she wants to buy, and completes the order using
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`the “check-out” system for whatever platform she is playing on—in K.W.’s case PlayStation and
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`Xbox. (Salario Decl., Ex. A). Public reporting establishes that Sony and Microsoft have the same
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`economic relationship for Fortnite transactions with Epic Games described in C.W.: Microsoft and
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`Sony take 30%, and Epic Games keeps 70%.6 Although Epic Games denies having detailed
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`information about such transactions, it avoids denying that receives a substantial amount of money
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`for in-game purchases of V-Bucks items completed in this way. (See Dkt. 23-3 ¶¶ 20-21).
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`K.W. remembers having to click on Fortnite license agreements at various times when he
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`was playing Fortnite. (K.W. Decl. ¶ 5). K.W. did not understand what they were, what they said, or
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`that they said anything about the right to bring a case in court. (See id.). K.W. never talked with an
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`adult about clicking the button before doing so. (Id.). To the extent K.W. clicked on a license
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`agreement that said it could only be accepted by an adult, he did not know that either. (Id. ¶ 6).
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`Epic Games thinks it significant that K.W. might play Fortnite again. (Dkt. 23 at 16). K.W.
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`has no plans to play in the future. (Id. ¶ 13).
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`ARGUMENT
`
`I.
`
`Ninth Circuit Precedent Prohibits Epic Games’ Attempt to Moot Plaintiffs’ Claims.
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`Epic Games’ argument that Plaintiffs’ claims are moot because it has refunded K.W.’s
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`Fortnite purchases (Dkt. 23 at 8-12) is foreclosed by Pitts v. Terrible Herbst, Inc., 653 F.3d 1081,
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`1086 (9th Cir. 2011), which holds that a defendant may not moot a class case by paying the named
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`plaintiff’s claims so long as the plaintiff can still file a timely motion for class certification.
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`In Terrible Herbst, the defendant in a class action made an offer of judgment for more than
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`the amount of the named plaintiff’s individual claim. Id. at 1085. After it was rejected, the defendant
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`argued that the offer satisfied and mooted the named plaintiff’s claims. Id. Reversing an order
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`dismissing the case, the Ninth Circuit reasoned that the claims of a named plaintiff in a class action
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`6See, e.g., Kyle Orland, Epic’s Battle for “open platforms: ignores consoles massive closed
`market, Ars Technica (Aug. 14, 2020), https://arstechnica.com/gaming/2020/08/as-epic-attacks-
`apple-and-google-it-ignores-the-same-problems-on-consoles/ (last accessed Apr. 5, 2021).
`Case No. 3:21-cv-00976
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`PLAINTIFFS’ OPPOSITION TO DEFENDANT’S MOTION TO DISMISS/COMPEL
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 10 of 19
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`are “inherently transitory” in that even if those individual claims go away, other class members will
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`continue to have the same unresolved claim. See id. at 1089-90 (cleaned up). The court thus held
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`that a defendant’s satisfaction of a named plaintiff’s claim does not moot a class action because the
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`claim is “capable of repetition yet evading review.” Id. (cleaned up).
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`Although Terrible Herbst involved an unaccepted offer of judgment and not a refund
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`tendered upon a minor’s disaffirmation of contracts, the same logic applies. Plaintiffs seek to
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`prosecute class claims against Epic Games founded upon a minor’s right to disaffirm contracts. In
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`order to assert those claims as a class representative, K.W. disaffirmed all contracts with Epic
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`Games. Epic Games has since attempted to moot the case by refunding K.W.’s purchases—a refund
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`K.W. refused. (See Dkt. 23-1 ¶ 8). As with claims that have been satisfied by an offer of judgment,
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`K.W.’s claims are “inherently transitory” and “capable of repetition yet evading review” because
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`Epic Games otherwise could repeatedly moot the claim of any named plaintiff in exactly the same
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`way. See also Chen v. Allstate Ins. Co., 819 F.3d 1136, 1138 (9th Cir. 2016) (applying Terrible
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`Herbst to defendant’s escrow deposit of the named plaintiff’s damages); Mavris v. RSI Ent’s., Inc.,
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`303 F.R.D. 561, 565 (D. Ariz. 2014) (holding that a class action was not moot under Terrible Herbst
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`even after the named plaintiff accepted an offer of judgment that satisfied her individual claims).
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`Epic Games asserts that Terrible Herbst does not apply because K.W.’s disaffirmation in the
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`Complaint was actually a “proposal” to resolve K.W.’s claims that it “honored” and “accepted”
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`when it tendered a refund. (Dkt. 23 at 8, 11). The statement that Epic Games “honored” or
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`“accepted” K.W.’s disaffirmation is inaccurate. Both in a letter and in a declaration, Epic Games
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`was clear that, as far as it is concerned, K.W. has no legal right to disaffirm contracts made through
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`the Microsoft and Sony marketplaces or with K.W.’s grandmother’s payment information, which is
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`to say all of the Fortnite in-game purchases at issue. (See Dkt. 18-1 ¶ 19; Salario Decl. ¶ 3(b)).
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`This is a rejection of K.W.’s right to disaffirm. And it highlights that there is no difference
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`in principle between this case and Terrible Herbst: Both involve nothing more than a defendant’s
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`attempt to avoid a class action by satisfying the named plaintiff’s monetary demand. Further, it
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`shows that Epic Games has not resolved K.W.’s full claim. K.W. seeks a declaratory judgment that
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`the case may be maintained as a class action, that K.W.’s contracts and those of the class members
`Case No. 3:21-cv-00976
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`PLAINTIFFS’ OPPOSITION TO DEFENDANT’S MOTION TO DISMISS/COMPEL
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 11 of 19
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`are legally subject to disaffirmance, and that K.W. and the class are entitled to restitution and interest.
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`(Dkt. 1 ¶ 65). Thus, even if Epic Games had mooted K.W.’s monetary claims, its rejection of K.W.’s
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`legal right to disaffirm does not resolve the prayer for declaratory relief. See T.K. v. Adobe Sys. Inc.,
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`2018 WL 1812200, at *12 (N.D. Cal. April 17, 2018) (declining discretionary dismissal of an
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`identical claim for declaratory relief where the defendant tendered a refund to a disaffirming minor
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`because the declaration “would serve a useful purpose”); McLaughlin v. Wells Fargo Bank, N.A.,
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`2016 WL 3418337, at *6 (N.D. Cal. June 22, 2016) (holding that plaintiff’s termination of her
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`relationship with defendant did not moot her class claims for declaratory and injunctive relief).
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`Furthermore, Epic Games’ theory of disaffirmation is based on a mischaracterization of
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`Judge Gonzales Rogers’s decision in C.W. Relying solely on C.W., Epic Games argues that (a)
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`K.W.’s disaffirmation was a “proposal” to Epic Games, and (b) its “acceptance” moots K.W.’s
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`claims because he should have sent Epic Games a pre-suit letter disaffirming the contracts so Epic
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`Games could have accepted it. (Dkt. 23 at 11). But C.W. says nothing of the kind.
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`First, C.W. actually says the exact opposite of what Epic Games claims. Relying on settled
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`disaffirmation law, C.W. holds that disaffirmation does not even require “express notice to the other
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`party—let alone a pre-suit letter—and that a statement in a complaint is sufficient to initiate a
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`disaffirmation. See Doe, 435 F. Supp. 3d at 1035-36 (N.D. Cal. 2020) (also stating that “any act or
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`declaration” is sufficient to disaffirm) (cleaned up) (collecting cases); see also Berg v. Traylor, 56
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`Cal. Rptr.3d 140 (Cal. 2007) (holding disaffirmation announced after a final arbitration award was
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`sufficient to disaffirm the contract containing the arbitration provision).
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`Second, C.W. does not imply that a pre-suit letter might be required. The Court considered
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`(a) whether the minor had clearly disaffirmed his license agreements as distinguished from his in-
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`game purchases and (b) whether there was an actual controversy about disaffirmation, not whether
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`a pre-suit letter was required to disaffirm. Doe, 435 F. Supp. 2d at 1036-37. It held that (a) the
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`statements in the pre-suit letter taken together with statements in the complaint were sufficiently
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`clear and (b) Epic Games’ failure to respond to a pre-suit letter—taken together with the fact that
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`Epic Games did not in its submissions to the Court after the complaint was filed agree that the
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`plaintiff was legally entitled to disaffirm—meant that there was an actual controversy supporting a
`Case No. 3:21-cv-00976
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`PLAINTIFFS’ OPPOSITION TO DEFENDANT’S MOTION TO DISMISS/COMPEL
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`Case 3:21-cv-00976-CRB Document 30 Filed 04/05/21 Page 12 of 19
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`declaratory judgment action. See Doe, 435 F. Supp. 3d at 1036, 1044.
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`Third, Epic Games did not try to moot C.W.’s purchases by refunding them, which should
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`explain why the opinion days nothing at all about proposal-by-disaffirmation, acceptance, mootness,
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`or any other idea Epic Games tosses out in support of its argument.7
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`Epic Games’ assertion that R.A. v. Epic Games, Inc., 2020 WL 865420 (E.D.N.C. Feb. 20,
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`2020), shows that the class claims here are moot mischaracterizes that decision as well. R.A. did
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`hold that the named plaintiff’s claim was moot after he disaffirmed his contract with Epic Games.
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`As Epic Games knows, the plaintiff in R.A. never argued that his claims were inherently transitory
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`or capable of repetition yet evading review, which is what Terrible Herbst is all about.8 (Dkt. 21 at
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`18-19). R.A. cannot be read to have decided questions that were never briefed or mentioned in the
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`decision. See In re Larry’s Apt., L.L.C., 249 F.3d 832, 839 (9th Cir. 2001). And even if it could,
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`R.A.’s abbreviated reasoning is unpersuasive. It hinges solely on the assertion that R.A.’s
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`disaffirmation “erase[d] the entire basis” of his claims. 2020 WL 865420, at *2. But the court
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`neither cited any authority for that conclusion nor explained why that was true or why it mooted the
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`whole class action as distinguished from R.A.’s individual claim. And in the end, Terrible Herbst,
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`not R.A., is the controlling precedent here, and it requires holding that this case is not moot.
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`II.
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`Plaintiffs Bought V-Bucks and Virtual Items from Epic Games.
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`Epic Games’ argument that Plaintiffs’ lack standing because K.W. never bought V-Bucks
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`from it is not accurate. K.W. bought V-Bucks directly from the store in Fortnite, which Epic Games
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`concedes is a purchase from it. (See Dkt. 23 at 7). That K.W. used a grandmother’s credit card is
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`7 Epic Games makes general statements about the law of disaffirmation that it purports to
`support with case citations. (See Dkt. 23 at 10). But none of it amounts to an argument that supports
`its proposal-by-disaffirmation theory of mootness. Epic Games also says, with no citation to
`authority, that the pending settlement in North Carolina means that “there was never any ‘class’ for
`K.W. to represent.” (Dkt. 23 at 11-12). That is wrong. See William B. Rubenstein, 4 Newberg on
`Class Actions § 13:19 (5th ed. 2020) (“A court’s preliminary approval of a proposed class
`settlement—in and of itself—has no effect on parallel actions. . . .”).
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` 8
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` That is likely because the plaintiff in R.A. was not pursuing class action claims based on
`the right of disaffirmance. He disaffirmed his contracts with Epic Games solely in connection with
`a dispute about arbitration. (Dkt. 21 at 19 nn. 14, 15). The plaintiff in R.A. did analogize his facts
`to an unaccepted offer of judgment, which the Supreme Court has held is a nullity. See Campbel