Mazur v. Ebay Inc.

257 F.R.D. 563, 2009 U.S. Dist. LEXIS 38124, 2009 WL 1203937
CourtDistrict Court, N.D. California
DecidedMay 5, 2009
DocketNo. C 07-03967 MHP
StatusPublished
Cited by40 cases

This text of 257 F.R.D. 563 (Mazur v. Ebay Inc.) is published on Counsel Stack Legal Research, covering District Court, N.D. California primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Mazur v. Ebay Inc., 257 F.R.D. 563, 2009 U.S. Dist. LEXIS 38124, 2009 WL 1203937 (N.D. Cal. 2009).

Opinion

MEMORANDUM & ORDER

MARILYN HALL PATEL, District Judge.

In this proposed class action, plaintiffs brought suit against eBay Inc. (“eBay”) and others (“Seller Defendants”), accusing the Seller Defendants of engaging in fake or “shill” bidding and eBay of acquiescing in the same. Now before the court is plaintiffs’ motion for class certification and for appointment of class representative and class counsel pursuant to Federal Rule of Civil Procedure 23. Having considered the parties’ arguments and for the reasons set forth below, the court enters the following memorandum and order.

BACKGROUND

On July 29, 2008, plaintiffs Michele Mazur and Sarah Bates filed a third amended complaint, on behalf of themselves and others similarly situated, setting forth the following [565]*565factual allegations. eBay provides the Live Auction service which allows eBay users to place bids on live auctions held by third-party auction houses. Pis.’ Third Amended Complaint (“Compl.”) ¶ 29. eBay’s Live Auction service is available at ebayliveaue-tions.com. Id. at ¶39. This service allows eBay users to compete with floor bidders at those auction houses. The offline bids made by the floor bidders are reflected online, but eBay users are not provided any details regarding the bidder. Id. at ¶ 73. The floor bidder could be someone who is physically present on the auction room floor, or an absentee bid placed in person, via fax, or real time phone bid. Id. at ¶ 33.

Despite claiming to hold live auctions— auctions held on an auction floor — Seller Defendants are not holding live auctions. Id. at ¶¶ 47, 53, 54, 65, 69. eBay knows that Seller Defendants are not holding live auctions, contrary to its assertion that the Live Auction service is live. Id. at ¶¶ 29, 38, 80, 84. The bids represented as floor bids are instead shill bids — which eBay defines as “bids that artificially increase an item’s price or apparent desirability, or bids by individuals with a level of access to the seller’s item information not available to the general community.” Id. at ¶¶ 71, 66. Shill bids artificially inflate the price that a winning internet bidder pays for a given item, by creating the illusion that there is substantial demand for each item. Id. at ¶¶72, 73. Shill bidding is allegedly prohibited by eBay rules. Id. at ¶ 66.

That Seller Defendants’ floor bids are shill bids is evidenced by the fact that the auctions are not live from any auction house floor, but rather the bidding goes online only and is “constant” such that bids are rapidly logged. Id. at ¶¶ 45-47, 53-54, 59-60. With respect to Hot Jewelry Auctions, com (“HJA”), for example, floor bids are logged at a rapid rate of approximately twenty live bids in seven seconds. Id. at ¶46. HJA acknowledges that floor bidders are VIPs who place bids from their homes using the Internet. Id. at ¶ 47. Plaintiffs contend that these VIPs are actually individuals employed by HJA who pretend to be floor bidders and bid to drive up the price of an item. Id. at 1150. With respect to Neimans Jewelry (“Neimans”), floor bids are logged in a pattern identical to HJA. Id. at ¶51. With respect to GoAntiques.com, Inc. (“GoAn-tiques.com”), floor bids only begin after an internet bidder has placed an initial bid, but are logged at a similar rapid rate to that of HJA and Neimans. Id. at ¶ 59. Auctioneers at GoAntiques.com are also responsible for protecting the seller’s reserve — the minimum price at which the seller is willing to sell— which is displayed to internet bidders as an “Auction floor bid.” Id. at ¶ 61.

The result of eBay permitting these Seller Defendant “auction houses” to not actually run auction floor auctions is “massive and systemic fraud.” Id. ¶¶ 38, 65. The items purchased by the eBay Internet bidders at inflated prices are worth far less than the purchase price. Id. at ¶¶ 98, 105, 110, 114. These items include jewelry, antiques, art, coins, paintings, estate items and other collectibles. Id. ¶¶44, 51, 57. eBay Internet bidders are induced to pay higher prices for these items both because the floor bidders have actually increased the price of the item, and because the eBay Internet bidders rely on the floor bidder having access to the item and therefore being able to better evaluate its worth. Id. at ¶¶ 97, 99, 105, 106, 110, 112-113.

As a result of these allegations, plaintiffs contend that Seller Defendants are liable for making misrepresentations regarding the nature of their auction services and for engaging in shill bidding practices. Plaintiffs also contend that eBay falsely claimed that the “live” auctions were safe and involved carefully screened reputable international auction houses with floor bidders. The Third Amended Complaint alleges a number of contract, tort and statutory claims against eBay and Seller Defendants. Further details concerning the procedural history of this action can be found in the court’s prior orders: Mazur v. eBay Inc., 2008 WL 618988 (N.D.Cal.2008), Docket No. 55, and Mazur v. eBay Inc., 2008 WL 2951351 (N.D.Cal.2008), Docket No. 69.

On December 1, 2008, plaintiffs filed this motion for class certification and to appoint class representative and class counsel pursu[566]*566ant to Federal Rule of Civil Procedure 23.1 eBay and the Seller Defendants filed a joint opposition to plaintiffs’ motion and GoAn-tiques.com filed a supplemental brief and joinder to defendants’ joint opposition. Collectively, they argue that plaintiffs are not adequate class representatives, plaintiffs’ claims are not typical of a class, and substantial individual issues predominate, i.e., issues of reliance, damages, causation and manageability that allegedly preclude class certification.

LEGAL STANDARD

Motion for Class Certification

Class certification is governed by Federal Rule of Civil Procedure 23, which provides a two step procedure. First, the four prerequisites enumerated in Rule 23(a) must be satisfied, and then the party seeking certification must also show that they have met one of the four disjunctive tests set out in Rule 23(b). Fed.R.Civ.P. 23.

Under Rule 23(a), the party seeking class certification must establish: (1) that the class is so large that joinder of all members is impracticable (“numerosity”); (2) that there are one or more questions of law or fact common to the class (“commonality”); (3) that the named parties’ claims are typical of the class (“typicality”); and (4) that the class representatives will fairly and adequately protect the interests of other members of the class (“adequacy of representation”). Fed. R.Civ.P. 23(a). In addition to the explicit requirements set out by Rule 23(a), the class definition must set forth a class which is ascertainable and clearly identifiable. La-mumba Corp. v. City of Oakland, 2007 WL 3245282 (N.D.Cal.2007) (Patel, J.).

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Cite This Page — Counsel Stack

Bluebook (online)
257 F.R.D. 563, 2009 U.S. Dist. LEXIS 38124, 2009 WL 1203937, Counsel Stack Legal Research, https://law.counselstack.com/opinion/mazur-v-ebay-inc-cand-2009.