Opinion
3:20-cv-00288-L-MSB
09-15-2021
ROBERT TURNIER, et al., Plaintiffs v. BED BATH & BEYOND INC., Defendant
ORDER GRANTING DEFENDANT'S MOTION TO DISMISS [ECF 22] WITH LEAVE TO AMEND.
Hon. M. James Lorenz United States District Judge
Pending before the Court in this putative class action is Defendant's motion to dismiss. Plaintiffs opposed, and Defendant replied. The Court decides the matter without oral argument. See Civ. L. R. 7.1. For the reasons stated below, the Court GRANTS Defendant's motion WITH LEAVE TO AMEND.
I. BACKGROUND
Plaintiffs filed this action in state court. (See Doc. No. 1). Defendant removed it here. Id.; see 28 U.S.C. section 1453. The Court has subject matter jurisdiction under 28 U.S.C. section 1332.
Defendant is a New York corporation that markets and sells household merchandise. (Doc. No. 18, First Amended Complaint (“FAC.”) ¶ 4). It sells merchandise in its stores and online. (Id. at ¶ 11). For 29 dollars a year, customers can enroll in Beyond + (also referred to as “the membership”), which offers them a 20 percent discount on all purchases and “free” shipping. (Id. at ¶ 13). Beyond + automatically renews each year. (Id. at ¶¶ 11-17).
On August 11, 2018, Plaintiff Robert Turnier purchased an item from Defendant on its website and enrolled in Beyond +. (Id. at ¶ 15). The enrollment cost was $31.25 (the $29 fee plus taxes). (Id. at ¶ 16). Turnier was charged that amount again in 2019 and 2020. (Id. at ¶ 17).
On August 12, 2019, Plaintiff Beatrice Moran purchased an item from Defendant. (Id. at ¶ 19). Defendant did not disclose it enrolled Moran in Beyond +. Id. On August 10, 2020, Defendant charged Moran $31.97. (Id. at ¶ 20).
Plaintiffs allege Defendant failed to disclose information on Beyond +'s autorenewal terms as required under California's Automatic Renewal Law (“ARL”) (Cal. Bus. & Prof. Code § 17600).
II. LEGAL STANDARD
A complaint must contain a “short and plain statement of the claim showing that the pleader is entitled to relief.” Ashcroft v. Iqbal, 556 U.S. 662, 677-78 (2009) (internal quotation marks and citation omitted). “A pleading that offers ‘labels and conclusions' or ‘a formulaic recitation of the elements of a cause of action will not do.'” Id. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The allegations “must be enough to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555.
The Court must accept as true all factual allegations in the complaint and draw reasonable inferences from those allegations in the light most favorable to the plaintiff. See Skilstaf, Inc. v. CVS Caremark Corp., 669 F.3d 1005, 1014 (9th Cir. 2012). The Court must also “draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679.
III. DISCUSSION
Defendant argues Plaintiffs failed to state a plausible claim under California's Consumers Legal Remedies Act (“CLRA”), Unfair Competition Law (“UCL”), or False Advertising Law (“FAL”).
Defendant also argues the UCL claim was dismissed with prejudice. (ECF 22). But the Court granted Plaintiff Turnier leave to amend the complaint, including that claim. (See ECF 17 at 9-10).
Consumers Legal Remedies Act
CLRA prohibits businesses from engaging in certain unlawful acts or practices. Cal. Civ. Code § 1770. It applies to transactions for “goods” or “services.” Id. Defendant argues the membership is neither. (ECF 22).
“Goods” means tangible chattels bought or leased for personal, family, or household purposes, including certificates or coupons exchangeable for those chattels. Cal. Civ. Code § 1761. “Services” means work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods. Id.
Plaintiffs argue the membership is a “coupon, ” and therefore a “good” under CLRA. (ECF 23). But, as alleged, the membership (and its 20 percent discount) is not exchanged for tangible items. See Cal. Civ. Code § 1761. Instead, it provides members with a set discount on all purchases. (See FAC).
Plaintiffs also argue the membership is a “service” because members receive “free” standard shipping for all purchases. (ECF 23). The Court agrees that shipping might be considered a service. Even so, as alleged, that service is not provided under the membership. (See FAC). Instead, it eliminates the cost to members. Iqbal, 556 U.S. at 679 (courts must draw on their “common sense” when determining whether a claim is plausible). For these reasons, the Court dismisses the CLRA claim.
Unfair Competition Law and False Advertising Law
The available remedies under UCL and FAL include injunctive relief and restitution. In re Vioxx Class Cases, 180 Cal.App.4th 116, 135 (2009). Plaintiffs request a full refund from Defendant. (FAC at ¶¶ 35 and 50). Defendant argues Plaintiffs failed to allege a plausible entitlement to that relief. (ECF 22); Iqbal, 556 U.S. at 677-678; Twombly, 550 U.S. at 555.
Plaintiffs do not seek injunctive relief in this action. (See FAC).
“The difference between what the plaintiff paid and the value of what the plaintiff received is a proper measure of restitution.” In re Vioxx Class Cases, 180 Cal.App. at 131; Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979, 988 (9th Cir. 2015) (“restitution is the return of the excess of what the plaintiff gave the defendant over the value of what the plaintiff received.”) (internal quotation marks and citation omitted); Dunkin v. Boskey, 82 Cal.App.4th 171, 198 (2000) (“a party seeking restitution must generally return any benefit that it has received.”) (internal quotations marks and citation omitted).
If a good or service had zero value, a plaintiff might be entitled to a full refund. In re Tobacco Case II, 240 Cal.App.4th 779, 795 (2015). That is the same measurement as the one in In re Vioxx (amount paid minus value received).
Here, the Court cannot infer from the factual allegations that Plaintiffs lacked access to the membership's benefits or knowledge about their re-enrollment. (See FAC). And the membership at renewal had some value (access to discounts on all purchases and “free” shipments). Id. Plaintiffs also do not argue the ARL violations altered the value of the renewed memberships. (See FAC); Pulaski & Middleman, LLC, 802 F.3d at 989 (“restitution is based on what a purchaser would have paid at the time of purchase had the purchaser received all the information.”) Overall, the factual allegations fail to support a plausible claim for restitution. For that reason, the Court dismisses the UCL and FAL claims. Plaintiffs need to set forth a plausible claim for restitution supported with factual allegations. Iqbal, 556 U.S. at 677-78.
The renewal charge was the same amount Plaintiff Turnier paid for his initial membership. (See FAC). The benefits were also identical. Id.
Plaintiffs are not required at this stage to set forth a precise amount.
Judicial Notice
Defendant requests judicial notice of terms and conditions that purportedly relate to the Beyond + enrollment. (See ECF 22). The Court's ruling does not rely on that document. Therefore, the request is DENIED.
Leave to Amend
Plaintiffs might cure the above deficiencies if given leave to amend. The Court therefore GRANTS their request. See Fed. R. Civ. P. 15; Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). Plaintiffs have leave to amend their allegations to support the CLRA, UCL, and FAL claims.
IV. CONCLUSION
For the reasons stated above, the Court GRANTS Defendant's motion to dismiss WITH LEAVE TO AMEND. Plaintiffs have until October 1, 2021, to file an amended complaint. Defendant shall have the time set forth under Federal Rule of Civil Procedure 15(a)(3) to file a response.
Defendant cited factual assertions in its motion that are not contained in the FAC. (See ECF 22 at 8 and 12). The Court did not consider those when ruling on Defendant's motion. Defendant should exclude that in subsequent motions.
IT IS SO ORDERED.