5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7
8 NATHAN CAMPOS, Case No. 2:22-cv-01806-RSM 9 10 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO DENY CLASS 11 v. CERTIFICATION
12 BIG FISH GAMES, INC., a Washington 13 corporation,
14 Defendant.
16 I. INTRODUCTION 17 This matter comes before the Court on Defendant Big Fish Games, INC. (“Big Fish”)’s 18 Motion for an Order Denying Class Certification, Dkt. #62. Plaintiff has opposed the Motion. The 19 Court has fully considered the Motion and the supporting and opposing memoranda, together with 20 the attached declarations. The Court finds that the circumstances here do not meet the 21 22 requirements for class certification, and for the reasons set forth below, shall GRANT 23 Defendant’s Motion and deny class certification with leave for Plaintiff to amend his First 24 Amended Complaint. 25 II. BACKGROUND 26 Plaintiff, Nathan Campos is a citizen and resident of Los Angeles County, California, who 27 28 downloaded the mobile application games Big Fish Casino and Jackpot Magic Slots (collectively “Games”) from the Apple App Store in this District. Dkt. #24. Plaintiff brings this suit as a class 1 2 action on behalf of himself and other similarly situated individual gamers. Id. Defendant Big Fish 3 is a mobile gaming company that operates the social casino-style games. Dkt. #62. 4 Plaintiff alleges that Defendant has engaged in deceptive business practices that deploy 5 false and misleading advertising practices in an effort to illegally profit from consumers. Dkt. 6 #24. Specifically, Plaintiff alleges that Defendant has falsely advertised price discounts and sales 7 8 for in-game purchases to mislead and induce customers into making in-game purchases. 9 In 2020, millions of players of the Games entered a class action settlement in Kater v. 10 Churchill Downs, Inc., No. 15-cv-00612 (W.D. Wash.). Dkt. #62. As part of that settlement, the 11 court approved a release of all claims arising from the purchase of virtual chips in the games. 12 13 Defendant, in its Motion, argues that Plaintiff lacks standing to present his arguments 14 because he does not meet the typicality and adequacy requirements of Rule 23(a) for class 15 certification. Dkt. #62. Specifically, Plaintiff lacks standing because (1) he opted out of the 16 arbitration clause, and (2) he was not a member of the Kater class and therefore not subject to the 17 class release. 18 19 III. ANALYSIS 20 1. Plaintiff Does Not Adequately Establish Standing 21 a. Legal Standard 22 The requirements for certification of a class action are found in Rule 23(a), which states: 23 One or more members of a class may sue or be sued as representative 24 parties on behalf of all only if (1) the class is so numerous that joinder of 25 all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative 26 parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the 27 class. 28 F.R.Civ.P. 23(a). These are commonly referred to as the numerosity, commonality, typicality, and 1 2 adequacy requirements. 3 Pursuant to Article III of the U.S. Constitution, standing is a necessary component of 4 subject matter jurisdiction.” In re Palmdale Hills Prop., LLC, 654 F.3d 868, 873 (9th Cir. 2011). 5 To satisfy this requirement, “a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) 6 concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the 7 8 injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed 9 to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the 10 Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 11 L.Ed.2d 610 (2000). When a plaintiff lacks standing, dismissal under Federal Rule of Civil 12 13 Procedure 12(b)(1) is appropriate. See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 14 2011); Walsh v. Microsoft Corp., 63 F. Supp. 3d 1312, 1317–18 (W.D. Wash. 2014). 15 b. Plaintiff cannot represent a putative class that includes members who did not 16 opt out of the arbitration agreement. 17 Defendant argues that because Plaintiff is seeking to represent a class that includes 18 19 individuals who are subject to arbitration provisions, of which he opted out, Plaintiff has no 20 personal interest in litigating the enforceability of those provisions. Dkt. #62. The Court agrees. 21 Plaintiff does not dispute that the alleged classes contain persons who are parties to 22 Defendant’s arbitration agreement and concedes that he himself is not a party to that agreement. 23 Dkt. #75. Under existing Ninth Circuit law, a class cannot be certified if it includes persons who 24 25 entered into agreements to arbitrate their claims and to waive their right to participate in a class 26 action with regard to those claims. See O'Connor v. Uber Technologies, Inc., 904 F.3d 1087, 1094 27 (9th Cir. 2018); Lawson v. Grubhub, Inc., 13 F.4th 908 (9th Cir. 2021). Plaintiff cannot satisfy the 28 requirements in Rule 23(a) because he is neither typical of the class nor an adequate 1 2 representative. 3 Because Plaintiff has no standing to challenge the applicability or enforceability of the 4 arbitration provisions, the Court does not address arguments as to whether the class waiver 5 provisions are unenforceable at this time. 6 2. Plaintiff cannot represent a Putative Class that includes members who are subject to 7 8 the Kater Settlement Release 9 Plaintiff argues that interpreting the scope of the Kater release is a pure question of law 10 that may be decided without considering the issue of standing. Dkt. #75. Defendant, however, 11 argues that like his challenge to the enforceability of the arbitration agreement, Plaintiff lacks 12 13 standing to challenge the enforceable scope of the Kater release. Dkt. #85. For the same reasons 14 above, the Court agrees. 15 Plaintiff does not dispute that he is seeking to represent persons who are parties to the 16 Kater release, nor does he dispute that he is not a party to that release. Dkt. #75. Since Plaintiff 17 lacks standing to litigate issues regarding the Kater release, he is in no position to raise arguments 18 19 about the scope of that release. 20 3. Leave to Amend 21 Plaintiff requests leave to amend the First Amended Complaint in the event the Court 22 finds he lacks standing. See Dkt. #75. A “court should freely give leave [to amend] when justice 23 so requires,” Fed. R. Civ. P. 15(a)(2). Courts apply this policy with “extreme liberality.” 24 25 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). Five factors are 26 commonly used to assess the propriety of granting leave to amend: (1) bad faith, (2) undue delay, 27 (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether plaintiff has 28 previously amended the complaint. Allen v.
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5 UNITED STATES DISTRICT COURT 6 WESTERN DISTRICT OF WASHINGTON AT SEATTLE 7
8 NATHAN CAMPOS, Case No. 2:22-cv-01806-RSM 9 10 Plaintiff, ORDER GRANTING DEFENDANT’S MOTION TO DENY CLASS 11 v. CERTIFICATION
12 BIG FISH GAMES, INC., a Washington 13 corporation,
14 Defendant.
16 I. INTRODUCTION 17 This matter comes before the Court on Defendant Big Fish Games, INC. (“Big Fish”)’s 18 Motion for an Order Denying Class Certification, Dkt. #62. Plaintiff has opposed the Motion. The 19 Court has fully considered the Motion and the supporting and opposing memoranda, together with 20 the attached declarations. The Court finds that the circumstances here do not meet the 21 22 requirements for class certification, and for the reasons set forth below, shall GRANT 23 Defendant’s Motion and deny class certification with leave for Plaintiff to amend his First 24 Amended Complaint. 25 II. BACKGROUND 26 Plaintiff, Nathan Campos is a citizen and resident of Los Angeles County, California, who 27 28 downloaded the mobile application games Big Fish Casino and Jackpot Magic Slots (collectively “Games”) from the Apple App Store in this District. Dkt. #24. Plaintiff brings this suit as a class 1 2 action on behalf of himself and other similarly situated individual gamers. Id. Defendant Big Fish 3 is a mobile gaming company that operates the social casino-style games. Dkt. #62. 4 Plaintiff alleges that Defendant has engaged in deceptive business practices that deploy 5 false and misleading advertising practices in an effort to illegally profit from consumers. Dkt. 6 #24. Specifically, Plaintiff alleges that Defendant has falsely advertised price discounts and sales 7 8 for in-game purchases to mislead and induce customers into making in-game purchases. 9 In 2020, millions of players of the Games entered a class action settlement in Kater v. 10 Churchill Downs, Inc., No. 15-cv-00612 (W.D. Wash.). Dkt. #62. As part of that settlement, the 11 court approved a release of all claims arising from the purchase of virtual chips in the games. 12 13 Defendant, in its Motion, argues that Plaintiff lacks standing to present his arguments 14 because he does not meet the typicality and adequacy requirements of Rule 23(a) for class 15 certification. Dkt. #62. Specifically, Plaintiff lacks standing because (1) he opted out of the 16 arbitration clause, and (2) he was not a member of the Kater class and therefore not subject to the 17 class release. 18 19 III. ANALYSIS 20 1. Plaintiff Does Not Adequately Establish Standing 21 a. Legal Standard 22 The requirements for certification of a class action are found in Rule 23(a), which states: 23 One or more members of a class may sue or be sued as representative 24 parties on behalf of all only if (1) the class is so numerous that joinder of 25 all members is impracticable, (2) there are questions of law or fact common to the class, (3) the claims or defenses of the representative 26 parties are typical of the claims or defenses of the class, and (4) the representative parties will fairly and adequately protect the interests of the 27 class. 28 F.R.Civ.P. 23(a). These are commonly referred to as the numerosity, commonality, typicality, and 1 2 adequacy requirements. 3 Pursuant to Article III of the U.S. Constitution, standing is a necessary component of 4 subject matter jurisdiction.” In re Palmdale Hills Prop., LLC, 654 F.3d 868, 873 (9th Cir. 2011). 5 To satisfy this requirement, “a plaintiff must show (1) it has suffered an ‘injury in fact’ that is (a) 6 concrete and particularized and (b) actual or imminent, not conjectural or hypothetical; (2) the 7 8 injury is fairly traceable to the challenged action of the defendant; and (3) it is likely, as opposed 9 to merely speculative, that the injury will be redressed by a favorable decision.” Friends of the 10 Earth, Inc. v. Laidlaw Envtl. Servs. (TOC), Inc., 528 U.S. 167, 180–81, 120 S.Ct. 693, 145 11 L.Ed.2d 610 (2000). When a plaintiff lacks standing, dismissal under Federal Rule of Civil 12 13 Procedure 12(b)(1) is appropriate. See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 14 2011); Walsh v. Microsoft Corp., 63 F. Supp. 3d 1312, 1317–18 (W.D. Wash. 2014). 15 b. Plaintiff cannot represent a putative class that includes members who did not 16 opt out of the arbitration agreement. 17 Defendant argues that because Plaintiff is seeking to represent a class that includes 18 19 individuals who are subject to arbitration provisions, of which he opted out, Plaintiff has no 20 personal interest in litigating the enforceability of those provisions. Dkt. #62. The Court agrees. 21 Plaintiff does not dispute that the alleged classes contain persons who are parties to 22 Defendant’s arbitration agreement and concedes that he himself is not a party to that agreement. 23 Dkt. #75. Under existing Ninth Circuit law, a class cannot be certified if it includes persons who 24 25 entered into agreements to arbitrate their claims and to waive their right to participate in a class 26 action with regard to those claims. See O'Connor v. Uber Technologies, Inc., 904 F.3d 1087, 1094 27 (9th Cir. 2018); Lawson v. Grubhub, Inc., 13 F.4th 908 (9th Cir. 2021). Plaintiff cannot satisfy the 28 requirements in Rule 23(a) because he is neither typical of the class nor an adequate 1 2 representative. 3 Because Plaintiff has no standing to challenge the applicability or enforceability of the 4 arbitration provisions, the Court does not address arguments as to whether the class waiver 5 provisions are unenforceable at this time. 6 2. Plaintiff cannot represent a Putative Class that includes members who are subject to 7 8 the Kater Settlement Release 9 Plaintiff argues that interpreting the scope of the Kater release is a pure question of law 10 that may be decided without considering the issue of standing. Dkt. #75. Defendant, however, 11 argues that like his challenge to the enforceability of the arbitration agreement, Plaintiff lacks 12 13 standing to challenge the enforceable scope of the Kater release. Dkt. #85. For the same reasons 14 above, the Court agrees. 15 Plaintiff does not dispute that he is seeking to represent persons who are parties to the 16 Kater release, nor does he dispute that he is not a party to that release. Dkt. #75. Since Plaintiff 17 lacks standing to litigate issues regarding the Kater release, he is in no position to raise arguments 18 19 about the scope of that release. 20 3. Leave to Amend 21 Plaintiff requests leave to amend the First Amended Complaint in the event the Court 22 finds he lacks standing. See Dkt. #75. A “court should freely give leave [to amend] when justice 23 so requires,” Fed. R. Civ. P. 15(a)(2). Courts apply this policy with “extreme liberality.” 24 25 Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003). Five factors are 26 commonly used to assess the propriety of granting leave to amend: (1) bad faith, (2) undue delay, 27 (3) prejudice to the opposing party, (4) futility of amendment, and (5) whether plaintiff has 28 previously amended the complaint. Allen v. City of Beverly Hills, 911 F.2d 367, 373 (9th Cir. 1 2 1990); Foman v. Davis, 371 U.S. 178, 182 (1962). In conducting this five-factor analysis, the 3 court must grant all inferences in favor of allowing amendment. Griggs v. Pace Am. Group, Inc., 4 170 F.3d 877, 880 (9th Cir. 1999). In addition, the court must be mindful of the fact that, for each 5 of these factors, the party opposing amendment has the burden of showing that amendment is not 6 warranted. DCD Programs, Ltd. v. Leighton, 833 F.2d 183, 187 (9th Cir. 1987); see also 7 8 Richardson v. United States, 841 F.2d 993, 999 (9th Cir. 1988). 9 The Court finds that the deficiencies with the First Amended Complaint can possibly be 10 cured by amendment. Weighing all the above factors, leave to amend will be granted. 11 IV. CONCLUSION 12 13 Having reviewed the relevant briefing and the remainder of the record, the Court hereby 14 finds and ORDERS: 15 1) Defendant’s Motion to Deny Class Certification, Dkt. #62, is GRANTED. 16 2) Plaintiff’s request for leave to amend the First Amended Complaint is GRANTED. 17 Plaintiff shall have thirty (30) days to file an amended complaint. If Plaintiff fails to 18 19 do so, the Clerk shall issue a Scheduling Order in this matter and Plaintiff shall proceed 20 individually. 21 DATED this 12th day of September, 2023. 22
23 A 24 25 RICARDO S. MARTINEZ UNITED STATES DISTRICT JUDGE 26 27 28