RICARDO S. MARTINEZ, District Judge.
This matter comes before the Court on Defendant Amazon.com, Inc.'s ("Amazon")
This case arises from allegations of selling counterfeit iPad covers on Amazon.com. Amazon enables third-party sellers to sell their products over Amazon's websites. Dkt. #1 at ¶ 10. H2F is a former seller. As a seller, H2F was required to accept and abide by Amazon's Business Solutions Agreement ("BSA"). Dkt. #1 at ¶ 12. H2F admits that it entered into such agreement in or about January 2012.
The BSA provides that Amazon may terminate or suspend the Agreement or any service by notice to the seller for any reason at any time. Dkt. #16, Ex. A at § 3. Likewise, sellers may terminate the Agreement or service for any reason at any time. Id. Accordingly, the Agreement provides for an "at will" relationship between sellers and Amazon.
The BSA also provides:
Dkt. #1 at ¶ 18 and Dkt. #16, Ex. A at § 2 (emphasis added).
On June 14, 2013, Amazon informed H2F that it had removed two of H2F's listings for Apple iPad Smart Covers because it had been notified by the rights owner (Apple) that the offers infringed their intellectual property rights and may be counterfeit. Dkt. #1 at ¶ 26. The communication from Amazon also suggested that H2F contact Apple directly to resolve the dispute, and asked H2F to tell Apple to contact Amazon if the dispute was resolved so Apple could withdraw its complaint. Id.
On June 17, 2013, Amazon informed H2F that it had removed its selling privileges, canceled its listings, and placed a temporary hold on any funds in its Amazon.com
H2F alleges that it subsequently resolved the complaint with Apple. Dkt. #1 at ¶¶ 60-63. H2F then informed Amazon that the complaint had been resolved, and asked for reinstatement. Id. at ¶ 64. However, on June 27, 2013, Amazon informed H2F that it would not reinstate its selling privileges. Id. at ¶ 65. H2F alleges that this communication "permanently shuttered" its business. Id.
After several weeks of subsequent communication between H2F, Apple and Amazon, H2F alleges it learned that Amazon had revoked its selling privileges because of additional customer complaints it had received about H2F's products, as well an additional infringement complaint. Dkt. #1 at ¶¶ 71-78.
H2F alleges that it has lost total revenue of $180,112.61 per month since its Amazon.com account was suspended/terminated. Dkt. #1 at ¶ 80. As a result, it has brought claims against Amazon.com for: breach of contract, violations of federal and state antitrust laws, violations of Washington's Uniform Money Services Act ("UMSA"), breach of covenants of good faith and fair dealing, violations of Washington's Consumer Protection Act ("CPA"), breach of fiduciary duty, and unjust enrichment.
On a motion to dismiss for failure to state a claim under Federal Rule of Civil Procedure 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co., 80 F.3d 336, 337-38 (9th Cir.1996). However, the court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007)). The Complaint "must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face." Id. at 678, 129 S.Ct. 1937. This requirement is met when the plaintiff "pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. Absent facial plausibility, Plaintiffs' claims must be dismissed. Twombly, 550 U.S. at 570, 127 S.Ct. 1955.
The Court generally may not consider material beyond the pleadings in ruling on a motion to dismiss. Lee v. City of Los Angeles, 250 F.3d 668, 688 (9th Cir.2001). However, where documents are referenced extensively in the Complaint, form the basis of Plaintiff's claim, or are subject to judicial notice, the Court may consider those documents in the context of a motion to dismiss. United States v. Ritchie, 342 F.3d 903, 908-09 (9th Cir.2003). The
Here, taking the "facts" described above as true, the Court finds no support for a single claim alleged by Plaintiff against Amazon, as further discussed below.
In order to succeed on a breach of contract claim, a Plaintiff must prove four elements: duty, breach, causation, and damages. BP W. Coast Prods. LLC v. SKR Inc., 989 F.Supp.2d 1109, 1121 (W.D.Wash.2013) (citing Baldwin v. Silver, 165 Wn.App. 463, 473, 269 P.3d 284 (2011)). For any breach to arise, there must first be some duty to perform. Id. Here, H2F alleges two breach of contract claims against Amazon—one alleging that Amazon held H2F's funds longer than authorized by the BSA (Cause of Action One), and one alleging that Amazon did not conduct a thorough investigation or treat it fairly in violation of Amazon's policies (Cause of Action Two). Dkt. #1 at ¶¶ 87-96. These claims must be dismissed, as H2F fails to allege any facts establishing a plausible claim. Specifically, it fails to adequately allege Amazon's duty or breach thereof for either of those claims.
With respect to Cause of Action One, Plaintiff relies on the BSA's alleged requirement that Amazon remit payments to its sellers within 14-19 days of receiving the funds from the purchaser. Dkt. #1 at ¶ 88. Plaintiff further alleges that the BSA was breached when Amazon held its funds for 92 days on one account and 98 days on another account between June and October of 2013. Id. at ¶ 89. However, Plaintiff fails to identify which section of the BSA is at issue and allegedly breached. This failure is fatal to Plaintiffs Claim. See, e.g., BP West Coast Prods., LLC v. Shalabi, 2012 WL 441155, 2012 U.S. Dist. LEXIS 17027 (W.D.Wash. Feb. 10, 2012) ("A breach of contract claim must point to a provision of the contract that was breached."); Curl v. CitiMortgage, Inc., 2014 WL 5321063, 2014 U.S. Dist. LEXIS 148055 (N.D.Cal. Oct. 17, 2014) ("[Plaintiff's] fourth cause of action, for breach of contract, fails because her complaint does not identify any express contractual provision that was breached by Defendants."); Commerce & Indus. Ins. Co. v. HR Staffing, Inc., 2014 WL 4983671, 2014 U.S. Dist. LEXIS 141637 (D.Or. Oct. 1, 2014) ("The court must know the provision (or provisions) of the contract (or contracts) that have allegedly been breached before it can perform the necessary interpretation.").
But even if this Court were to glean which provision of the contract is allegedly breached, Plaintiff ignores the contract language itself.
Dkt. #16, Ex. A at § S-6 (emphasis added).
Section 2 of the BSA provides:
Dkt. #1 at ¶ 18 and Dkt. #16, Ex. A at § 2 (emphasis added). Amazon argues that these two provisions, when read together, authorize Amazon to delay any remittance for 90 days, and may then remit funds under the bi-weekly schedule after the 90-day withholding period ends. As a result, the two time periods are cumulative, and Amazon remitted funds within that cumulative time period. Dkts. #15 at 11-13 and #28 at 6-7. The Court agrees.
The plain language of Section S-2 states that Amazon may, under certain circumstances, delay "initiating" remittances for the shorter of 90 days or the investigation period. Dkt. #16, Ex. A at § 2 (emphasis added). Thus, once the applicable time period has passed, Amazon must move forward with initiating the remittance under the Section S-6 schedule, which provides that remittances will occur on a bi-weekly basis. Id. at § S-6. There is nothing ambiguous about those provisions, and, as Amazon argues, when read together the two provisions are cumulative. Accordingly, even accepting the alleged facts of Plaintiff's Complaint as true, H2F fails to allege facts demonstrating that Amazon had any duty to remit payments to H2F in 90 days or less, and therefore no breach can be established. For these reasons, Cause of Action One must be dismissed.
Likewise, Cause of Action Two must also be dismissed. Under this Cause of Action, Plaintiff alleges that Amazon breached its contract by violating its policies to conduct thorough investigations and maintain selling platforms that are fair to sellers. Dkt. #1 at ¶¶ 92-96. Again Plaintiff fails to provide an identification of the contract provisions from which it quotes, and again, assuming the Court can identify such provisions, it misinterprets them.
As an initial matter, the BSA incorporates Amazon's Service Terms and Program Policies for the country in which a seller registers. Dkt. #16, Ex. A, "General Terms." The BSA provides:
http://www.amazon.com/gp/help/customer/display.html?nodeId=200832290 (last visited Nov. 4, 2014).
http://www.amazon.com/gp/help/customer/display.html?nodeId=200414320 (last visited Nov. 4, 2014).
Neither of these policies creates contractual obligations upon which H2F's breach of contract claim could be based. Indeed, the Reporting policy simply states that it encourages sellers to report listing violations. The second policy is simply an explanatory statement for the creation of the list of prohibited activities. See Evergreen Int'l Airlines, Inc. v. Boeing Co., 2012 U.S. Dist. LEXIS 140547, at *15-17 (W.D. Wash. June 9, 2010) (explaining that a provision stating that Boeing would "conduct its business fairly" is "aspirational language" that does not "give rise to an enforceable promise"). Moreover, the second policy explicitly states that it in no way limits the BSA. The BSA, as discussed above, creates an "at will" relationship between Amazon and its sellers, which allows either to terminate the agreement for any reason at any time. For these reasons, Cause of Action Two must be dismissed.
Plaintiff's Cause of Action Six, alleges that Amazon breached its duty to act in good faith and deal fairly with H2F by failing to conduct a thorough investigation of the complaints it received and by failing to remit payment within 90 days. Dkt. #1 at ¶¶ 126-135. As the Washington Supreme Court has recently explained, under Washington law, "`[t]here is in every contract an implied duty of good faith and fair dealing' that `obligates the parties to cooperate with each other so that each may obtain the full benefit of performance.'" Rekhter v. Dep't of Soc. & Health Servs., 180 Wn.2d 102, 112-113, 323 P.3d 1036, 1041 (2014) (quoting Badgett v. Sec. State Bank, 116 Wn.2d 563, 569, 807 P.2d 356 (1991)). The implied covenant of good faith and fair dealing cannot add or contradict express contract terms and does not impose a free-floating obligation of good faith on the parties. "Instead, `the duty [of good faith and fair dealing] arises
This claim rests on the assumption that Amazon had the contractual duties discussed above. Because the Court has determined that no such contractual duties existed, there is also no duty to perform such obligations in good faith. Accordingly, the Court dismisses Cause of Action Six.
Plaintiff's Cause of Action Four alleges a violation of Washington's UMSA. Dkt. #1 at ¶¶ 110-116. Specifically, Plaintiff alleges a violation of RCW 19.230.330, which requires a "money transmitter" to remit funds to a customer within 10 days. Plaintiff asserts that Amazon "routinely" failed to remit payments to H2F in violation of that section of the UMSA. Id. This Cause of Action fails as a matter of law.
First, Plaintiff appears to concede that the UMSA itself does not create a private cause of action. See Dkts. #15 at 13-16 and #24 at 13-17. Instead, Plaintiff argues that there is an implied private cause of action under the Act. The Court agrees with Amazon that H2F misstates the UMSA in applying the implied cause of action analysis, and therefore this claim must be dismissed. See Dkt. #28 at 7-10.
In Washington, courts consider three questions when determining whether an implied private cause of action under a specific statute exists: "first, whether the plaintiff is within the class for whose `especial' benefit the statute was enacted; second, whether the legislative intent, explicitly or implicitly, supports creating or denying a remedy; and third, whether implying a remedy is consistent with the underlying purpose of the legislation." Bennett v. Hardy, 113 Wn.2d 912, 920, 784 P.2d 1258 (1990). Here, H2F cannot show that the legislature enacted the UMSA for its "especial" benefit. In fact, the legislative history clearly indicates that the Bill was enacted for the benefit of all users of money transmission or currency exchange services. See Dkt. #25, Ex. A at 1, "Background." When "a statute protects the general public instead of an identifiable class of persons, a plaintiff is not a member of the class for whose especial benefit the statute was enacted." Protect the Peninsula's Future v. City of Port Angeles, 175 Wn.App. 201, 210, 304 P.3d 914 (2013). Accordingly, Plaintiff's Cause of Action fails as a matter of law, and must be dismissed.
Plaintiff's Cause of Action Seven alleges a violation of Washington's CPA. Dkt. #1 at ¶¶ 136-143. This Cause of Action appears to be premised on Plaintiffs belief that a violation of the UMSA is a per se violation of the CPA. To prevail in a private CPA claim, a plaintiff must prove: "(1) unfair or deceptive act or practice; (2) occurring in trade or commerce;
In this case, Plaintiff has alleged the existence of a pertinent statute—the UMSA. It has also alleged a violation of that statute. Specifically, it has alleged that Amazon violated the CPA by forcing its sellers to enter into a contract whereby they accepted a 14-day remittance schedule, in violation of the UMSA. Problematically, however, H2F fails to allege that it was a party to the contract referenced in the Cause of Action. Indeed, the Cause of Action references a Service Participation Agreement. Yet nowhere in the Complaint does Plaintiff actually allege that it was a party to such agreement. In fact, in reviewing the facts set forth in support of its allegations, the only Agreement to which H2F admits being a party is the BSA, and the Service Participation Agreement is not mentioned at all. See Dkt. #1 at ¶¶ 8-86. Therefore, the Court finds that Plaintiff has not alleged sufficient facts on the face of the Complaint to allow this claim to proceed.
Plaintiff's Cause of Action Three alleges violations of state and federal antitrust laws. Dkt. #1 at ¶¶ 97-109. Essentially, this claim alleges that Apple and Amazon have conspired to "shutter" Apple's competitors. Specifically, H2F alleges that Apple and Amazon have agreed to a scheme whereby Apple monitors sellers who sell items at an "aggressive price point," then report such sellers to Amazon, which in turn shuts down the seller. Then, Apple allegedly stalls its resolution of the complaint with the seller in order to allow Amazon to "conjure up" an after-the-fact reason for closing the seller's account. Dkt. #1 at ¶ 103. Alternatively, Plaintiff alleges that Amazon and Apple are engaged in horizontal price fixing because they both sell the same iPad accessories as H2F. Dkt. #1 at ¶¶ 108-109.
Plaintiff fails to allege any facts to support either basis for the claims. In fact, a review of Plaintiff's alleged facts reveals no allegations of any relationship between Apple and Amazon, other than that Apple communicated with Amazon regarding the complaint of counterfeit iPad covers in this
Under Cause of Action Eight, Plaintiff alleges a breach of fiduciary duty. Dkt. #1 at ¶¶ 144-148. Plaintiff alleges that Amazon owes it a fiduciary duty as its "payment agent" and breached such duty by holding its funds in violation of the BSA. Id. The Court finds this claim without merit. The BSA specifically states that it does not create any dependent relationship between Amazon and H2F. Dkt. #16, Ex. A at § 13. Plaintiff attempts to justify its claim by pointing to language in a document titled Service Participation Agreement. Yet Plaintiff fails to actually allege that it was a party to such agreement, or that such agreement modifies the applicable BSA in any manner. In fact, in reviewing the facts set forth in support of its allegations, the only Agreement to which H2F admits being a party is the BSA, and the Service Participation Agreement is not mentioned at all. See Dkt. #1 at ¶¶ 8-86. Accordingly, Cause of Action Eight is dismissed.
Finally, Plaintiff alleges under Cause of Action Nine that Amazon was unjustly enriched by earning interest on the funds it failed to remit to H2F in 90 days or less. Dkt. #1 at ¶¶ 149-151. Amazon argues that this claim fails because a party may not bring a claim for unjust enrichment for issues arising under a contract's express subject matter. Dkt. #15 at 24. H2F does not oppose that argument. Instead, in an attempt to save the claim, H2F argues that the claim is properly pled because it is premised on an alleged violation of the UMSA. Dkt. #24 at 23. However, recharacterizing the claim as resting solely on a violation of Washington's UMSA cannot save it.
"`Unjust enrichment is the method of recovery for the value of the benefit retained absent any contractual relationship because notions of fairness and justice require it.'" Austin v. Ettl, 171 Wn.App. 82, 92, 286 P.3d 85, 91 (2012) (quoting Young v. Young, 164 Wn.2d 477, 484, 191 P.3d 1258 (2008)). A claim for unjust enrichment consists of three elements: (1) a plaintiff conferred a benefit upon the defendant, (2) the defendant had knowledge or appreciation of the benefit, and (3) the defendant's accepting or retaining the benefit without the payment of its value is inequitable under the circumstances of the case. See Young, 164 Wash.2d at 484, 191 P.3d 1258 (quoting Bailie Commc'ns, Ltd. v. Trend Bus. Sys., Inc., 61 Wn.App. 151, 159-60, 810 P.2d 12, 814 P.2d 699, review denied, 117 Wn.2d 1029, 820 P.2d 511 (1991)). Plaintiff fails to plead any facts to support the first element of the claim. In addition, to support the first element, Plaintiff would necessarily need to acknowledge that it "conferred a benefit" upon Amazon pursuant to a contract which allowed Amazon to collect funds on behalf of H2F. Thus, it is clear that the issue arises under a contract's express subject matter and may not be the basis of an unjust enrichment claim. Accordingly, this claim also fails as a matter of law.
Ordinarily, leave to amend a complaint should be freely given following an order of dismissal, "unless it is absolutely clear that the deficiencies of the complaint could not be cured by amendment." Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987); see also DeSoto v. Yellow Freight Sys., Inc., 957 F.2d 655, 658 (9th Cir.1992) ("A district court does not err in denying leave to amend where the amendment would be futile.") (citing Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990)). Here, the Court concludes that granting leave to amend would be futile. The Court can conceive of no possible cure for the deficiencies in Plaintiff's Complaint, particularly given the documentary evidence provided by Defendant and the invalidity of Plaintiff's primary legal arguments as discussed above.
Having reviewed the relevant pleadings, the declarations and exhibits attached thereto, and the remainder of the record, the Court hereby ORDERS: