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Liston v. King.Com, Ltd.

United States District Court, N.D. Illinois, Eastern Division

May 23, 2017

ZACHERY LISTON, individually and on behalf of all others similarly situated, Plaintiff,
v.
KING.COM, LTD., Defendant.

          MEMORANDUM OPINION AND ORDER

          John J. Tharp, Jr., United States District Judge

         Plaintiff Zachery Liston brings this proposed class action against defendant King.com, Ltd., the operator of the popular mobile game Candy Crush Saga, alleging that King improperly and unilaterally removed so-called Donated Lives from Liston's and other players' game accounts. King has moved to dismiss the complaint under Federal Rule of Civil Procedure 12(b)(1) for lack of standing, and under Federal Rule of Civil Procedure 12(b)(6) for failure to state a claim. For the reasons stated below, the defendant's motion to dismiss [31] is granted in part and denied in part.

         BACKGROUND

         In deciding a motion to dismiss under Rule 12(b)(1) or Rule 12(b)(6), the Court takes as true all well-pleaded facts alleged in the complaint and draws reasonable inferences in the plaintiff's favor. Lee v. City of Chi., 330 F.3d 456, 468 (7th Cir. 2003) (Rule 12(b)(1); Mann v. Vogel, 707 F.3d 872, 877 (7th Cir. 2012) (Rule 12(b)(6)). The following facts are, therefore, accepted as true for the purposes of deciding this motion.

         Candy Crush, played on mobile devices including iPhones, iPads, and Androids, is essentially a match-making puzzle game in which players aim to line up three or more of the same icon in various configurations so as to clear them from the board and earn points. First Am. Compl. ¶¶ 30-34, ECF No. 15. Players advance to subsequent levels of the game as they clear the requisite number of icons from the board, and have only a limited number of turns, or moves, they may take to try to clear those icons. Id. ¶ 34. If a player fails to remove the requisite icons within a certain number of moves, they lose one of their in-game “lives”-chances to line up the requisite number of icons-and have to repeat that level. Id. ¶ 35.

         Candy Crush players start the game with five lives, and also gain an additional free life every thirty minutes, up to a limit of five (the “Free Life Option”). Id. ¶¶ 37-38. Players using this method for obtaining additional lives have to wait thirty minutes to resume the game once they have lost all of their lives. Id. ¶ 38. Because the game is “addictive, ” as described by news outlets, players often do not want to wait thirty minutes for additional lives, and instead can rely on the two other avenues that King has provided for obtaining more lives. Id. ¶¶ 39-40. The first method is for players to buy additional lives while they are in the game through so-called In-App purchases (the “Purchase Option”). Id. ¶ 42. A player can buy five additional lives for $.99. Id. ¶ 3. The second method is for players to link their Candy Crush accounts to their Facebook accounts, which then enables them to request and receive more lives (which the plaintiff refers to as “Donated Lives”) from their friends on Facebook who also have Candy Crush installed on their mobile devices (the “Facebook Option”). Id. ¶¶ 43-46. If a player's Facebook friends have not yet installed Candy Crush, they are prompted to do so, meaning that the Facebook Option allows King to receive a benefit from players marketing Candy Crush to their friends, according to Liston. Id. ¶ 45. This option thus enables King to pass on marketing costs to consumers. Id. Under either the Purchase Option or the Facebook Option, “lives have an economic and ascertainable value equal to approximately $0.20.” Id. ¶ 47.

         Candy Crush has enjoyed enormous popularity among mobile gamers, bringing in an average of 93 million daily active users in December 2013 and grossing an estimated $1.9 billion in revenue that year. Id. ¶¶ 3, 28. Overall, the game has counted roughly 250 million people as players. Id. ¶ 9. Plaintiff Zachery Liston began playing Candy Crush on his iPhone in early 2012, and connected his Candy Crush account to his Facebook account around that same time. Id. at ¶¶ 49-50. When he ran out of lives, Liston used the Facebook Option, “periodically asking his Facebook friends for Donated Lives.” Id. ¶ 51. Some of those Facebook friends installed Candy Crush because of that request, and Liston received his Donated Lives and exited the game. Id. ¶¶ 52-53. When he returned to the game, however, he discovered that the Donated Lives had disappeared; other Candy Crush players reported the same problem on various online message boards.[1] Id. ¶¶ 54, 56-57. King had allegedly designed or changed Candy Crush in order to remove the Donated Lives, and did not inform players beforehand. Id. ¶ 58.

         Based on these vanishing Donated Lives, Liston, an Illinois citizen, brings this proposed class action against the game's operator, King.com, Ltd. (“King”). Liston filed the first amended complaint in this case on March 27, 2015, asserting claims for violation of the Computer Fraud and Abuse Act (“CFAA”), 18 U.S.C. § 1030 (Count I), breach of implied contract (Count III), and unjust enrichment (Count IV) as an alternative to the breach of implied contract claim, seeking to represent himself and a national class of all individuals in the United Sates whose Donated Lives were removed from their Candy Crush accounts by King. Id. at 11-22. Liston also brings a claim for violation of the consumer protection statutes of all 50 states and the District of Columbia (Count II), and seeks to represent a multi-state class of all individuals in those states whose Donated Lives were similarly removed. Id. He brings a separate count for violation of Illinois' Consumer Fraud and Deceptive Business Practices Act, 815 Ill. Comp. Stat. 505/1 et seq., (Count V), on which he seeks to represent an Illinois subclass of all individuals residing in Illinois who experienced the same removal of their Donated Lives. Id. King has moved to dismiss Liston's complaint under Rule 12(b)(1) for lack of Article III standing, and under Rule 12(b)(6) for failure to state a claim.

         ANALYSIS

         I. Jurisdiction

         Liston asserted both federal question and diversity jurisdiction in his complaint, but he has voluntarily withdrawn his claim under the CFAA, see Pl.'s Resp. at 2 n.1, ECF No. 41, which was the only federal claim he alleged and thus his only basis for federal question jurisdiction. He alleges diversity jurisdiction, meanwhile, under the Class Action Fairness Act (“CAFA”). King does not dispute the existence of diversity jurisdiction, but contends that Liston lacks Article III standing to pursue the claims he has asserted, both individually and on behalf of the putative class.

         A. Diversity Jurisdiction under CAFA

         The diversity jurisdiction statute, 28 U.S.C. § 1332, ordinarily requires complete diversity of citizenship before a federal court may exercise jurisdiction on that basis. CAFA alters the complete diversity requirement, however, vesting federal courts with subject matter jurisdiction over cases in which any member of the proposed class is a citizen of a state and, as relevant here, “any defendant is a foreign state or a citizen or subject of a foreign state.” 28 U.S.C. § 1332(d)(2). For CAFA diversity jurisdiction to be available, the amount in controversy must also exceed the sum or value of $5, 000, 000, exclusive of interest and costs, and the proposed classes must encompass at least 100 members in the aggregate. Id. § 1332(d)(2), (5).

         CAFA's diversity criteria are satisfied here. King is organized in and has its principal place of business in the Republic of Malta. First Am. Compl.¶ 21. Liston is an Illinois citizen. Id. ¶ 17. Liston's complaint satisfies CAFA's other jurisdictional requirements as well. Here, Liston alleges that Candy Crush has brought in roughly 250 million players-with an average of 93 million daily active users at one point-and that at least 25 million individuals have been injured by King's removal of the lives allegedly worth $.20 each. These allegations are sufficient to support the exercise of CAFA diversity jurisdiction given that CAFA authorizes the aggregation of class members' claims to meet the amount of controversy threshold. 28 U.S.C. § 1332(d)(6); see also, e.g., Baldwin v. Star Scientific, Inc., 78 F.Supp.3d 724, 736 (N.D. Ill. 2015) (“The court assumes that it has jurisdiction because Plaintiff's expectation (however realistic it may be) that he could litigate a nationwide class action against Defendants justified the conclusion that the class could recover economic damages in excess of CAFA's $5 million amount-in-controversy threshold.”); cf. Back Doctors Ltd. v. Metro. Prop. & Cas. Co., Inc., 637 F.3d 827, 830 (7th Cir. 2011) (“[T]he estimate of the dispute's stakes advanced by the proponent of federal jurisdiction controls unless a recovery that large is legally impossible.”). Given Liston's allegations regarding the number of Candy Crush players overall, his claim of at least 25 million class members is not legally impossible. With a minimum alleged loss per person of just 20 cents (the alleged value of the loss of just one Donated Life), Liston's claim on behalf of the putative class provides an adequate basis for jurisdiction under CAFA.

         B. Standing

         King asserts that Liston lacks Article III standing and that the First Amended Complaint must therefore be dismissed under Rule 12(b)(1) for lack of subject matter jurisdiction. Def.'s Mem. at 7, ECF No. 33. The issue of standing concerns whether Liston “is entitled to have the court decide the merits of the dispute or particular issues.” See Apex Digital, Inc. v. Sears, Roebuck & Co., 572 F.3d 440, 443 (7th Cir. 2009) (citations and quotations omitted). It is the plaintiff's burden to show that he meets the requirements of standing. See Kathrein v. City of Evanston, 636 F.3d 906, 914 (7th Cir. 2011) (citation omitted). To establish Article III standing, Liston must show “an ‘injury in fact' that is ‘fairly traceable' to the defendant's conduct and ‘that is likely to be redressed by a favorable judicial decision.'” Bank of Am. Corp. v. City of Miami, __ U.S. __, __, 137 S.Ct. 1296, 1302 (2017) (quoting Spokeo, Inc. v. Robins, 578 U.S. __, __, 136 S.Ct. 1540, 1547 (2016)). To establish an injury in fact, Liston must allege that he “suffered an invasion of a legally protected interest that is concrete and particularized and actual or imminent, not conjectural or hypothetical.” Spokeo, 136 S.Ct. at 1548 (citation and quotation marks omitted). An injury must “actually exist, ” but does not need to be tangible, to satisfy the concreteness requirement. Id. But a plaintiff cannot “allege a bare procedural violation, divorced from any concrete harm, and satisfy the injury-in-fact requirement of Article III.” Id. at 1549.

         King argues that Liston has not alleged an injury-in-fact because he played Candy Crush for free, received the additional Donated Lives for free, and never purchased anything from King. Def.'s Mem. at 4-5. King analogizes this scenario to data breach cases in which plaintiffs' personally identifiable information (“PII”) is accessed, but never actually used improperly, in a breach. Id. at 5. Data breach plaintiffs have alleged that they lost the monetary value of their PII when that information was stolen and potentially sold, but King points to cases that found those plaintiffs lacked standing. Some courts have held that PII does not have “an inherent monetary value for which plaintiffs can expect compensation, ” King notes. Id. at 5. King also draws parallels to other decisions that have reasoned that even if PII did have such a value, plaintiffs cannot allege an injury-in-fact unless they would have sold their PII but for its theft. Id. at 6. King argues that Liston has not alleged that he would have sold his Donated ...


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