Summary
finding liquidated damages provision to be penalty because they may be awarded "in addition to actual damages"
Summary of this case from Hypertouch, Inc. v. Valueclick, Inc.Opinion
No. 09-15943.
Argued and Submitted April 13, 2010.
Filed July 9, 2010.
Lawrence P. Riff, Esquire, Lynn R. Levitan, Steptoe Johnson LLP, Los Angeles, CA, Thomas M. Barba, John J. Duffy, Jennie Kneedler, Alice Elizabeth Loughran, Anthony A. Onorato, Richard Willard, Steptoe Johnson LLP, Washington, DC, for Plaintiff-Appellant.
Henry M. Burgoyne, III, Esquire, Margarita Calpotura, Karl S. Kronenberger, Esquire, Jeffrey M. Rosenfeld, Esquire, Kronenberger Burgoyne, LLP, San Francisco, CA, Sheila Pierce, James G. Snell, Bingham McCutchen LLP, East Palo Alto, CA, Bennet G. Kelley, Santa Monica, CA, for Defendants-Appellees.
Appeal from the United States District Court for the Northern District of California, Maxine M. Chesney, Senior District Judge, Presiding. D.C. No. 3:08-cv-04970-MMC.
MEMORANDUM
This disposition is not appropriate for publication and is not precedent except as provided by 9th Cir. R. 36-3.
Plaintiff-appellant Hypertouch, Inc. ("Hypertouch") is an internet service provider that filed this action pursuant to California Business and Professions Code § 17529.5(a) against defendants-appellants Azoogle.com, Inc. and Subscriberbase, Inc., commercial e-mail advertisers, and defendant-appellant Quicken Loans, Inc. (collectively "Azoogle"), a company that hired Azoogle.com to transmit its commercial e-mail advertisements.
The complaint alleges that Azoogle has directed over 380, 000 misleading email advertisements that have resulted in financial injury to Hypertouch. Hypertouch seeks statutory and actual damages for each of the close to half a million alleged advertisements, but its complaint refers in general terms only to eleven examples.
The district court ruled that Hypertouch had failed to comply with the heightened pleading provisions of Federal Rule of Civil Procedure 9(b) relating to complaints alleging fraud. Hypertouch declined to make any amendment, elected to take a dismissal, and filed this appeal.
We agree with the district court that the causes of action as pled sound in fraud. See Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-04 (9th Cir. 2003). Not only does the California statute speak in terms of commercial e-mail advertisements that contain "falsified," "misrepresented," "forged," or misleading information, see Cal. Bus. Prof. Code § 17529.5(a)(2)-(3), terms common to fraud allegations, but Hypertouch's own complaint repeatedly describes the advertisements and their content as "fraudulent." It cannot circumvent the requirements of the Federal Rules of Civil Procedure by arguing that it did not plead all of the allegations sufficiently to set forth a claim of fraud. See Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); Vess, 317 F.3d at 1103-04, 1106-07. We express no opinion as to the degree of particularity required for a statutory claim of this nature, but the allegations of this complaint were pled with no degree of particularity.
We also agree with the district court that Hypertouch's claims for liquidated damages under California Business and Professions Code § 17529.5(b)(1)(B)(ii) were subject to California Code of Civil Procedure § 340(a)'s one-year statute of limitations. An award of liquidated damages under § 17529.5(b)(1)(B)(ii) has no relation to the amount of damages actually suffered by the plaintiff or to the defendant's culpability in causing those damages, and liquidated damages may be awarded in addition to actual damages. Such an award is therefore a "penalty" within the meaning of § 340(a). See Murphy v. Kenneth Cole Prods., Inc., 40 Cal.4th 1094, 56 Cal.Rptr.3d 880, 155 P.3d 284, 290 (2007).
The judgment of the district court is AFFIRMED. Azoogle's request for judicial notice is denied.