Los Angeles Court Rejects Transfer, Grants Dismissal of Google Gift Card Fraud Suit

In an in-chambers order regarding several pending motions filed by Google LLC, Judge Fernando M. Olguin offered the plaintiffs a chance to replead their case and denied Google’s motion to transfer, declining to give effect to the applicable forum selection clause. Monday’s order gives the plaintiffs until March 7 to amend their complaint. 

The lawsuit dates back two years when consumers sued Google over how difficult it made Google Play Store gift card redemption. They alleged that though touted as easy to redeem, never expiring, and easily managed, Google ensnared many honest customers in its overly broad fraud detection net, “effectively invalidating otherwise valid gift cards.”

Briefing on Google’s motion to dismiss ensued. The consumers opposed, arguing that Google’s practices indeed violate California’s Unfair Competition Law and its Gift Card Law mandating that offerors honor advertised features such as no expiration date.

This week’s order found that Google ineffectively notified consumers of its terms and conditions’ forum selection clause. The court overrode several arguments contending that the plaintiffs assented to those terms. 

In its analysis, the court reviewed what consumers see when purchasing and redeeming gift cards and determined that “[t]here is no evidence that plaintiffs had actual or constructive notice of the clause at the time they purchased their gift cards.” In this regard, the court pointed to the fact that many purchasers bought gift cards at brick-and-mortar stores and were not then presented with Google’s terms of use.

In a short discussion on Google’s motion to dismiss, the court summarily granted its request as to all of the plaintiffs’ claims. “In preparing the Second Amended Complaint, plaintiffs shall carefully evaluate the contentions set forth in Google’s Motion, particularly as to the contention that Google Play gift cards are exempt from the requirements of California’s Gift Certificate Law,” the order said.

The plaintiffs are represented by McCune Wright Arevalo, LLP. Google is represented by Cooley LLP.