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    • Moises Zepeda v. Paypal Inc.

    Jun. 11, 2011
    Verdicts and settlements
    Sign up for Daily Journal emails
    Contracts
    Breach of Fiduciary Duty
    Breach of the Implied Covenant of Good Faith and Fair Dealing

    Moises Zepeda v. Paypal Inc.

    Published: Jun. 11, 2011 | Result Date: Feb. 15, 2011 | Filing Date: Jan. 1, 1900 |
    Case number: 5:10-cv-02500-EJD Bench Decision –  Dismissal

    Court

    USDC Northern


    Attorneys

    Plaintiff

    Brian S. Kabateck
    (Kabateck LLP)

    Jonathan Shub
    (Kohn, Swift & Graf PC)

    Mark N. Todzo
    (Lexington Law Group)

    Richard L. Kellner
    (Kellner Law Group LLC)

    Seth M. Lehrman
    (Edwards Pottinger LLC)

    Michael V. Storti
    (Meyers, Fozi & Dwork LLP)

    Howard J. Hirsch
    (Lexington Law Group LLP)

    Alfredo Torrijos
    (Arias, Sanguinetti, Wang & Torrijos LLP)

    Eric D. Freed


    Defendant

    George S. Azadian
    (Azadian Law Group PC)

    Julia B. Strickland
    (Steptoe LLP)

    David W. Moon
    (Stroock & Stroock & Lavan LLP)

    Lisa M. Simonetti
    (Vedder Price PC)


    Facts

    Moises Zepeda and other online sellers who used PayPal in sales transactions, filed a class action against PayPal Inc. alleging breach of contract and breach of fiduciary duty. Plaintiffs claimed that PayPal's placement of holds on sellers' accounts even though they had not engaged in restricted activities violated the terms of the parties' user agreements. Plaintiffs claimed that the "hold" resulted in them being unable to access the money in their PayPal accounts. PayPal moved to dismiss the complaint.

    Result

    The district court granted the motion to dismiss, finding that plaintiffs failed to state a breach of contract claim. The court found that the user agreement gave PayPal the discretion to suspend a user's account without providing a reason if PayPal believed the account would be associated with a high level of risk. Plaintiffs have been granted leave to file an amended complaint.


    #114656

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