In May, a Florida state court dismissed a plaintiff’s claim that the terms of service for popular mobile game Pokémon GO violated Florida’s Deceptive and Unfair Trade Practices Act (FDUTPA). The case illustrates how establishing injury continues to be a key hurdle for plaintiffs in litigation involving online services, and shows that a well-framed choice of law provision can help protect providers of online services.
The plaintiff sought injunctive and declaratory relief against Niantic, Inc., the game’s developer, on grounds that the terms of service allegedly created an illusory contract, permitting Niantic to unilaterally and materially change the terms at any time. He alleged that Niantic reserves the right to “cancel, suspend, or terminate” a user account, and to eliminate or modify user’s access to virtual money or goods without compensation, notice, or liability. He asserted that the Pokémon GO Terms of Service were therefore “illusory, deceptive, unfair, and/or unconscionable”, and thus unenforceable under FDUTPA.
The court dismissed the complaint on several grounds. First, the court held that plaintiff did not have standing because he did not allege any actual injury as a result of Niantic’s actions. While the plaintiff alleged that he is uncertain whether he will suffer an injury in the future, the court noted, that no injuries had occurred. In fact, the plaintiff conceded in hearings that he had not suffered any concrete injury as a result of Niantic’s Terms or policies. The court thus concluded that the alleged injuries were “conjectural and hypothetical.”
The court also ruled that even if the plaintiff had standing to bring the suit, the choice of law provision in the terms mandated that California, not Florida, law would govern. Under Florida law, courts will not invalidate a choice of law provision unless it creates “some great prejudice to the dominant public interest sufficient to overthrow the fundamental policy of the right to freedom of contract . . . .” The burden to demonstrate that a foreign law contravenes Florida public policy lies with the party seeking to avoid enforcement of the choice of law provision. And the court ruled that the plaintiff offered no evidence that applying California law to the dispute would contravene public policy. The court therefore upheld the choice of law provision, ruling that California law governed all claims in the dispute, including the claims for injunctive relief that plaintiff claimed were independent of contractual issues.
Plaintiffs continue to face challenges when establishing that they have suffered an injury sufficient to establish standing, even in state courts. And this case illustrates how choice of law provisions may provide companies with additional protection in the event that plaintiffs can, in fact, establish standing.
Rachel Noveroske, in our Washington, D.C. office, contributed to this post.