James Falls, individually and on behalf of other persons similarly situated v. Soulbound Studios, LLC

NOT FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
JAMES FALLS, individually and on behalf
of other persons similarly situated,
Plaintiff-Appellant,
v.
SOULBOUND STUDIOS, LLC,
Defendant-Appellee,
and
SOULBOUND STUDIOS USA; XSOLLA
USA, INC.; DOES, 1 through 50, inclusive,
Defendants.
No. 22-35863
D.C. No. 2:21-cv-00922-JCC
MEMORANDUM*
Appeal from the United States District Court
for the Western District of Washington
John C. Coughenour, District Judge, Presiding
Argued and Submitted October 3, 2023
Seattle, Washington
Before: WARDLAW and M. SMITH, Circuit Judges, and HINKLE,** District
Judge.
* This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
** The Honorable Robert L. Hinkle, United States District Judge for the
Northern District of Florida, sitting by designation.
FILED
OCT 26 2023
MOLLY C. DWYER, CLERK
U.S. COURT OF APPEALS

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2
James Falls (“Falls”) appeals the district court’s order granting Soulbound
Studios LLC’s (“Soulbound”) motion to dismiss his breach of contract and
Washington Consumer Protection Act (“WCPA”) claims. We have jurisdiction
pursuant to 28 U.S.C. §§ 1291 and 1332.1 We affirm.
1. The district court did not err in dismissing Falls’s breach of contract
claim. Falls rested the claim solely on incorporation by reference of a refund
policy of third-party payment processing platform Xsolla, Inc. (“Xsolla”).
Washington contract law requires incorporation by reference to be clear and
unequivocal. Satomi Owners Ass’n v. Satomi, LLC, 225 P.3d 215, 225 (Wash.
2009) (“If the parties to a contract clearly and unequivocally incorporate by
reference into their contract some other document, that document becomes part of
their contract.”). This is so even for incorporation by reference of only part of a
document. See Odyssey-Geronimo JV v. Wash. Dep’t of Transp., 4 Wash. App. 2d
1056 (Wash. Ct. App. 2018) (unpublished). “[I]ncorporation by reference is
ineffective to accomplish its intended purpose where the provisions to which
reference is made do not have a reasonably clear and ascertainable meaning.” W.
Washington Corp. of Seventh-Day Adventists v. Ferrellgas, Inc., 7 P.3d 861, 865
(Wash. 2000).
1 Falls’s action satisfies the diversity and amount in controversy requirements for
both § 1332(a)(1) diversity jurisdiction and § 1332(d)(2) jurisdiction under the
Class Action Fairness Act.

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3
We reject Falls’s contention that a single sentence from Section 5 of the
Soulbound Studios Terms of Service incorporates by reference the Xsolla refund
policy such that Soulbound was required to refund any amounts. In Section 5
(titled “Kickstarter and Fundraising”), the contract states: “Any portion of funds
raised for the provision of the Services shall be non-refundable, unless such funds
shall be deemed refundable under terms of service of the third-party service
through which those funds for the provision of Services were procured.” This
language does not explicitly reference Xsolla or any Xsolla policy, nor does it
explicitly state that Soulbound will provide any refunds. We thus find no “clear”
or “unequivocal” incorporation of Xsolla’s refund policy by reference.
Moreover, other than the single sentence to which Falls points, the contract
repeatedly disclaims any refund obligations. Therefore, absent allegations
sufficient to establish that Section 5 unequivocally incorporates Xsolla’s refund
policy against Soulbound by reference, Falls’s breach of contract claim against
Soulbound based on an alleged breach of Xsolla’s refund policy necessarily fails.
2. Falls waived any challenge to the district court’s dismissal of his
WCPA claim. Although Falls suggested otherwise during oral argument, the
district court explicitly relied upon judicial estoppel as one of two bases for its
dismissal of this claim and cited the transcript of the hearing before the magistrate
judge. Therefore, Falls was required to challenge the judicial estoppel ruling in his

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4
opening brief and he failed to do so. In his reply brief, he contests the issue only in
a cursory manner, without any citation to legal authority. “[W]e do not consider
issues raised for the first time in reply briefs,” and thus “deem this late-raised
argument forfeited.” Vasquez v. Rackauckas, 734 F.3d 1025, 1054 (9th Cir. 2013).
In light of Falls’s waiver, we do not reach the merits of his WCPA claim.
AFFIRMED.

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