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'Firs,t Amended

SUMMONS
E'ACEBOOK, INC. Th

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FRCUTUEOL (SOLO PARA USO DE LA CORT5E7j

(CITACION JUDICIAL)
NOTICE TO DEFENDANT: (A VISO AL DEMANDADO):

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GLYNNIS BOHANNON, individually and on behalf of her minor child I.B. and on behalf of all others similarly situated,

YOU ARE BEING SUED BY PLAINTIFF:

(LO EsTA DEMANDANDO EL DEMANDANTE):

NOTICEI You have been sued. The court may decide against you without your being heard unless you respond within 30 days. Read the information below. You have 30 CALENDAR DAYS after this summons and legal papers are served on you to file a written response at this court and have a copy served on the plaintiff. A letter or phone call will not protect you. Your written response must be in proper legal form if you want the court to hear you:. case. There may be a court form that you can use for your response. You can find these court forms and more information at the California Courts Online Self-Help Center (www.courtinfo,ca.gov/sefhep), your county law library, or the courthouse nearest you. If you cannot pay the filing fee, ask the court clerk for a fee waiver form. If you do not file your response on time, you may lose the case by default, and your wages, money, and property may be taken without further warning from the court. .There are other legal requirements. You may want to call an attorney right away. If you do not know an attorney, you may want to call an attorney referral service. If you cannot afford an attorney, you may be eligible for free legal services from a nonprofit legal services program. You can locate these nonprofit groups at the California Legal Services Web site (www.lawhe/pcalifornia.org), the California Courts Online Self-Help Center (www.courtinf ocagovlself help), or by contacting your local court or county bar association. NOTE: The court has a statutory lien for waived fees and costs on any settlement or arbitration award of $10,000 or more in a civil case. The court's lien must be paid before the court will dismiss the case. 1AVISOI Lo han demandado. Si1 no responde den tro de 30 di'as, la Corte puede decidir en su contra sin escuchar su version, Lea /a inforinacibn a continuacidin Tiene 30 DIAS DE CALENDA RIO despu~s de que le entreguen esta citacibn ypapeles lega/es para presentar una respuesta per escrito en esta codte y hacer qUe se entregUe una copia al demandante. Una carfa o una flamada telefdnica no lo protegen. Su respuesta por escrito tiene que estar en formato legal corrocto si desoa qua procesen su caso en/la Corte. Es posible que haya Ufl formularic, que ustedpueda usarpara su respuesta. PUede encontrar estos forrnulariois de Ia codfe y mds informacidn en et Centro de Ayuda de las Codtes de California (www.sucorte.ca.gov), en Ia biblioteca cde leyes de sU condado a en la Corte que le quede mas cerca. Si no pUede pagar /a cuota de presentacidn, pida a/ secretanio de la corte que le d6 Ur formUlaric de exencidn do pago de cuotas. Si no prosenta su respuesta a tiempo, pUedo perder el caso por incump/imionto y ]a code le podr6 quirar su sueldo, dinero y biones sin mas advodtencia. Hay otros requisitos legales. Es recomendable qUe llarne a un abogado inmediatamente. Si no conoce a un abogado, puede Ilamar a un servicio de remisicin a abogados. Si no pUede pagar a uin abogado, es posible que cumpla con los requisitos para obtener servicios legales gratUitos de un programa de servicios lega/es sin fines de lucro. Puede encontrar estos grupos sin fines de lucre en e/ sitio web de Ca/ifornia Legal Services, (www.lawhelpcalifornia.org), en e/ Centro de Ayuda de las Codtes de California, (www.sucorte.ca.gov) o ponidndose en contacto con/la codte a el colegio de abogados locales. AV/SO: Per ley, la carte tione derecho a reclamar las cuotas y los costos exentos per inlponer un gravamen sebre cue/quier recuperacidn de $10,000 6 m~s de valor recibicla mediante uin acuerdo e Una concesibn; de arbitraje en un case de derecho civil. Tiene que P pgar Li/ gamon de la cedte antes do que ]a codte pueda desochar e/ case. I e name andl address ol the court is: CASE NUMBER: (N~,,em del Caso): (El nombro y direccidn de la corte es):

Santa Clara County Superior Court 191 N. First Street San Jose, CA 95113

11C295

The name, address, and telephone number of plaintiff's attorney, or plaintiff without an attorney, is:

(El nombre, la direccidn y e! nr~mero do told fono del abogado del domandante, o del domandante quo no tione abogado, es): 916-669-4499 John R. Parker, Jr., Esq. (SBN 257761) 916-448-9800
KERSHAW,

401 Watt Avenue 95864 Sacramento, CA DATE:


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NOTICE TO THE PERSON SERVED: You are served 1. as an individual defendant. 2. as the person sued under the fictitious name of (specify):

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on behalf of (specify): under: V

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CCP 416.60 (minor) jCCP 416.70 (conservatee) CCP 416.90 (authorized person) Page
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Form~ Adopted forMandatory' Use Ju~dicial Council of California

%SUMMONS'

Code of Civil Procedur'e 412.20, 465

SUM-i 00 [Rev. July 1. 20091

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C. Brooks Cutter, SBN 121407 John R. Parker, Jr., SBN 257761 KERSHAW, CUTTER & RATINOFF. LLP 401 Watt Avenue Sacramento, CA 95864 Telephone: (916) 448-9800 Facsimile: (916) 669-4499 Attorneys for Plaintiff

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SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SANTA CLARA

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11 GLYNNIS BOHANNON, individually and on behalf of her minor child I.B. and on behalf of all others similarly situated, Case No. 1 12CV219256

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Plaintiffs,
v. FACEBOOK, INC., Defendant.

FIRST AMENDED CLASS ACTION COMPLAINT


JIURY TRIAL DEMANDED

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Plaintiff Glynnis Bohannon, individually and on behalf of the class described below, by

1 9 their attorneys, make the following allegations pursuant to the investigation of counsel and based 20 21 22 23 24 25 26 27 28
1. upon information and belief, except as to allegations specifically pertaining to Plaintiff and counsel, which are based on personal knowledge.

1.

OVERVIEW OF THE ACTION

Plaintiff brings this class action on behalf of herself and other parents and

guardians whose minor children purchased from defendant Facebook a virtual good, incurring charges for voidable purchases that Facebook has misrepresented to be "final." and nonrefundable. 2. In addition to its distinction as operator of the largest social network, Facebook

also provides a paymnent system, Facebook Credits, for users to make purchases within
First Amended Class Action Complaint

Facebook. For example, a user can purchase a "virtual flower" to "send" to another friend, causing a picture to appear on the friend's page. A user can also use Facebook Credits, which the user has purchased from Facebook in exchange for real-world currency, to acquire points, coins, or virtual currency within Facebook Applications or "Apps" that appear within the Facebook site. 3. Facebook knows that many of its users are minors. Facebook specifically permits

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7minors to register and use its service: Facebook's Statement of Rights and Responsibilities 8 requires only that a user be at least thirteen years of age. Furthermore, in order to create a Facebook account, a user must specify his or her date of birth. Through its Statement of Rights and Responsibilities contract, Facebook specifically requires that -users agree "not [to] provide any false personal information on Facebook." Millions of Facebook's users have thereby told Facebook that they are minors, and Facebook has actual knowledge of each of its minor users' age and status as a legal infant. Furthermnore, users' youth is readily appafent through the profiles they create on Facebook. For example, millions of users say they are enrolled in junior high school, middle school, or high school. 4. Facebook has uniformly told all of its users that purchases through Facebook

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Credits are final, including purchases within Apps and purchases of v'irtual goods. Facebook's Payments Terms says "Don't commit to a transaction unless you are ready to pay, because all sales are final." 'When consumers seek refunds f-rm Facebook, Facebook denies that it is obliged to provide such refunds. 5. Plaintiff brings this action for monetary, declaratory and equitable relief under

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California's contract laws, the California Consumers Legal Remedies Act at California Civil Code 1750 et seq., California Business and Professions Code Sections 17200 et seq., and/or for Unjust Enrichment. IL 6. JURISDICTION AND VENUE

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This Court has personal and subject matter jurisdiction over this case. This Court

has personal jurisdiction over Defendant, who is a California citizen. The amount in controversy exceeds the jurisdictional minimum for unlimited superior court.
First Amended

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Class Action Complaint

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Defendant is a California corporation, has its principal place of business in Palo

Alto, California, transacts business in this county, has subjected itself to this Court's jurisdiction through such activity, and a substantial part of the events and omissions giving rise to the claim occurred in this county. Accordingly, venue is proper in this county under Code of Civil Procedure 395(a).

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111.
8.

PARTIES

Plaintiff Glynnis Bohannon resides in Phoenix, Arizona with her son I.B. l.B.

joined Facebook on or about July 11, 2011. I.B. was then, and is still now, a minor. 9. Defendant Facebook is a California corporation with its principal place of

business in Palo Alto, California.

IV.
10.

FACTUAL ALLEGATIONS

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Facebook describes itself as "a social utility that helps people communicate more

efficiently with their friends, family and coworkers." Facebook has more than 800 million active users worldwide and is the single most visited web site in the United States. 11. When users make payments within Facebook apps and on the Facebook site,

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Facebook requires that all such payments flow through the Facebook Credits system. 12. Facebook allows third-party application developers to provide software "'Apps"

that appear within the Facebook site. Facebook supervises and controls the function and operation of the apps it allows to appear on the Facebook platform. Facebook has the right and ability to remove any App at any time, or to prevent an App from soliciting or receiving payment

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Facebook Credits. 13. In all instances relevant to this action, the purchase and/or purchase of virtual

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goods is a transaction directly between Facebook and the consumer. Facebook charges consumers' credit or debit card, PayPal account, mobile phone, or other payment account. No App developer ever receives a Facebook customner's payment information. 14. Facebook users may fund their Facebook Credits purchases by various methods

including credit card, debit card, Paypal, and mobile phone. Facebook draws funds from the specified source to pay for users' purchases. For purchases fr-omi third-party Apps, Facebook
First Amended Class Action Complaint 3

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1keeps a 30%
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.~account

fee for itself and forwards the balance to the provider of the App. Anyone thirteen years old or older can open an account on Facebook. Opening an

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requires, among other things, selecting a user name and password, providing certain

contact and other information, and agreeing to Facebook's Statement of Rights and Responsibilities which incorporates by reference Facebook's Payment Terms. 16. Many Facebook apps are targeted to minors. For example, Facebook Apps often

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cartoon-style images, exaggerated facial features, children within the applications,

animals, and other design characteristics consistent with use by minor children. 17. Many Facebook Apps are, by desigzn, highly addictive. Often, an App presents a
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virtual environment in which a user seeks to build an imaginary city, farm, or- other facility

11task made difficult by the limited supplies. Facebook sells Facebook Credits for real money, 12 13 14 15 16 17 18 19 which allows users to obtain additional supplies to speed progress and otherwise enhance use of the App and play of the game. 18. For example, the App Farm Ville is free for new players to start playing.1

However, the object of the game is to build a thriving virtual farm, a process rendered progressively more difficult by inadequate supplies, but the process is greatly sped up by obtaining Facebook Credits to be used in the App. By using Facebook Credits to buy a virtual "biplane," a Farm Ville player can "instant grow" his virtual crops rather than waiting several hours for crops to "grow." Similarly, if virtual crops "wither" and "die," a Farm Ville player can pay real money to "unwither" the crops. 19. Facebook Credits are obtained by users for consumption in many games and Apps

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that use the same business scheme as FarmVille. For each such game, Facebook and its App partners sell Facebook Credits that users must obtain to enjoy the game as it was designed to be played. While using such a game, a player sees a screen that sells virtual currency, so that the player can "build" thin(ts or- "have" other virtual things. 20. In-App purchases and virtual goods are substantial money-makers for Facebook.

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Facebook charges App developers a 30% fee on users' payments via Facebook Credits, and Facebook does not allow App developers to charge users via methods other than Facebook First Amended Class Action Complaint
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Credits. Facebook's recent SEC filing indicates that Facebook's revenue from "Payments and other fees" was $557 million in 2011. 21. Facebook has not offered to return any of the millions of dollars it received from

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minor children's purchases of Facebook Credits for virtual currency or iters within Facebook Apps. To the contrary, Facebook has represented that, with regard to Facebook Credits, "all sales are final," and that minors and their parents and guardians have no proper claim to refunds for purchases originated from accounts that belong to minors-purchases with regard to which Facebook is on constructive and actual notice that it is doing business with minors. Facebook carefully stores and tracks the personal informnation associated with each Facebook profile and ID, including whether or not the Facebook user is a minor. 22 . In October 2011, I.B. (the minor child of Plaintiff Glynnis Bohannon) asked his

mother Glynnis Bohannon for permission to spend $20 on his Facebook account using Glynnis Bohannon's Wells Fargo Master Card. J.B. gave his mother $20 in cash in exchange. He purchased Facebook Credits from Pacebook for use in "Ninja Saga." Subsequently, without any notice that his mother's credit card information had been stored by Facebook and the Facebook Credits system, or that his mother's credit card informnation was being used again after the initial $20 purchase, I.B. made in-game purchases in which he thought he was expending virtual, ingame currency. In fact, Bohannon's credit card was charged repeatedly, and the charges totaled several hundred dollars. 23. Upon learning of these charges, Glynnis Bohannon attempted to find a

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mechanism to contact Facebook to dispute the charges. After several hours of searching, Bohannon finally found a phone number at Facebook, and she left a message about her problemn, to which she has to date received no reply. She was never able to find an email address for someone at Facebook who could process her complaint. Glynnis Bohannon has still not received a refund. V. 24. CLASS ACTION ALLEGATIONS

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Plaintiff brinazs this action as a class action for monetary and equitable relief

pursuant to California Code of Civil Procedure section 3 82, California Civil Code section 178 1,
First Amended Class Actioni Complaint 5

and applicable case law on behalf of the following class: All parents and legal guardians in the United States whose minor children made unauthorized purchases of Facebook Credits from the minor child's Facebook account (the "Class"). Excluded from the Class are Facebook; any entity in which it has a controlling interest; any of its parents, subsidiaries, affiliates, officers, directors, employees and members of their immediate families: and members of the federal' judiciary. 25. The members of the Class are ascertainable, and are so numerous that joinder is

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impracticable. Plaintiff believes there are thousands of members of the Class, whose names and addresses are in Facebook's records. 26. There are questions of law or fact common to the Class, and such questions

predominate over individual questions. Facebook pursued a common course of conduct toward the Class as alleged. This action arises out of a common nucleus of operative facts and questions of law and fact which predominate over individual questions. Common questions include: (a) 15(b) Whether Facebook sold in-App purchases and virtual goods; Whether Facebook sold in-App purchases and virtual goods to minors; (c) Whether Facebook knew that many gaming apps are designed to induce minors to make purchases; (d) Whether Facebook intended for minors to purchase such apps and virtual currency without the knowledge or authorization of the minors' parents or guardians; Whether Facebook's sales to minors of in-App purchases and virtual goods constitute voidable contracts; Whether Facebook's scheme to sell in-App purchases and virtual goods to minors without providing refunds under any circumstance violates California's Consumers Legal Remedies Act, Cal. Civ. Code 1750, and Unfair Competition Law, Business & Professions Code 17200 et seq.; Whether Facebook represented to minors and their parents and guardians that purchases of Facebook Credits arc non-refundable under all circumstances;

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(f)

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(g)

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Firsi Amended Class Actioni Complaint 6

(h) 2material

Whether Facebook engaged in deceptive, misleading, unfair, fraudulent and/or otherwise unlawful practices through its non-disclosure of facts and affirmative misleadingy st -atements regarding the riuhts of minors to disaffirm contracts;

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(i)

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Whether Plaintiff and members of the Class are entitled to recover restit'ution of monies remitted to Defendants as a result of the actions and omissions alleged herein; Whether Defendant should be enjoined from continuing to make deceptive, misleading, unfair, fraudulent and/or other-wise unlawful through its non-disclosure of material facts and affirmative misleading statements regarding the rights of minors to disaffirmn contracts; Whether Facebook was unjustly enriched by its scheme; and

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7practices

()

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9(k)

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(1)

Whether Facebook and the Class have been damaged, and if so, in what amount.

Plaintiff s claims are typical of the claims of other members of the Class, and

there is no defense available to Facebook that is unique to Plaintiff. Plaintiff paid hundreds of dollars to Facebook for unauthorized purchases made by her minor child. 28. Plaintiff will fairly and adequately represent the interests of the Class. Plaintiff

has no interests that are antaglonistic to those of the Class. Plaintiff has the ability to assist and adequately protect the rights and interests of the Class during the litigation. Further, Plaintiff is Srepresented by counsel who are competent and experienced in this type of class action litigation.

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29.

This class action is not only the appropriate method for the fair and efficient

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adjudication of the controversy, it is the superior method because: (a) The joinder of thousands of geographically diverse individual class members is impracticable, cumbersome, unduly burdensome, and a waste ofjudicial and litigation resources; (b) There is no special interest by class members in individually controlling prosecution of separate causes of action; Clas's members' individual claims are relatively modest compared with the expense of litigating the claim, thereby making it impracticable, unduly burdensome, expensive, if not totally impossible, to justify individual class members addressing their loss;

(c)

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First Amended Class Action Complaint

(d) 1 2

When Facebook's liability has been adjudicated, claims of all class members can be determined by the Court and administered efficiently in a manner ihat is far less erroneous, burdensome, and expensive than if it were attempted through filing, discovery, and trial of many individual cases;

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(e)

This class action will promote orderly, efficient, expeditious, and appropriate adjudication and administration of class claims to promote economies of time, resources, and limited pool of recovery; This class action will assure uniformity of decisions among class

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(f)

members;
Without this class action, restitution will not be ordered and Facebook will be able to reap the benefits or profits of its wrongdoing; and (h) I The resolution of this controversy through this class action prsent fewr maagemnt difficulties than individual claims filed in which the parties may be subject to varying indifferent adjudications of their rights.

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Further, class certification is appropriate because Facebook has acted, or refused

to act, on grounds generally applicable to the Class, making class-wide equitable, injunctive, declaratory and monetary relief appropriate. In addition, the prosecution of separate actions by or against individual members of the Class would create a risk of incompatible standards of 18 conduct for Facebook and inconsistent or varying adjudications for all parties. A class action is

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superior to other available methods for the fair and efficient adjudication of this action. VI. 213. CALIFORNIA LAW APPLIES TO THE ENTIRE CLASS

California's substantive laws apply to every member of the Class, regardless of

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where in the United States the class member resides. Facebook imposes on its account holders a Statement of Rights and Responsibilities contract that must be accepted before becoming an account holder and before joining Facebook or making any purchases via Facebook Credits. This contract provides as follows: You will resolve any claim, cause of action or dispute ("claim") you have with us arising out of or relating to this Statement or Facebook exclusively in a state or federal court located in Santa Clara County. The laws of the State of California will govern this
First Amended Class Action Complaint 8

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Statement. as well as any claim that might arise between you and us, without regard to conflict of law provisions. You agree to 2 submit to the personal jurisdiction of the courts located in Santa Clara County, Califor-nia for the purpose of litigating all such

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claims. 32.
Further, California's substantive laws may be constitution ally applied to the

claims of Plaintiff and the Class under the Due Process Clause, 14th Amend. 1, and the Full Faith and Credit Clause, Art. IV 1 of the U.S. Constitution. California has significant contact, or significant aggregation of contacts, to the claims asserted by Plaintiff and all class members, thereby creating state interests that ensure that the choice of California state law is not arbitrary or unfair. .)-. 1 Facebook's United States headquarters and principal place of business is located

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in California. Facebook also owns property and conducts substantial business in California, and therefore California has an interest in regulating Facebook's conduct under its laws. Facebook's decision to reside in California and avail itself of California's laws, and to engage in the challenged conduct from and emanating out of California, renders the application of California law to the claims herein constitutionally permissible. 34. California is also the state from which Facebook's alleged misconduct emanated.

This conduct similarly injured and affected Plaintiff and all other class members.

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35.

The application of California laws to the Class is also appropriate under

California's choice of law rules because California has significant contacts to the claims of Plaintiff and the proposed Class, and California has a greater interest in applying its laws here than any other interested state. NVII. CAUSES OF ACTION

FIRST CAUSE OF ACTION (Declaratory Judgment)

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36.
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Plaintiff repeats and re-alleges herein the foregoing allegations. All Facebook Credit purchases and in-App purchases for virtual goods via

Facebook Credits that Facebook presents for sale constitutes an offer to enter into a sales

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contract.
First Amended Class Action Complaint 9

-38.

By purchasing a virtual good or making a purchasing inside an App, a minor

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accepts Facebook's offer. 39. Members of the class tendered payment for in-App purchases or virtual goods.

These payments constitute consideration. 540. Accordingly, all transactions that are the subject of this Complaint are possessed

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of the three elements of a contract, i.e., offer, acceptance and consideration. 41. issue here: 9 Under California law, minors have the right to disaffirm contracts such as those at Except as otherwise provided by statute, a contract of a minor may disaffirmned by the minor before majority or within a reasonable time afterwards

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Cal. Fain. Code 6710, 42. California law further provides that a guardian may enforce a minor's rights in a

13civil action or other legal proceeding: A minor may enforce the minor's ri ghts by civil action or other 14 legal proceedings in the same manner as an adult, except that a 1 5 16 17 18 19 guardian must conduct the action or proceedings. See Cal. Fain. Code 6601. 43. The contracts between Defendant and the members of the Class are voidable,

notwithstanding, Defendant's statements to the contrary. 44 Accordingly, there is an actual controversy between the parties, requiring a

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declaratory judgment. 2145. This claim for declaratory judgment is brought pursuant to 28 U.S.C. 2201 et

22seq., seeking a determination by the Court that: (a) this action may proceed and be maintained as 23a class action; (b) the contracts between Defendant and the Class members relating to in-App 24 25 purchases and virtual goods are voidable at the option of the respective class members; (c) if the Class members elect to void the contracts, they will be entitled to restitution; (d) an award of reasonable attorneys' fees and costs of suit to Plaintiff and the Class; and (e) such other and fur ther relief as is necessary and just.

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First Amended Class Action Complaint 10

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I1I 46. 47.

SECOND CAUSE OF ACTION (Violation of the California Consumers Legal Remedies Act)
Plaintiff repeats and re-alleges herein the foregoing allegations. At all times relevant hereto, there was in full force and effect the California

Consumers Legal Remedies Act ("CLRA"), Cal. Civ. Code 1750. 48. Plaintiff and the other class members are consumers within the meaning, of Cal.

Civ. Code 1761 (d). 49. Facebook violated the CLRA's proscription against the concealment of the

characteristics, use, benefit, or quality of goods by actively marketing and promoting its in-App purchases and virtual goods with the statement that purportedly "all sales are final" when in fact that is not the case. Specifically, Facebook has violated: (a) 1770(a)(5)'s proscription against representing that goods have uses or characteristics they do not have; (b) I 770(a)(7)'s proscription against representing that goods are of particular standard or quality when they are of another; (c) I 770(a)(1 4)'s proscription against "Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law." 50. Under California law, a duty to disclose arises in four circumstances: (I) when the

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defendant is in a fiduciary relationship with the plaintiff;, (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff, or (4) when the defendant makes partial representations but also suppresses some material facts. 51. Facebook owed a duty to disclose material fact s about the Facebook Credit

transactions embedded in games it marketed, advertised and promoted to minor children, and Facebook owed a duty either to be silent as to the finality of the transactions under California law or to note that such transactions are not in fact final under California law. Facebook breached such duty as alleged in this Complaint. 52. Plaintiff and the Class suffered actual damages as a direct and proximate result of

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Facebook's actions, concealment and/or omissions in violation of the CLRA, as evidenced by the First Amiended Class Action Complaint
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substantial sums Facebook pocketed. 53. Plaintiff, on behalf of herself and for all those similarly situated, demands

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judgment against Facebook for equitable relief in the form of restitution and/or disgorgement of funds paid to Facebook.

54.

In accordance with 1782(a) of the CLRA, counsel will serve Facebook, by

certified mail, with notice of its alleged violations of the CLRA. 55. If Facebook does not fully meet the demand set forth in that letter, then Plaintiff

will amend or seek leave to amend this complaint in order to seek the following relief under CLRA 1780, for Facebook's violations of CLRA 1770(a)(5) and (a)(7): actual damages under Cal. Civ. Code 1 780(a)(1); * punitive damages under Cal. Civ. Code 1780(a)(4);

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* attorneys' fees and costs under Cal. Civ. Code 1780(d); and

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any other relief the Court deems proper under Cal. Civ. Code 1780(a)(5). THIRD CAUSE OF ACTION (Violation of Bus. & Prof. Code 17200 et seq.) Plaintiff repeats and re..alleges herein the foregoing allegations.

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57.

Plaintiff brings this cause of action on behalf of herself, on behalf of the other

class members, and in her capacity as private attorneys general against Facebook for its unlawful, unfair, fraudulent and/or deceptive business acts and/or practices pursuant to California's Unfair Competition Law (UCL). Business & Professions Code 17200 et seq., which prohibits unlawful, unfair and/or fr-audulent business acts and/or practices. 2358. Plaintiff asserts these claims as a representative of an aggrieved group and as a attorney general on behalf of the general public and other persons who have expended

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funds that Facebook should be required to reimburse under IJCL 17200 et seq. 59. This claim is predicated on the duty to refr-aini from unlawful, unfair and deceptive

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business practices. Plaintiff and the other class mem-bers hereby seek to enforce a general proscription of unfair business practices and the requirement to refrain fr-om deceptive conduct.
First Amended Class Action Comiplaint 12

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60.

The UCL 17200 et seq. prohibits acts of "unfair competition." As used in this

section, "unfair competition" encompasses three distinct types of misconduct: (a) "unlawful... business acts or practices;" (b) "unfair fraudulent business acts or practices;" and (c) "unfair, deceptive or misleading advertising." 61. Facebook violated the UCL by engaging in conduct that violated each of the three

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prongs identified by the statute as set forth throughout this Complaint. 62. Facebook committed an unlawful business act or practice in violation of the UCL

17200 et seq. when it violated the CLRA.


63. Facebook committed unfair and fraudulent business acts and practices in violation

of the UCL 17200 and I 7500.et seq. by actively advertising, marketing and promoting certain gamning with the statement that "all sales are final" when Facebook knew that minors were making such purchases and that minors had the right to void such contracts if they so chose. 1364. Facebook's deceptive practices were specifically desigzned to induce Plaintiff and

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the other members of the Class to believe they had no right to receive refunds. when in fact they have such a riu2ht.

65.

Facebook's deceptive practices have deceived and/or are likely to deceive

Plaintiff and members of the consuming public. 66. As a direct and proximate cause of Facebook's violation of the UCL, Plaintiff and

the Class have suffered harm in that they have not been reimbursed for the purchases their minor children made from Facebook. 67. As a direct and proximate result of Facebook's violation of the IJCL, Facebook

20 21 22 23
24 25

has been unjustly enriched and should be required to make restitution to Plaintiff and the Class or disgorge its ill-gotten profits pursuant to the UCL 17203 . 68. Plaintiff, on behalf of herself and for all others similarly situated, demand

judgments against Facebook for injunctive relief in the form of restitution, and/or disgorgeinent of funds paid to Facebook as allegyed herein.

26

27 28

//

Fir-st Amended Class Action Complaint 13

2 3
4 69. 70.

FOURTH CAUSE OF ACTION (Unjust Enrichment (alternative claim))


Plaintiff repeats and re-alleges herein the foregoing allegations. Plaintiff and the Class have conferr ed benefits on Facebook by paying for virtual

5 6
7

goods and in-App purchases their minor children purchased from Facebook without their authorization. 71. Facebook knowingly and willingly accepted those monetary benefits from

8 9 10
11

Plaintiff and the Class. 72. Under the circumstances alleged herein, it is inequitable for Defendant to retain

such benefits at the expense of Plaintiff and the Class. 73. Facebook has been unjustly enriched at the expense of, and to the detriment of.

12
13' 14 15

Plaintiff and the Class by wrongfully collecting and retaining money to which Facebook, in equity, is not entitled. 74. Plaintiff and the Class are entitled to recover from Facebook all amounts

wrongfully collected and improperly retained by Facebook, plus interest thereon. 75. As a direct and proximate result of Facebook's unjust enrichment, Plaintiff and

16 17 18 19

the Class have suffered injury and are entitled to reimbursement, restitution and disgorgement from Facebook of the benefits conferred by Plaintiff and the Class. 76. As a direct and proximate result of Facebook's misconduct as set forth herein,

20
21 22

Facebook has been unjustly enriched.

WHEREFORE, Plaintiff, individually and on behalf of the Class, prays for an Order as follows:
A. Findina2 that this action satisfies the prerequisites for maintenance as a class

23
24

25
26
27

action under California Code of Civil ProceduLre secti on 382. California Civil Code section 178 1 an d applicable case law and certifying the Class defined herein;, B. Designating Plaintiff as representativ'es of the Class and their counsel as class

28

counsel;
First Amended Class Action Complaint 14

1C. 2 3 4, D.

Entering judgment in favor of Plaintiff and the Class and against Facebook; Entering a Declaratory Judgment determining that the contracts between

Defendant and the Class members relating to the purchase of Game Currency are voidable at 5 the option of the respective class members and that if the Class members elect to void the

6
7

contracts, they will be entitled to restitution; E. An injunction that either requires Facebook to cease selling Facebook Credits or

8 9

similar virtual currency to accounts that belong to minors, or to adequately disclose that such transactions may be disaffirmed under California law; and F. Awarding Plaintiff and members of the Class their individual damages and

10
I1I

12attorneys' fees and allowing costs, including interest thereon; and/or restitution and equitable 13, 14 relief; and G. Granting such further reli ef as the Court deems just.
N7111.

15
16 17

JURY DEMAND

Plaintiff demands a trial by jury on all issues so triable.

18

Dated: March 2, 2012 19

Respectfully submitted, KERSHAW, CUTTER & RATI-NOFF. LLP

20
21By 22
23 24 25 PakrJr

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First Amended Class Act ion Complaint 15

CIVIL LAWSUIT NOTICE1


Superior Court of California, Counfy of Santa Clara
191 N.First St., Sari Jose, CA 95113 CASENUtR_-

ATTACHMENT CV-501t2

2CV

5-

PLEASREA

THIS ENTIRE FORMj

PLAINTIFF (the porson suing): Within 50 days after filng the lawsuit, you must servce@ Dah efendant with the Cornpliiit, Summons, an Alternative Dispute, Resolution (ADR) Information Shoot, anid a copy of this Civil Lawsuit Notice, and you mun[ file written proof of such service. (The person siucd): You must do each of the following to protect your righs 1, You must file- a written response to the Comnplaint, using the pioper legal form? or formnat, inthe Clerk's Office of the Court, within 30 days of the date you were served with the Summnns and Complaint: .. You must serve luy nail a copy of your witten response on) the Plaintiff's'attorney oron the Plaintiff if Plaintiff has no 1ttolney (to "seiv by mnailo means to have an adult other than youlrqilf mail acopy); and 1 You itus! aittend the first Case Manaoerient Confereince. Warning: Ifyou, as the Defendant, do not follow these instructions, you may automatically lose this case, RULES AND FORMS: YOU must follow the California Rules Of Court and the Superior Court of ClfriCouinty Ot Santai Glarai Local Civil Rules and use proper forms. You can obtain legal intformation, view the rules and receive form,,, tree of charge, tror the Self-Flelp Center at 049 Notrre Darnc Avenue, oin .Joe (408-882-2900 x-2926i), wv.j,; csfsriceon(eetCvl)o ri
" State Ruleus cnd Judiciat Co uncil Porms :

DEE

Local Rules anid Fonno: h I

h cc u/oei n weA'lym~i jumiiurLorfjH I 1n~Ir

r:~ri~

~a-vw~ .qnrre

CASE M1ANAGEMENT CONFERFNCE ICMC): You mUS1 11eet With [T otherT parties and dic~sthe case, inpersort or by tetephorle, at least 30 calrndar days before the CMC. You must also fill out, file anid snirve a Caseo Manaoemnent Sltemtnt (judicial council form CNM-1 it) at le ast 15 calendar days hetfoie thie CMC. You or your attorney must appear at tho CMIC. You ma-yask to Cp~'~~ohn Your Case Management Judge Is: Honorable Peter Kirwan Tho P"CMC is scheduled for: (Cormpleted by Clerli Of COClI) see Locnl GivlORule 8. eatlt? t 8

Date: -Date:
___

.~ 0

&

Time:ILOO pr _in Department:

The next CMC is scheduled for., (C ompleted by party ifthe 11t CMC wlas continued or has passed)
________Time:

inDepartment:_..._

ALTERNATIVE DISPUTE RESOLUTION (ADR): Ifall parties have appearedl and tiled acompleted ABDl Stipulationt Form (local form CV-5008) at least 15 days before, the CMC, the Court will cancel the CMC anid mail notice of an ADR Stotlus Conference, Visit the Court's website at VA/scueirot~rliilD/or call flie ADR Admirnist rater (408-882-2100 X-2530) (foa list of ADR providers and their qualifications, services, and fees. WARNING: Sanctions may be imposed ifyou do not follow the California Rules of Court or the Local Rules of Court.

Fcwrn CV-60i2. REy 7(01108

CIVIL LAWSUIT NOTICE

PA~ I f

SUPERIOR COURT OF CALWFORNIA, COUNT Y SANTA CLARA OF ALTERNATIVE lDISPUTE RESOLUTION


_______

iNFORM0AION SIFET / CIVIL IVISION

Mvany eases carn bre resolved to the satisfaction of all pries without thre necessity o' traditional litigation, which cani be ex ' ensive' ltme O')rrSilring, and strssfl. The Cort finds that it is in the best irrteresss of the parties; that they plitcipate ini aIremittives to traditional litigation, including arbitrtion, flirdiatlon, lriiral evalurutisn, sIpecial matsters andI refereevcs, and eslrrrreilriea 'therefore, all maters shall be referred to ont appropriate form of Alternativec Dispute Resolution (ADR) before; they art wCt tri, Forr runless there is good entic to dispense withi the ADR requireenit.

ADR is tire general term fibi a wide variety oifdispute renrluion p(0Cces that are0 sltcrnslives Ws litigation. ITypes of AbE. processes irristd mediatin, arbitratiorr, traii-l evanluation, special triasrees andl referes, larid seh nrn q cnfrece, snon otis-.
Whiw arehe ii Sun tog Li of schcoior .DR :ts mtoi; (

rial 1?

ADR curl have- a numaber of advanttages over litigation;


< Ws)it CartSAve KADRi KAD ti

time. A tisp te cn r, be resolved iii a rmarte r ofnitthis, o evenr weeks, whnI i liigatlirn catirate a en

can save moneir y. Attorney's fees, coons costs, soil expert ftes cars be reduced or avoided al rogetbei. prul'ides more lar tcrisiri bon, Parties riave ore oppnrmrrjiricN with AD?.. t xpre ss their itteretis rind cwrtcenis, insrcod o

Ienreing exclusively on legal rights.


KA 01pr avides inr e.errntrot arid flex ilbitity. Pars ok r:Air Lh omse ADI pirreesl that i.5most hieel y to isrirg ai Sat: stactory the resisiution to their dlispote.

< AtM calears eduee at res. AD?. eseuae nqlssa lion arid c ornatnwhile ntiscosrragiis the advcisnlal arrnosjpncre of I iigahion. Sorseys of parties who hove trwalieipstest in anl ADR process have. fwsrid mnuch greater Nattiafceion than wsirthpiris whos~ Ihave, gone through Ilitigatin. Whait ore the nrrrifrmS
sr/ADA 0feed by the Lory!?

Illftdiasiors siui inforl'3, e;Orttdcntial, 11Cxitsle id inon-bincirsg procQss iii the inserliti Ielps lie pafiies-ru rrlrrssarid the ithere er of eseryose inrvolvyed.i arid thren irPractical isl I grl choies. The rrcdi aloe hlipe rise ;rari es to a sin ritc is: explore legal and firautin; l settlement up irons, and reach lin uxncceptabitc Sehoruion ofthre p risbteri. Tire mredit or does not dcide the solution to tihe diSPUte; the jairtitS do. Med liarirnr miay be apiproprite. whets; * The pairties want a non-idversary proucr *The panties have aeontirruing business or personial relationship -: CorntrieAtion problem~s urc interfe;rig with a resolsariori < There is art ernorionat element invorlvedi < 'hc Patties are Interested ill Sll injunction, eon writ deree, ror lithr foznr of ecqimsble relief

it

r,

< Neutral tvalrrratfur, sornelines calkdl "Early Neutrnl Evtldialiol'' cr 'PNI ' 5 ritil infrrrrna ;vricea s in wich tIe eriririrur ar, experienced nreutral lawyer, hatirs at comtoc prsenitarior ofirth titles of tire cas, giv es air on-bindsing. aissessrnerm of the: 1 st-rngths arid weakniesses ort each aidle, anid predicts tire likely outeome, The evahrnrrlr (:arr) help palrties to ideltt i is~aues, prepare stipurlations, and draft nisc'ovety plans. The parties Ira' se the neutral' a evirrarion to discuss ireftiense ut. Neutral evitluaition rosy be appropriaste whets: -Tire piri i are far apart in their view of rthe Inn%'/ or "atuhr of the case < Tc ase involves a techinical isue in wich tire evairratos has expenise <Case ptinninlg asistanice would be helpfil mid would gave legal fees mid costs The parties ace intreresred In Sio iritinchir, conisent decreec, ollother Ibinr of equitaible relict

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OV-5003 REV 6/08

ALTERNATIVE DISPUTE RESOLUTION INFORMATION SHEET/ CIVIL DIVISION

< Arbitration is a less formal process thanf a la ', with nojusjy. The achitraror hears the. ovicrrice and arguments of the prties, then maikes: a written dirston, The parties can agnreebinding or non-binding arbitration. In binding arbittation, the to arbitrator'r decision is final and-corrapletely resolves the case, without theb opportunity for appeal. In nion-binding ar~bitrarion, the arbitrator's decision could resolve the case, without the Opportunity for appeaiL, unless iaparty timely rejects thre arbrtrator's decision within 30 days and requests a trial. P~rivate atbirrators are allowed to charge for their time.

Arbiuadion may be appropiate when:


<The action is for personal injury, pritb damage, or breach Of co1tract <Only mionetary damnages aro sought <.Witess testimony, under oath, atredi to be, evaluated <An advisory Opinion is sought from an experienedd litigatojr (if a noni-binding arbitration) Civil Judge APR allows pantics to haves mediation or settlemuent conrferernce with an experienced judge of the Superior Court. Mediation is an tatonial, confidential, flexible and tron-binding process in which thejudge helps the parties tn understand the irnterests of cvsryone involved, and their practial andi legal choices. A settlemnt confiternce is an infonsal process ir which the judge meets with the panics or their attorneys, hecars thecfacts of the: dispute, helps idenrib', issues to be resolved, and normally suggests a resolution that the partes may accept or use as a basis for itthcr negotiations. The reqluest for mediation or s~cetent confererte titay be tiade promptly by stiptulation (agreement) upon istfiling of the Civil coimplaint and the: answeti. Tlhere is no charge for this service.
C:

Civil Judtge AVR n-Say be appropriate when: <'The parties have conmplex facts to review < Tire ea'se involves ultiplepjarties and prohlims <111o pouitloise srtrrourrding.9 would hie helpfrl to the settlceent proces
< Special masters and referees are nteurtral partieg who may be appointed by the court. to obtain. rfraino

fact findings that

ay lead to a resolution of a dispute.

to nakce specific

Special mra-sters and referees can be particularly effective in,complex eases with a numnber offparties, like construaction disprats. <Settlemnent conferentces ace informal processes in which the neutral (atjudge or tin ;xperietreed attornecy) meets with the par-ties or their attorneys, hecars the facts of the dispute, hrelps identity issues to be resolve, and nor-rially suggests a res4olution that the parties may accept or use as a basis; for futher inegotiations, Setticanrnt contnreneea can he effective when the authority or expertise, of the judge or experiencedl rstlorraey mnay help the partics reach at rsolution.

What kind of/disputeT cain hr resrolved by AJDR? Although sonre disputes rorast go to court, almost anyv dispute can) be resolved tluorg ALDR. This includes disputes inivolvig businesus matters; civil rights; collections; corporations; crrnstrutetionr; consumeor Protection; coinracts; copyr ightir defarostiort; disabilities; diserirstinatioa; ernploymrsrt; environrmental pioblemsa; fraud; harassment; henilia care; hOusijng; insurance; intellectual

property; tabor; landlord/sent; media; medical malpractice anti other professional negligence; neighborhood problems; partnerships; patents; personal injury; probate; product liability; properly datnage; real estate; securities; spoils; trade secret; anrd wrongfirl death, among other matters. Pk7rr can you get assistancewit/s .seleccdng arn azppmopriauefrrsn of ADR andoa neutral.for y'our case, lnfornratioin about ADR procedures, o,'arsioers to at/si-t questi about AMR? Contract:

Santa Clara County Su iperior Court


ADR Adrninistnatrsr

Santa Clara County IYRYA Coordirnator


408-792-2910

ALTERNATIVE DISPUTE RESOLUTION INFORMATION SHEET/ CIVIL DIVISION

CV-5003 REV 8/00