Alexandre Forouzesh v. Starbucks Corporation et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.July 13, 2016

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations ROBERT J. GUITE, Cal. Bar No. 244590 Four Embarcadero Center, 17 th Floor San Francisco, California 94111-4109 Telephone: 415.434.9100 Facsimile: 415.434.3947 Email: rguite@sheppardmullin.com SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations FRED R. PUGLISI, Cal. Bar No. 121822 SASCHA HENRY, Cal. Bar No. 191914 ROBIN A. ACHEN, Cal. Bar No. 287033 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 Telephone: 213.620.1780 Facsimile: 213.620.1398 Email: fpuglisi@sheppardmullin.com Email: shenry@sheppardmullin.com Email: rachen@sheppardmullin.com Attorneys for Starbucks Corporation UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION ALEXANDER FOROUZESH, individually and on behalf of all others similarly situated., Plaintiff, v. STARBUCKS CORPORATION; and DOES 1 through 10, inclusive, Defendants. Case No. 2:16-cv-03830-PA-AGR Hon. Percy Anderson CLASS ACTION NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT [Fed. R. Civ. P. 12(b)(1) and 12(b)(6)] [Memorandum of Points and Authorities and Proposed Order filed concurrently herewith] Date: August 15, 2016 Time: 1:30 p.m. Courtroom: 15 [Complaint Filed: May 25, 2016] [Complaint Removed: June 1, 2016] Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 1 of 7 Page ID #:164 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND THEIR COUNSEL OF RECORD: PLEASE TAKE NOTICE THAT on August 15, 2016 at 1:30 p.m., or as soon thereafter as counsel may be heard in Courtroom 15, in the United States District Court for the Central District of California, 312 North Spring Street Los Angeles, California, 90012, the Honorable Percy Anderson presiding, defendant Starbucks Corporation (“Starbucks”) will and hereby does move the Court for an order dismissing the Complaint filed by Plaintiff Alexander Forouzesh (“Plaintiff”). Starbucks brings this Motion pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6) because Plaintiff lacks standing to bring any claims for injunctive relief against Starbucks, and because Plaintiff has failed to state claims upon which relief can be granted, respectively. Claim for Injunctive Relief: Standing. Plaintiff lacks standing to assert claims for injunctive relief. In order to have standing for injunctive relief, Plaintiff must establish a “real or immediate threat” of repeated injury. Hodgers-Durgin v. de la Vina, 199 F.3d 1037, 1042 (9th Cir. 1999). The prospect of future injury to unnamed class members is not sufficient. Castagnola v. Hewlett-Packard Co., Case No. 11-cv-05772, 2012 WL 2159385, *5 (N.D. Cal. June 13, 2012). Plaintiff has not alleged facts showing he is likely to be wronged in a similar way in the future. Accordingly, he lacks standing to assert a claim for injunctive relief. Count I: Breach of Express Warranty. The Complaint fails to plausibly plead a claim for breach of express warranty. To state a breach of warranty claim, Plaintiff must demonstrate that the express warranty was breached, and that the alleged breach of warranty injured them. Viggiano v. Hansen Natural Corp., 944 F. Supp. 2d 877, 896-97 (C.D. Cal. 2013). Plaintiff fails to allege facts demonstrating that any alleged warranty was breached. Additionally, Plaintiff failed to allege that he provided the requisite pre-suit notice of the alleged breach to Starbucks. Alvarez Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 2 of 7 Page ID #:165 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS v. Chevron Corp., 656 F.3d 925, 932 (9th Cir. 2011). Since Plaintiff failed to provide that notice, his breach of express warranty claim fails as a matter of law. Count II: Breach of the Implied Warranty of Merchantability. The Complaint fails to plausibly plead a claim for breach of the implied warranty of merchantability. In order to plead a breach of the implied warranty of merchantability, a plaintiff must show that the product does not possess even the “most basic degree of fitness for ordinary use.” Mocek v. Alfa Leisure, Inc., 114 Cal. App. 4th 402, 406 (2003); see also Viggiano, 944 F. Supp. 2d at 896-97 (claim dismissed where plaintiff alleged only that certain representations regarding soda products were misleading, not that the sodas were not drinkable, contaminated, or otherwise unfit for use as a soft drink). As Plaintiff has not alleged that the products he purchased -- iced beverages -- were unfit for consumption, his claim for breach of the implied warranty of merchantability fails. Count III: Negligent Misrepresentation. The Complaint fails to state a claim for negligent misrepresentation because Plaintiff’s claim is barred by the economic loss doctrine. The economic loss doctrine restricts the remedy of plaintiffs who have suffered economic loss, but not personal or property injury, to an action in contract. Shahinian v. Kimberly-Clark Corp., 2015 WL 4264638, *8 (C.D. Cal. July 10, 2015) (“Generally, under the ‘economic loss’ rule, a plaintiff who suffers only pecuniary injury as a result of the conduct of another cannot recover those losses in tort. Instead, the claimant is limited to recovery under the law of contract.”). The economic loss doctrine applies to claims for negligent misrepresentation under California law. Id. Plaintiff has not alleged personal injury or property damage. As a result his claim for negligent misrepresentation must be dismissed. Count IV: Unjust Enrichment. Plaintiff’s claim for unjust enrichment fails as a matter of law. There is no independent cause of action for unjust enrichment under California law. See Levine v. Blue Shield of California, 189 Cal. App. 4th Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 3 of 7 Page ID #:166 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS 1117 (2010); Smith v. Allmax Nutrition, Inc., 2015 WL 9434768, *9 (E.D. Cal. Dec. 23, 2015). Count V: Fraud. The Complaint fails to state a claim for fraud. “[A] party [must] state with particularity the circumstances constituting fraud or mistake.” Fed. R. Civ. P. 9(b). In order to state a claim for fraud, a plaintiff must allege, in detail, the “who, what, when, where, and how” of the alleged fraudulent conduct. Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009). Plaintiff has failed to allege “when during the class period, where, how many, or how many times [he] purchased [the products] or was exposed to the alleged misrepresentations.” Edmunson v. Procter & Gamble Co., 2011 WL 1897625, at *4 (S.D. Cal. May 17, 2011); see also Frenzel v. Aliphcom, 76 F. Supp. 3d 999, 1014-15 (N.D. Cal. 2014); Gomez v. Carmax Auto Superstores Cal., LLC, 2015 WL 350219, *7 (C.D. Cal. Jan. 22, 2015). Count VI: Violation of California’s Consumers Legal Remedies Act (“CLRA”). The Complaint fails to state a claim under the CLRA because the CLRA utilizes a “reasonable consumer standard.” Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 1360 (2003). To state a claim, Plaintiff must plausibly plead “it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled” by the statement in question. Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 506-07 (2003). Here, Plaintiff’s CLRA claim fails to plausibly plead that a reasonable consumer would be misled by the statements in question. Additionally, Plaintiff’s CLRA claim is not pled with specificity and, therefore, fails under Rule 9(b) of the Federal Rules of Civil Procedure. Count VII: Violation of California’s Unfair Competition Law (“UCL”). The Complaint fails to state a claim under UCL because the UCL utilizes a “reasonable consumer standard.” Lavie, 105 Cal. App. 4th at 506-07. To state a claim, Plaintiff must plausibly plead “it is probable that a significant portion of the Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 4 of 7 Page ID #:167 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled” by the statement in question. Id., at 506-07. Here, Plaintiff’s UCL claim fails to plausibly plead that a reasonable consumer would be misled by the statements in question. Plaintiff also fails to plead a claim under the “unlawful” prong of the UCL because he has failed to allege a violation of a predicate, underlying law. Additionally, Plaintiff’s UCL claim is not pled with specificity and, therefore, fails under Rule 9(b) of the Federal Rules of Civil Procedure. Count VIII: Violation of California’s False Advertising Law (“FAL”). The Complaint fails to state a claim under the FAL because the FAL utilizes a “reasonable consumer standard.” Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 1360 (2003). To state a claim, Plaintiff must plausibly plead “it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled” by the statement in question. Lavie, 105 Cal. App. 4th at 506-07. Here, Plaintiff’s FAL claim fails to plausibly plead that a reasonable consumer would be misled by the statements in question. Additionally, Plaintiff’s FAL claim is not pled with specificity and, therefore, fails under Rule 9(b) of the Federal Rules of Civil Procedure. Prior to bringing this Motion, counsel for Starbucks met and conferred with Plaintiff’s counsel by telephone on June 6, 2016 in compliance with Local Rule 7-3. That discussion did not resolve the dispute. Therefore, Starbucks brings this motion to dismiss the Complaint. Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 5 of 7 Page ID #:168 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- SMRH:478455704.1 NOTICE OF MOTION AND MOTION TO DISMISS This Motion is based on this Notice, the accompanying Memorandum of Points and Authorities, all pleadings, papers and other documentary materials in the Court’s file for this action, those matters of which this Court may or must take judicial notice, and such other matters as this Court may consider. Dated: July 13, 2016 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By /s/ Robert J. Guite SASCHA HENRY ROBERT J. GUITE ROBIN A. ACHEN Attorneys for Defendant Starbucks Corporation Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 6 of 7 Page ID #:169 1 2 3 4 5 6 7 8 9 10 1 1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA. COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 333 South Flope Street, 43rd Floor, Los Angeles, CA 90071-1422. On July 13, 2016,1 served true copies of the following document(s) described as: NOTICE OF MOTION AND MOTION TO DISMISS COMPLAINT on the interested parties in this action as follows: Justin Farahi Telephone: 310-774-4500 Raymond M. Collins Fax: 310-295-0557 Farahi Law Firm 22760 Flawthorne Blvd., Ste. 230 Torrance. CA 90505 0 BY MAIL: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. postal service on that same day with postage thereon fully prepaid at Los Angeles, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on July 13, 2016, at Los Angeles, California. 0WT"42890 ANDRK HERNANDE. nit SMRH:478510722.1 PROOF OF SERVICE Case 2:16-cv-03830-PA-AGR Document 17 Filed 07/13/16 Page 7 of 7 Page ID #:170 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations ROBERT J. GUITE, Cal. Bar No. 244590 Four Embarcadero Center, 17 th Floor San Francisco, California 94111-4109 Telephone: 415.434.9100 Facsimile: 415.434.3947 Email: rguite@sheppardmullin.com SHEPPARD, MULLIN, RICHTER & HAMPTON LLP A Limited Liability Partnership Including Professional Corporations FRED R. PUGLISI, Cal. Bar No. 121822 SASCHA HENRY, Cal. Bar No. 191914 ROBIN A. ACHEN, Cal. Bar No. 287033 333 South Hope Street, 43rd Floor Los Angeles, California 90071-1422 Telephone: 213.620.1780 Facsimile: 213.620.1398 Email: fpuglisi@sheppardmullin.com Email: shenry@sheppardmullin.com Email: rachen@sheppardmullin.com Attorneys for Starbucks Corporation UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA, WESTERN DIVISION ALEXANDER FOROUZESH, individually and on behalf of all others similarly situated., Plaintiff, v. STARBUCKS CORPORATION; and DOES 1 through 10, inclusive, Defendants. Case No. 2:16-cv-03830-PA-AGR Hon. Percy Anderson CLASS ACTION MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT [Notice of Motion and Motion and Proposed Order filed concurrently herewith] Date: August 15, 2016 Time: 1:30 p.m. Courtroom: 15 [Complaint Filed: May 25, 2016] [Action Removed: June 1, 2016] Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 1 of 24 Page ID #:171 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -i- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS TABLE OF CONTENTS Page I. INTRODUCTION ............................................................................................. 1 II. FACTUAL BACKGROUND ........................................................................... 2 A. General Allegations Regarding Starbucks and Its Iced Drinks .............. 2 B. Plaintiff’s Alleged Visits to and Purchases from Starbucks ................... 3 C. Relevant Procedural Background ........................................................... 4 III. ARGUMENT .................................................................................................... 4 A. Plaintiff Fails to State a Claim for Violation of the CLRA, UCL, or FAL ....................................................................................................... 4 1. The Plausibility Standard Is Not Met Where a “Reasonable Consumer” Would Not Likely Be Deceived by the Challenged Advertising.................................................................................... 5 2. A Reasonable Consumer Would Not Be Deceived by the Challenged Statements.................................................................. 7 3. Plaintiff Also Fails to State a Claim Under the Unlawful Prong of the UCL. ................................................................................... 9 B. Plaintiff’s CLRA, UCL, FAL, and Fraud Claims Should Be Dismissed for Failure to Satisfy Rule 9(b) ............................................................. 10 C. Plaintiff’s Breach of Warranty Claims Fail .......................................... 12 1. Plaintiff’s Breach of Express Warranty Claim Fails as a Matter of Law. ........................................................................................ 12 2. Plaintiff’s Claim for Breach of Express Warranty Also Fails Because Plaintiff Has Failed to Allege the Breach of Any Alleged Express Warranty. ......................................................... 12 3. Plaintiff’s Claim for Breach of the Implied Warranty of Merchantability Fails Because Plaintiff Has Not Alleged the Beverages Are Unfit for Their Ordinary Purpose. ..................... 13 D. The Economic Loss Doctrine Bars Plaintiff’s Claim for Negligent Misrepresentation .................................................................................. 14 E. Plaintiff’s Claim for Unjust Enrichment Fails ...................................... 15 F. Plaintiff Lacks Standing to State a Claim for Injunctive Relief ........... 16 IV. CONCLUSION ............................................................................................... 17 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 2 of 24 Page ID #:172 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -ii- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS TABLE OF AUTHORITIES Page(s) Cases Alvarez v. Chevron Corp. 656 F.3d 925 (9th Cir. 2011) ................................................................................ 12 Ashcroft v. Iqbal 556 U.S. 662 (2009) ........................................................................................... 4, 5 Astiana v. Hain Celestial Grp., Inc. 783 F.3d 753 (9th Cir. 2015) ................................................................................ 15 Bell Atl. Corp. v. Twombly 550 U.S. 544 (2007) ............................................................................................... 4 Blanks v. Shaw 171 Cal. App. 4th 336 (2009) ................................................................................. 9 Brod v. Sioux Honey Ass’n Coop. 927 F. Supp. 2d 811 (N.D. Cal. 2013) ................................................................ 5, 7 Campion v. Old Rep. Home Protection Co., Inc. 861 F. Supp. 2d 1139 (S.D. Cal. 2012) ................................................................ 16 Carrea v. Dreyer’s Grand Ice Cream, Inc. 475 F. App’x 113 (9th Cir. 2012) ........................................................................... 5 Castagnola v. Hewlett-Packard Co. 2012 WL 2159385 (N.D. Cal. June 13, 2012) ..................................................... 16 Consumer Advocates v. Echostar Satellite Corp. 113 Cal. App. 4th 1351 (2003) ............................................................................... 5 Ebner v. Fresh, Inc. 818 F.3d 799 (9th Cir. 2016) .............................................................................. 5, 6 Edmunson v. Procter & Gamble Co. 2011 WL 1897625 (S.D. Cal. May 17, 2011) ................................................ 10, 11 Freeman v. Time, Inc. 68 F.3d 285 (9th Cir. 1995) .................................................................................... 5 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 3 of 24 Page ID #:173 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iii- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Frenzel v. Aliphcom 76 F. Supp. 3d 999, 1014-15 (N.D. Cal. 2014) .................................................... 11 Gallagher v. Chipotle Mexican Grill, Inc. 2016 U.S. Dist. LEXIS 14479 (N.D. Cal. Feb. 5, 2016) ........................................ 7 Gomez v. Carmax Auto Superstores Cal., LLC 2015 WL 350219 (C.D. Cal. Jan. 22, 2015) ......................................................... 11 Hauter v. Zogarts 14 Cal. 3d 104 (1975) ........................................................................................... 13 Hill v. Roll Internat. Corp. 195 Cal. App. 4th 1295 (2011) ............................................................................. 15 Hodgers-Durgin v. de la Vina 199 F.3d 1037 (9th Cir. 1999) .............................................................................. 16 Kearns v. Ford Motor Co. 567 F.3d 1120 (9th Cir. 2009) .............................................................................. 10 Lavie v. Procter & Gamble Co. 105 Cal. App. 4th 496 (2003) ................................................................................. 5 Lazar v. Hertz Corp. 69 Cal. App. 4th 1494 (1999) ................................................................................. 9 Levine v. Blue Shield of California 189 Cal. App. 4th 1117 (2010) ............................................................................. 15 Manchouck v. Mondeléz Int’l, Inc. 2013 WL 454083 (N.D. Cal. Sept. 26, 2013) ......................................................... 7 Mason v. Nature’s Innovation, Inc. 2013 WL 1969957 (S.D. Cal. May 13, 2013) ...................................................... 16 McBride v. Boughton 123 Cal. App. 4th 379 (2004) ............................................................................... 15 Melchior v. New Line Prods., Inc. 106 Cal. App. 4th 779 (2003) ............................................................................... 15 Minkler v. Apple, Inc. 65 F. Supp. 3d 810, 820 (N.D. Cal. 2014) ............................................................ 15 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 4 of 24 Page ID #:174 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -iv- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Mocek v. Alfa Leisure, Inc. 114 Cal. App. 4th 402 (2003) ............................................................................... 13 Munoz v. MacMillan 195 Cal. App. 4th 648 (2011) ............................................................................... 15 Nowrouzi v. Maker’s Mark Distillery, Inc. 2015 WL 4523551 (S.D. Cal. July 27, 2015) ......................................................... 6 Pelayo v. Nestle USA, Inc. 989 F. Supp. 2d 973 (C.D. Cal. 2013) .................................................................... 7 Saavedra v. Eli Lily & Co. 2013 U.S. Dist. LEXIS 173055 (C.D. Cal. Feb. 26, 2013) .................................. 16 Shahinian v. Kimberly-Clark Corp. 2015 WL 4264638 (C.D. Cal. July 10, 2015) ................................................ 14, 15 Smith v. Allmax Nutrition, Inc. 2015 WL 9434768 (E.D. Cal. Dec. 23, 2015) ...................................................... 15 Stearns v. Select Comfort Retail Corp. 2009 WL 1635931 (N.D. Cal. June 5, 2009) ......................................................... 6 Strumlauf v. Starbucks Corp. 2016 U.S. Dist. LEXIS 79456 (N.D. Cal. June 17, 2016) ........... 13, 14, 15, 16, 17 Stuart v. Cadbury Adams USA, LLC 458 F. App’x 689 (9th Cir. 2011) ........................................................................... 5 Swearingen v. Amazon Preservation Partners, Inc. 2014 U.S. Dist. LEXIS 111704 (N.D. Cal. 2014) ................................................ 14 Vess v. Ciba-Geigy Corp. USA 317 F.3d 1097 (9th Cir. 2003) .............................................................................. 10 Viggiano v. Hansen Natural Corp. 944 F. Supp. 2d 877 (C.D. Cal. 2013) ............................................................ 12, 14 Williamson v. Apple, Inc. 2012 WL 3835104 (N.D. Cal. Sept. 4, 2012) ......................................................... 6 Yumul v. Smart Balance, Inc. 733 F. Supp. 2d 1117 (C.D. Cal. 2010) ................................................................ 10 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 5 of 24 Page ID #:175 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -v- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Statutes 28 U.S.C. § 1407 .......................................................................................................... 4 Cal. Bus. & Prof. Code § 17200 et seq. ................................................................... 1, 5 Cal. Bus. & Prof. Code § 17204 .................................................................................. 5 Cal. Bus. & Prof. Code § 17500 et seq. ................................................................... 1, 5 Cal. Civ. Code § 1750 et seq. ...................................................................................... 1 Cal. Civ. Code § 1770(a) ............................................................................................. 5 Cal. Civil Code: § 1572 ............................................................................................... 9 Cal. Com. Code § 2607(3)(A) ................................................................................... 12 Other Authorities Rule 9(b) .................................................................................................... 2, 10, 11, 12 Rule 12(b)(6) ................................................................................................................ 4 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 6 of 24 Page ID #:176 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -1- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS I. INTRODUCTION Plaintiff Alexander Forouzesh alleges that Starbucks misrepresents its “iced coffee, iced tea, and iced blended specialty drinks” (the “Iced Beverages”) “as having more fluid ounces…than it actually delivers.” In support of this claim, Plaintiff does not allege that the cups in which Starbucks serves its Iced Beverages are not full when given to consumers. Nor does Plaintiff allege that Starbucks cups cannot hold the represented amount of Iced Beverage. Instead, Plaintiff argues that Starbucks misrepresents the quantity of Iced Beverages because they, as poured and served, contain ice. Plaintiff alleges the following eight claims for relief in his putative class action Complaint: (1) breach of express warranty; (2) breach of the implied warranty of merchantability; (3) negligent misrepresentation; (4) unjust enrichment; (5) fraud; (6) violation of California’s Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq. (the “CLRA”); (7) violation of California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200 et seq. (the “UCL”); and (8) violation of California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq. None of these causes of action states a claim upon which relief can be granted because the Iced Beverages meet the expectations of reasonable consumers. All of the beverages at issue are, by their very nature, iced. “Ice” is the first word in the names of many of these Iced Beverages. Ice is part of what customers are ordering when they purchase an Iced Beverage like iced tea, iced coffee, or a shaken iced tea. Indeed, ice is what Plaintiff apparently ordered. Plaintiff fails to plausibly allege that a representation regarding the fluid ounces in an Iced Beverage is misleading unless the representation reflects the number of fluid ounces provided without ice. No reasonable consumer would be misled by the alleged representation. Plaintiff’s claims also fail because he has not actually identified any misrepresentation. Plaintiff alleges that Starbucks represents its beverage sizes to correspond to certain fluid ounces. Plaintiff does not allege that Starbucks makes Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 7 of 24 Page ID #:177 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -2- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS any representations as to the ratio of ingredients in each Iced Beverage. Plaintiff’s allegation that there is too much of one ingredient in the Iced Beverages, as prepared, thus fails to allege a misrepresentation. The Complaint also suffers from additional pleading defects. Plaintiff’s claims sounding in fraud fail because they are not pled with the requisite specificity under Rule 9(b). Plaintiff’s breach of express warranty claim should be dismissed both because he did not provide Starbucks with the requisite notice and because he has failed to allege the breach of any purported warranty. Plaintiff’s breach of the implied warranty of merchantability fails because he has not alleged the Iced Beverages are unfit for their ordinary purpose. Plaintiff’s claim for negligent misrepresentation is barred by the economic loss doctrine. Lastly, Plaintiff’s unjust enrichment claim should be dismissed because unjust enrichment is not an independent claim under California law. Additionally, Plaintiff lacks standing to pursue any claims for injunctive relief because he has not alleged any intention to purchase Iced Beverages from Starbucks in the future. For these reasons, Plaintiff’s claims fail and the Complaint should be dismissed in its entirety. II. FACTUAL BACKGROUND A. General Allegations Regarding Starbucks and Its Iced Drinks Starbucks operates cafés throughout the United States that offer for sale a variety of beverages, including the Iced Beverages at issue in Plaintiff’s Complaint. (Compl., ¶ 1.) Plaintiff alleges that Starbucks menus identify that Tall Iced Beverages are 12 fluid ounces, that Grande Iced Beverages are 16 fluid ounces that Venti Iced Beverages are 24 fluid ounces and Trenta Iced Beverages are 30 fluid ounces. (Compl., ¶¶ 27-28.) The beverages sold at Starbucks cafés are handmade, and made-to-order. (Compl., ¶¶ 1, n.1, 26.) Plaintiff admits that Starbucks serves Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 8 of 24 Page ID #:178 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS its Iced Beverages in clear cups. (Compl., ¶¶ 30-31, 40.) Customers can see the Iced Beverages they are purchasing when they receive them. Plaintiff’s Complaint is unclear as to which Starbucks products are purportedly at issue in this case. At one point, Plaintiff alleges that the “cold or iced drinks” that are the subject of the lawsuit include “iced coffee, iced tea, and iced blended specialty drinks.” (Compl., ¶ 1.) At another, Plaintiff alleges that the “Cold Drinks involved in this lawsuit are those which are handcrafted by Starbucks employees…and served with ice - including, but not limited to, iced coffee, shaken iced tea, shaken iced tea lemonade, Refreshers™, and Fazio ™ [sic] handcrafted sodas.” (Compl., ¶ 26.) Plaintiff also vaguely refers to “ice blended specialty drinks.” Plaintiff is unclear as to whether his definition of “Cold Drinks” is meant to include Starbucks iced drinks containing milk, such as iced lattes. To the extent that Plaintiff actually identifies the beverages at issue, Plaintiff implicitly admits that ice is an integral part of each beverage. (See Compl., ¶ 1 (identifying “iced coffee, iced tea, and iced blended” drinks (emphasis added); ¶ 26 (identifying “iced coffee, shaken iced tea, shaken iced tea lemonade”).) B. Plaintiff’s Alleged Visits to and Purchases from Starbucks Plaintiff alleges that the Starbucks menu “advertises all of its drinks…by fluid ounce, and that its menu “was plainly visible to Plaintiff…during the Class Period.” (Compl., ¶¶ 27, 29.) However, Plaintiff never alleges that he read any of the menu boards, much less the specific menu boards depicted in the Complaint. (Compare Compl., ¶¶ 15-16 with ¶¶ 27-29.) He also alleges that Starbucks menu is available on Starbucks website, and includes what appears to be a screenshot of the online menu. (Compl., ¶ 27.) However, Plaintiff never alleges that he visited Starbucks website. Plaintiff alleges that he “regularly visited Starbucks locations in California and purchased Starbucks Cold Drinks from Starbucks retail stores.” (Compl., ¶ 15.) Plaintiff does not allege when he began “regularly” visiting Starbucks locations. He Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 9 of 24 Page ID #:179 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -4- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS does not allege which Starbucks locations in California he visited. Nor does he allege which of the unspecified plethora of Starbucks Iced Beverages he has purchased over time or any specific purchases. C. Relevant Procedural Background This case is the fourth of four putative class actions pending against Starbucks in federal courts across the country, alleging that Starbucks underfills certain of its beverages. As Starbucks informed this Court on June 1, Starbucks filed a Motion for Coordination or Consolidation and Transfer Pursuant to 28 U.S.C. § 1407 on May 26, 2016 seeking to coordinate or consolidate all of the cases. The Judicial Panel on Multidistrict Litigation (the “JPML”) has set oral argument on that motion for July 28, 2016. III. ARGUMENT To survive a motion to dismiss under 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.” Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009) (internal quotes omitted). These factual allegations must “raise a right to relief above the speculative level” and “some threshold of plausibility must be crossed at the outset” before a case can proceed. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555, 558 (2007). While “[t]he plausibility standard is not akin to a probability requirement…it asks for more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S. at 678 (internal quotations omitted). A. Plaintiff Fails to State a Claim for Violation of the CLRA, UCL, or FAL The plausibility standard applies to Plaintiff’s causes of action for violation of California’s Unfair Competition Law (“UCL”), False Advertising Law (“FAL”), and Consumers Legal Remedies Act (“CLRA”). California’s consumer protection laws prohibit any “unfair, deceptive, untrue, or misleading advertising,” and provide a remedy for a consumer “who has suffered injury in fact and has lost money or Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 10 of 24 Page ID #:180 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -5- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS property as a result of such” activities. Cal. Bus. & Prof. Code §§ 17200, 17204; see also Cal. Bus. & Prof. Code §§ 17500; Cal. Civ. Code §§ 1770(a). Courts have repeatedly dismissed claims where a plaintiff’s allegations have not stated a plausible false advertising claim. See, e.g., Ebner v. Fresh, Inc., 818 F.3d 799, 806-7, (9th Cir. 2016); Carrea v. Dreyer’s Grand Ice Cream, Inc., 475 F. App’x 113, 115 (9th Cir. 2012); Stuart v. Cadbury Adams USA, LLC, 458 F. App’x 689, 690 (9th Cir. 2011). 1. The Plausibility Standard Is Not Met Where a “Reasonable Consumer” Would Not Likely Be Deceived by the Challenged Advertising. The CLRA, UCL, and FAL utilize a “reasonable” consumer standard. Freeman v. Time, Inc., 68 F.3d 285, 289 (9th Cir. 1995); Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 506-12 (2003) (reasonable consumer standard applies to UCL and FAL claims); Consumer Advocates v. Echostar Satellite Corp., 113 Cal. App. 4th 1351, 1360 (2003) (same with respect to CLRA claims). To state a claim under those statutes, Plaintiff must plausibly plead that “members of the public are likely to be deceived” by the allegedly misleading statement. Brod v. Sioux Honey Ass’n Coop., 927 F. Supp. 2d 811, 828 (N.D. Cal. 2013) (citing Freeman, 68 F.3d at 289). “Likely to be deceived” implies more than a mere possibility of misunderstanding “likelihood” means “it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” Lavie, 105 Cal. App. 4th at 508 (emphasis added). District courts may use their “common sense” when applying this standard at the pleading stage. See Ebner, 818 F.3d at 803 (citing Iqbal, 556 U.S. at 679); Stuart, 458 F. App’x at 690 (affirming dismissal of a UCL claim that “def[ied] common sense,” noting that “[o]nly an unreasonable consumer would be confused or deceived by Cadbury’s failure to clarify that Trident White gum works only if consumers continue to brush and floss regularly.”); Carrea, 475 F. App’x at 115 Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 11 of 24 Page ID #:181 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -6- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS (affirming dismissal of UCL claim because “it strains credulity” to argue that a reasonable consumer would be misled to think that ice cream with “chocolate coating topped with nuts” is healthier than competing brands). Ebner is instructive here. In Ebner, the Ninth Circuit recently affirmed the dismissal of a class action complaint alleging that the labeling and packaging of defendant’s lip balm products was misleading because the tube screw mechanism only allows 75% percent of the product to advance past the opening of the tube. Ebner, 818 F.3d at 802. The Ninth Circuit noted that “[d]etermining whether a complaint states a plausible claim for relief is ‘a context-specific task that requires the reviewing court to draw on its judicial experience and common sense.’” Id. at 803. Applying that standard, the court held that a reasonable consumer could not plausibly be deceived as to the amount of lip balm in the tube. Id. at 806. The court noted that the reasonable consumer “understands the general mechanics of these [lip balm dispenser] tubes and further understands that some product may be left in the tube....” Id. District courts within the Ninth Circuit have also dismissed consumer class actions where no reasonable consumer, using common sense, would be misled by the statement at issue. See, e.g., Nowrouzi v. Maker’s Mark Distillery, Inc., 2015 WL 4523551, *5-7 (S.D. Cal. July 27, 2015) (dismissing UCL and FAL claims alleging that “handmade” statement on whisky label was misleading because, in context, “‘handmade’ cannot reasonably be interpreted as meaning literally by hand” and a reasonable consumer would not understand the term to mean “no equipment or automated process was used to manufacture the whisky”); Williamson v. Apple, Inc., 2012 WL 3835104, at *1, 6 (N.D. Cal. Sept. 4, 2012) (dismissing UCL claim of plaintiff with a shattered iPhone who challenged Apple’s statement that the glass it uses for the phones is “comparable in strength to sapphire crystal” because “it is a well-known fact of life that glass can break under impact” and it would require “a suspension of logic” to think otherwise); Stearns v. Select Comfort Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 12 of 24 Page ID #:182 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -7- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Retail Corp., 2009 WL 1635931, at *11 (N.D. Cal. June 5, 2009) (intentional misrepresentation claim dismissed based on statement that beds would be “maintenance free” and that a purchaser would receive “constant and wear free support night after night” because “no product is ever maintenance-free” and “no consumer reasonably could have that expectation.”); Brod, 927 F. Supp. 2d at 828-30 (dismissing UCL and CLRA claims of consumer who purchased pollen-free honey because plaintiff failed to plead sufficient facts to establish that a reasonable consumer would expect honey to contain pollen); Manchouck v. Mondeléz Int’l, Inc., 2013 WL 454083, *3-4 (N.D. Cal. Sept. 26, 2013) (dismissing UCL, FAL, and CLRA claims because allegation that a reasonable consumer would believe “made with real fruit” claim excluded fruit puree “strain[ed] credibility”); Gallagher v. Chipotle Mexican Grill, Inc., 2016 U.S. Dist. LEXIS 14479, 9-12 (N.D. Cal. Feb. 5, 2016) (dismissing complaint because reasonable consumer would not have been deceived by representation that defendant sold “non-GMO” food where plaintiff failed to allege that defendant used any GMO ingredients, and where defendant’s advertisements defined its use of the phrase “non-GMO”). Although “[t]he question of whether a business practice is deceptive in most cases presents a question of fact not amenable to resolution on a motion to dismiss, … dismissal is appropriate … where a Court can conclude as a matter of law that members of the public are not likely to be deceived.” Pelayo v. Nestle USA, Inc., 989 F. Supp. 2d 973, 978-80 (C.D. Cal. 2013) (dismissing complaint without leave to amend where plaintiff failed to allege how labeling “could be deceptive to a consumer acting reasonably under the circumstances”). 2. A Reasonable Consumer Would Not Be Deceived by the Challenged Statements. Plaintiff has not identified a statement that, when read reasonably in context, is likely to deceive a consumer. Plaintiff has identified four statements that he alleges are false and/or deceptive: (1) that a “Tall” Iced Beverage is 12 fluid Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 13 of 24 Page ID #:183 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -8- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS ounces; (2) that a “Grande” Iced Beverage is 16 fluid ounces; (3) that a “Venti” Iced Beverage is 24 fluid ounces; and (4) that a “Trenta” Iced Beverage is 30 fluid ounces. (Compl., ¶ 27.) Plaintiff alleges that these representations are deceptive because a consumer who orders an Iced Beverage does not receive the represented amount of fluid ounces without ice. These representations do not create a likelihood of deception, and no reasonable consumer would be misled by the representations. The Iced Beverages at issue in this lawsuit are just that -- iced. Inherent in their name, and in the reasonable consumer’s expectation, is the understanding that an iced tea, for example, will be comprised of both tea and ice. Ice is, in fact, part of what a customer is ordering when he or she purchases an iced tea. Including a named ingredient in an Iced Beverage, the “ice” of an iced tea or iced coffee, is simply not misleading. Plaintiff’s allegations to the contrary are contradictory and illogical, and this is all the more so as Plaintiff admits he “regularly visited” Starbucks locations. (See Compl., ¶ 15.) While Plaintiff acknowledges that ice is an integral part of the Iced Beverages, Plaintiff alleges that ice does not count toward the appropriate fill of an Iced Beverage. (See, e.g., Compl., ¶¶ 32-35.) In support of this allegation, Plaintiff alleges that ice is not a “fluid,” and thus does not fit into the Merriam Webster Dictionary of “beverage,” which Plaintiff alleges is a “drinkable liquid.” (Compl., ¶¶ 43, 45.) However, Plaintiff provides no support for the implicit contention that a reasonable consumer would expect a Grande iced tea, for example, to contain 16 ounces of only one ingredient -- tea -- without any of another essential ingredient -- ice. Plaintiff goes to great lengths to disassociate the necessary ingredient “ice” from the Iced Beverages at issue. Plaintiff’s Complaint includes a series of pictures, allegedly of Starbucks Iced Beverages from which the ice has been removed. (See Compl., ¶¶ 31, 34, 39-40.) Plaintiff’s allegations belie his attempt to disassociate ice from the Iced Beverages. (See, e.g., Compl., ¶ 37 (“a Starbucks customer who Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 14 of 24 Page ID #:184 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -9- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS orders and pays for a Venti iced coffee, expecting to receive 24 fluid ounces of iced coffee …will instead receive only about 14 fluid ounces of iced coffee.”) (emphasis added).) Additionally, Plaintiff’s photographs highlight an important point -- that the Iced Beverages are served in clear cups. A consumer can thus see the ice in an Iced Beverage upon picking it up from a barista. 3. Plaintiff Also Fails to State a Claim Under the Unlawful Prong of the UCL. To state a cause of action based on an “unlawful” business act or practice under the UCL, a plaintiff must allege facts sufficient to show a violation of some underlying law. See Lazar v. Hertz Corp., 69 Cal. App. 4th 1494, 1505 (1999); Blanks v. Shaw, 171 Cal. App. 4th 336, 363-64 (2009) (failure to show violation of predicate law bars UCL action for unlawful conduct). Plaintiff has failed to allege facts sufficient to demonstrate such a violation here. Plaintiff’s “unlawful” claim is predicated on violation of the following provisions of the California Civil Code: §§ 1572 (defining fraud), 1 1573 (constructive fraud), 1709 (fraudulent deceit), 1710 (defining deceit), 1711 (deceit upon the public), and 1770 (CLRA). (Compl., ¶ 124.) For the reasons demonstrated above, Plaintiff has failed to establish a violation of the CLRA. Plaintiff has also failed to demonstrate violation of the Civil Code provisions defining fraud, as each section requires a false representation of some kind. Plaintiff has failed to allege facts demonstrating actual falsity of any representation or with the requisite specificity. Plaintiff alleges that “Starbucks is advertising the size of its Cold Drink cups on its menu.” (Compl., ¶ 44.) Plaintiff does not allege that Starbucks cups are smaller than the advertised sizes. Plaintiff does not allege that the cups in which he received her Iced Beverages were not full. Instead, Plaintiff argues the Iced 1 Plaintiff’s Complaint lists section “181572,” but as no such section exists, Starbucks presumes that Plaintiff refers to section 1572. Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 15 of 24 Page ID #:185 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -10- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Beverages contain ice. However, Plaintiff alleges no facts demonstrating Starbucks ever made any representations as to the ratio of ingredients in its Iced Beverages, or any representation that an Iced Beverage is measured without ice. Plaintiff’s allegations regarding the methods that Starbucks baristas use to prepare Iced Beverages, and allegations that a reasonable consumer would “not wait for the ice … to melt before consuming” an Iced Beverage are inapposite. 2 (Compl., ¶¶ 31- 32, 46.) As Plaintiff has not alleged, and cannot allege, that Starbucks makes any representations regarding the ratio of ingredients used in its beverages, Plaintiff has failed to allege any actual misrepresentation. B. Plaintiff’s CLRA, UCL, FAL, and Fraud Claims Should Be Dismissed for Failure to Satisfy Rule 9(b) Claims sounding in fraud should be dismissed if they do not meet the special pleading requirements of Rule 9(b). Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103-06 (9th Cir. 2003). To satisfy this standard, the complaint must allege, in detail, “the who, what, when, where, and how” of the alleged fraudulent conduct,” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124-26 (9th Cir. 2009), and “set forth what is false or misleading about a statement, and why it is false.” Vess, 317 F.3d at 1106; see also Edmunson v. Procter & Gamble Co., 2011 WL 1897625, *4 (S.D. Cal. May 17, 2011). Rule 9(b) applies to claims based on the UCL, FAL, and CLRA. Kearns, 567 F.3d at 1125; Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1117, 1122-23 (C.D. Cal. 2010). Even if fraud is not a necessary element of a claim, the claim must be pled with particularity if its basis is defendant’s alleged fraudulent conduct. See Vess, 317 F.3d at 1103-04. Because Plaintiff’s statutory 2 Plaintiff’s allegation that Starbucks admits “by analogy” that “a reasonable consumer would not allow a scoop of hand-dipped ice cream to melt before consuming it” is both nonsensical and irrelevant to Plaintiff’s claims. (Compl., ¶ 47.) Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 16 of 24 Page ID #:186 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -11- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS claims are based on alleged misrepresentations, those claims must be pled with particularity. (See, e.g., Compl., ¶¶ 105-44.) Plaintiff fails to plead his CLRA, UCL, and FAL claims with the particularity required by Rule 9(b). Plaintiff fails to specifically allege which Iced Beverages are at issue in the Complaint. His allegations are inconsistent and unspecific. (Compare Compl., ¶ 1 with ¶ 26.) Some Iced Beverages, like the “blended” drinks Plaintiff references briefly in the first paragraph of his Complaint, are prepared via entirely different methods than others. This does not satisfy Rule 9(b)’s specificity requirement. Plaintiff also fails to allege the “how” of the purported fraud as he does not actually allege that he ever read the purported misrepresentations. Though Plaintiff alleges that the in-store menus were “visible,” he does not allege that he saw or read any in-store menu board, much less the specific menu boards included in the complaint. (See Compl., ¶ 27 (“This menu was plainly visible to Plaintiff and the Class during the Class Period.”).) Similarly, though the Complaint includes a snapshot of Starbucks website describing the size of Starbucks drinks, plaintiff never alleges that he visited the website. (See Compl., ¶ 18.) This is not sufficient. See Frenzel v. Aliphcom, 76 F. Supp. 3d 999, 1014-15 (N.D. Cal. 2014) (plaintiff’s allegation that he reviewed representations before purchasing the product at issue was “not enough”). Plaintiff also fails to allege when he made any purchases at Starbucks. (See Compl., ¶ 10 (alleging that he visited Starbucks “regularly”).) Plaintiff’s allegation that he “regularly visited Starbucks locations in California and purchased Starbucks Cold Drinks” is insufficient. See Gomez v. Carmax Auto Superstores Cal., LLC, 2015 WL 350219, *7 (C.D. Cal. Jan. 22, 2015) (allegation that plaintiff saw advertising “at some point” was insufficient). As Plaintiff has not specifically alleged the “who, what, when, where, and how” of the fraud, his CLRA, UCL, and FAL claims must be dismissed. Edmunson, Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 17 of 24 Page ID #:187 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -12- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS 2011 WL 1897625, at *5 (dismissing misrepresentation claims regarding product labeling for failure to satisfy Rule 9(b)). C. Plaintiff’s Breach of Warranty Claims Fail 1. Plaintiff’s Breach of Express Warranty Claim Fails as a Matter of Law. California law requires a buyer bringing a breach of express warranty claim to plead that the buyer provided “notice of the alleged breach … to the seller within a reasonable time.” Alvarez v. Chevron Corp., 656 F.3d 925, 932 (9th Cir. 2011) (internal quotations omitted); see also Cal. Com. Code § 2607(3)(A). The purpose of giving notice of the breach is to allow the breaching party to cure the breach and thereby avoid the necessity of litigating the matter in court. Alvarez, 656 F.3d at 932. California district courts have construed the notice requirement to require pre- suit notice. Id. Plaintiff does not allege any facts showing that he provided the requisite pre-suit notice to Starbucks. Accordingly, Plaintiff’s breach of express warranty claim fails as a matter of law. 2. Plaintiff’s Claim for Breach of Express Warranty Also Fails Because Plaintiff Has Failed to Allege the Breach of Any Alleged Express Warranty. “To prevail on a breach of express warranty claim, a plaintiff must prove that the seller (1) made an affirmation of fact or promise or provided a description of its goods; (2) the promise or description formed part of the basis of the bargain; (3) the express warranty was breached; and (4) the breach caused injury to the plaintiff.” Viggiano v. Hansen Natural Corp., 944 F. Supp. 2d 877, 893-95 (C.D. Cal. 2013) (dismissing breach of express warranty claims to the extent based on alleged warranty that products contained “all natural flavors” because the representation was accurate, and to the extent it was based on use of the term “premium” because the latter was mere puffery). A description of the goods creates an express warranty when “it was part of the basis of the bargain between the parties.” Id. at 893. Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 18 of 24 Page ID #:188 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -13- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS Plaintiff has not alleged facts demonstrating the breach of any purported express warranty. Plaintiff alleges that Starbucks expressly warranted that its Iced Drinks “contained ‘12 fl. oz.’ for a Tall, ‘16 fl. oz.’ for a Grande, ‘24 fl. oz.’ for a Venti, and ‘30 fl. oz.’ for a Trenta.” (Compl. ¶ 67.) Nowhere does Plaintiff allege that Starbucks cups do not hold the advertised amount of fluid ounces. Nowhere does Plaintiff allege that the cups are underfilled when provided to the consumer. Instead, Plaintiff asserts that Starbucks Iced Drinks must be measured without an integral component of the beverage -- ice. However, Plaintiff does not allege that Starbucks makes any representation as to the ratio of ingredients in any Iced Beverage. Nor does Plaintiff allege that Starbucks represents that the size of an Iced Beverage is measured without ice. As such, Plaintiff has failed to allege that Starbucks has breached any alleged warranty. 3. Plaintiff’s Claim for Breach of the Implied Warranty of Merchantability Fails Because Plaintiff Has Not Alleged the Beverages Are Unfit for Their Ordinary Purpose. A plaintiff who claims a breach of the implied warranty of merchantability must show that the product “did not possess even the most basic degree of fitness for ordinary use.” Mocek v. Alfa Leisure, Inc., 114 Cal. App. 4th 402, 406 (2003). “[L]iability for an implied warranty does not depend upon any specific conduct or promise on [the defendant’s] part, but instead turns upon whether the[ ] product is merchantable under the code.” Hauter v. Zogarts, 14 Cal. 3d 104, 117 (1975). Courts have dismissed claims for breach of the implied warranty of merchantability in consumer class actions where plaintiffs have alleged that the products are falsely advertised or otherwise misleading, but fail to allege that the products at issue were not usable -- or consumable -- for their ordinary purpose. See, e.g., Strumlauf v. Starbucks Corp., 2016 U.S. Dist. LEXIS 79456 (N.D. Cal. June 17, 2016) (dismissing claim where plaintiffs did not allege that lattes were unfit for Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 19 of 24 Page ID #:189 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -14- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS consumption) 3 ; Swearingen v. Amazon Preservation Partners, Inc., 2014 U.S. Dist. LEXIS 111704, 2-4 (N.D. Cal. 2014) (claim dismissed where plaintiff did not “allege[] that the products lack even the most basic degree of fitness for ordinary use”); Viggiano, 944 F. Supp. 2d at 896-97 (claim dismissed where plaintiff alleged only that certain representations regarding soda products were misleading, not that the sodas were not drinkable, contaminated, or otherwise unfit for use as a soft drink). Plaintiff has not alleged any facts demonstrating that the Iced Beverage were not usable for their ordinary purpose of consumption. Accordingly, Plaintiff’s claim should be dismissed. D. The Economic Loss Doctrine Bars Plaintiff’s Claim for Negligent Misrepresentation Negligent misrepresentation claims based solely on economic injury fail under the economic loss doctrine, which restricts the remedy of plaintiffs who have suffered economic loss, but not personal or property injury, to an action in contract. Shahinian v. Kimberly-Clark Corp., 2015 WL 4264638, *8 (C.D. Cal. July 10, 2015) (“Generally, under the ‘economic loss’ rule, a plaintiff who suffers only pecuniary injury as a result of the conduct of another cannot recover those losses in tort. Instead, the claimant is limited to recovery under the law of contract.”). The 3 Judge Henderson in the Northern District in California recently ruled on a motion to dismiss Starbucks filed in a related case, Strumlauf v. Starbucks Corporation where Plaintiffs similarly allege that Starbucks beverages are underfilled. The Strumlauf Plaintiffs allege similar causes of action. Judge Henderson granted Starbucks motion to dismiss as against some causes of action, but denied the motion to dismiss plaintiff’s UCL, FAL, and CLRA claims under the reasonable consumer standard on the ground that “it is also possible that consumers would expect the serving cups to be slightly larger, such that the consumers would receive 16 ounces of the fluid portion of the latte when ordering a ‘Grande.’” Strumlauf, 2016 U.S. Dist. LEXIS 79456 at *17. Starbucks respectfully disagrees with Judge Henderson’s determination that a reasonable consumer could be misled by the representations at issue in Strumlauf. Here, the alleged misrepresentation arises from the presence of ice in iced beverages. Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 20 of 24 Page ID #:190 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -15- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS economic loss doctrine applies to claims for negligent misrepresentation under California law, and courts have repeatedly held that the doctrine bars such claims based on economic injury in consumer class actions. See, e.g., Strumlauf, 2016 U.S. Dist. LEXIS 79456 at *20-22 (dismissing negligent misrepresentation claim under economic loss doctrine); Minkler v. Apple, Inc., 65 F. Supp. 3d 810, 820 (N.D. Cal. 2014) (same); Shahinian, 2015 WL 4264638 at *8 (same). Plaintiff does not allege personal injury or property damage. He merely alleges that he “would not have purchased” the Iced Beverages “or would not have paid the price they did” if they had known the purported “true facts” regarding the fluid ounces. (See, e.g., Compl., ¶ 90.) As Plaintiff has not and cannot establish the required injury to avoid the economic loss doctrine, his negligent misrepresentation claim should be dismissed as a matter of law. E. Plaintiff’s Claim for Unjust Enrichment Fails California courts have held that there is no separate cause of action for unjust enrichment. See Levine v. Blue Shield of California, 189 Cal. App. 4th 1117, 1138 (2010). Unjust enrichment “is not a cause of action . . . or even a remedy, but rather a general principle, underlying various legal doctrines and remedies.” McBride v. Boughton, 123 Cal. App. 4th 379, 387 (2004) (citations omitted); see also Melchior v. New Line Prods., Inc., 106 Cal. App. 4th 779, 793 (2003) (“‘Unjust Enrichment’ does not describe a theory of recovery, but an effect: the result of a failure to make restitution under circumstances where it is equitable to do so”); Munoz v. MacMillan, 195 Cal. App. 4th 648, 661 (2011) (no freestanding cause of action); Hill v. Roll Internat. Corp., 195 Cal. App. 4th 1295, 1307 (2011) (same). The Ninth Circuit has also recognized that “in California, there is not a standalone cause of action for ‘unjust enrichment,’ which is synonymous with ‘restitution.’” Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015). District courts have also dismissed unjust enrichment claims on this ground. E.g., Smith v. Allmax Nutrition, Inc., 2015 WL 9434768, *9 (E.D. Cal. Dec. 23, 2015) (dismissing unjust Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 21 of 24 Page ID #:191 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -16- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS enrichment claim); Strumlauf, 2016 U.S. Dist. LEXIS 79456 at *13-15 (same). Plaintiff’s claim for unjust enrichment thus cannot stand because there is no independent cause of action for unjust enrichment under California law. F. Plaintiff Lacks Standing to State a Claim for Injunctive Relief “[A] plaintiff must demonstrate standing separately for each form of relief sought.” Castagnola v. Hewlett-Packard Co., 2012 WL 2159385, *5 (N.D. Cal. June 13, 2012). To establish standing for prospective injunctive relief, a plaintiff must demonstrate that he or she has suffered or is threatened with a “concrete and particularized” legal harm coupled with a sufficient likelihood that she will again be wronged in a similar way. Id. A plaintiff must establish a “real or immediate threat” of repeated injury. Hodgers-Durgin v. de la Vina, 199 F.3d 1037, 1042 (9th Cir. 1999). He or she “cannot rely on the prospect of future injury to unnamed class members if [she] cannot establish [she has] standing to seek injunctive relief.” Castagnola, 2012 WL 2159385, at *5. Pursuant to Article III, “a plaintiff does not have standing to seek prospective injunctive relief against a manufacturer or seller engaging in false or misleading advertising unless there is a likelihood that the plaintiff would suffer future harm from the defendant’s conduct.” Mason v. Nature’s Innovation, Inc., 2013 WL 1969957, *4 (S.D. Cal. May 13, 2013). In false and misleading advertising cases, there is no likelihood of injury to the plaintiff in the future where he or she will not purchase the product at issue from defendant again. Castagnola, 2012 WL 2159385, at *6 (dismissing injunctive relief claim where plaintiffs did not allege that they intended to purchase from defendant again); Campion v. Old Rep. Home Protection Co., Inc., 861 F. Supp. 2d 1139, 1150 (S.D. Cal. 2012) (“Plaintiff no longer has a warranty plan with Defendant and testified that he does not ever intend to purchase another one.… Thus, Plaintiff cannot show he is realistically threatened by a repetition of the alleged violation.”); Saavedra v. Eli Lily & Co., 2013 U.S. Dist. LEXIS 173055, *29-30 (C.D. Cal. Feb. 26, 2013) (dismissing injunctive relief Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 22 of 24 Page ID #:192 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -17- SMRH:478430958.5 MEMORANDUM OF POINTS AND AUTHORITIES ISO MOTION TO DISMISS claim where plaintiffs “failed to allege that they intend to purchase [the product] in the future.”); Strumlauf, 2016 U.S. Dist. LEXIS 79456 at *7-8 (“Because Plaintiffs cannot allege a threat of repeated injury, they may not proceed on injunctive relief.”). As Plaintiff has not alleged any intent to purchase Cold Drinks from Starbucks in the future, Plaintiff has alleged no facts indicating there is a significant likelihood and immediate danger of Plaintiff being harmed. Accordingly, Plaintiff lacks standing to seek injunctive relief. IV. CONCLUSION For the foregoing reasons, Starbucks respectfully requests that Plaintiff’s Complaint be dismissed. Dated: July 13, 2016 SHEPPARD, MULLIN, RICHTER & HAMPTON LLP By /s/ Robert J. Guite SASCHA HENRY ROBERT J. GUITE ROBIN A. ACHEN Attorneys for Defendant Starbucks Corporation Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 23 of 24 Page ID #:193 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES At the time of service, I was over 18 years of age and not a party to this action. I am employed in the County of Los Angeles, State of California. My business address is 333 South Hope Street, 43rd Floor, Los Angeles, CA 90071-1422. On July 13, 2016,1 served true copies of the following document(s) described as: MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF MOTION TO DISMISS COMPLAINT on the interested parties in this action as follows: Justin Farahi Telephone: 310-774-4500 Raymond M. Collins Fax: 310-295-0557 Farahi Law Firm 22760 Hawthorne Blvd., Ste. 230 Torrance. CA 90505 13 BY MAIL: I am "readily familiar" with the firm's practice of collection and processing correspondence for mailing. Under that practice it would be deposited with the U.S. postal service on that same day with postage thereon fully prepaid at Los Angeles, California in the ordinary course ol business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed on July 13, 2016, at Los Angeles, California. SMRH:478510722.1 - 1 - PROOF OF SERVICE Case 2:16-cv-03830-PA-AGR Document 17-1 Filed 07/13/16 Page 24 of 24 Page ID #:194