Yun v. Ubid

Citation: Yun v. Ubid, Inc., 2003 WL 21268053 (Cal. App. 4th Dist. 2003).

Factual Background
Steven Yun (“Plaintiff”) purchased merchandise from Ubid’s (“Defendant”) online auction website. Defendant’s shipping policy stated that shipping charges were based on the actual weight of the item. The website stated that Plaintiff’s goods weighed six pounds and Plaintiff agreed to pay the corresponding fee for six pounds worth or goods. When the goods arrived, they weighed two pounds. Plaintiff filed a suit against Defendant alleging breach of contract, involuntary trust, money had and received, unfair competition and false advertising.

Trial Court Proceedings
Defendant petitioned to compel arbitration of all the claims. The trial court denied Defendant’s petition to compel arbitration of the false advertising and unfair competition claims and the Plaintiff dismissed the remaining three claims for breach of contract, involuntary trust and money had and received. Defendant appealed.

Appellate Court Proceedings
Plaintiff’s claim for unfair competition alleged that Defendant’s shipping policy is unfair and fraudulent, and the false advertising claim alleging that Defendant intentionally induced customers to contract for its shipping by means of false and misleading advertising. Both claims sought an injunction as their remedy. Defendant argued that Plaintiff’s claims sought restitution and disgorgement so they must be arbitrated. In accordance with the decision in Cruz v. PacifiCare Health Systems, Inc., the appellate court held that the plaintiff’s claims were not subject to arbitration. The court reasoned that the Plaintiff voluntarily dismissed all claims that sought restitution and disgorgement as a remedy. The remaining claims for false advertising and unfair competition were not subject to arbitration since the claims sought an injunction and absent any claim for restitution or [[disgorgement], “there is nothing to arbitrate.” The appellate court affirmed the trial court’s ruling and held that plaintiff was entitled to costs on appeal.