This expansive view of “benefit of the bargain” injury stands in contrast to the many courts that have rejected similar theories based on alleged diminished value of the services received. But, significantly, the Gamestop court did not end its analysis there. “When a district court erroneously dismisses under Rule 12(b)(1) a claim that is ‘clearly meritless,’ an appellate court may affirm under Rule 12(b)(6).” The Court noted that “[a]lthough we have discretion to remand for the district court to rule on the Rule 12(b)(6) motion in the first instance, we are not bound to remand, and we decline to do so here.”
The Court wrote:
Accordingly, the majority found as a matter of law that the defendant had not actually made the promise it was accused of violating. This disposed of the breach of contract claim and also the Minnesota Consumer Fraud Act claim. In a discussion that was arguably at odds with its standing analysis, the Court dismissed the unjust enrichment claim on the grounds that the plaintiff “does not allege that any specific portion of his subscriber fee went toward data protection or that GameStop agreed to provide additional protection to paid subscribers that it did not also provide to non-paid subscribers.” Accordingly, the Court found that plaintiff “has alleged neither a benefit conferred in exchange for protection of his PII, nor has he shown how GameStop’s retention of his subscription fee would be inequitable.”
Judge Arlen Beam concurred in the result but dissented from the Court’s holding on standing. He concluded that the plaintiff had not pled concrete injury as required by Spokeo. Notably, Judge Beam applied the pleading standards of Twombly and Iqbal to defendant’s 12(b)(1) motion to dismiss for lack of standing, finding the plaintiff’s allegations of injury to be “the antithesis of virtually every one of the [Supreme Court’s standing] requirements.” He wrote that the complaint’s “panoply of imprecise contractual emanations purporting to illustrate possible economic harm … is not enough.”
A lesson of this decision is that defendants prevailing on 12(b)(1) standing grounds should cross-appeal to ensure the possibility the court of appeals may consider the merits under Rule 12(b)(6) – even if the district court had not done so.
Another lesson is that the pleading standards of Twombly and Iqbal should be argued vigorously in motions to dismiss for lack of subject matter jurisdiction (i.e., standing) as well as in motions to dismiss for failure to state plausible claim for relief.
The majority opinion also demonstrates the importance of limiting and carefully specifying the definitions and promises set forth in online privacy policies.
Finally, the decision also teaches that if a complaint is “clearly meritless,” courts can find a way to dismiss it one way or another.