Ninth Circuit: 12(b)(6) Not the Time to Decide Whether a Business Practice Was Misleading

|

In a brief memorandum opinion issued Friday, the Ninth Circuit issued a reminder that whether a business practice is misleading under California’s consumer protection statutes is typically a question of fact better deferred until later in the litigation.

In McMahon v. Take-Two Interactive Software, Inc., plaintiffs brought suit after purchasing the Grand Theft Auto V video game.  Plaintiffs alleged that the game was marketed in a fashion that misleadingly marketed the game’s online component.  The district court concluded as a matter of law that the alleged misrepresentations were not actionable under the UCL or the FAL.

The Ninth Circuit reversed, explaining:

plaintiffs alleged that they read all the disclosures and statements on GTA V’s packaging, and that these representations led them to believe that GTA Online would be available to play immediately upon purchase of GTA V. Contrary to these representations, GTA Online was not available immediately to any purchasers. The district court erred by failing to construe plaintiffs’ allegations that these representations were misleading in the light most favorable to plaintiffs, and by making the finding that the representations were not misleading. See Lilly v. ConAgra Foods, Inc., 743 F.3d 662, 665 (9th Cir. 2014) (“Whether a business practice is deceptive will usually be a question of fact not appropriate for decision on [a motion to dismiss].” (quotation marks and citation omitted)).

Read more