Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_16-cv-05822/USCOURTS-cand-5_16-cv-05822-0/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Contract Dispute

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Case No.: 5:16-cv-05822-EJD

ORDER GRANTING MOTION TO DISMISS

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

SAN JOSE DIVISION

EONLINE GLOBAL, INC, et al.,

Plaintiffs,

v.

GOOGLE INC.,

Defendant.

Case No. 5:16-cv-05822-EJD 

ORDER GRANTING DEFENDANT'S 

MOTION TO DISMISS

Re: Dkt. No. 15

Defendant’s motion to dismiss is granted as unopposed as to the third and fourth causes of 

action (“Unjust Enrichment” and “Quantum Meruit,” respectively). The third and fourth causes of 

action are DISMISSED WITH PREJUDICE.

Defendant’s motion to dismiss is GRANTED WITH LEAVE TO AMEND as to the 

second cause of action for Breach of the Implied Covenant of Good Faith and Fair Dealing. 

“Under California law, a claim for breach of the covenant of good faith and fair dealing requires that a 

contract exists between the parties, that the plaintiff performed his contractual duties or was excused 

from nonperformance, that the defendant deprived the plaintiff of a benefit conferred by the contract in 

violation of the parties' expectations at the time of contracting, and that the plaintiff's damages resulted 

from the defendant's actions.” Avila v. Countrywide Home Loans, No. 10-CV-05485-LHK, 2010 WL 

5071714, at *5 (N.D. Cal. Dec. 7, 2010).

In its opposition to the motion to dismiss, Plaintiffs clarify the basis of the claim, stating: 

“Google breached the implied covenant through its failure to act in good faith in making its 

various discretionary determinations – whether to confiscate all of the fund, even if one or another 

of plaintiffs’ hundreds of websites did not meet Google’s standards” (id. ¶49), and its 

Case 5:16-cv-05822-EJD Document 40 Filed 08/18/17 Page 1 of 2
Case No.: 5:16-cv-05822-EJD

ORDER GRANTING MOTION TO DISMISS

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United States District Court

Northern District of California

unconsidered rejection of Plaintiffs’ appeal.” Plaintiffs’ first theory of liability fails to state a 

claim upon which relief may be granted because it is inconsistent with the Terms of Service. 

Paragraph 10 of the Terms of Service gives Google a right to terminate the agreement and 

“withhold unpaid amounts.” See McNeary-Calloway v. JP Morgan Chase Bank, N.A., 863 

F.Supp.2d 928, 957 (N.D. Cal. 2012) (“implied terms should never be read to vary express 

terms”).

Plaintiffs’ second theory of liability has merit. Paragraph Five of the Terms of Service 

provides: “If you dispute any payment made or withheld relating to the Services, you must notify 

Google in writing within 30 days of any such payment.” Liu Decl., Ex. 1 ¶5. Plaintiffs alleges in 

the complaint that Defendants denied them their right to appeal by “[f]orcing Plaintiffs to limit 

their appeal to 1,000 characters” and by denying Plaintiffs’ a “human” review. Although the 

Terms of Service does not specifically use the term “appeal,” Paragraph 5 invites the contracting 

party to submit a complaint, which implies that the complaint will be reviewed by someone and 

that the review will be conducted in a reasonable manner. At the pleading stage, these allegations 

are sufficient to state a claim for breach of the implied covenant of good faith and fair dealing.

See McNeary-Calloway v. JP Morgan Chase Bank, N.A., 863 F.Supp.2d 928, 956-57 (N.D. Cal. 

2012) (discretionary powers evaluated under the implied covenant to assure that the promises of 

the contract are effective and in accordance with the parties' legitimate expectations).

Plaintiffs shall file and serve an amended complaint consistent with this Order no later than 

September 18, 2017. 

IT IS SO ORDERED.

Dated: August 18, 2017

______________________________________

EDWARD J. DAVILA

United States District Judge

Case 5:16-cv-05822-EJD Document 40 Filed 08/18/17 Page 2 of 2