Opinion
Civil Action 21-cv-02960-CMA-NYW
06-24-2022
JAMES VANDIVER, on behalf of himself and all others similarly situated, Plaintiff, v. MG BILLING LIMITED d/b/a PROBILLER, and DOES 1-50, Defendants.
RECOMMENDATION OF UNITED STATES MAGISTRATE JUDGE
Nina Y. Wang United States Magistrate Judge
This matter comes before the court on Defendant MG Billing Limited d/b/a Probiller's (“Probiller” or “Defendant”) Motion to Dismiss Plaintiff's Complaint Pursuant to Fed.R.Civ.P. 12(b)(6) (“Motion to Dismiss” or “Motion”), [Doc. 15, filed January 7, 2022]. The undersigned considers the Motion pursuant to 28 U.S.C. § 636(b), the Order Referring Case dated November 16, 2021, [Doc. 12], and the Memorandum dated January 13, 2022. See [Doc. 19]; see also [Doc. 20; Doc. 22]. After reviewing the Motion, the entire case file, and the applicable case law, I respectfully RECOMMEND that the Motion to Dismiss be GRANTED IN PART AND DENIED IN PART.
FACTUAL BACKGROUND
The following facts are drawn from the Class Action Complaint (“Complaint”), [Doc. 1], and taken as true for the purposes of the instant Motion to Dismiss. In the Complaint, Plaintiff James Vandiver (“Mr. Vandiver” or “Plaintiff”) alleges that Probiller-which provides “billing services to American consumers,” [id. at ¶ 11]-engaged in “deceptive and fraudulent billing practices” when it charged Mr. Vandiver and other consumers for a two-day “trial” membership to an adult entertainment website, “Brazzers”, which the consumers signed up for, but then “surreptitiously opt[ed] users into membership for a second, additional adult entertainment membership” for which the consumers were charged a separate monthly subscription fee. [Id. at ¶¶ 1 -5, 19-20]. Mr. Vandiver claims that he “duly cancelled the trial membership within 48 hours,” but then he was surprised to later learn that he was charged monthly fees exceeding “$500 for a different adult entertainment membership, which he did not want and did not use.” [Id. at ¶ 6].
Mr. Vandiver alleges that “Probiller's conduct amounts to a bait & switch, violates state consumer protection law, and breaches its contract with consumers.” [Id. at ¶ 12]; see also [id. at ¶ 39]. The contract at issue, according to Mr. Vandiver, is the Customer Terms and Conditions, see [id. at ¶¶ 40-44], which he attaches to the Complaint at Exhibit A. See [Doc. 1-1; Doc. 30-1].
On February 7, 2022, Plaintiff refiled a clean version of Exhibit A on the basis that “the previous Exhibit A was difficult to read due to a technical error.” [Doc. 30 at 1].
Mr. Vandiver purports to bring this action on behalf of himself and all others similarly situated pursuant to Federal Rule of Civil Procedure 23, and proposes two classes of individuals:
All consumers who, within the applicable statute of limitations preceding the filing of this action to the date of class certification, signed up for a Brazzers membership and subsequently paid more than the Brazzers membership fee to Probiller (the “Bait & Switch Class”).
All consumers who, within the applicable statute of limitations preceding the filing of this action to the date of class certification cancelled their Brazzers
membership but were subsequently charged by Probiller (the “Cancellation Class”).[Id. at ¶ 45]. Plaintiff asserts three causes of action against Probiller: breach of contract, including breach of the covenant of good faith and fair dealing (“Count I”); violation of the Colorado Consumer Protection Act (“CCPA”) (“Count II”); and unjust enrichment (“Count III”). [Id. at ¶¶ 57-83]. He seeks “monetary damages, restitution, and injunctive and declaratory relief.” [Id. at ¶ 1].
PROCEDURAL BACKGROUND
Plaintiff initiated this action by filing the Complaint on November 3, 2021. See [Doc. 1]. This action was ultimately assigned to the Honorable Christine M. Arguello and drawn to the undersigned Magistrate Judge. See [Doc. 6; Doc. 8; Doc. 10; Doc. 11; Doc. 12]. On November 16, 2021, the court entered an Order setting the Scheduling Conference for January 12, 2022. [Doc. 13]. On January 7, 2022, Probiller filed the instant Motion to Dismiss. See [Doc. 15]. In the Motion, Probiller seeks to dismiss Plaintiff's causes of action in their entirety or, in the alternative, to dismiss or strike the class claims for alleged violations of the CCPA (Count II) on the basis that Mr. Vandiver “cannot as a matter of law maintain class claims under the [CCPA].” [Id. at 1].
On January 12, 2022, the court conducted the Scheduling Conference and entered the Scheduling Order, [Doc. 18], wherein the court established the following case deadlines: fact discovery is due November 10, 2022; expert discovery is due February 10, 2023; and the class certification deadline is February 17, 2023. [Doc. 18 at 8].
On January 19, 2022, the court granted the Parties' requests to extend Plaintiff's deadline to respond to the Motion to Dismiss until February 7, 2022, and Defendant's deadline to file its Reply until February 28, 2022. See [Doc. 21; Doc. 24]. Plaintiff filed his Opposition to Defendant's Motion to Dismiss Plaintiff's Complaint (“Response”) on February 7, 2022. See [Doc. 29]. The next day, Defendant filed an Unopposed Motion for a Stay of Class Discovery (“Motion to Stay”), [Doc. 31], seeking to stay class discovery pending the court's ruling on the Motion to Dismiss. [Doc. 31 at 1]. The court granted the Motion to Stay on February 15, 2022. See [Doc. 33]. On February 28, 2022, Defendant filed its Reply in support of the Motion to Dismiss. See [Doc. 34]. The Motion to Dismiss is thus ripe for determination.
LEGAL STANDARD
To survive a motion to dismiss pursuant to Rule 12(b)(6), “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Walker v. Mohiuddin, 947 F.3d 1244, 1248-49 (10th Cir. 2020) (internal quotation marks omitted). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Cummings v. Dean, 913 F.3d 1227, 1238 (10th Cir. 2019) (internal quotation marks omitted). In making this determination, the “court accepts as true all well-pleaded factual allegations in [the] complaint and views those allegations in the light most favorable to the plaintiff.” Straub v. BNSF Ry. Co., 909 F.3d 1280, 1287 (10th Cir. 2018).
The court generally limits its review of a motion to dismiss brought pursuant Federal Rule of Civil Procedure 12(b)(6) to the four corners of the pleadings. In some instances, however, the court may consider materials beyond the complaint if the documents are central to the plaintiff's claims, referred to in the complaint, and the parties do not dispute their authenticity. See Waller v. City & Cty. of Denver, 932 F.3d 1277, 1282 (10th Cir. 2019). The court may also take judicial notice of undisputed court documents and matters of public record without requiring conversion, but the court may consider those documents only to show their contents, not to prove the truth of matters asserted therein. See Tal v. Hogan, 453 F.3d 1244, 1264 n.24 (10th Cir. 2006).
ANALYSIS
Defendant seeks dismissal of the Complaint in its entirety on three primary grounds. First, Probiller argues that Plaintiff fails to state a claim for breach of contract because the Customer Terms and Conditions (“CTC” or “contract”) “expressly authorized” Probiller to charge Plaintiff for the second, premium membership. [Doc. 15 at 2]. Second, Defendant argues that Plaintiff's unjust enrichment claim fails because Plaintiff “cannot maintain a claim for unjust enrichment where, as here, a contract governs the same subject matter.” [Id.]. Third, Defendant contends that Plaintiff's CCPA claim fails because Plaintiff “fails to allege any unfair or deceptive trade practice.” [Id.]. Defendant also argues in the alternative that the court should dismiss or strike Plaintiff's CCPA class claims because Plaintiff cannot maintain class claims under the CCPA as a matter of law. [Id. at 3]. The court will address Defendant's arguments in turn.
I. Record Before the Court
The court begins by considering the record before it. In the Motion, Defendant contends that the court may consider evidentiary materials outside the pleadings. See [Doc. 15 at 4]. Specifically, Defendant argues that Plaintiff “selectively includes in his [C]omplaint certain excerpts of the Brazzers website, [but] omits the checkout page that . . . shows that he purchased both a Brazzers membership and a premium membership.” [Id.]. For support, Defendant proffers two documents.
First, Defendant includes a copy of the purported checkout page, see [Doc. 15 at 4; Doc. 15-2 at 5], and argues that the court may consider this document because it “comprises and is central to [P]laintiff's allegations concerning his membership purchase, website experience, and contract attached to his [C]omplaint.” [Doc. 15 at 3]. Second, Defendant attaches the Declaration of Matt Kilicci (“Kilicci Declaration”). See [Doc. 15-2 at 1-2]. Therein, Mr. Kilicci represents that he is “employed by 9219-1568 Quebec Inc. as the Vice President of Operations.” [Id. at 1]. Mr. Kilicci states that his “team researched and reviewed checkout pages to which they had access” and “[b]ased on the research and review, they determined that to the best of their knowledge the checkout page [submitted by Defendant] . . . is an accurate representation of the checkout page that was live at the time Mr. Vandiver purchased his memberships on Brazzers.com in October 2019.” [Id. at 1-2]. Mr. Kilicci further states that “[t]he checkout page . . . is one of the business records that is maintained and to which [his] team has access in the ordinary course of business.” [Id. at 2].
Plaintiff disputes the authenticity of the checkout page proffered by Probiller on the basis that it reflects different pricing for Brazzers memberships than the prices Plaintiff alleges in the Complaint. See [Doc. 29 at 10]. Mr. Vandiver also argues that the court should not consider the Kilicci Declaration because “the evidence[] presented in the Declaration is not attached or relied on in the Complaint” and Mr. Kilicci “fails to demonstrate he has personal knowledge of the purported facts” stated in the Declaration. [Id. at 8-9].
When citing to Plaintiff's Response, this court will refer to the page numbers generated by the Electronic Case Filing (“ECF”) system located in the top right corner of each page, and not the page numbers included by Plaintiff at the bottom center of each page.
While the court does find that the checkout page is central to Plaintiff's allegations, see, e.g., [Doc. 1 at ¶ 22 (“[T]he webpage on which consumers enter their credit card information . . . can be found at probiller.brazzers.com.”)], the court nevertheless concludes that Plaintiff's challenges preclude this court's consideration of the Kilicci Declaration or, by extension, the checkout page proffered by Defendant in resolving the instant Motion to Dismiss. Notably, although Defendant acknowledges the differences between the prices in the checkout page and the prices alleged by Plaintiff in the Complaint, see [Doc. 34 at 7], Defendant disregards those differences based on the Kilicci Declaration, which Defendant argues supports the authenticity of the checkout page. [Id. (“Although [P]laintiff argues that the checkout page shows a different price than what he alleges he paid . . ., Mr. Kilicci addresses that very issue in his declaration.”)]; see also [Doc. 15-2 at 1-2]. However, Defendant points to no case law that permits this court to overlook Plaintiff's challenge to its authenticity and credit Mr. Kilicci's Declaration over Plaintiff's challenge. See [Doc. 34 at 6-7]. Accordingly, the court is not persuaded that the exception to allow consideration of “documents referred to in the complaint” permits the court to consider the disputed checkout page and Kilicci Declaration in evaluating Defendant's Rule 12(b)(6) Motion to Dismiss. See Waller, 932 F.3d at 1282.
Defendant also submits with its Motion a version of Plaintiff's Complaint which strikes the CCPA class claims. See [Doc. 15-1]. However, Defendant only cites that document in passing and does not appear to rely upon it in making any substantive arguments. See [Doc. 15 at 1, 10, 15].
The court now turns to the Parties' arguments. The court will first address Plaintiff's contract-based claims-breach of contract (Count I) and unjust enrichment (Count III)- and then address Plaintiff's CCPA claim (Count II).
II. Breach of Contract
To state a claim for breach of contract under Colorado law, a plaintiff must sufficiently plead the following elements: (1) the existence of a contract; (2) performance by the plaintiff or some justification for nonperformance; (3) failure to perform the contract by the defendant; and (4) resulting damages to the plaintiff. PayoutOne v. Coral Mortg. Bankers, 602 F.Supp.2d 1219, 1224 (D. Colo. 2009) (citing W. Distrib. Co. v. Diodosio, 841 P.2d 1053, 1058 (Colo. 1992)); see also Indus. Prods. Int'l, Inc. v. Emo Trans, Inc., 962 P.2d 983, 988 (Colo.App. 1997) (stating that an enforceable contract requires mutual assent to an exchange between competent parties regarding certain subject matter, for which there is legal consideration).
The interpretation of a contract is a question of law. See Fed. Deposit Ins. Corp. v. Fisher, 292 P.3d 934, 937 (Colo. 2013). A reviewing court's “primary aim in contract interpretation is to ascertain and implement the intent of the parties.” Id. If the underlying contract is unambiguous and the plaintiff fails to state a claim based on the language of the contract, a motion to dismiss should be granted. See Titan Indem. Co. v. Travelers Prop. Cas. Co. of Am., 181 P.3d 303, 307 (Colo.App. 2007) (en banc). On the other hand, dismissal is inappropriate when the claim “may have merit if ambiguities are resolved in favor of the claimant.” Dorman v. Petrol Aspen, Inc., 914 P.2d 909, 915 (Colo. 1996) (en banc). A contract is ambiguous when it “is reasonably and fairly susceptible of more than one meaning.” Arenberg v. Cent. United Life Ins. Co., 18 F.Supp.2d 1167, 1179 (D. Colo. 1998). “In determining whether a provision in a contract is ambiguous, the instrument's language must be examined and construed in harmony with the plain and generally accepted meaning of the words used, and reference must be made to all the agreement's provisions.” Fibreglas Fabricators, Inc. v. Kylberg, 799 P.2d 371, 374 (Colo. 1990) (en banc); see also Tegu v. Vestal Design Atelier LLC, 407 F.Supp.3d 1171, 1177 (D. Colo. 2019) (“The meaning of a contract is found by examination of the entire instrument and not by viewing clauses or phrases in isolation.” (citations and quotations omitted)).
Here, Mr. Vandiver bases his breach of contract claim on three theories: (1) Probiller breached the CTC by charging Plaintiff for “more than the one membership [he] affirmatively select[ed]”; (2) Probiller breached the CTC by continuing to charge Plaintiff after he cancelled his membership; and (3) Probiller “breached the covenant of good faith and fair dealing and abused its discretion in its contract . . .” [Doc. 1 at ¶¶ 59-60, 65]; see also [Doc. 29 at 4-8, 11-12]. The court will address each theory in turn.
In his Response, Mr. Vandiver characterizes his claims in part as follows: “Defendant . . . tricks consumers into signing up for two separate automatically recurring subscriptions when they only want one. This practice, known as ‘upselling,' has been frequently (and successfully) attacked by the FTC as an unfair and deceptive business practice.” [Doc. 29 at 1 (emphasis added)]. However, insofar as Mr. Vandiver claims that Probiller engaged in “upselling,” he does not allege that any such upselling relates to his breach of contract claim, see [Doc. 1]; and, likewise, the cases Plaintiff cites in the Response do not support a breach of contract claim based on such a practice, see [Doc. 29 at 2 n.2 (citing F.T.C. v. Johnson, 96 F.Supp.3d 1110, 1146 (D. Nev. 2015) and F.T.C. v. Health Formulas, LLC, No. 2:14-cv-01649-RFB, 2015 WL 2130504, at *19 (D. Nev. May 6, 2015))].
A. Whether the Customer Terms and Conditions Prohibited Probiller from Charging Plaintiff for More than One Membership to Brazzers
For his first breach of contract theory, Mr. Vandiver alleges that “[n]o contract provision authorizes Defendant to charge consumers for more than the one membership they affirmatively select.” [Doc. 1 at ¶ 59]; see also [id. at ¶¶ 40-41]; [Doc. 29 at 5-6 (arguing that Probiller was not authorized under the CTC to charge Plaintiff “for anything other than th[e] one, single Brazzers membership”)]. For support, Mr. Vandiver alleges that the CTC expressly “prohibits” Probiller from “bill[ing] Plaintiff and class members for additional ancillary membership that they did not explicitly agree to.” [Doc. 1 at ¶ 40]; see also [id. at ¶ 26 (“Plaintiff, like other reasonable consumers, selected the ‘2 Days Membership' and clicked the large ‘Start Membership' button without realizing that by doing so, he would be automatically enrolled in two separate memberships, including an additional paid membership that would require a separate cancellation.”)]; [Doc. 29 at 56 (arguing that Probiller was not authorized under the CTC to charge Plaintiff “for anything other than th[e] one, single Brazzers membership”)]. In the Motion, Probiller argues that Plaintiff fails to identify any contract provision Probiller breached. See [Doc. 15 at 7]. The court respectfully agrees with Defendant.
Plaintiff's Response appears to rely only secondarily on the CTC as the basis for his breach of contract claim. Specifically, he argues that “at the time plaintiff signed up for his Brazzers trial, he selected: ‘2 days Membership, $1/day,' with a disclaimer at the bottom of the page that stated ‘Rebill at $39.99 until cancelled.'” [Doc. 29 at 4]. Therefore, Mr. Vandiver contends, his “selection of the ‘START MEMBERSHIP' button . . . formed a contractual bargain for a single ‘membership,' which membership would continue to be effective until cancelled.” [Id. (emphasis added)]. He then argues that “[e]ven if those [Terms and Conditions] are considered to be a part of the contractual bargain described above, they too show that Probiller breached the contract.” [Id. at 5 (emphasis added)]. However, insofar as Plaintiff seeks to assert a different breach of contract theory than that alleged in the Complaint, Plaintiff may not amend his Complaint by alleging new facts in his response to the Motion to Dismiss. See In re Qwest Commun. Intern., Inc., 396 F.Supp.2d 1178, 1203 (D. Colo. 2004).
“To prevail on a claim for breach of contract, a party must show that there was a contract in existence and that one party failed to perform some term of the contract.” Spencer Investments, Inc. v. Bohn, 923 P.2d 140, 143 (Colo.App. 1995), as modified on denial of reh'g (Nov. 9, 1995). Moreover, in addressing Plaintiff's breach of contract claim, this court is guided by the Colorado Supreme Court's instruction that courts must “interpret a contract ‘in its entirety with the end in view of seeking to harmonize and to give effect to all provisions so that none will be rendered meaningless.'” Id. (quoting Pepcol Mfg. Co. v. Denver Union Corp., 687 P.2d 1310, 1313 (Colo.1984)). Thus, courts ascertain the meaning of a contract by examining the contract as a whole rather than viewing clauses or phrases in isolation. Id.
In that light, the court does not read the CTC to expressly “prohibit[]” Probiller from “bill[ing] Plaintiff and class members for additional ancillary memberships that they did not explicitly agree to[,]” [Doc. 1 at ¶ 40]; and Plaintiff's arguments to the contrary do not persuade this court otherwise. As an initial matter, Plaintiff fails to point to any contract provision that expressly states such prohibition and this court's review does not reveal any such provision. See [Doc. 30-1]. Instead, to support his assertion, Plaintiff points to the “Automatic Recurring Billing” policy in the CTC, see [Doc. 1 at ¶ 40; Doc. 29 at 5], which provides in relevant part as follows:
Automatic Recurring Billing (If Selected By Subscriber On The Sign Up Page)
In accordance with the terms and conditions of the Site subscription fees may be automatically renewed at or after the end of the original term selected, for a similar period of time and for a similar or lower amount, unless notice of cancellation is received from the Subscriber. Unless and until this agreement is cancelled in accordance with the terms hereof, Subscriber hereby authorizes MG Billing to charge subscriber's chosen payment method to pay for the ongoing cost of membership. Subscriber hereby further authorizes MG Billing to charge subscriber's chosen payment method for any and all additional purchases of materials provided on the site. In the event of an unsuccessful recurring payment, an administration fee of up to $2.00 may be applied in order to keep a subscription temporarily active until the full subscription fee can be processed successfully.[Doc. 30-1 at ¶ 6 (emphasis added)]. In addition, in his Response, Mr. Vandiver further points to the “Subscription Fees and User Communication” policy in the CTC, see [Doc. 29 at 5], which states in relevant part that
[t]he current monthly membership rate which will appear on Subscriber credit card bill, will be debited from Subscriber account, charged to Subscriber telephone, etc., depending Subscriber, choice of payment means.[Id. at ¶ 19 (emphasis added)]. Mr. Vandiver thus concludes that, together, the “Automatic Recurring Billing” and “Subscription Fees and User Communication” policies of the CTC “make[] clear that there is a single membership subject to a single cancellation[ ]” [Doc. 29 at 4 (emphasis in original)].
Mr. Vandiver's conclusions, however, are premised upon certain interpretations of the definitions of the terms “membership” and “site” under the CTC. See [id. at 5-6]. Specifically, Plaintiff contends that: (a) because the term “membership” is defined in the CTC as “the subscriber or user of a valid username and password for the site during the term of membership,” and the term “site” is defined in part as “the website for which a subscriber is purchasing a username and password . . .”, see [Doc. 30-1 at ¶1]; and (b) because Plaintiff “only ‘purchased' a username and password to one website-Brazzers . . .”; then (c) the CTC does not “authorize[] Probiller to charge Plaintiff on a recurring basis for anything other than that one, single Brazzers membership” because the terms “site” and the “website” refer to “the Brazzers website and all activity undertaken therein; [thus] there can only be one membership to the ‘site.'” [Id. at 5-6]. But this conclusion appears to be based on Plaintiff's opinion, as opposed to the terms of the CTC.
Putting aside whether the practice itself is permissible under the law, nothing in the CTC expressly “prohibits” Probiller from charging Plaintiff for “additional, ancillary memberships that [he] did not expressly agree to” as alleged in the Complaint. [Doc. 1 at ¶ 40]. Nor do the terms of the CTC limit a user, using a single username and password, from maintaining different types of membership plans. Moreover, Plaintiff does not allege in the Complaint that he was a “subscriber or user of a valid username and password” for any website other than Brazzers. See [Doc. 1].
Indeed, as Mr. Vandiver acknowledges, the CTC defines “membership” to mean “the subscriber or use of a valid username and password for the site during the term of membership.” [Doc. 30-1 at ¶ 1]. Thus, in evaluating this argument, the court must assume that a subscriber's username and password to Brazzers cannot be associated with more than one membership account. However, Mr. Vandiver fails to point to any language in the CTC showing this to be the case.
Plaintiff also urges the court to find that (a) because “the contract consistently uses the term ‘membership' (singular) in reference to billing”, and (b) because the contract does not “refer to the possibility of a ‘premium membership' or the possibility of two different ‘memberships' being created while signing up for one website”, then (c) it “is clear [that] Probiller had contractual authorization to charge for one recurring membership, and not two.” [Doc. 29 at 6 (emphasis in original)]. Plaintiff then proffers the following global conclusion:
All this means that even under the [CTC], the “currently [sic] monthly membership rate” plainly means $2 for the first two days followed by $39.99 per month-as those prices were displayed on the purchase screen. Pursuant to the plain terms of the agreement, Probiller is only allowed to charged Plaintiff this “current monthly membership rate” for the “ongoing cost of membership” to the site as a whole.[Id.]. Respectfully, the court is not persuaded.
As mentioned, Plaintiff must establish that “there was a contract in existence and that [Probiller] failed to perform some term of the contract” in order to prevail on his breach of contract claim. Bohn, 923 P.2d at 143. The court finds that Plaintiff has failed to identify any term in the CTC that Probiller allegedly breached by charging Plaintiff for more than one membership to Brazzers. See Miller v. Metro. Life Ins. Co., 17 Civ. 7284 (AT), 2019 WL 4450637, at *5 (S.D.N.Y. Sept. 17, 2019) (“MetLife is correct that, under the law of [Colorado], a plaintiff must identify a specific provision of the contract that the defendant breached.”) (citing Pernick v. Computershare Tr. Co., Inc., 136 F.Supp.3d 1247, 1266 (D. Colo. 2015)). This failure warrants dismissal of his breach of contract claim based on such a theory. See Snyder v. ACORD Corp., No. 14-cv-01736-JLK, 2016 WL 192270, at *12 (D. Colo. Jan. 15, 2016) (“I will dismiss Plaintiffs' breach of contract claims.... Plaintiffs' claims for breach of the insurance policies themselves fail because Plaintiffs have not identified any actual provisions of the policies or explained how Defendants breached them.”) (first citing Pernick, 136 F.Supp.3d at 1266; and then citing Conagra Trade Grp., Inc. v. Fuel Expl., LLC, 636 F.Supp.2d 1166, 1172 (D. Colo. 2009)) (applying Colorado law); see also Pernick, 136 F.Supp.3d at 1266 (“Plaintiff fails to identify contractual provisions suggesting [Defendant's alleged obligation] and, as a result, fails to state a claim for breach of contract.”); cf. Rocky Mt. Prestress, LLC v. Liberty Mut. Fire Ins. Co., 960 F.3d 1255, 1260 (10th Cir. 2020) (affirming district court's grant of summary judgment in insurer's favor and noting, in part, that “[t]he insured bears the initial burden of demonstrating coverage under the policy”) (citing Rodriguez v. Safeco Ins. Co. of Am., 821 P.2d 849, 853 (Colo.App. 1991)).
The cases cited by Plaintiff do not support his theory that Probiller breached the CTC by charging Plaintiff for more than one membership to Brazzers or change this court's analysis. See [Doc. 29 at 5-6 (first citing Ironforge.com v. Paychex, Inc., 747 F.Supp.2d 384, 399-400 (W.D.N.Y. 2010); then citing Williamson v. McAfee, Inc., No. 5:14-cv-00158-EJD, 2014 WL 4220824, at *5 (N.D. Cal. Aug. 22, 2014); and then citing Herman v. SeaWorld Parks & Ent., Inc., No. 8:14-cv-3028-T-35JSS, 2017 WL 1376169, at *4 (M.D. Fla. Apr. 17, 2017)].
In Ironforge.com v. Paychex, Inc., 747 F.Supp.2d 384 (W.D.N.Y. 2010), the plaintiffs alleged that “Paychex made withdrawals from their bank accounts that were not authorized under the parties' contracts, and that Paychex ha[d] refused to explain the reason for the withdrawals or to reimburse plaintiffs.” 747 F.Supp.2d at 401. The plaintiffs further alleged that “‘[b]y overcharging Plaintiffs and with fees that were not in the contract and not notifying it of the extra charges, Paychex breached its contract with Plaintiffs.'” Id. at 399-400 (citation omitted).
In addition, although the court commented it did “not believe that plaintiffs must point to a particular section of their contracts expressly prohibiting such charges or withdrawals . . . to state a facially valid cause of action for breach of contract”, see Paychex, 747 F.Supp.2d at 400, the court did not explain the basis for its opinion.
In Williamson v. McAfee, Inc., No. 5:14-cv-00158-EJD, 2014 WL 4220824, at *5 (N.D. Cal. Aug. 22, 2014), the plaintiff's breach of contract claim was based on a disparity between the defendant's auto-renewal and off-the-rack pricing for its anti-virus software. Id. at *1. Specifically, the plaintiff alleged that when customers purchased “an initial one-year subscription,” the defendant “aggressively pushe[d] them into an auto-renewal, whereby, upon a customer's subscription expiration,” the defendant “automatically renew[ed] the subscription for another one-year period by charging” the plaintiff's credit card. Id. at *1. Moreover, “[o]nce in the auto-renewal program, these customers [were] allegedly charged a higher price for their renewed subscriptions than [the] [d]efendant charge[d] any of its other customers for a one-year subscription.” Id. Thus, the plaintiff alleged the defendant “breached its contract with him by charging him a higher price for his auto-renewal [than] the normal, then-current price offered to other customers for the same product.” Id. at *3; see also id. at *4 (“But the heart of Plaintiff's argument is his assertion that the price offered to all customers other than the auto-renewal customers is not a ‘discounted' or ‘promotional' price at all, but in fact is the true, non-discounted price of the Software.”).
Here, Mr. Vandiver does not allege that Probiller charged him more for his two-day trial membership than his contractual obligation; that Probiller failed to notify him of the charges for the separate, premium membership; or that Probiller otherwise refused to explain the reasons why it was charging Plaintiff for a premium membership. See [Doc. 1]. Notably, the “Agreed Upon Method of Communication” policy under the CTC provides that “MG Billing and the Subscriber agree that a transaction receipt will be provided via email to the subscriber's address provided at the time of initial enrolment [sic].” [Doc. 30 1 at ¶ 7]; see also [id. at ¶ 8 (“Subscribers will receive an email receipt to their email provided upon initial subscription....”)]. Plaintiff does not accuse Probiller of failing to notify him of all of his charges in his initial transaction receipt or any subsequent receipts. Nor does Plaintiff allege that he requested a refund from Probiller that the company refused to provide, see [id.], despite the “Refund” policy under the CTC, see [Doc. 30-1 at ¶ 10]. Rather, Plaintiff alleges that “Probiller did not alert users that two separate memberships were created simultaneously,” [id. at ¶ 29]; and Probiller “automatically enrolled Plaintiff and other consumers into ancillary memberships they did not want, need, or use[,]” [id. at ¶ 30].
Indeed, by Plaintiff's account, “he was assessed monthly fees in excess of $500” for the premium membership after he cancelled the 2-day trial membership; and, yet, Plaintiff does not allege that he inquired from Probiller as to why the company continued to charge him after his cancellation. See [Doc. 1 at ¶ 6 (“He duly cancelled the trial membership within 48 hours. He later learned, to his surprise, that he was assessed monthly fees in excess of $500 for a different adult entertainment membership . . . (emphasis in original)]; see also [id. at ¶ 35 (“However, Plaintiff continued to be billed by Probiller for several more months for membership in the separate, additional adult entertainment website that Probiller had surreptitiously signed him up for.”)].
Finally, Plaintiff cites Herman v. SeaWorld Parks & Ent., Inc., No. 8:14-cv-3028-T-35JSS, 2017 WL 1376169, at *4 (M.D. Fla. Apr. 17, 2017) for the position that the court in that case “grant[ed] summary judgment to certified plaintiff-class in [a] case alleging SeaWorld automatically renewed its season passholders' passes in breach of the specific circumstances set forth in the contract[.]” [Doc. 29 at 7]. However, the facts of that case are inapposite. There, the plaintiffs purchased annual theme park passes “through SeaWorld's ‘EZ Pay' system, which allowed consumers to pay for an annual pass over twelve installments in essentially eleven months.” Herman, 2017 WL 1376169, at *1. SeaWorld's renewal of the annual passes was governed by the following contract provision: “EXCEPT FOR ANY PASSES PAID IN LESS THAN 12 MONTHS, THIS CONTRACT WILL RENEW AUTOMATICALLY ON A MONTH-TO-MONTH BASIS FOLLOWING THE PAYMENT PERIOD until I terminate it.” Id. at *1, 3. However, “[b]ecause the first and second installments under the [ ] contract were paid within a single month's time and the remaining ten installments were paid in the ensuing ten months, all passes were ‘paid in less than 12 months.'” Id. at *1. Therefore, after SeaWorld automatically renewed the plaintiffs' contracts during the contract period despite the plaintiffs' payment of the contract in fewer than twelve months, the plaintiffs alleged that SeaWorld breached the language of the contract. See id. at 1-4. The court held that the plaintiffs established a claim for breach of contract “based on SeaWorld's unauthorized renewal during the contract period, and based on SeaWorld's unauthorized charges after the contract expired.” Id. at *2. Here, Mr. Vandiver does not allege a “renewal-as-breach” theory, see Herman, 2017 WL 1376169, at *3, nor does he allege that the CTC contains similar language to the contract provision on which the Herman plaintiffs asserted such a theory.
In sum, the court finds that Plaintiff fails to state a breach of contract claim based on Probiller's allegedly charging Plaintiff for a second, premium membership to Brazzers. Accordingly, the court RECOMMENDS that Defendant's Motion be GRANTED insofar as it seeks dismissal of Plaintiff's breach of contract claim based on a theory that the CTC prohibited Probiller from charging Plaintiff for more than one membership to Brazzers.
B. Whether the Terms and Conditions Prohibited Probiller from Continuing to Charge Plaintiff After He Ended His Brazzers Membership
For his second breach of contract theory, Mr. Vandiver alleges that “no contract provision authorizes Defendant to charge consumers after they cancel their memberships.” [Doc. 1 at ¶ 60]. For support, Plaintiff points to the “Cancellation” policy in the CTC, see [id. at ¶ 43], which provides that
[a]t any time, and without cause, subscription to the service may be terminated by either: MG Billing, the Site, or the Subscriber upon notification of the other by electronic or convention mail, by chat, or by telephone. Subscribers are liable for charges incurred until the date of the termination. Using the online form to cancel your membership, as opposed to contacting Customer Care via phone or chat, may result in an immediate loss of access to the site.[Doc. 30-1 at ¶ 9]. Plaintiff also alleges that, “[o]n October 20, 2019 . . . Plaintiff cancelled his membership and received a confirmation email from cancellation@probiller.com” which stated in relevant part:
Your member account has been cancelled.
...
This his is to confirm that your web site membership to www.brazzers.com has been cancelled. You will continue to have access until 2019-10-20 18:17:43.[Doc. 1 at ¶ 32]. In addition, Plaintiff alleges that, upon receiving the cancellation email, he ”reasonably understood that he would incur no further charges for the ‘trial' he began less than 48 hours before.” [Id. at 33].
In his Response, Mr. Vandiver further argues that the Cancellation policy under the CTC “promises Plaintiff the ability to cancel at any time.” [doc. 29 at 7]. Specifically, he argues that (a) because the “plain language [of the Cancellation policy] allows the Subscriber to ‘terminate the membership ‘at any time[]'”; and (b) “because the Subscriber is liable for charges incurred ‘until the date of the termination[]'”; then (c) “[t]he converse must also [be] true: Subscribers are not liable for charges after termination.” [Id. (emphasis in original)]. Therefore, Plaintiff contends, “[i]n continuing to charge Plaintiff after Plaintiff cancelled his membership, Probiller breached the contract.” [Id.]. Plaintiff also asserts that, “[a]t a minimum, the contract is ambiguous, compelling a denial of the motion.” [Id. at 8]. The court respectfully agrees.
Plaintiff also asserts, without any further explanation, that the CTC constitutes an adhesion contract, and therefore the court “must ‘honor the expectations of the reasonable consumer.'” [Doc. 29 at 7 (citing Urtado v. Shupe, 517 P.2d 1357, 1360 (1973))]; see also [id. at 4 (“Contracts of adhesion must be construed to ‘honor the reasonable expectations of the adherer.'”)]. Nevertheless, in its Reply, Defendant counters that “the law governing contracts of adhesion does not apply because [P]laintiff has not alleged a contract of adhesion for the premium membership.” [Doc. 34 at 3]. The court agrees. Under Colorado law, an adhesion contract is defined as a contract that is “‘generally not bargained for, but imposed on the public for a necessary service on a take it or leave it basis.'” Bauer v. Aspen Highlands Skiing Corp., 788 F.Supp. 472, 474 (D. Colo. 1992) (quoting Jones v. Dressel, 623 P.2d 370, 374 (Colo. 1981) (emphasis added). “However, printed form contracts offered on a take it or leave it basis, alone, do not render the agreement an adhesion contract.” Id. at 474-75. Rather, “[t]here must a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation, or that [the] services could not be obtained elsewhere.” Clinic Masters, Inc. v. Dist. Ct. in and for El Paso Cty., 556 P.2d 473, 476 (Colo. 1976). For instance, in Jones, the Colorado Supreme Court held that an exculpatory contract relating to skydiving, was not an unenforceable adhesion contract “because the service provided . .. was not an essential service.” Jones, 623 P.2d at 377-78. Here, Mr. Vandiver does not present any allegations in the Complaint or sufficiently explain in the Response how the CTC constitutes an adhesion contract. See [Doc. 1; Doc. 29]. In any case, Plaintiff acknowledges that Brazzers is a popular website and “many other websites offer[] similar content” and do not require payment. [Doc. 1 at ¶¶ 19-20]. Accordingly, the court finds that the CTC does not constitute an adhesion contract because the service it provides is not essential. See Bauer v. Aspen Highlands Skiing Corp., 788 F.Supp. 472, 474-75 (D. Colo. 1992) (“Colorado defines an adhesion contract as ‘generally not bargained for, but imposed on the public for a necessary service on a take it or leave it basis.' However, printed form contracts offered on a take it or leave it basis, alone, do not render the agreement an adhesion contract. Rather, ‘[t]here must a showing that the parties were greatly disparate in bargaining power, that there was no opportunity for negotiation, or that [the] services could not be obtained elsewhere.'” (citations omitted)]; Jones, 623 P.2d at 377 (holding that an agreement was not an adhesion contract and the party seeking exculpation did not possess a decisive bargaining advantage “because the service provided by Free Flight was not an essential service”).
At the outset, the court notes that the Cancellation policy does not provide that a subscriber may terminate “the membership” as Plaintiff claims in his Response. See [Doc. 29 at 7]. Rather, it provides that a subscriber may terminate “subscription to the service” at any time. [Doc. 30-1 at ¶ 9 (emphasis added)]. Notwithstanding this discrepancy, the court finds Plaintiff's arguments persuasive to survive dismissal of his breach of contract claim based on a theory that the CTC prohibited Probiller from continuing to charge Plaintiff after he ended his membership. In particular, the court agrees that the Cancellation policy is ambiguous regarding (1) when a subscriber's multiple memberships to Brazzers are deemed cancelled; and (2) by extension, when Probiller stops charging customers for their multiple memberships.
The court expressly does not weigh on whether this distinction will ultimately hold any significance in this case, nor does Defendant address this point in its Reply. See [Doc. 34]. The court does note, however, that although the term “service” is not expressly defined in the CTC, the references to “service(s)” in the CTC indicates that that term covers more than just the single “membership” that Plaintiff insists. For instance, the introduction to the CTC provides that “[b]y applying for access and or services from this website, Subscriber is agreeing to these terms and conditions, and is agreeing to be legally bound by them.” [Doc. 30-1 at 2 (emphasis added)]. Moreover, the term “Subscriber” is defined as “the user of the services of the site and holder of a valid username and password for the Site.” [Id. (emphasis added)]. The CTC also provides that “[s]ubscribers to the Site are hereby authorized a single access rights access the service or material located at this website.” [Id. at ¶ 12 (emphasis added)]. And the Notice section further provides that “[a]ll cancellations of service to a site must also be directed to MG Billing.” [Id. at ¶ 17].
The Cancellation policy provides that “[s]ubscribers are liable for charges incurred until the date of termination.” [Doc. 30-1 at ¶ 9]. And Plaintiff alleges in the Complaint that, after he cancelled his membership, he received a confirmation email from “cancellation@probiller.com” which stated his “member account has been cancelled.” [Doc. 1 at ¶ 32]. The email further stated that “your web site membership to www.brazzers.com has been cancelled.” [Id.]. Plaintiff also alleges that, upon receiving the cancellation email, he “reasonably understood that he would incur no further charges for the ‘trial' he began less than 48 hours before.” [Id. at ¶ 33]. However, the allegations continue, Plaintiff “continued to be billed by Probiller for several more months for membership” for the premium membership account. [Id. at ¶ 35]. In other words, regardless of whether Mr. Vandiver agreed to sign up for one membership account or multiple membership accounts, he claims he believed that Probiller would no longer charge him for any membership accounts to Brazzers based on the language in the Cancellation policy and his receipt of confirmation that his “web site membership . . . has been cancelled.” See [id. at ¶ 32].
Moreover, as mentioned above, Mr. Vandiver does not allege in the Complaint that the trial or premium memberships provided him access to any website other than Brazzers. See [Doc. 1]. Put differently, both the trial and premium membership accounts provided Plaintiff access to the same website-Brazzers. See [Doc. 29 at 5 (“Here, Plaintiff only ‘purchased' a username and password to one website-Brazzers . . .”)]; see also [Doc. 30-1 at ¶ 1 (“‘Member' or ‘Membership,' shall mean the subscriber or user of a valid username and password for the site during the term of membership.”)]. Therefore, at this stage in the litigation, the court does not find it unreasonable for Plaintiff to believe that any and all memberships to Brazzers would have ceased upon his receipt of the confirmation email stating that his “web site membership to www.brazzers.com has been cancelled.” [Doc. 1 at ¶ 32].
The court thus finds that the Cancellation policy is ambiguous as it “is reasonably and fairly susceptible of more than one meaning.” Arenberg, 18 F.Supp.2d at 1179. Moreover, Defendant's Reply fails to sufficiently address these ambiguities with respect to the language in the CTC regarding membership account cancellation. See [Doc. 34 at 2]. Accordingly, the court RECOMMENDS that Defendant's Motion be DENIED insofar as it seeks dismissal of Plaintiff's breach of contract claim based on a theory that the CTC did not permit Probiller to continue charging Plaintiff after he ended his membership.
C. Whether Plaintiff Has Sufficiently Stated a Breach of Contract Claim Based on a Theory that Defendant Violated the Duty of Good Faith and Fair Dealing
Every contract in Colorado contains an implied duty of good faith and fair dealing. See Cary v. United of Omaha Life Ins. Co., 68 P.3d 462, 466 (Colo. 2003), as modified on denial of reh'g (May 19, 2003) (citations omitted). In Colorado, this duty exists “to effectuate the intentions of the parties or to honor their reasonable expectations[,]” and may be invoked “when the manner of performance under a specific contract term allows for discretion on the part of either party[,]” i.e., one party has the power to set or control the terms of performance after formation. See City of Golden v. Parker, 138 P.3d 285, 292 (Colo. 2006) (internal citations and quotation marks omitted).
Here, Defendant challenges Plaintiff's good faith and fear dealing theory primarily on the basis that Plaintiff fails to identify a contract term that gives either party discretion. See [Doc. 15 at 9; Doc. 34 at 3-4]. Based on the record before it, this court concludes that Plaintiff fails to identify any specific contract term that allows for discretion on the part of Defendant. See [Doc. 1 at ¶¶ 62-66]. Instead, he alleges in conclusory fashion that “Defendant has breached the covenant of good faith and fair dealing and abused its discretion in its contract as described herein.” [Id. at ¶ 65]. Plaintiff's Response to the Motion fares no better. See [Doc. 29 at 12-13 (“If the Court finds Probiller's contractual terms are replete with gaps, or that it abused discretion, the law requires the parties to act in good faith to fill the gaps.... Probiller has abused its contractual discretion by interpreting its contract to allow it to charge consumers for two memberships, when they only signed up for one. Probiller further abuses its contractual discretion by requiring that consumers cancel both memberships separately.”)].
Accordingly, the court RECOMMENDS that Defendant's Motion be GRANTED insofar as it seeks dismissal of Plaintiff's breach of contract claim based on a theory that Defendant violated the duty of good faith and fair dealing. See McKinnis v. Fitness Together Fran. Corp., No. 10-cv-02308-RPM, 2010 WL 5056666, at *4 (D. Colo. Dec. 6, 2010) (“The plaintiffs have not identified any specific contract term that allows for discretion on the part of the defendant. Dismissal is appropriate for that reason.”); Builder MT LLC v. Zybertech Constr. Software Servs., Ltd., No. 08-cv-00435-LTB, 2008 WL 4724146, at *3 (D. Colo. 2008) (claim for breach of implied covenant of good faith and fair dealing dismissed because the plaintiff failed to allege a specific contract term allowing for discretion on the part of either party).
III. Unjust Enrichment
To recover for unjust enrichment, Mr. Vandiver must show that “(1) a benefit was conferred on the defendant by the plaintiff; (2) the benefit was appreciated by the defendant; and (3) the benefit was accepted by the defendant under such circumstances that it would be inequitable for it to be retained without payment of its value.” Humphrey v. O'Connor, 940 P.2d 1015, 1021 (Colo.App. 1996); accord Does v. Rodriguez, No. 06-cv-00805-LTB, 2007 WL 684117, at *5 (D. Colo. Mar. 2, 2007).
In the Complaint, Plaintiff alleges he “conferred a benefit on Defendant”; and “Defendant unfairly, deceptively, unjustly, and/or unlawfully accepted said benefits, which under the circumstances, would be unjust to allow Defendant to retain.” [Doc. 1 at ¶¶ 80-81]. Defendant argues that Plaintiff's unjust enrichment claim should be dismissed because the conduct in question is allegedly covered by an express contract. See [Doc. 15 at 9-10].
While it is true that a party may not recover on both an unjust enrichment claim and an express contract claim covering the same subject matter, “Colorado law permits a party to advance multiple theories of recovery, even if the party will not be permitted to recover under each of those theories.” See Hemmann Mgt. Services v. Mediacell, Inc., 176 P.3d 856, 860 (Colo.App. 2007) (citing City & Cty. of Denver v. Dist. Ct., 939 P.2d 1353, 1359 n.5 (Colo. 1997)); Interbank Invs., LLC v. Eagle River Water & Sanitation, 77 P.3d 814, 816 (Colo. Ct. App. 2003). Accordingly, Mr. Vandiver's “allegation of an express contract does not preclude his unjust enrichment claim.” Builder MT LLC v. Zybertech Const. Software Services, LTD, No. 08-cv-00435-LTB, 2008 WL 4724146, at *4 (D. Colo. Oct. 24, 2008).
Accordingly, the court RECOMMENDS that Defendant's Motion be DENIED insofar as it seeks dismissal of Plaintiff's unjust enrichment claim.
IV. Violation of the Colorado Consumer Protection Act
The CCPA was enacted to regulate commercial activities and practices which, “because of their nature, may prove injurious, offensive, or dangerous to the public.” Rhino Linings USA, Inc. v. Rocky Mountain Rhino Lining, Inc., 62 P.3d 142, 14 (Colo. 2003) (quoting People ex rel. Dunbar v. Gym of America, Inc., 177 Colo. 97, 493 P.2d 660, 667 (1972)). Thus, the CCPA “deters and punishes businesses which commit deceptive practices in their dealings with the public by providing prompt, economical, and readily available remedies against consumer fraud.” Id. (citations omitted). To prevail on a private right of action brought pursuant to the CCPA, a plaintiff must establish five elements: “(1) that the defendant engaged in an unfair or deceptive trade practice; (2) that the challenged practice occurred in the course of [the] defendant's business, vocation, or occupation; (3) that it significantly impacts the public as actual or potential consumers of the defendant's goods, services, or property; (4) that the plaintiff suffered injury in fact to a legally protected interest; and (5) that the challenged practice caused the plaintiff's injury.” Garcia v. Medved Chevrolet, Inc., 263 P.3d 92, 98 (Colo. 2011) (quoting Hall v. Walter, 969 P.2d 224, 235 (Colo. 1998)).
To establish a “deceptive trade practice,” a plaintiff must show that a defendant “knowingly [made] a false representation.” Rhino, 62 P.3d at 147 (Colo. 2003) (quoting Colo. Rev. Stat. § 6-1-105(1)(e)). A false representation, in turn, “must either induce a party to act, refrain from acting, or have the capacity or tendency to attract consumers.” Id. Misrepresentations are actionable when made “either with knowledge of [their] untruth, or recklessly and willfully made without regard to [the] consequences, and with an intent to mislead and deceive the plaintiff.” Id. (citation omitted). Importantly, a promise “cannot constitute a misrepresentation unless the promisor did not intend to honor it at the time it was made.” Id. at 148 (citing Brody v. Brock, 897 P.2d 769, 776 (Colo. 1995); Ballow v. PHICO Ins. Co., 875 P.2d 1354,1362 (Colo. 1993)). Alternatively, a plaintiff may show that a false representation “had the capacity or tendency to deceive, even if it did not.” Id. Thus, as opposed to a breach of contract claim, “which arises when one contracting party breaks a promise, a CCPA claim arises when a party knowingly makes a misrepresentation or makes a false representation that has the capacity to deceive.” Id.
For his CCPA claim, Mr. Vandiver alleges that “Probiller engaged in unfair and deceptive practices by automatically enrolling Plaintiff and class members in ancillary memberships and additional products they did not want or use”; and such “conduct amounted to a bait & switch.” [Doc. 1 at ¶ 70]; see also [id. at ¶ 30 (“Defendant's bait-and-switch lured Plaintiff and other consumers into purchasing the ‘2 Days Membership' based on the false promise that timely cancellation would avoid all monthly subscription fees. Then, armed with consumers' credit card information, Defendant quietly and automatically enrolled Plaintiff and other consumers into ancillary memberships they did not want, need, or use.”)]. Mr. Vandiver also alleges that Probiller “engaged in unfair and deceptive practices by continuing to bill consumers after they cancelled their memberships.” [Id. at ¶ 71]. Plaintiff claims that, “[h]ad [he] known the truth, he would not have signed up for a Brazzers membership.” [Id. at ¶ 75].
Defendant challenges Plaintiff's CCPA claim on two grounds. First, Defendant argues that Plaintiff fails to allege an unlawful trade practice. [Doc. 15 at 10-13]. Second, Defendant argues that Plaintiff cannot maintain a CCPA claim as a class action. [Id. at 14-15]. The court will address each challenge in turn.
A. Whether Plaintiff Sufficiently Alleges an Unlawful Trade Practice
For its first challenge to Plaintiff's CCPA claim, Defendant argues that the Complaint “fails to establish that Probiller engaged in any unfair or deceptive act because: (1) Probiller disclosed the terms of, and plaintiff affirmatively accepted, the two memberships; (2) Probiller did not charge plaintiff for the memberships after he cancelled them; and (3) Probiller acted consistently with the contract attached to plaintiff's complaint.” [Doc. 15 at 12]. Plaintiff argues that the determination of whether a certain act is deceptive or misleading for the purposes of his CCPA claim is a question of fact for the fact-finder, and inappropriate for resolution at this stage of the proceedings. See [Doc. 29 at 13-14]. The court respectfully agrees with Plaintiff. See Francis v. Mead Johnson & Co., No. 1:10-cv-00701-JLK, 2010 WL 5313540, at *4 (D. Colo. Dec. 17, 2010) (“Plaintiff argues that the determination of whether a certain act is deceptive or misleading for the purposes of her CCPA claims is a question of fact for the fact-finder, and inappropriate for resolution at this stage of the proceedings. Despite the lack of any Colorado cases addressing this issue and notwithstanding Defendant's argument to the contrary, I find Plaintiff's argument persuasive. Plaintiff has adequately pled statements which a reasonable finder of fact could find misleading or deceptive.”).
Moreover, the court is not persuaded by Defendant's arguments. For its first argument, Defendant relies upon the checkout page that it attaches to the Motion. See [Doc. 15 at 12 (arguing that “the checkout page clearly and conspicuously disclosed both memberships in two places immediately prior to plaintiff's clicking ‘Start Membership' as he alleges in the complaint”)]; see also [Doc. 34 at 5]. As explained above, however, Plaintiff has sufficiently disputed the authenticity of the checkout page and, therefore, the court does not consider that document (or the Kilicci Declaration) in deciding the instant Motion to Dismiss.
In its Reply, Probiller argues that “[P]laintiff's argument about the ‘authenticity' of the checkout page is a mere distraction” and, for support, cites to this court's opinion in MacKinney v. Allstate Fire & Cas. Ins. Co., No. 16-cv-01447-NYW, 2016 WL 7034977 (D. Colo. Dec. 1, 2016). [Doc. 34 at 7]. However, in MacKinney, this court expressly noted that the “[p]laintiff d[id] not dispute the authenticity of the [agreement] as offered by [the] [d]efendant.” MacKinney, 2016 WL 7034977, at *5 (emphasis added).
For its second argument, Defendant contends that “it can be inferred that” Plaintiff cancelled the second membership, based on Plaintiff's allegations that he “continued to incur charges for the second membership until those charges totaled $500”, and Plaintiff “does not allege that Probiller continued to bill him” after he cancelled the second membership. [Doc. 15 at 12-13]; see also [Doc. 34 at 8]. Therefore, Defendant's argument continues, Plaintiff “cannot claim that Probiller committed an unfair or deceptive act on the ground that Probiller continued to charge plaintiff after he cancelled his memberships.” [Doc. 15 at 13].
Relevant here, the CCPA defines bait and switch advertising as “advertising accompanied by an effort to sell . . . services . . . other than those advertised or on terms other than those advertised and which is also accompanied by . . . [r]efusal . . . to offer the services advertised.” Colo. Rev. Stat. § 6-1-105(1)(n)(I). In the Complaint, Plaintiff alleges that
[b]y using a large “Start Membership” button-which after all, refers to a single membership, not multiple memberships-along with other design tricks, Defendant ensured users did not and could not determine the truth: that Probiller was signing up users for two separate memberships and two
separate trials that required two separate cancellations to avoid expensive monthly subscription fees.[Doc. 1 at ¶ 27]; see also [id. at ¶¶ 30, 70]. Plaintiff also alleges that Probiller's “bait-and-switch lured Plaintiff and other consumers into purchasing the ‘2 Days Membership' based on the false promise that timely cancellation would avoid all monthly subscription fees. Then, armed with consumers' credit card information, Defendant quietly and automatically enrolled Plaintiff and other consumers into ancillary memberships they did not want, need, or use.” [Id. at ¶ 30 (emphasis added)]. Further, Plaintiff asserts that, “[a]fter receiving confirmation from Probiller that his ‘membership' had been cancelled, [he] reasonably understood that he would incur no further charges for the ‘trial' he began less than 48 hours before.” [Doc. 1 at ¶ 33]. In other words, regardless of whether Plaintiff agreed to sign up for one or two membership accounts, Plaintiff alleges he believed that Probiller would no longer charge him for any memberships to Brazzers based on his receipt of confirmation that his “membership” was cancelled, and yet he continued to incur charges thereafter. Accordingly, Defendant's argument that Plaintiff cannot state a CCPA claim because he “does not allege that Probiller continued to bill him” after he cancelled the second membership, [Doc. 15 at 13], is unavailing and does not warrant dismissal of Plaintiff's CCPA claim at this stage in the litigation.
Finally, the court also is not persuaded by Defendant's third argument-that “Probiller acted consistently with the contract attached to plaintiff's complaint.” [Doc. 15 at 12]. Defendant contends that the CTC “authorized Probiller to bill [P]laintiff for both memberships until he cancelled, and [P]laintiff does not allege he incurred any charges after he cancelled both memberships.” [Id. at 13]. However, as explained above, the contract is ambiguous regarding (1) when a subscriber's multiple memberships to Brazzers are deemed cancelled; and (2) by extension, when Probiller stops charging customers for their multiple memberships.
In sum, the court finds that Plaintiff plausibly alleges a CCPA claim on his own behalf that may not be dismissed under Rule 12(b)(6). See Francis, 2010 WL 5313540, at *4. Accordingly, the court RECOMMENDS that Defendant's Motion be DENIED insofar as it seeks dismissal of Plaintiff's CCPA claim for failure to state a claim as to Plaintiff individually.
In its Reply, Probiller also asserts that Plaintiff's CCPA claim “fails for the additional reason that” Mr. Vandiver “acknowledges, but does not allege, that the CCPA requires that the conduct ‘significantly impacts the public as actual or potential consumers of the defendant's goods, services, or property.'” [Doc. 34 at 8 n.1]. However, Probiller makes this argument for the first time in its Reply brief, compare [id.] with [Doc. 15], and, therefore, the court does not consider it here. See United States v. Leffler, 942 F.3d 1192, 1197-98 (10th Cir. 2019) (observing that arguments raised for first time in reply brief are waived; “to allow an appellant to raise an argument for the first time in a reply brief would be manifestly unfair” and protects the court “from issuing an improvident or ill-advised opinion [that] did not have the benefit of the adversarial process”) (citations and internal quotations marks omitted); Home Design Services, Inc., v. B & B Custom Homes, 509 F.Supp.2d 968, 971 (D. Colo. 2007) (“[R]eply briefs reply to arguments made in the response brief - they do not provide the moving party with a new opportunity to present yet another issue for the court's consideration.” (citation and internal quotation marks omitted)).
B. Whether Plaintiff May Maintain a CCPA Claim as a Class Action
For its second challenge to Plaintiff's CCPA claim, Probiller argues in the alternative that the court should dismiss or strike Plaintiff's class claims because Plaintiff cannot maintain a CCPA claim as a class action as a matter of law. See [Doc. 15 at 14 15]. Defendant contends that “the CCPA expressly excludes from its protections class action claims.” [Id. at 14 (citing Colo. Rev. Stat. § 6-1-113(2)]. I respectfully agree with Defendant.
The CCPA excludes the recovery of actual damages, treble damages for bad faith conduct, and reasonable attorney fees in class actions. See Colo. Rev. Stat. § 6-1-113(2) (“Except in a class action . . . any person who, in a private civil action, is found to have engaged in or caused another to engage in any deceptive trade practice . . . is liable in an amount equal to the sum of: ....” (emphasis added)). Consistent with this directive, several courts have held that the CCPA “creates no statutory liability for a defendant in a private class action.” Pearson v. Geico Cas. Co., No. 17-cv-02116-CMA-MEH, 2018 WL 2096348, at *9 (D. Colo. May 7, 2018) (internal quotation marks omitted) (citing Martinez v. Nash Finch Co., 886 F.Supp.2d 1212, 1218-19 (D. Colo. 2012) (concluding that § 61-113(2) “defines a defendant's liability under the CCPA in a private action. It limits such liability to specified remedies, and expressly states that such remedies are not applicable in class actions” and “[b]y logical extension, the CCPA creates no statutory liability for a defendant in a private class action.”)); Friedman v. Dollar Thrifty Auto. Grp., Inc., No. 12-cv-02432-WYD, 2015 WL 4036319, at **2-3 (D. Colo. July 1, 2015) (concluding “a class action for damages under the CCPA is barred,” but also acknowledging courts concluding otherwise); In re Syngenta AG MIR 162 Corn Litig., 131 F.Supp.3d 1177, 1234-35 (D. Kan. 2015) (observing that “the plain language of the present statute precludes a class action claim for actual damages”); In re Santa Fe Natural Tobacco Co. Marketing & Sales Practices & Prods. Liability Litig., 288 F.Supp.3d 1087, 1260 (D.N.M. 2017) (“The CCPA's statutory language, however, expressly prohibits class action recovery for damages.”)); see also Davidson v. Apple, Inc., No. 16-cv-04942-LHK, 2018 WL 2325426, at *11 (N.D. Cal. May 8, 2018) (denying class certification on the plaintiffs' CCPA claim because the CCPA barred class claims for damages).
Notwithstanding the above, Mr. Vandiver argues that he may proceed with a class action under the CCPA on the basis that Rule 23 of the Federal Rules of Civil Procedure controls. [Doc. 29 at 13]. However, this court has previously found that “the CCPA's exclusion of class actions controls, not Rule 23” because “allowing private class actions under the CCPA, where no such actions are contemplated either by private individuals, the Attorney General, or district attorneys, would logically ‘enlarge or modify' the substantive rights or remedies conferred under the CCPA.” Murtagh v. Bed Bath & Beyond Inc., No. 19-cv-03487-CMA-NYW, 2020 WL 4195126, at *7 (D. Colo. July 3, 2020), report and recommendation adopted, 2020 WL 4193553 (D. Colo. July 21, 2020). In reaching this conclusion, the court relied upon Justice Stevens's concurrence in Shady Grove Orthopedic Associates, P.A. v. Allstate Insurance Company, 559 U.S. 393 (2010). See id. at *6 (“Justice Stevens agreed that Rule 23 controlled but did so after concluding the New York law was procedural in nature, and therefore applying Rule 23 did not ‘abridge, enlarge or modify New York's substantive rights or remedies.'” (emphasis in original) (quoting Shady Grove, 559 U.S. at 416-36 (Stevens, J., concurring in part and concurring in judgment))).
Here, Mr. Vandiver asks this court to go against Tenth Circuit precedent and persuasive authority from this District to conclude that Rule 23 trumps the CCPA's class action bar. See [Doc. 29 at 13]. However, Mr. Vandiver provides no convincing reason for this court to ignore the Tenth Circuit's command that “[w]hen faced with a choice between a state law and an allegedly conflicting federal rule, we follow the framework described by the Supreme Court in Shady Grove, as laid out by Justice Stevens in his concurring opinion.” Racher v. Westlake Nursing Home LP, 871 F.3d 1152, 1162 (10th Cir. 2017).
The court also finds Mr. Vandiver's reliance upon Stender v. Archstone-Smith Operating Tr., 958 F.3d 938, 940 (10th Cir. 2020) misplaced. See [Doc. 29 at 14]. Plaintiff contends that “[i]n Stender, the Tenth Circuit acknowledged its previous holding that Justice Stevens's approach is controlling, while simultaneously implying that it may have been incorrect.” [Id. at 15]. The court respectfully disagrees. In Stender, the Tenth Circuit held that Federal Rule of Civil Procedure 54's prevailing party costs provision displaced Colorado's rule on prevailing party costs because those provisions “answer the same question.” Stender, 958 F.3d at 945 (citing Shady Grove, 559 U.S. at 399). And although the Tenth Circuit acknowledged the differing views between Shady Grove's plurality and concurring opinions, the court expressly determined that it “need not confront this disagreement” because “[s]imply put, a challenge in this case under the Rules Enabling Act fails under any available Supreme Court doctrine.” Id. at 947.
In sum, I conclude that Mr. Vandiver cannot maintain a class action under his CCPA claim (Count II). Accordingly, I respectfully RECOMMEND that Defendant's Motion be GRANTED insofar as it seeks dismissal of Plaintiff's class claims under the CCPA.
In the alternative, Plaintiff asks the court to certify this issue for interlocutory review. See [Doc. 29 at 14-15]. Under 28 U.S.C. § 1292(b), a district court may certify an interlocutory order for appeal if (1) “[the] order involves a controlling question of law”; (2) “there is substantial ground for difference of opinion” on that issue; and (3) certification “may materially advance the ultimate termination of the litigation.” 28 U.S.C. § 1292(b). “A district court has discretion in determining whether to certify an order for interlocutory appeal.” Ebonie S. ex rel. Mary S. v. Pueblo Sch. Dist. 60, No. 09-cv-00858-WJM-MEH, 2011 WL 1882829, at *2 (D. Colo. May 17, 2011). “Only ‘exceptional' circumstances warrant interlocutory appeals under § 1292(b).” Id. (quoting Caterpillar Inc. v. Lewis, 519 U.S. 61, 74 (1996)); see also Carson v. Am. Brands, Inc., 450 U.S. 79, 84 (1981) (“Unless a litigant can show . . . that the order can be ‘effectually challenged' only by immediate appeal, the general congressional policy against piecemeal review will preclude interlocutory appeal.”). Here, Mr. Vandiver argues that “because the result may differ under Justice Scalia and Justice Stevens's approach, the disagreement requires confrontation, supporting interlocutory review.” [Doc. 29 at 15]. However, as explained above, Plaintiff's argument is based on a misunderstanding of the Tenth Circuit's holding in Stender. In any case, Plaintiff once again provides no convincing reason for this court to ignore the Tenth Circuit's command that “[w]hen faced with a choice between a state law and an allegedly conflicting federal rule, we follow the framework described by the Supreme Court in Shady Grove, as laid out by Justice Stevens in his concurring opinion.” Racher, 871 F.3d at 1162. Accordingly, this court declines to recommend this issue be certified for review.
CONCLUSION
For the reasons stated herein, IT IS RECOMMENDED that:
(1) Defendant's Motion to Dismiss [Doc. 15] be GRANTED IN PART AND DENIED IN PART as follows: (a) Plaintiff's breach of contract claim (Count I) be DISMISSED insofar as it is based on a theory that the Terms and Conditions did not permit Probiller to charge Plaintiff for more than one membership to Brazzers; 37 (b) Plaintiff's breach of contract claim (Count I) be DISMISSED insofar as it relies on an alleged breach of the duty of good faith and fair dealing; and (c) Plaintiff's Colorado Consumer Protection Act claim (Count II) be DISMISSED insofar as Plaintiff seeks to maintain that claim on a class-wide basis.