Y.H. v. Blizzard Entertainment, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: October 25, 2023
• Docket: 22-56145
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS OCT 25 2023 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

Y.H., by and through her Guardian Nathan No. 22-56145 Harris, individually and on behalf of similarly situated individuals, D.C. No. 8:22-cv-00998-SSS-ADS Plaintiff-Appellee,

v. MEMORANDUM*

BLIZZARD ENTERTAINMENT, INC., a Delaware corporation,

Defendant-Appellant.

Appeal from the United States District Court for the Central District of California Sunshine Suzanne Sykes, District Judge, Presiding

Argued and Submitted October 16, 2023 Phoenix, Arizona

Before: IKUTA, BADE, and BRESS, Circuit Judges.

Blizzard Entertainment, Inc. (“Blizzard”) appeals from the district court’s

order denying its motion to compel arbitration. In its reply brief, Blizzard asserted

for the first time that Y.H. did not have Article III standing because she was not

financially responsible for any of the purchases at issue and therefore did not suffer

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. an injury. Because these assertions raise serious questions of subject-matter

jurisdiction, we directed the parties to be prepared to discuss at oral argument

whether the allegations in Y.H.’s complaint meet the requirements of Article III

standing. At oral argument, Blizzard changed its position from its reply brief and

argued that Y.H. did have Article III standing. After considering the parties’

arguments, we vacate the district court’s order denying the motion to compel

arbitration and remand to allow the district court to evaluate standing in the first

instance.

We have an independent obligation to consider our subject-matter

jurisdiction, as well as the district court’s subject-matter jurisdiction. Allstate Ins.

Co. v. Hughes, 358 F.3d 1089, 1093 (9th Cir. 2004) (citations omitted). This

independent obligation extends to determining whether “standing exists, regardless

of whether it is challenged by any of the parties.” Summers v. Earth Island Inst.,

555 U.S. 488, 499 (2009) (citation omitted). To have standing under Article III, a

plaintiff must, among other requirements, allege “an ‘injury in fact’—an invasion

of a legally protected interest which is (a) concrete and particularized; and

(b) actual or imminent, not conjectural or hypothetical.” Patel v. Facebook, Inc.,

932 F.3d 1264, 1270 (9th Cir. 2019) (quoting Lujan v. Defs. of Wildlife, 504 U.S.

555, 560 (1992)). There must be standing for each of a plaintiff’s claims. Maya v.

Centex Corp., 658 F.3d 1060, 1068–69 (9th Cir. 2011) (citations omitted).

2 On this record, there is a serious question of whether Y.H. has adequately

alleged an injury in fact for any of her claims. Y.H. seeks a declaratory judgment

on her right to disaffirm her contracts with Blizzard under California Family Code

§ 6710. At oral argument, Y.H.’s counsel clarified that the contracts at issue in her

claims are the individual purchases of card packs in the Hearthstone game. She

alleges that Blizzard denied her right to disaffirm in its Terms of Service. But

there is no allegation that Y.H. agreed to the Terms of Service or that Blizzard ever

denied a refund request from Y.H. This raises a question of whether the harm

alleged is “conjectural or hypothetical,” rather than “actual or imminent.” Spokeo,

Inc. v. Robins, 578 U.S. 330, 339 (2016) (citation omitted), as revised (May 24,

2016). And even assuming Y.H. had a right to disaffirm the contracts at issue

under § 6710, there is a question of whether a violation of § 6710 results in the

type of “concrete harm” required for Article III standing. See TransUnion LLC v.

Ramirez, 141 S. Ct. 2190, 2200 (2021) (“Central to assessing concreteness is

whether the asserted harm has a ‘close relationship’ to a harm traditionally

recognized as providing a basis for a lawsuit in American courts—such as physical

harm, monetary harm, or various intangible harms.” (citation omitted)).

Y.H. also brings claims under California’s Unfair Competition Law and for

restitution or unjust enrichment. Although her complaint alleges that she “suffered

actual damages, including monetary losses,” she also alleges that she used “her

3 father’s credit cards and debit cards” to make these purchases. These allegations

raise an issue of whether it was Y.H.’s father who “suffered an injury in fact,” as

opposed to Y.H. See Spokeo, Inc., 578 U.S. at 338.

Constitutional standing is a jurisdictional issue and “must be addressed

whenever raised.” Pershing Park Villas Homeowners Ass’n v. United Pac. Ins.

Co., 219 F.3d 895, 899 (9th Cir. 2000) (citation omitted), as amended (Aug. 11,

2000). But the parties’ briefs did not address whether the complaint adequately

alleged Article III standing. In these circumstances, and because it is unclear

whether additional factual development is needed to evaluate Article III standing,

we conclude that the better course is to allow the district court to consider standing

in the first instance.

Because there is a serious question of standing in this case, we vacate the

district court’s denial of the motion to compel arbitration and remand for the

district court to determine in the first instance whether Y.H. has Article III

standing. If the district court determines Y.H. does not have standing, it should

remand this case to state court. If the district court determines that there is

standing, then it may conduct further proceedings as it deems appropriate. This

decision is without prejudice to Blizzard renewing any motion to compel

arbitration at the appropriate time.

VACATED and REMANDED.