Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 1 of 30
`
`
`
`
`
`Bradford K. Newman (State Bar No. 178902)
` bradford.newman@bakermckenzie.com
`Alexander G. Davis (State Bar No. 287840)
` alexander.davis@bakermckenzie.com
`Anne Kelts Assayag (State Bar No. 298710)
` anne.assayag@bakermckenzie.com
`BAKER & McKENZIE LLP
`600 Hansen Way
`Palo Alto, CA 94304
`Telephone: +1 650 856 2400
`Facsimile: +1 650 856 9299
`
`Teresa H. Michaud (State Bar No. 296329)
` teresa.michaud@bakermckenzie.com
`BAKER & McKENZIE LLP
`10250 Constellation Blvd., Suite 1850
`Los Angeles, CA 90067
`Telephone: +1 310 201 4728
`Facsimile: +1 310 201 4721
`
`Attorneys for Defendant
`GOOGLE LLC
`
`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
`
`JOHN COFFEE, MEI-LING MONTANEZ,
`and S.M., a minor by MEI-LING
`MONTANEZ, S.M.’s parent and guardian, on
`behalf of themselves and all others similarly
`situated,
`
`Plaintiffs,
`
`v.
`GOOGLE LLC,
`Defendant.
`
`Case No. 5:20-cv-03901-BLF
`Date Action Filed: June 12, 2020
`DEFENDANT GOOGLE LLC’S
`MOTION TO DISMISS PLAINTIFFS’
`FIRST AMENDED COMPLAINT
`
`Date:
`July 15, 2021
`Time:
`9:00 a.m.
`Ctrm.:
`3 - 5th Floor
`Judge: Hon. Beth Labson Freeman
`
`Robert F. Peckham Federal Building &
`United States Courthouse
`280 South 1st Street
`San Jose, CA 95113
`
`
`
`
`
`
`
`
`
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Baker & McKenzie LLP
`10250 Constellation Blvd.,
`Suite 1850
`Los Angeles, CA 90067
`Tel: 310.201.4728
`
`
`
`
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 2 of 30
`
`
`
`TABLE OF CONTENTS
`
`D.
`
`E.
`
`III.
`
`B.
`
`Page
`
`NOTICE OF MOTION AND RELIEF REQUESTED ........................................................................ 1
`STATEMENT OF ISSUES TO BE DECIDED ................................................................................... 1
`I.
`INTRODUCTION .................................................................................................................... 2
`II.
`ALLEGED FACTS ................................................................................................................... 4
`A.
`Google Manages the Play Store Platform to Permit Downloads of Third-Party Apps 4
`B.
`Plaintiffs Download Two Skill-Based Video Games From the Play Store .................. 6
`C.
`Google Does Not Create or Sell the Loot Boxes Plaintiffs Allegedly Acquired to
`Enhance Their Enjoyment of Third-Party Video Games .............................................. 7
`Plaintiffs Rely on Academic Theory and Regulatory Debate To Try To Impose Legal
`Liability on Google for the Content of Third-Party Video Games ............................... 8
`Plaintiffs’ Claims Seek To Require Google To Monitor Content-Based Developer
`Activity in the Play Store and To Recover the Value of Alleged Gambling Losses .... 9
`ARGUMENT .......................................................................................................................... 10
`Despite a Spate of New Conclusory Allegations, Plaintiffs’ Factual Allegations
`A.
`Confirm That Section 230 Protects Google From the Claims in the FAC ................. 10
`1.
`Plaintiffs offer mere legal conclusions instead of pleading facts ................... 10
`2.
`Plaintiffs’ attempts to re-characterize old allegations cannot avoid
`application of Section 230 .............................................................................. 12
`Plaintiffs’ new factual allegations describe Google providing content neutral
`tools and exercising a platform-wide editorial function for all third-party
`developers ....................................................................................................... 12
`The FAC confirms that Google is still entitled to Section 230 protections .... 14
`a.
`Google is still an interactive computer service ................................... 14
`b.
`Plaintiffs are still seeking to treat Google as a publisher of third-party
`content ................................................................................................. 14
`The loot box content at issue was created by third-party app
`developers, not by Google .................................................................. 17
`Plaintiffs Still Fail To State Plausible Claims for Relief Under the UCL and CLRA 17
`1.
`Plaintiffs cannot solve the fundamental problem that they lack statutory
`standing ........................................................................................................... 17
`Plaintiffs allege no economic loss from purchasing virtual currency on
`a.
`set terms .............................................................................................. 18
`Plaintiffs fail to attribute any alleged loss of virtual currency to Google
`............................................................................................................. 19
`Plaintiffs fail to state plausible UCL claims against Google ......................... 19
`a.
`Loot Boxes do not violate California or federal gambling laws ......... 19
`California prohibits civil recovery for alleged gambling losses
`(1)
`................................................................................................. 20
`Loot boxes do not dispense “thing[s] of value” ..................... 20
`
`3.
`
`4.
`
`2.
`
`c.
`
`b.
`
`(2)
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Baker & McKenzie LLP
`10250 Constellation Blvd.,
`Suite 1850
`Los Angeles, CA 90067
`Tel: 310.201.4728
`
`
`
`
`
`i
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`
`
`
`
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 3 of 30
`
`b.
`
`(3)
`
`The loot boxes at issue are seamlessly incorporated into games
`predominantly of skill ............................................................. 22
`Loot Boxes Do Not Provide a Basis for a UCL Unfair Practices Claim
`............................................................................................................. 23
`Plaintiffs have failed to salvage their CLRA cause of action ......................... 24
`3.
`Plaintiffs Fail to State a Claim for Unjust Enrichment ............................................... 24
`C.
`CONCLUSION ....................................................................................................................... 25
`
`
`
`
`
`IV.
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`ii
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 4 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`TABLE OF AUTHORITIES
`
`
`
`Page(s)
`
`Cases
`
`Alves v. Players Edge, Inc.,
`No. 05CV1654 WQH (CAB), 2007 WL 6004919 (S.D. Cal. Aug. 8, 2007) ................................20
`
`Balzer v. Wal-Mart Stores, Inc.,
`No. CV 14-9779-JFW, 2015 WL 13828418 (C.D. Cal. Feb. 25, 2015) ........................................25
`
`Barnes v. Yahoo! Inc.,
`570 F.3d 1096 (9th Cir. 2009) .................................................................................................10, 14
`
`Blum v. Caldwell,
`446 U.S. 1311 (1980) .....................................................................................................................22
`
`Duncan v. Walker,
`533 U.S. 167 (2001) .......................................................................................................................22
`
`Evans v. Hewlett-Packard Co.,
`No. C 13-02477 WHA, 2013 WL 5594717 (N.D. Cal. Oct. 10, 2013) ...................................11, 13
`
`Goddard v. Google, Inc.,
`No. C 08-2738 JF (PVT), 2008 WL 5245490 (N.D. Cal. Dec. 17, 2008) .....................................19
`
`HomeAway.com v. City of Santa Monica,
`918 F.3d 676 (9th Cir. 2018) .............................................................................................15, 16, 17
`
`Kater v. Churchill Downs Inc.,
`886 F.3d 784 (9th Cir. 2018) .........................................................................................................21
`
`Kelly v. First Astri Corp.,
`72 Cal. App. 4th 462 (1999) ..................................................................................................2, 4, 20
`
`Letizia v. Facebook Inc.,
`267 F. Supp. 3d 1235 (N.D. Cal. 2017) .........................................................................................25
`
`Mason v. Mach. Zone, Inc.,
`140 F. Supp. 3d 457 (D. Md. 2015) .....................................................................................8, 20, 23
`
`Merandette v. City & Cty. of S.F.,
`88 Cal. App. 3d 105 (1979) ...........................................................................................................22
`
`Peterson v. Cellco P’ship,
`164 Cal. App. 4th 1583 (2008) ......................................................................................................25
`
`Phillips v. Double Down Interactive LLC,
`173 F. Supp. 3d 731 (N.D. Ill. 2016) .............................................................................................23
`
`
`
`
`
`
`
`
`iii
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 5 of 30
`
`
`
`Ristic v. Mach. Zone, Inc.,
`No. 15-cv-8996, 2016 WL 4987943 (N.D. Ill. Sep. 19, 2016) ......................................................23
`
`Rizo v. Yovino,
`950 F.3d 1217 (9th Cir. 2020) .......................................................................................................21
`
`Soto v. Sky Union, LLC,
`159 F. Supp. 3d 871 (N.D. Ill. 2016) ...................................................................................9, 20, 21
`
`Taylor v. Apple,
`No. 20-cv-03906-RS (N.D. Cal. Mar. 19, 2021) ...........................................................................16
`
`West v. Palo Alto Hous. Corp.,
`No. 17-CV-00238-LHK, 2019 WL 2549218 (N.D. Cal. June 20, 2019) ......................................24
`
`Statutes / Other Authorities
`
`18 U.S.C. § 1955 ..................................................................................................................................20
`
`31 U.S.C. § 5361-5367 ........................................................................................................................20
`
`47 U.S.C. § 230 (2018) ................................................................................................................ passim
`
`Cal. Bus. & Prof. Code § 17200 et seq. ....................................................................................... passim
`
`Cal. Bus. & Prof. Code § 19800, et seq. ..............................................................................................20
`
`Cal. Consumers Legal Remedies Act .......................................................................................... passim
`
`Cal. Civ. Code § 1761 ............................................................................................................................1
`
`Cal. Civ. Code § 1770(a)(14) ...............................................................................................................20
`
`Cal. Pen. Code § 330.2.........................................................................................................................22
`
`Cal. Pen. Code § 330a(a) ...............................................................................................................20, 21
`
`Cal. Pen. Code § 330b(f)..........................................................................................................20, 22, 23
`
`Cal. Pen. Code § 337j(a)(1)-(3) ...........................................................................................................20
`
`Federal Rule of Civil Procedure 12(b)(6) ..............................................................................................1
`
`
`
`
`
`
`
`
`iv
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 6 of 30
`
`
`
`NOTICE OF MOTION AND RELIEF REQUESTED
`PLEASE TAKE NOTICE ON July 15, 2021 at 9:00 a.m., or as soon thereafter as the matter
`can be heard, in Courtroom 3 - 5th Floor of the United States District Courthouse located at 280 South
`1st Street, San Jose, California 95113, Defendant Google LLC (“Google”) will and does move the
`Court for an order dismissing the First, Second, Third, and Fourth Causes of Action in the First
`Amended Complaint (ECF No. 59) of Plaintiffs John Coffee, Mei-Ling Montanez, and S.M., a minor
`by Mei-Ling Montanez (collectively, “Plaintiffs”) under Federal Rule of Civil Procedure 12(b)(6) for
`failure to state claims upon which relief may be granted. Google’s Motion to Dismiss is based upon
`this Notice of Motion and Motion, the accompanying Memorandum of Points and Authorities, the
`Proposed Order, and any oral argument as may be presented at the hearing, all other papers, records,
`and pleadings on file in this action, and on such additional evidence and argument as the Court may
`allow prior to and during the hearing on this motion.
`Relief Requested: Google respectfully requests that the Court issue an order dismissing with
`prejudice the First Amended Complaint in its entirety under Federal Rule of Civil Procedure 12(b)(6)
`for failure to state any claim upon which relief may be granted and terminating this action.
`STATEMENT OF ISSUES TO BE DECIDED
`Whether Plaintiffs’ four state law causes of action are still barred under section 230 of
`1.
`the Communications Decency Act, 47 U.S.C. § 230 (2018).
`2.
`Whether Plaintiffs continue to lack statutory standing under California’s Unfair
`Competition Law, Cal. Bus. & Profs. Code §§ 17200 et seq. (“UCL”), and Consumer Legal Remedies
`Act, Cal. Civ. Code §§ 1750 et seq. (“CLRA”).
`3.
`Whether Plaintiffs have failed to allege unlawful or unfair conduct by Google under
`the UCL (Cal. Bus. & Profs. Code §§ 17200 et seq.).
`4.
`Whether Plaintiffs have failed to allege the purchase of “goods” or “services” from
`Google as those terms are defined under the CLRA (Cal. Civ. Code § 1761).
`5.
`Whether Plaintiffs have failed to allege a plausible claim for unjust enrichment.
`
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`Baker & McKenzie LLP
`10250 Constellation Blvd.,
`Suite 1850
`Los Angeles, CA 90067
`Tel: 310.201.4728
`
`
`
`
`
`1
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`
`
`
`
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 7 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`I.
`INTRODUCTION
`At the hearing granting Google LLC’s motion to dismiss Plaintiffs John Coffee, Mei-Ling
`
`Montanez, and S.M.’s original Complaint, Plaintiffs’ counsel admitted that they have filed this lawsuit
`to convince the Court to declare currently lawful video game content as criminal based on recently-
`published social science research. The Court responded that there is “a big difference between
`something that should be deemed illegal [by] a legislature . . . versus whether it is under existing law,”
`and that the Court “live[s] in the realm of existing law.” (ECF No. 55 (Tr. of Oral Arg.) at 34:7-11.)
`The Court subsequently directed Plaintiffs to address fundamental threshold defects in their pleading
`requiring dismissal of all claims without having to resolve any public policy issues.
`In granting Plaintiffs leave to amend, the Court set a high bar: the problems identified in the
`Court’s order granting the motion to dismiss (ECF No. 56 (“Dismissal Order”)) are fundamental
`realities of both “existing law” and the basic structure of Google’s platform vis-à-vis third party
`content developers. It is perhaps no surprise, then, that Plaintiffs have failed in this essentially
`impossible task. While they have doubled the size of their complaint, they do so primarily with more
`of the same normative social science research that the Court already indicated has little, if any,
`relevance to resolving the legal claims at issue. Plaintiffs purge from their pleading many of the
`inconvenient allegations which the Court ordered them to specifically address through amendment.
`They then proceed to rely on generic legal conclusions to try and impute conduct of third parties to
`Google. The result is a meandering pleading that reveals the following persistent structural defects
`mandating dismissal, this time with prejudice.
`First, nothing in the First Amended Complaint (“FAC”) affects Google’s entitlement to
`Section 230 protections. The Court found that Plaintiffs had failed to allege facts showing how Google
`supposedly “facilitates” alleged illegal gambling. (Dismissal Order at 14:25-27.) The FAC now
`includes the word “facilitates” more than a dozen times, but provides no facts to establish any actual
`“facilitation,” only generic legal conclusions. Plaintiffs similarly attempt to ascribe third party conduct
`to Google by alleging that Google acts “in concert with” these parties, but again offer no factual
`support. The FAC further declines the Court’s express invitation to offer facts to support Plaintiffs’
`accusation that Google engages in a “predatory Loot Box scheme.” Instead, the FAC confirms that
`
`
`
`
`
`
`
`
`2
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 8 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`the term is simply taken from the title of an academic paper attacking the conduct and content of third
`parties, not a passive platform provider like Google. What few new fact allegations Plaintiffs can
`muster about Google’s operation of its Play Store platform fall squarely within the categories of
`“neutral tools” to facilitate third party content development, and “editorial parameters” for managing
`a popular interactive computer service, both of which are protected by Section 230. Ultimately,
`Plaintiffs concede that their own theory about why loot boxes supposedly constitute illegal gambling
`is based on purely in-app mechanics: “consideration, chance, and the possibility to win prizes of
`value.” (FAC ¶ 48.) Plaintiffs allege no conduct by Google that “materially contributes” to this
`purported content-based illegality of loot boxes. The Court should therefore reaffirm its prior
`conclusion and dismiss this action.
`Second, Plaintiffs still establish no statutory standing to sue Google for their interactions with
`third party game developers under California’s Unfair Competition Law or Consumer Legal Remedies
`Act. In dismissing Plaintiffs’ initial complaint, the Court held that any amended pleading “must
`address the fact that players can choose to ‘spend’ virtual currency on a variety of game items other
`than Loot Boxes, and that Google does not appear to have any role in those choices.” (Dismissal Order
`at 19:2-4.) Despite this express instruction, the FAC makes no effort to remedy this defect. Instead,
`Plaintiffs have “addressed” the issue primarily by attempting to delete from their pleading any mention
`of these inconvenient facts. But this effort is in vain, as Plaintiffs’ new allegations make clear that
`third party developers, not Google, are solely responsible for creating the various “audio-visual
`effects” and other circumstances that purportedly induce players to use virtual currency for loot boxes
`instead of other in-game items. In short, the FAC again confirms that Plaintiffs’ only economic
`transaction involving Google was the purchase of virtual currency from developers using Google’s
`payment processing tool. Plaintiffs do not allege this sale to be illegal. Nor do Plaintiffs claim they
`ever received less virtual currency than was promised, or that Google misrepresented anything
`concerning this transaction. The result is that Plaintiffs’ UCL and CLRA claims still fail for lack of
`standing, and their unjust enrichment claim fails on its merits given that Plaintiffs received the exact
`amount of virtual currency promised.
`Third, Plaintiffs still rely on an untenable statutory interpretation to support their claim that
`
`
`
`
`
`
`
`
`3
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 9 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`loot boxes in skill-based video games constitute illegal gambling. The key statutory requirement at
`issue—that the games dispense “thing[s] of value”—refers to real-world, transferrable value. Every
`court to have considered and resolved the issue has generally agreed with this interpretation. Plaintiffs’
`alternative theory—that various subjective forms of “symbolic,” “aesthetic,” or “social” value should
`suffice—would (i) effectively read a key requirement out of this criminal liability statute entirely, (ii)
`violate the interpretive principle of ejusdem generis, and (iii) short-circuit the current legislative
`process described in the FAC to consider whether and to what extent to regulate loot boxes. Moreover,
`even accepting Plaintiffs’ theory, California has a “strong, broad, and long-standing public policy
`against judicial resolution of civil disputes arising out of gambling contracts or transactions.” Kelly v.
`First Astri Corp., 72 Cal. App. 4th 462, 477 (1999). So even if the Plaintiffs’ tortured interpretation
`of the California Penal Code were accepted, the Court would have to dismiss their attempts to obtain
`restitution or money damages as contrary to firmly-established public policy.
`For all of these reasons, and those set forth below, the Court should once again dismiss
`Plaintiffs’ complaint, but this time without leave to amend.
`
`II.
`
`ALLEGED FACTS
`A.
`Google Manages the Play Store Platform to Permit Downloads of Third-Party
`Apps
`
`Google has created the Android operating system, which Plaintiffs allege is installed on
`approximately one billion smartphones and other electronic devices. (FAC ¶ 19.) Various developers
`have created content, generally called “apps,” to run on Android. (See id. ¶¶ 18, 20.) Android users
`access those third-party apps by downloading them through Google’s Play Store. (Id. ¶ 19.)
`Google provides an array of content-neutral tools and resources to assist third party developers
`in posting their content to the Play Store. Google and the developers are parties to a Developer
`Distribution Agreement. (Id. ¶ 24.) The Agreement makes clear that the Play Store is a platform on
`which third parties distribute their products to end users such as Plaintiffs. (See id. ¶¶ 24-25.)
`Google’s role is limited to providing a “marketplace service” and acting as agent and “Merchant of
`Record” in processing in-app transactions between players and the developers. (Id. ¶¶ 24, 27.)
`Google also provides developers a “Software Development Kit.” (Id. ¶ 32.) This Software
`
`
`
`
`
`
`
`
`4
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 10 of 30
`
`
`
`Development Kit contains no tools specific to the so-called “loot box” mechanisms with which
`Plaintiffs take issue in the FAC. Instead, as Plaintiffs themselves allege, it is used in all games
`appearing on the Google Play Store. (Id. ¶ 33.) The Software Development Kit contains a payment
`processing mechanism used to process all purchases made in developers’ apps, enables various
`analytics services to give developers insight into users’ activity within their apps, and facilitates
`service of advertising content. (Id. ¶¶ 32-33.)
`Google offers app developers resources and suggestions for displaying and selling ads, offering
`subscription services, and selling digital or physical goods and services within apps. (Id. ¶ 213.)
`Again, these resources are not specific to loot boxes; indeed, they are not specific even to game apps,
`but instead apply to any of the almost 3 million apps that are available for download on the Google
`Play Store. (See id. ¶¶ 20, 213.)
`Like any other mature interactive computer service, Google also imposes various editorial
`parameters regarding the third-party content that appears in the Play Store. For example, Google’s
`Developer Program Policy prohibits app developers from including games that allow players to wager
`for the chance to win prizes of “real world monetary value.” (Id. ¶ 35.) For apps that offer players
`the option to access “mechanisms to receive randomized virtual items”—generally referred to as “loot
`boxes”—Google requires developers to disclose the odds of receiving those virtual items. (Id. ¶ 36.)
`Google requires this disclosure because the developers, not Google, are solely responsible for actually
`setting these odds. (See, e.g., id. ¶ 69 (noting that the developers of the game Brawl Stars use an
`algorithm to set odds).) The developers likewise solely control the “scarcity” of loot box items,
`including whether to describe the items as “Common,” “Rare,” “Epic,” and “Legendary.” (Id. ¶ 101.)
`Google further requires developers to make certain “parental disclosures” about the content
`appearing in their games. (Id. ¶ 37.) This includes industry-standard Entertainment Software Ratings
`Board (“ESRB”) game ratings, which provide “information about what’s in a game or app so parents
`and consumers can make informed choices about which games are right for their family.” (Id. ¶¶ 38-
`39.) Finally, the Google Play Terms of Service prohibit the sale or transfer of any in-app content,
`including loot box items. (See Dismissal Order at 6:25-57 (granting request for judicial notice of
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`
`
`
`
`
`5
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 11 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`
`
`Google Play Terms of Service § 41).)
`
`B.
`Plaintiffs Download Two Skill-Based Video Games From the Play Store
`Although the FAC describes multiple video games available for download through the Play
`Store, only two are alleged to have been played by Plaintiffs: Final Fantasy Brave Exvius (“Final
`Fantasy”) and Dragon Ball Z Dokkan Battle (“Dokkan Battle”). (FAC ¶¶ 11-12; see also Dismissal
`Order at 2:11-16 (limiting analysis to games actually allegedly played by named plaintiffs).)
`Final Fantasy is free to download and play. (FAC ¶ 70.) It is a role-playing video game,
`meaning that players assume the role of various characters, and then control those characters through
`a series of stages. (Id.) During gameplay, players have the option, but not the obligation, to obtain a
`“Summons,” which Plaintiffs characterize as a loot box. (Id. ¶ 71.) A Summons offers the chance to
`obtain “new and better characters” to facilitate players’ progress through this skill-based game. (Id.)
`A player may access a Summons with virtual currency known as “Lapis Crystals.” (Id.) A player
`receives Lapis Crystals for free simply by making progress in the game. (Id. ¶ 72.) Alternatively, a
`player may choose to purchase a specific amount of Lapis Crystals for a specific amount of money.
`(Id. ¶ 71.) After receiving the virtual currency, players may choose to acquire any number of in-game
`items offered by the developer, of which a Summons is simply one option among many. (See, e.g.,
`id. ¶ 118 (acknowledging the existence of “other types of microtransactions” in video games).)
`Similarly, Dokkan Battle is a free-to-play game “made up of levels that play like a board game
`. . . .” (Id. ¶¶ 75, 77.) During gameplay a player has the option, but never the obligation, to access a
`“Summons,” which Plaintiffs again characterize as a loot box. (Id. ¶¶ 76, 78.) A Summons dispenses
`“rewards and characters” that are useful only to help progress through Dokkan Battle’s skill-based
`gameplay. (Id. ¶ 77.) Players may obtain a Summons using virtual currency called dragon stones.
`(Id. ¶ 76.) Plaintiffs initially alleged that dragon stones could be acquired for free through normal
`gameplay. (ECF No. 1 (Compl.) ¶ 74.) While they have deleted this allegation in their amended
`pleading, the FAC alleges nothing to the contrary. Instead, Plaintiffs note that players may also
`purchase dragon stones on set pricing terms. (FAC ¶ 76.)
`
`
`1 See https://play.google.com/intl/en-US_us/about/play-terms/index.html.
`
`6
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`
`
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 12 of 30
`
`
`
`1
`2
`3
`4
`5
`6
`7
`8
`9
`10
`11
`12
`13
`14
`15
`16
`17
`18
`19
`20
`21
`22
`23
`24
`25
`26
`27
`28
`
`C.
`
`Google Does Not Create or Sell the Loot Boxes Plaintiffs Allegedly Acquired to
`Enhance Their Enjoyment of Third-Party Video Games
`
`Google does not create the video games or the loot box mechanisms which Plaintiffs accessed
`through the Google Play Store platform. (Id. ¶ 9.) The loot boxes at issue here are in-app items
`integrated into and offered within skill-based video games. (Id. ¶¶ 42-43.) They do not dispense items
`bearing any “real world monetary value.” (See id. ¶ 35.) Instead, loot boxes merely provide “in game
`item[s] or feature[s] designed or perceived to enhance gameplay or provide competitive advantage”
`within the game. (Id. ¶ 1.) Critically, Plaintiffs allege that three things equate loot boxes to gambling:
`consideration, chance, and the possibility to win prizes of value. (Id. ¶ 48.) Each of those alleged
`game features is created solely by the developer, with no participation at all by Google.
`Because both Final Fantasy and Dokkan Battle are free to play, Plaintiffs could progress
`through their various skill-based stages without ever accessing a Summons. (See id. ¶¶ 70, 75.) If
`they wanted a Summons, Plaintiffs had two options. First, they could accrue sufficient virtual currency
`for free in-game (see, e.g., id. ¶¶ 72, 90), and then use that freely-acquired virtual currency to access
`a Summons. Second, they could use the Play Store’s payment system to purchase virtual currency
`from the app developer. (See id. ¶¶ 11, 13.) Google takes a commission for such services. (Id. ¶ 29.)
`Both Plaintiffs appear to have made the choice to purchase virtual currency from app
`developers using Google’s content-neutral payment processing service. (Id. ¶¶ 11, 13.) In doing so,
`they received exactly as much virtual currency—dragon stones or Lapis Crystals—as was promised.
`They do not claim that they relied upon any representations by Google concerning these purchases of
`virtual currency. Plaintiffs instead allege that the name of the virtual currency can induce its purchase.
`(Id. ¶ 88.) But Google does not create video game content (id. ¶ 9), and Plaintiffs allege no facts
`suggesting that Google has any involvement in how developers choose to name virtual currency.
`Plaintiffs then appear to have chosen to use virtual currency to obtain in-app items offered by
`developers, including Summonses. (Id. ¶¶ 11, 13.) They allege no facts indicating that Google had
`any role in these subsequent transactions, which took place exclusively between Plaintiffs and the
`third-party video game developers. Plaintiffs’ allegations instead confirm the opposite: they were
`induced to use their virtual currency for loot boxes instead of other in-app purchase options because
`
`
`
`
`
`
`
`
`7
`Case No. 5:20-cv-03901-BLF
`DEFENDANT GOOGLE LLC’S MOTION TO DISMISS FIRST AMENDED COMPLAINT
`
`

`

`Case 5:20-cv-03901-BLF Document 66 Filed 04/19/21 Page 13 of 30
`
`
`
`1