pro rata share

eBay, Inc. operates an Internet-based person-to-person trading site that allows sellers to list items for auction and buyers to search listings and place bids directly with sellers. The site has over 7 million registered users, adds more than 400,000 new items daily, receives 10 million searches per day, and processes 600 bids per minute across nearly 3 million items. Users register by clicking an “I Accept” button on a seven-page User Agreement that prohibits robots, spiders, or other automated devices from monitoring or copying web pages without prior written permission. Bidder’s Edge, Inc., a 22-employee company founded in 1997, operates an auction aggregation site that compiles data from more than one hundred auction sites into its own database containing over five million items. When a user searches on the BE site, the site queries its database rather than the original host sites. Approximately 69 percent of the items in BE’s database come from eBay auctions, and BE estimates it would lose one-third of its users if it stopped covering eBay. In early 1998 eBay permitted BE to include Beanie Babies and Furbies listings. In April 1999 eBay verbally approved BE crawling the site for a 90-day period while the parties negotiated a licensing agreement, but they failed to reach terms. After BE briefly stopped posting eBay listings in late August or early September 1999 and then resumed in November, eBay sent a November 9 letter demanding that BE cease access, alleging trespass, and offering a license. eBay then blocked 169 IP addresses it believed BE was using; BE evaded the blocks by routing queries through proxy servers. BE sent eBay’s systems between 80,000 and 100,000 requests per day, accounting for 0.70 to 1.53 percent of eBay’s requests and data transfer during October and November 1999. eBay calculated alleged damages of $45,323 to $61,804 over ten months but did not identify specific incremental costs caused by BE. The motion for a preliminary injunction was heard on April 14, 2000.

In 1963 the United States filed a civil antitrust action against Old Blue Chip Stamp Co., a company providing trading stamps to retailers, and nine retailers who owned 90 percent of its shares. In 1967 the action was terminated by entry of a consent decree. The decree contemplated a plan of reorganization whereby Old Blue Chip would merge into a newly formed corporation, Blue Chip Stamps. The holdings of the majority shareholders would be reduced. The new company would offer a substantial number of its shares of common stock to retailers who had used the stamp service in the past but were not shareholders. The offering was to be proportional to past stamp usage and packaged in units consisting of common stock and debentures. The reorganization plan was carried out. The offering was registered with the Securities and Exchange Commission under the Securities Act of 1933. A prospectus was distributed to all offerees as required by section 5 of that Act. Somewhat more than 50 percent of the offered units were actually purchased. In 1970, two years after the offering, Manor Drug Stores, a former user of the stamp service and therefore an offeree of the 1968 offering, filed suit in the United States District Court for the Central District of California against Old and New Blue Chip, eight of the nine majority shareholders of Old Blue Chip, and the directors of New Blue Chip. The complaint alleged that the prospectus prepared and distributed in connection with the offering was materially misleading in its overly pessimistic appraisal of Blue Chip's status and future prospects. It further alleged that Blue Chip intentionally made the prospectus overly pessimistic. This was done to discourage the offerees from accepting the offer. The goal was so that the rejected shares might later be offered to the public at a higher price. Class members because of and in reliance on the false and misleading prospectus failed to purchase the offered units. The complaint sought on behalf of the alleged class some $21,400,000 in damages representing the lost opportunity to purchase the units, the right to purchase the previously rejected units at the 1968 price, and some $25,000,000 in exemplary damages. The district court dismissed the complaint for failure to state a claim upon which relief might be granted. On appeal to the United States Court of Appeals for the Ninth Circuit, a divided panel reversed the district court. After the Ninth Circuit denied rehearing en banc, the Supreme Court granted certiorari.

In October 1964, plaintiff and defendant entered into an oral agreement. While the parties lived together, they would combine their efforts and earnings. They would share equally any and all property accumulated as a result of their efforts, whether individual or combined. They further agreed to hold themselves out to the general public as husband and wife. Plaintiff would render her services as a companion, homemaker, housekeeper, and cook to defendant. Shortly thereafter, plaintiff agreed to give up her lucrative career as an entertainer and singer. She did so to devote her full time to defendant as a companion, homemaker, housekeeper, and cook. In return, defendant agreed to provide for all of plaintiff's financial support and needs for the rest of her life. The parties lived together from October 1964 through May 1970. During this period, as a result of their efforts and earnings, they acquired in defendant's name substantial real and personal property. This included motion picture rights worth over $1 million. In May 1970, defendant compelled plaintiff to leave his household. He continued to support plaintiff until November 1971 but thereafter refused to provide further support. Plaintiff brought this action asserting two causes of action. The first, for declaratory relief, asked the court to determine her contract and property rights. The second sought to impose a constructive trust upon one half of the property acquired during the course of the relationship. Defendant answered the complaint after an unsuccessful demurrer. Following extensive discovery and pretrial proceedings, the case came to trial. When the case was called for trial, plaintiff sought leave to file an amended complaint. The trial court treated defendant's motion to dismiss as one for judgment on the pleadings. This was augmented by a stipulation that defendant's marriage to Betty Marvin did not terminate until the filing of a final decree of divorce in January 1967. The court granted the motion and entered judgment for defendant. Plaintiff moved to set aside the judgment. She asked leave to amend her complaint to allege that she and defendant reaffirmed their agreement after the divorce became final. The trial court denied the motion. Plaintiff appealed from the judgment.