NDCA Court Dismisses ‘Loot Box’ Suit Against Google Once and For All

An order by District Judge Beth Labson Freeman issued on Monday terminated the plaintiffs’ lawsuit over Google’s alleged violation of gambling and consumer protection laws. The complaint said that by selling, in its Play Store, video game “loot boxes,” which are purchased using fiat or fictitious currency and consist of a collection of secret items of unknown value that can be used in-game, the company illegally preyed on people’s gambling instincts.

This week’s decision comes after the court initially dismissed the complaint in February 2021. In that opinion, Judge Freeman ruled that Google’s Section 230 Communications Decency Act (CDA) defense was viable and that in addition, the plaintiffs failed to plead all elements of their consumer protection claims.

The complainants, including a minor video gamer, subsequently amended their complaint. Google once again moved to dismiss and the plaintiffs opposed. In November, Google moved to strike a proffer submitted by the plaintiffs. The extra information filed to show that one plaintiff lost money as a result of purchasing Loot Boxes was outside the pleadings, untimely, and factually irrelevant, Google said.

In this week’s opinion the court partly denied the motion to strike and considered whether the plaintiffs alleged facts that would trigger reconsideration of its prior conclusion that Google is immune from suit under Section 230 of the CDA.

As to Section 230, the court summarized that “when stripped of Plaintiffs’ speculation as to Google’s motives, the conduct alleged in the [amended complaint] amounts to Google’s publication of third-party apps in the Play Store and provision of neutral tools and services to all developers across the Google Play platform.” This conduct, the opinion said, falls squarely within the protection of the CDA, and therefore bars the plaintiffs’ claims to the extent they are based on Google’s receipt of a portion of revenue from loot box sales.

The court found that it was uncertain whether the plaintiffs could plead facts sufficient to circumvent Section 230. However, even if they could, Judge Freeman dismissed the claims with prejudice due to other deficiencies.

The court dismissed the plaintiffs’ California consumer law claims for lack of statutory standing and determined that loot boxes are not illegal slot machines. As to the latter, Judge Freeman ruled that “[b]ased on the relevant case law holding that Loot Box prizes are not things of value under California gambling laws, and absent any case law holding to the contrary, the Court concludes that Loot Boxes are not illegal slot machines under California law.”

The plaintiffs are represented by Blood Hurst & O’Reardon LLP and The Law Offices of Andrew J. Brown. Google is represented by Baker & McKenzie LLP