Grace Galway v. Valve Corporation

• Court: Court of Appeals for the Ninth Circuit
• Decided: January 20, 2023
• Docket: 22-35105
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JAN 20 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

GRACE GALWAY; BRENDA SHOSS, No. 22-35105 individually and on behalf of all others similarly situated, D.C. No. 2:16-cv-01941-JLR

Plaintiffs-Appellants, MEMORANDUM* v.

VALVE CORPORATION, a Washington corporation,

Defendant-Appellee.

Appeal from the United States District Court for the Western District of Washington James L. Robart, District Judge, Presiding

Argued and Submitted December 8, 2022 Seattle, Washington

Before: O’SCANNLAIN, McKEOWN, and MILLER, Circuit Judges.

Grace Galway and Brenda Shoss appeal the district court’s dismissal of their

claims brought under Washington’s Consumer Protection Act (“CPA”). We have

jurisdiction under 28 U.S.C. § 1291 and review de novo the grant of summary

judgment. Los Padres ForestWatch v. U.S. Forest Serv., 25 F.4th 649, 654 (9th

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. Cir. 2022). We affirm.

Galway and Shoss allege that Valve Corporation’s (“Valve”) embedding a

loot box feature in Counter-Strike: Global Offensive (“Counter-Strike”), a video

game Valve makes available to teenagers, violated the CPA because Galway and

Shoss’s children spent their parents’ money on this feature, and thus on illegal

underage gambling. The district court granted Valve’s motion for summary

judgment on the CPA claim for failure to prove causation.

To prevail on a CPA claim, “a plaintiff must establish five distinct elements:

(1) unfair or deceptive act or practice; (2) occurring in trade or commerce;

(3) public interest impact; (4) injury to plaintiff in his or her business or property;

(5) causation.” Perez-Crisantos v. State Farm Fire & Cas. Co., 389 P.3d 476, 483

(Wash. 2017) (quoting Hangman Ridge Training Stables, Inc. v. Safeco Title Ins.

Co., 719 P.2d 531, 533 (Wash. 1986)). Failing to establish any element is fatal to

the claim. Rush v. Blackburn, 361 P.3d 217, 224 (Wash. Ct. App. 2015).

Although proof that the plaintiff relied on the defendant’s misrepresentations or

omissions is not generally required to show causation, a court may require the

plaintiff to show reliance where reliance is the causation theory the plaintiff

pleaded. See Young v. Toyota Motor Sales, 472 P.3d 990, 996–97 (Wash. 2020).

The district court correctly granted summary judgment. Galway and Shoss

alleged that Valve’s embedding the loot box feature and failing to disclose that

2 feature induced Galway and Shoss to give money to their children, who then used

that money to buy game credits to spend on this feature. This is a reliance

argument, and the district court accordingly applied the rebuttable presumption of

reliance. See Deegan v. Windermere Real Estate/Ctr.-Isle, Inc., 391 P.3d 582,

587–88 (Wash. Ct. App. 2017); Reichert v. Keefe Commissary Network, LLC, 331

F.R.D. 541, 556 (W.D. Wash. 2019). We analyze separately the two alleged unfair

or deceptive acts and practices—embedding and failure to disclose.

Galway and Shoss fail to establish a genuine dispute of material fact

regarding causation with respect to the failure to disclose. Valve proffered

evidence that neither parent viewed or sought out Valve statements about Counter-

Strike during the relevant time period. This evidence—which Galway and Shoss

did not challenge or contradict—successfully rebuts the presumption of reliance by

establishing that Galway and Shoss’s behavior would not have changed if the

disclosure they seek had in fact been made. See Morris v. Int’l Yogurt Co., 729

P.2d 33, 41 (Wash. 1986). Without the presumption of reliance, Galway and Shoss

fail to provide evidence to support a genuine dispute of material fact as to whether

Valve’s alleged omissions induced their monetary injuries. Their sole remaining

argument, that they would have acted differently had they seen a gambling

disclosure on their credit card statements, is unpersuasive when, as the district

court noted, the statements accurately reflected that payments were made to

3 Valve’s gaming platform and neither the Washington courts nor the legislature

have deemed video game loot box features to be gambling, so no such disclosure

would be required.

Galway and Shoss also fail to establish a genuine dispute of material fact as

to causation with respect to embedding the loot box feature. Their sole theory of

causation before the district court was reliance. Before this court, by contrast,

Galway and Shoss argue that reliance is an inappropriate framework because

underage gambling cannot be remedied through disclosures. Because Galway and

Shoss did not raise this argument in opposition to Valve’s motion for summary

judgment below, we do not address it here. See Pac. Dawn LLC v. Pritzker, 831

F.3d 1166, 1178 n.7 (9th Cir. 2016). Limited to proving a reliance theory of

causation, Galway and Shoss fail to establish a genuine dispute of material fact.

See Young, 472 P.3d at 996–97 (“Reliance was Young’s theory, and he failed to

prove it.”).

Galway and Shoss have failed to identify a genuine issue of material fact as

to the causation element of their CPA claim. The district court properly granted

summary judgment to Valve.

AFFIRMED.