## Facts

- Michael Ewert, an eBay user, listed two items using eBay’s “auction-style” format with a five-day duration.
- Ewert alleged the listings did not begin immediately after submission and did not last the full five days.
- Ewert filed a putative class action asserting, among other claims, a cause of action under the California Auction Act (CAA), Cal. Bus. & Prof. Code §§ 5700–5714.
- Ewert alleged eBay’s timed bidding format constituted an “auction” and that eBay acted as an “auctioneer” or “auction company” subject to the CAA.
- eBay’s system allowed users to submit bids during a preset listing period and, when time expired, automatically identified the highest bid and recorded the transaction.
- eBay moved to dismiss the CAA claim under Federal Rule of Civil Procedure 12(b)(6), arguing the CAA does not apply to its platform.

## Issues

1. Whether eBay’s “auction-style” online format qualifies as an “auction” within the meaning of the California Auction Act.
2. Whether eBay, by operating an automated bidding platform that consummates transactions at a preset end time, functions as an “auctioneer” regulated by the CAA.
3. Whether the complaint stated a plausible CAA claim when the alleged “acceptance” of the highest bid occurred automatically through software rather than through an auctioneer’s act.

## Decision

- The court granted eBay’s Rule 12(b)(6) motion to dismiss the California Auction Act cause of action.
- The court held the CAA did not apply to eBay’s online platform because the statutory concept of an “auction” contemplates an auctioneer who accepts the highest offer.
- The court concluded eBay’s role as a provider of an automated, rule-based platform did not satisfy the statutory requirement that an auctioneer conduct the auction and accept bids.
- Because the CAA was inapplicable as a matter of law, Ewert failed to state a claim under that statute.

## Legal Principles

- Statutory auctioneering regulations that define an “auction” as an event where an “auctioneer” accepts the highest offer do not necessarily apply to automated online bidding platforms.
- An automated process that records bids and completes a sale at the end of a preset time period is not, without more, “acceptance” by an “auctioneer” for purposes of the California Auction Act.
- On a Rule 12(b)(6) motion, even accepting pleaded facts as true, dismissal is proper where the statutory definitions foreclose liability as a matter of law.

## Conclusion

The court dismissed the California Auction Act claim because eBay’s automated “auction-style” listings did not constitute statutory “auctions,” and eBay did not act as an “auctioneer” under the Act.


Ewert v. eBay, Inc., No. C 07-01128 RMW, 2008 WL 906162 (N.D. Cal. Mar. 31, 2008)