August 25, 2011
Claims Against Mylife.com for Allegedly Luring Users to Sign up Using "Your Friend is Looking for you" Emails Proceed -- Clerkin v. Mylife
[Post by Venkat Balasubramani]
Clerkin v. Mylife.com, C 11-00527 CW (N.D. Cal. Aug 15, 2011)
I do not understand the lure of the "your friend is looking for you . . . sign up to our network to find out more" advertisements or emails. Then again, I don't understand why companies continue to engage in this practice. Hapless internet users who sign up to use your service in the hopes of finding that person who was searching for them may not find their long lost friend, but they will find a way to assert claims against you.
Several plaintiffs received emails from Mylife stating that people "were searching for them" on the Mylife website. The named plaintiffs paid trial subscription fees and signed up for Mylife. They alleged that they did not find what they were looking for (the people who were searching for them). Despite their requests, Mylife declined to fully refund them their fees. Plaintiffs asserted various state law claims for unfair competition, unjust enrichment, fraud, and under California's Consumer Legal Remedies Act.
The court first addresses plaintiffs' CLRA claims, which were premised on Mylife's allegedly misleading emails and also on Mylife's billing practices. Plaintiffs alleged that they tried out Mylife with an obviously fake name ("sfsf sdgfsdgs") and still received a message that someone was searching for them. They also alleged that Mylife provided a list of fake names of people who were ostensibly searching for those who signed up. In addition to arguing that the emails were not false or deceptive, Mylife also argued that plaintiffs suffered no damage based on the alleged misrepresentations. The court rejects Mylife's arguments, finding that plaintiffs' allegations that the persons who were purportedly looking for them were fictitious sufficiently alleged that the emails were misleading. As to Mylife's argument that plaintiffs had no suffered damages, the court notes that plaintiffs are paying customers and had not been refunded the full amount of their subscription fees from Mylife. The court also finds that plaintiffs adequately alleged a CLRA claim based on Mylife's billing practices--the plaintiffs alleged that they "signed up for a particular subscription, but that Mylife billed for another."
Having allowed the CLRA claim to proceed, the court also declines to dismiss plaintiffs' claims for unjust enrichment, "money had and received," and their claims under California's unfair competition statute.
Although the court allows the claims against Mylife to proceed, the court dismisses (with leave to amend) the claims against the individual defendants and against Oak Investment Partners, because plaintiffs failed to allege sufficient personal involvement in Mylife's allegedly misleading marketing practices. Separately, the court also grants one of the individual defendant's motion to dismiss on the basis of lack of personal jurisdiction.
Networks, including Classmates.com, Match.com, Reunion.com, Yahoo have been sued over the alleged use of fictitious profiles. The Reunion and Classmates cases both involved allegations similar to those raised by plaintiffs here (e.g., emails that say "your friend is looking for you, join our network to learn more"). The plaintiffs in the Reunion case struggled with the fact that they were not easily able to show damages--it did not look like they had paid money out of pocket in reliance on the alleged misstatements. Classmates, which settled, and this case, both look like they do not have that problem, although it wasn't totally clear from the court's order in this case that the plaintiffs signed up and paid fees in reliance on the allegedly misleading statements.
I'm no marketing expert, but at the end of the day, it's probably easy to conclude that these types of marketing practices are not worth the hassle and are not that effective anyway. If you are considering deploying a marketing initiative similar to those allegedly employed by Reunion and Classmates, ask yourself whether it's really worth it.
As a sidenote, Oak Investment Partners can't be happy about a chunk of its $25m investment being used for this type of a marketing practice. Mylife may or may not be vindicated at the end of the day, but these emails were all but guaranteed to ensnare Mylife in litigation.
Posted by Venkat at August 25, 2011 12:23 PM | Marketing