Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 1 of 7
`
`NOT FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`DEC 6 2022
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`
`
`
` Plaintiff-Appellant,
`
`
`DREAMSTIME.COM, LLC, A Florida LLC, No. 20-16472
`
`
`
`
`
`
`D.C. No. 3:18-cv-01910-WHA
`
`
` v.
`
`
`MEMORANDUM*
`
`
`GOOGLE LLC,
`
`
`
`
`
`
`
`
`
` Defendant-Appellee.
`
`
`
`Appeal from the United States District Court
`for the Northern District of California
`William Alsup, District Judge, Presiding
`
`Argued and Submitted February 16, 2022
`San Francisco, California
`
`Before: GOULD and RAWLINSON, Circuit Judges, and ZIPPS,** District Judge.
`Concurrence by Judge RAWLINSON.
`
`
`
`
`
`
`*
` This disposition is not appropriate for publication and is not precedent
`
`
`except as provided by Ninth Circuit Rule 36-3.
`
`** The Honorable Jennifer G. Zipps, United States District Judge for the
`
`
`District of Arizona, sitting by designation.
`
`
`
`
`
`
`
`
`
`NOT FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`
`FOR THE NINTH CIRCUIT
`
`
`FILED
`
`
`DEC 6 2022
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`
`
`
`
`
`
` Plaintiff-Appellant,
`
`
`DREAMSTIME.COM, LLC, A Florida LLC, No. 20-16472
`
`
`
`
`
`
`D.C. No. 3:18-cv-01910-WHA
`
`
` v.
`
`
`MEMORANDUM*
`
`
`GOOGLE LLC,
`
`
`
`
`
`
`
`
`
` Defendant-Appellee.
`
`
`
`Appeal from the United States District Court
`for the Northern District of California
`William Alsup, District Judge, Presiding
`
`Argued and Submitted February 16, 2022
`San Francisco, California
`
`Before: GOULD and RAWLINSON, Circuit Judges, and ZIPPS,** District Judge.
`Concurrence by Judge RAWLINSON.
`
`
`
`
`
`
`*
` This disposition is not appropriate for publication and is not precedent
`
`
`except as provided by Ninth Circuit Rule 36-3.
`
`** The Honorable Jennifer G. Zipps, United States District Judge for the
`
`
`District of Arizona, sitting by designation.
`
`
`
`
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 2 of 7
`
`In this antitrust case,1 Appellant Dreamstime.com (“Dreamstime”) appeals
`
`the district court’s grant of summary judgment on its claims that Appellee Google
`
`LLC violated (1) the implied covenant of good faith and fair dealing and (2)
`
`California’s Unfair Competition Law (“UCL”). We have jurisdiction under 28
`
`U.S.C. § 1291. We review a grant of summary judgment de novo. Glen Holly
`
`Ent., Inc. v. Tektronix, Inc., 352 F.3d 367, 368 (9th Cir. 2003). We affirm.
`
`I
`
`
`
`Dreamstime argues on appeal that “misrepresentations and other
`
`misconduct” by Google’s advertising support representatives violated the implied
`
`covenant of good faith and fair dealing arising from Google’s contractual
`
`discretion to offer advertising support services to Dreamstime.
`
`
`
`“Under California law, every contract includes a covenant of good faith and
`
`fair dealing, which requires that neither party do anything which will deprive the
`
`other of the benefits of the agreement.” Kern v. Levolor Lorentzen, Inc., 899 F.2d
`
`772, 777 (9th Cir. 1990) (citation and internal quotation marks omitted). The
`
`scope of the implied covenant is “circumscribed by the purposes and express terms
`
`of the contract.” Carma Devs., Inc. v. Marathon Dev., 826 P.2d 710, 727 (Cal.
`
`1992).
`
`
`1 We set forth in detail the procedural and factual background of this case in a
`separate published opinion filed simultaneously with this memorandum
`disposition. We do not repeat it here.
`
`
`
`2
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 3 of 7
`
`
`
`We conclude that the district court did not err in granting summary judgment
`
`on this claim for two independent reasons. First, the district court need not even
`
`have considered the implied covenant theory Dreamstime asserts on appeal
`
`because it was not pled in Dreamstime’s complaint. Dreamstime raised that theory
`
`for the first time in its summary judgment briefing.2 District courts do “not err
`
`when” they do “not allow [plaintiffs] to proceed on” claims raised “for the first
`
`time at summary judgment.” Coleman v. Quaker Oats Co., 232 F.3d 1271, 1294
`
`(9th Cir. 2000).
`
`
`
`Second, summary judgment was proper on the merits. Google’s discretion
`
`under the contract was not the kind of “absolute discretion” that California courts
`
`identify as giving rise to an implied duty of good faith and fair dealing. See Storek
`
`& Storek, Inc. v. Citicorp Real Estate, Inc., 122 Cal. Rptr. 2d 267, 281 (Cal. Ct.
`
`App. 2002). The contractual provision on which Dreamstime relies provides that
`
`Dreamstime “is not required to authorize use of” Google’s advertising support
`
`services and that Dreamstime “may opt -in to or opt -out of usage of these
`
`features.” Moreover, the contractual provision provides that if Dreamstime elected
`
`to authorize Google’s additional services, Dreamstime would “be solely
`
`
`2 Dreamstime did not, in its briefing before us, contest Google’s assertion that
`Dreamstime raised this implied covenant theory for the first time in its summary
`judgment briefing.
`
`
`
`3
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 4 of 7
`
`responsible.” We conclude that there is no error in the district court’s conclusion
`
`that Google did not breach the implied covenant.
`
`II
`
`
`
`We turn next to Dreamstime’s claims under the UCL. Dreamstime argues
`
`that it raised triable issues of fact under the “fraud” and “unfair” prongs of the
`
`UCL. Cal. Bus. & Prof. Code § 17200. We disagree.
`
`A
`
`
`
`California courts apply at least two different tests under the UCL’s unfair
`
`prong. Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 735 (9th Cir. 2007).
`
`The South Bay test asks whether a practice is “immoral, unethical, oppressive,
`
`unscrupulous or substantially injurious to consumers.” S. Bay Chevrolet v. Gen.
`
`Motors Acceptance Corp., 85 Cal. Rptr. 2d 301, 316 (Ct. App. 1999) (citation
`
`omitted). The Cel-Tech test asks whether the “conduct [] threatens an incipient
`
`violation of an antitrust law, or violates the policy or spirit of one of those laws . . .
`
`or otherwise significantly threatens or harms competition.” Cel-Tech Commc’ns,
`
`Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 544 (Cal. 1999).
`
`
`
`The district court properly granted summary judgment on Dreamstime’s
`
`UCL unfair claim under either test.3 Dreamstime has not raised a genuine dispute
`
`of material fact that Google’s conduct was “immoral, unethical, oppressive,
`
`
`3 We need not and do not decide which test applies.
`
`
`
`4
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 5 of 7
`
`unscrupulous, or substantially injurious to consumers” as is required under the
`
`South Bay test. 85 Cal. Rptr. 2d. at 316. And, for the reasons set forth in the
`
`opinion accompanying this memorandum disposition, Dreamstime’s claim fails the
`
`Cel-Tech test because it has not shown an antitrust violation. We hold that
`
`summary judgment was proper on Dreamstime’s claim under the UCL’s unfair
`
`prong.
`
`B
`
`Finally, the UCL’s fraud prong bars business practices that are “likely to
`
`deceive the reasonable consumer to whom the practice[s] w[ere] directed.” S. Bay,
`
`85 Cal. Rptr. 2d. at 310 (internal citation and quotation marks omitted). A “few
`
`isolated examples” of deception are insufficient because the plaintiff needs to
`
`submit evidence showing a likelihood of confusing an “appreciable number of
`
`reasonably prudent purchasers.” Clemens v. DaimlerChrysler Corp., 534 F.3d
`
`1017, 1026 (9th Cir. 2008).
`
`
`
`We hold summary judgment was correct on this claim. Dreamstime alleges
`
`that Google violated the UCL’s fraud prong by (1) not disclosing its algorithmic
`
`revision; and (2) misrepresenting certain aspects of its advertising service. Neither
`
`allegation is sufficient. Google had no affirmative duty under the parties’
`
`agreement to disclose its confidential algorithmic revision. Moreover, there is no
`
`evidence suggesting that the Google employees with whom Dreamstime interacted
`
`
`
`5
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 6 of 7
`
`(1) knew about the algorithmic revision, and/or (2) believed that the algorithmic
`
`revision caused Dreamstime harm.4 Parties have no legal duty to disclose facts that
`
`they do not know or believe to be true. Wilson v. Hewlett-Packard Co., 668 F.3d
`
`1136, 1145 n.5 (9th Cir. 2012). Dreamstime has not shown more than, at most, a
`
`“few isolated examples” of misrepresentation, and that evidence falls short of
`
`demonstrating that an “appreciable number of reasonably prudent purchasers”
`
`would likely be misled by Google’s misconduct. Clemens, 534 F.3d at 1026.
`
`Summary judgment was thus properly granted on Dreamstime’s UCL fraud claim.
`
`III
`
`
`
`For the reasons provided above, we conclude that the district court did not
`
`err in granting summary judgment for Google on Dreamstime’s implied covenant
`
`of good faith and UCL claims. The district court’s judgment is AFFIRMED.
`
`
`4 Absent other evidence, Dreamstime’s assertion that the algorithmic revision
`caused it harm boils down to post hoc ergo propter hoc, a common logical fallacy
`that states that if event x followed event y, then y must have been caused by x.
`Here, because expert opinions were conflicted, as set forth in the accompanying
`published opinion, the record does not unequivocally disclose whether Google’s
`revision of its algorithms in fact was the cause of declines in search ranking.
`
`
`
`6
`
`
`
`
`
`Case: 20-16472, 12/06/2022, ID: 12603052, DktEntry: 72, Page 7 of 7
`
`Dreamstime.com, LLC v. Google LLC, Case No. 20-16472
`Rawlinson, Circuit Judge, concurring in the result:
`
` I concur in the result.
`
`FILED
`
`DEC 6 2022
`
`MOLLY C. DWYER, CLERK
`U.S. COURT OF APPEALS
`
`1
`
`
Accessing this document will incur an additional charge of $.
After purchase, you can access this document again without charge.
Accept $ Charge
Still Working On It
This document is taking longer than usual to download. This can happen if we need to contact the court directly to obtain the document and their servers are running slowly.
Give it another minute or two to complete, and then try the refresh button.
A few More Minutes ... Still Working
It can take up to 5 minutes for us to download a document if the court servers are running slowly.
Thank you for your continued patience.
This document could not be displayed.
We could not find this document within its docket. Please go back to the docket page and check the link. If that does not work, go back to the docket and refresh it to pull the newest information.
Your account does not support viewing this document.
You need a Paid Account to view this document. Click here to change your account type.
Your account does not support viewing this document.
Set your membership
status to view this document.
With a Docket Alarm membership, you'll
get a whole lot more, including:
- Up-to-date information for this case.
- Email alerts whenever there is an update.
- Full text search for other cases.
- Get email alerts whenever a new case matches your search.
One Moment Please
The filing “” is large (MB) and is being downloaded.
Please refresh this page in a few minutes to see if the filing has been downloaded. The filing will also be emailed to you when the download completes.
Your document is on its way!
If you do not receive the document in five minutes, contact support at support@docketalarm.com.
Sealed Document
We are unable to display this document, it may be under a court ordered seal.
If you have proper credentials to access the file, you may proceed directly to the court's system using your government issued username and password.
Access Government Site
