OpenAI: Did the Plaintiffs Fail to State a Claim for Unjust Enrichment?

II. ARGUMENT

E. Plaintiffs Fail to State a Claim for Unjust Enrichment

Plaintiffs’ unjust enrichment claim fails because they have not alleged the absence of any applicable and enforceable contract provisions, even in the alternative, as required for quasi-contract claim.

Plaintiffs do not deny that an unjust enrichment claim cannot proceed “when the parties have a valid contract regarding the same subject matter.”

(See MTD at 19.) Plaintiffs allege that the open source licenses are a contract between them and OpenAI and that OpenAI breached those licenses. (FAC ¶¶ 217, 222-25.)

Although Plaintiffs now argue in their Opposition that “the [open source] licenses do not specifically address the use of code as training data or in connection with generative AI products sold to the public” (Opp. at 21), nowhere in the FAC do Plaintiffs allege that the open source licenses are inapplicable.

See In re Bang Energy Drink Mktg. Litig., No. 18-CV-05758-JST, 2020 WL 4458916, at *10 (N.D. Cal. Feb. 6, 2020) (dismissing unjust enrichment claim where “[p]laintiffs have not alternatively alleged the absence of [applicable and enforceable] provisions”).

Moreover, Plaintiffs do not sufficiently allege that OpenAI unjustly retained a benefit at their expense. (See MTD at 20.)

“Restitution [under unjust enrichment] is not mandated merely because one person has realized a gain at another’s expense,” but rather, “the obligation arises when the enrichment obtained lacks any adequate legal basis and thus cannot conscientiously be retained.”

Russell v. Walmart, Inc., No. 22-CV-02813-JST, 2023 WL 4341460, at *2 (N.D. Cal. July 5, 2023) (cleaned up).

Restitution requires “that a defendant has been unjustly conferred a benefit,” and “[a]bsent qualifying mistake, fraud, coercion, or request by [defendant], there is no injustice.” Id. (cleaned up). Plaintiffs fail to point to any such qualifying conduct by OpenAI to render retention of any benefit unjust.

See id. (dismissing unjust enrichment claim based on allegations that customers using Walmart’s self-checkout conferred a benefit on Walmart by providing uncompensated labor because plaintiff failed to allege qualifying mistake, fraud, coercion, or request by Walmart). This claim should be dismissed.