Cook et al v. General Nutrition Corporation

BRIEF in Opposition re Motion to Dismiss for Failure to State a Claim

W.D. Pa.June 13, 2017

IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA DOUG COOK, JODY EBERHART, ) BARBARA SWILLEY, MATTHEW ) DOVNER, and CORY MAYFIELD ) ) Plaintiffs, ) v. ) Civil Action No. No. 2:17-cv-135-NBF ) GENERAL NUTRITION CORPORATION, ) ) Defendant. ) PLAINTIFFS’ RESPONSE AND MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT David A. Borkovic Pa. I.D. No. 23005 JONES, GREGG, CREEHAN GERACE, LLP Of Counsel 411 Seventh Ave, Suite 1200 Pittsburgh, PA 15219 Tel: (412) 261-6400/ Fax: (412) 261-2652 dab@jgcg.com David M. Cohen COMPLEX LAW GROUP, LLC Admitted Pro Hac Vice 40 Powder Springs Street Marietta, GA 30064 Tel: (770) 200-3100/ Fax: (770) 200-3101 dcohen@complexlaw.com Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 1 of 29 i TABLE OF CONTENTS Page No. INTRODUCTION ................................................................................................ 1 STATEMENT OF FACTS. ....................................................................................... 2 THE STANDARD FOR RULE 12(B)(6). ................................................................. 4 ARGUMENT. .......................................................................................................... 4 I. Count I of the Amended Complaint Alleges a Breach of Contract ............... 4 II. Count II of the Amended Complaint Pleads an Alternative Claim for Unjust Enrichment ........................................................................................ 8 III. Plaintiffs Have Both Standing And A Claim For Equitable Relief in Count III ......................................................................................................... 9 IV. GNC’s Contention That Application of Pennsylvania Law Bars Plaintiffs’ California and Florida Consumer Protection Act Claims Has No Merit. ...... 11 1. The choice of law provision here is inapplicable to the California and Florida consumer protection claims. ........................................................ 13 2. Application of Sections 187 and/or 145(2)(a)-(d) of the Restatement (Second) Conflict of Law Precludes Dismissal of the California and Florida Consumer Protection Claims and Dictates Application of California and Florida Law Thereto. ................................................... 14 (a) Whether application of Pennsylvania law would be contrary to a fundamental policy of Florida or California. .................................... 15 (b) Whether California and Florida have materially greater interests in the application of their consumer protection statutes to this case than Pennsylvania in application of its consumer protection statute .… 17 (c) Whether California and Florida law would apply in the absence of The choice-of-law provision. ............................................................. 18 (d) Analysis of the § 145(2)(a)-(d), § 148 and § 156 Factors Results In Application of California and Florida Law To The Consumer Claims. ............................................................................................... 19 V. Plaintiffs Allege Unlawful Conduct Under California And Florida Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 2 of 29 ii Consumer Protection Laws, And The Issue Is Improperly Raised On A Motion To Dismiss..................................................................................... 21 VI. Plaintiffs Sufficiently Plead Their California Consumer Protection Claims With Particularity. .......................................................................................... 22 VII. Defendant’s Contention That Plaintiffs Failed to Comply With CLRA Pre-Suit Notice Requirements Misconstrues Those Requirements. .............. 23 CONCLUSION .......................................................................................................... 25 Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 3 of 29 1 IN THE UNITED STATES DISTRICT COURT FOR THE WESTERN DISTRICT OF PENNSYLVANIA DOUG COOK, JODY EBERHART, ) BARBARA SWILLEY, MATTHEW ) DOVNER, and CORY MAYFIELD ) ) Plaintiffs, ) v. ) Civil Action No. No. 2:17-cv-135-NBF ) GENERAL NUTRITION CORPORATION, ) ) Defendant. ) PLAINTIFFS’ RESPONSE AND MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT INTRODUCTION Defendant General Nutrition Corporation (“GNC”) sold memberships in a Gold Card/Member Price Program (the “Gold Card Program”) which provided loyalty benefits to customers for shopping at GNC. Unlike airline mileage programs or a Giant Eagle Advantage Card, GNC’s Gold Card Program was not free. GNC’s loyal customers paid $15 each to participate in the Program. GNC, in return, promised that the Members would receive discounts on purchases for one year from the date each paid the $15 fee. In an effort to improve its revenues, GNC in 2016 decided to terminate the Gold Card Program. Rather than telling its millions of loyal customers that the program would be terminated, it continued - for many months and until 10 days before it ended the Program - to solicit and accept $15 from customers who sought to purchase or renew the discount memberships. On December 28, 2016, GNC terminated the Program. It did not, however, provide any Gold Card benefits to members after that date, and it did not return the cash that members had paid for their memberships. Rather than refunding the cash, GNC in the first Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 4 of 29 2 quarter of 2017 recognized more than $24,000,000 in deferred income from Gold Card fees its customers paid for benefits due in months after GNC cancelled the Program. Through this action, Plaintiffs and Class members seek to recover their damages resulting from GNC’s breach of its obligations and promises, alternatively the amount by which GNC was unjustly enriched, and damages from Defendant’s violation of Florida’s and California’s consumer protection laws. STATEMENT OF FACTS GNC operated the Gold Card Program as a paid customer loyalty program. [Doc. 23 (Amended Complaint) ¶ 2] It essentially sold members one year (or two years) of discounts on its products. In return for paying GNC a $15 annual membership fee, a Gold Card member received discounts and benefits on purchases from GNC for a period of 12 months. Id. According to the Program’s Terms & Conditions, a Gold Card member would receive “[u]p to fifty percent (50%) off eligible purchases made at GNC retail stores every day for one year.” [Doc. 23-1 at 1] The Terms and Conditions also specified that the membership fee was $15.00 and that the “Duration of Membership is one (1) year from the date of purchase.” Id. Thus, for a one-year period, a Gold Card member was to receive substantial discounts on eligible purchases in return for making an upfront payment of $15.00 to GNC. The program was successful: roughly 6.5 million customers purchased Gold Cards, and Gold Card holders accounted for more than 75% of sales at GNC-owned stores. [Doc. 23 ¶ 17] At some point well before October 2016, GNC decided to terminate the Gold Card Program as of the end of 2016. [Id. ¶ 21] Defendant, however, did not tell Gold Card holders or prospective members about that secret. It continued to sell memberships and renewals in the Gold Card Program through December 18, 2016. [Id. ¶ 22] GNC terminated the Gold Card Program on December 28, 2016. [Id.] Thus, a Gold Card Member who purchased a Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 5 of 29 3 membership on December 18, 2016, paid $15.00 for annual membership, but GNC only gave the member discounts for 10 days. GNC did not return or issue pro-rata refunds of the membership fees it received, nor did it honor its obligations under the Gold Card Program. Id. GNC simply increased its revenue by pocketing some $24,000,000 paid by Gold Card members for future discounts. [Id. ¶¶ 4-5] GNC drafted the terms of the Gold Card program, and Card members had no opportunity or ability to negotiate or change GNC’s language. 1 [Doc. 23 ¶ 20] Given its unchecked drafting of the Program’s terms and conditions, GNC reserved some right to modify the Program’s “Terms.” The Terms and Conditions contain the following: [1] Additional benefits may apply. Full details are available at GNC.com. Benefits may be altered at any time with or without notice. Benefits may not be available for immediate use. Id. (Emphasis supplied) [and] [2] Changes to the Terms GNC reserves the right to change the Terms at any time with or without prior notice or consent. Any change shall take effect thirty (30) days from the date of posting to GNC.com. [Doc. 23-1 at 1-2] As will be seen below, GNC seizes upon these provisions to make a “Heads I win, tails you lose” argument under which - according to GNC - no breach of contract claim could exist because GNC could terminate the contract, and no unjust enrichment claim can be asserted because members could sue for breach of contract. Put bluntly, Defendant would have this Court hold 1 Two additional class actions were filed after this case, Register v. GNC Holdings, Case 1:17-cv-01320 (D.N.J.), and Santich v. GNC Holdings, 3:17-cv-00540 (S.C.Cal.). Defendant has sought to transfer Register to this Court based on the forum selection provision in the terms and conditions. After plaintiffs filed their Amended Complaint, GNC filed Declarations in this action and in Register admitting that he “Terms and Conditions” had been posted on its website. The Register plaintiffs deny the Terms and Conditions were provided to class members or made available other than by website, and GNC has not disputed that assertion. While GNC’s Declarations state that the Terms and Conditions were available at GNC’s website, www.gnc.com, the Terms and Conditions were actually buried down additional layers below GNC’s homepage. In any event, no discovery has taken place to probe this issue, but even if the Terms and Conditions apply, GNC’s Motion must be denied as described below. Additionally, plaintiffs have pled an unjust enrichment claim to the extent the Court finds that no contract exists, is illusory or is otherwise unenforceable. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 6 of 29 4 that any Pennsylvania business could use such language to solicit and pocket money from consumers through an adhesion contract and never have to account for its actions. Buyer beware, indeed. THE STANDARD FOR RULE 12(B)(6) A complaint requires nothing more than “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). In ruling on a Rule 12(b)(6) Motion, a court must “‘accept all factual allegations as true, construe the complaint in the light most favorable to the plaintiff, and determine whether, under any reasonable reading of the complaint, the plaintiff may be entitled to relief.’” Phillips v. County of Allegheny, 515 F.3d 224, 233 (3d Cir. 2008). The complaint’s factual allegations, taken as a whole, must render the plaintiff's entitlement to relief plausible. Phillips, 515 F.3d at 234. This “‘does not impose a probability requirement at the pleading stage,’ but instead ‘simply calls for enough facts to raise a reasonable expectation that discovery will reveal evidence of’ the necessary element.” Phillips, 515 F.3d at 234. “In determining whether a complaint is sufficient, courts should disregard the complaint's legal conclusions and determine whether the remaining factual allegations suggest that the plaintiff has a plausible - as opposed to merely conceivable - claim for relief.” West Penn Allegheny Health System, Inc., v. UPMC, 627 F.3d 85, 98 (3d Cir. 2010), cert. denied, 565 U.S. 817 (2011). ARGUMENT I. Count I of the Amended Complaint Alleges a Breach of Contract Count I of the Amended Complaint alleges that Gold Card members paid $15.00 membership fees to GNC in order to participate in the Program. Each membership was expressly stated in a form drafted by Defendant to be valid for one year (or two years) from the Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 7 of 29 5 date of purchase. GNC, however, terminated the Program before the one-year memberships expired. Not only did it terminate the Program, it refused to honor its obligations or to refund the membership fees. Instead, it took the portion of the membership fees it had not earned into income to inflate its financial reports. The only defense GNC can summon in its Rule 12(b)(6) motion is that the parties’ contract supposedly gave GNC the discretion to alter or terminate the membership benefits at any time, whenever it chose. The argument fails because it fails to give effect to the language of the contract and ignores Pennsylvania law. Under the Program’s Terms and Conditions, “Benefits may be altered at any time with or without notice.” [Doc. 23-1 at 1] According to GNC, the purported back of the membership card also provides, “GNC reserves the right to vary, change or discontinue the privileges granted by this card without prior notice.” [Doc. 29 at 8] The membership card is not attached to the Amended Complaint. Even if the back of the membership card could be considered, 2 the agreement between GNC and each card member is ambiguous and contains facially conflicting provisions. On the one hand, GNC expressly promised that the membership would last for one year [Doc. 23-1 at 1]; on the other hand, GNC reserved the right to alter the benefits or to discontinue the “privileges granted by [the] card.” The standard form agreement between each plaintiff and GNC must be interpreted to give effect to each of the contract’s provisions. Sykes v. Nationwide Mutual Ins. Co., 413 Pa. 640, 643, 198 A.2d 844, 845 (1964) (“… in interpreting a contract, effect must be given to all 2 Consideration of the language on the back of the purported membership card in the context of GNC’s motion to dismiss is not appropriate. A Court may not consider matters extraneous to the complaint under Rule 12(b)(6) unless the claims are “based” on the extrinsic document. In re Burlington Coat Factory Securities Litigation, 114 F.3d 1410, 1426 (3d Cir. 1997). Plaintiffs’ breach of contract claim is not based upon or related to the membership card. Even if the Court were inclined to consider the back of the membership card, the Terms and Conditions, to the extent applicable, nullify that language. The Terms and Conditions “govern membership” in the Program [Doc. 23-1 at 1] and provide that they “constitute the entire agreement between you and GNC with respect to the Program….” [Id. at 3] (emphasis supplied.) As such, the back of the card and the Terms and Conditions cannot both apply. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 8 of 29 6 provisions in the contract.”); see also, Capek v. DeVito, 564 Pa. 267, 273-74, 767 A.2d 1047, 1050 (2001); Gaffer Ins. Co. v. Discover Reinsurance Co., 936 A.2d 1109, 1113 (Pa.Super. 2007). As Pennsylvania law makes clear: ‘all provisions in the agreement will be construed together and each will be given effect’ because a court ‘will not interpret one provision . . . in a manner which results in another portion being annulled.’ Pacific Employers Ins. Co. v. Global Reinsurance Corporation, 693 F.3d 417, 426 (3 rd Cir. 2012) (citation omitted). Thus, a Court must give effect both to GNC’s promised one-year membership period as well as to GNC’s discretion to alter the benefits. Moreover, this and all other ambiguities must be construed against GNC, the party that prepared each provision in the standard form Terms and Conditions. Shovel Transfer and Storage, Inc. v. Liquor Control Board, 559 Pa. 56, 67, 739 A.2d 133, 139 (1999). GNC’s express promise that the Membership would last for one year can be reconciled with its discretionary right to alter benefits through the implied duty of good faith and fair dealing. Under Pennsylvania law, each party to a contract has a duty to perform in good faith and fairly. Huang v. BP Amoco Corp., 271 F.3d 560, 564-65 (3d Cir. 2001); John B. Conomos, Inc. v. Sun Company, Inc., 831 A.2d 696, 706 (Pa.Super. 2003); Donahue v. Federal Express Corp., 753 A.2d 238, 242 (Pa.Super. 2000). If an obligation is within the contemplation of the parties at the time of contracting - such as providing membership benefits for one year - the court will imply a duty to act reasonably and fairly. Pacific Employers Ins. Co., 693 F.3d at 429 n.5; Huang, 271 F.3d at 564-65. As Pennsylvania’s Courts have made clear, In the absence of an express provision, the law will imply an agreement by the parties to a contract to do and perform those things that according to reason and justice they should do in order to carry out the purpose for which the contract was made and to refrain from doing anything that would destroy or injure the other party’s right to receive the fruits of the contract. Accordingly, a promise to do an act necessary to carry out the contract must be implied. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 9 of 29 7 John B. Conomos, 831 A.2d at 706. (Citations omitted.) See also Murphy v. Duquesne University, 565 Pa. 571, 777 A.2d 418, 431 n.11 (2001). Put simply, GNC had to act fairly and in good faith in exercising its discretion to change the Gold Card Program. 3 Given GNC’s duty to change the Program only fairly and in good faith, the seemingly inconsistent one-year membership provision and the right to alter the benefits can co-exist with each having effect. For example, GNC could have changed certain benefits or terms of the Program, but it had to exercise its discretion in good faith and fairly and could not terminate the Program prior to one year (giving effect, as required, to that provision). Whether GNC acted in good faith is a question of fact, Huang, 271 F.3d at 565, and the facts pled in the Amended Complaint, read in the light most favorable to Plaintiffs, establish a plausible and compelling claim that GNC breached its duty of good faith and acting reasonably when it terminated the Plaintiffs’ rights before the end of their membership periods and kept all the money. It is certainly for a jury to decide issues such as whether GNC acted fairly and in good faith when it solicited and accepted $15.00 from class members for annual Gold Card memberships on December 17, 2016, when it knew that it would terminate the program on December 28 and not return any funds. Defendant’s Rule 12(b)(6) motion as to Count I should be denied. 4 3 Far from simply “altering” the Program, GNC has admitted that it discontinued and terminated the Program. 4 Gordon v. United Cont’l Holding, Inc., 73 F.Supp.3d 472 (D.N.J. 2014), and Grossman v. USAir, Inc., 1997 WL 1433744 (Phil. Pa. Ct. Cmmn. Pl. 1997) are inapplicable. Gordon did not involve a contract with a definite duration or any payment by the member. More important, the Gordon Court not only did not consider but was prohibited from considering the duty of good faith and fair dealing because the federal Airline Deregulation Act preempted any state law duty of good faith from applying to an airline. 73 F.Supp.3d at 480. Grossman similarly did not involve a definite duration of a contract, no party raised the duty of good faith, the court did not consider the duty of good faith, and good faith could have been found to exist because USAir gave frequent fliers time to use their accrued miles. Kemmerer v. ICI Am. Inc., 70 F.3d 281 (3d Cir. 1995), In re Unisys Corp Retiree Med. Bene. ERISA Litig., 58 F.3d 896 (3d Cir. 1995), and the like involved the interpretation of ERISA rights under federal common law, involved unique ERISA considerations, and did not involve any state law duty of good faith. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 10 of 29 8 II. Count II of the Amended Complaint Pleads an Alternative Claim for Unjust Enrichment Count II pleads a claim for unjust enrichment. GNC’s sole objection to the unjust enrichment claim is that: (i) Plaintiffs in Count I pled that a contract exists; and (ii) an unjust enrichment claim cannot exist when there is an express written contract. Plaintiffs’ unjust enrichment claim, however, is expressly an alternative claim pled in the event that no contract between the parties exists or is unenforceable. [Doc. 23 ¶ 41] In moving to dismiss Count I, GNC argues that it had the unfettered right under the contract to terminate the Gold Card Program and to curtail all benefits without liability. If GNC is eventually correct that it could terminate all benefits, then its performance was entirely optional. That is, GNC reserved the right to decide whether and to what extent it should perform under the Gold Card Program. Such a right, however, means that no contract existed. If a party has the unfettered choice of whether to perform and the arbitrary right to cancel an agreement without liability, the contract is illusory, lacks consideration and is unenforceable. See Lackner v. Glosser, 892 A.2d 21, 31 (Pa.Super. 2006) (“If the promise is entirely optional with the promisor, it is illusory, lacks consideration, and is unenforceable.”); Starr v. O-I Brockway Glass, Inc., 432 Pa.Super. 255, 637 A.2d 1371, 1373 n.2 (1994) (“[I]f the provisions of a contract are optional with the promisor, the contract is termed ‘illusory’ and the promise is not ‘justified in an expectation of performance.’”); Geisinger Clinic v. DiCussio, 414 Pa.Super. 85, 606 A.2d 509, 512 (1992) (“If the promise is entirely optional with the promisor, it is said to be illusory and, therefore, lacking consideration and unenforceable.”). See also 1 Williston on Contracts § 4:27 (4 th ed.) (“One of the most common types of promise that is too indefinite for legal enforcement is the promise where the promisor retains an unlimited right to decide later the Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 11 of 29 9 nature or extent of his or her performance. This unlimited choice in effect destroys the promise and makes it illusory.”) Thus, to the extent that GNC can avoid liability for breach of contract because it had the right to terminate the agreement without liability, no express contract existed. Defendant’s promises were illusory, did not constitute consideration, and were unenforceable. In that setting, the Terms and Conditions did not constitute an enforceable contract, and there is and can be no bar to a claim for unjust enrichment. GNC cannot succeed in its “heads I win, tails you lose” argument. Plaintiffs have alternative claims for breach of contract and unjust enrichment which can be pursued simultaneously. III. Plaintiffs Have Both Standing And A Claim For Equitable Relief in Count III Defendant misapprehends Count III of the Amended Complaint. Count III seeks equitable relief in the form of an order for specific performance of GNC’s contractual duties described in Count I, is incorporated in and is a material aspect of the state law consumer protection claims. Placing the claim for equitable relief in a separate count simplifies the eventual motion for class certification in that certification under Count III will be pursuant to Fed.R.Civ.P. 23(b)(2) while certification of the other claims will be pursuant to Fed.R.Civ.P. 23(b)(3). There can be no serious assertion that Plaintiffs have not suffered injury in fact for Article III purposes. Each Plaintiff paid a sum of money to receive at least one year’s worth of discounts at GNC. GNC admits that it terminated the program and did not provide those benefits. GNC then took into income more than $24,000,000 in membership fees paid by Class members applicable to the months after it terminated the program. The real issue is not injury in Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 12 of 29 10 fact, but whether Plaintiffs will be entitled to an order requiring specific performance, a subject that should not be addressed in the context of a motion to dismiss. Specific performance under Pennsylvania law is an equitable remedy that permits a court to compel performance of a contract. Lackner v. Glosser, 892 A.2d at 31; Geisinger Clinic v. DiCussio, 606 A.2d at 521. The Third Circuit has held that specific performance under Pennsylvania law should only be granted where no adequate remedy at law exists. Allegheny Energy, Inc. v. DQE, Inc., 171 F.3d 153, 159-60 (3d Cir. 1999). But the simple fact that some perceived remedy at law exists does not preclude equitable relief because, “the question is whether the remedy is adequate or complete.” Allegheny Energy, 171 F.3d 160 (quoting Edison Illuminating Co. v. Eastern Pa. Power Co., 253 Pa. 457, 98 A. 652, 655 (1916)). Under Pennsylvania law, “‘[a]n action for damages is an inadequate remedy when there is no method by which the amount of damages can be accurately computed or ascertained.’” Allegheny Energy, 171 F.3d at 160 (emphasis supplied, citation omitted). Stated otherwise, “‘An injury is regarded as “irreparable” if it will cause damage which can be estimated only by conjecture and not by an accurate pecuniary standard.’” Santoro v. Morse, 781 A.2d 1220, 1227 (Pa.Super. 2001) (En banc, citations omitted). See also A. O. Smith Corp. v. F.T.C., 530 F.2d 515, 525 (3d Cir. 1976), in which Judge Aldisert wrote, “‘Irreparable injury is suffered where monetary damages are difficult to ascertain or are inadequate.’”; Luckenbach S.S. Co., Inc. v. Norton, 21 F.Supp. 707, 709 (E.D.Pa. 1937), (Maris, J.) (“The general rule in equity is that an injury is deemed irreparable when … there exists no certain pecuniary standard for the measurement of damages.”) A barebones minimum quantum of damages seems evident in this action: Plaintiffs and each class member paid $15.00 per year or $1.25 per month in order to obtain GNC’s promised Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 13 of 29 11 discounts. At a minimum, Plaintiffs and class members should be permitted to recover $1.25 per month for each month in which they were denied the benefits of the contract, an amount roughly equal to at least $24,000,000. This “back of the envelope” calculation may not and likely will not, however, capture all of the Plaintiffs’ damages. Plaintiffs and each class member were deprived of the amount of any discount they would have received had GNC honored its obligations, an amount that easily could have exceeded $1.25/month. Logically, each class member had to believe that the benefits from purchasing a Gold Card membership had to exceed the $15.00 annual fee or the class member would not have purchased the membership. Whether that amount can be ascertained accurately cannot be answered without the benefit of discovery. As such, there is no basis for dismissing Count III of the Amended Complaint. IV. GNC’s Contention That Application of Pennsylvania Law Bars Plaintiffs’ California and Florida Consumer Protection Act Claims Has No Merit. GNC asserts that because the Gold Card Terms and Conditions contain a Pennsylvania choice of law provision, named Plaintiffs and class members from California and Florida cannot pursue consumer protection act claims from those states. GNC’s position must be rejected for at least three primary reasons. First, Pennsylvania choice of law analysis "employs depecage, the principle whereby 'different states' laws may apply to different issues in a single case." Taylor v. Mooney Aircraft Corp., 265 F. App'x 87, 91 (3d Cir. 2008) (citing Berg Chilling Sys., Inc. v. Hull Corp., 435 F.3d 455, 462 (3d Cir. 2006)). Therefore, courts separately analyze the law of the potentially interested jurisdictions regarding each of the disputed legal issues between the parties. Second, GNC fails to advance any choice of law analysis as to the California and Florida consumer protection act claims, or address any other aspect of the required choice of law Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 14 of 29 12 analysis. 5 Rather, and even though the analysis is a central part of cases GNC cites, 6 GNC leaps past any analysis and simple asserts conclusory statements supported by artfully-selected and inapplicable case quotes. The proper analysis mandated by the Third Circuit, including under Sections 187 and/or 145(2)(a)-(d) of the Restatement, Second, Conflict of Law, is addressed below and has been extensively addressed by the federal and state courts in Pennsylvania (including with respect to California and Florida’s consumer protection claims). Application of the proper analysis guts GNC’s contention. Third, this matter has been filed as a class action. Pennsylvania’s Unfair Trade Practices and Consumer Protection Law (“UTPCPL”) cannot be asserted on a class-wide basis, 7 and no alternative consumer protection claim is available to named Plaintiffs and putative class members from California and Florida. This point alone forecloses the only support GNC cites for its contention - footnote 11 of its brief. None of the cases cited by GNC in footnote 11 were class actions. Consequently, the UTPCPL was available to those individual plaintiffs, the UTPCPL was determined not to materially vary from the respective state consumer codes in those cases, and the UTPCPL was then applied instead so to not violate § 187(2)(b) (“application of the law of the chosen state would be contrary to a fundamental policy of a state…”). Here, in contrast, where Pennsylvania’s UTPCPL is unavailable to Plaintiffs, well-established law 5 Because contract law in Pennsylvania, Florida and California does not materially vary or conflict, Plaintiffs do not contest application of Pennsylvania law to the breach of contract claim in this matter and no choice of law analysis is necessary regarding same. Fin. Software Sys., Inc. v. First Union Nat’l. Bank, 1999 U.S. Dist. Lexis 19479 (E.D. Pa. 1999) (“Where the different laws do not produce different results, courts presume that the law of the forum state shall apply”). 6 In footnote 11 of its brief, GNC copies a string cite from Cottman Transmission Sys. LLC, 492 F. Supp. 2d 461, 471 (E.D. Pa. 2007) as the core authority for its position. Those cases actually discuss the applicable standard - “a party challenging a choice-of-law provision must show that its application would be contrary to a ‘materially greater interest’ or ‘fundamental public policy’ of another state.” Id. 7 Hunt v. United States Tobacco Company, 538 F.3d 217, 221 (3d Cir. 2008) (justifiable reliance bars UTPCPL claim); Kern v. Lehigh Valley Hosp., Inc., 2015 PA Super 19, 108 A.3d 1281, 1290 (Pa. Super. Ct. 2015) (same); Coleman v. Commonwealth Land Title Ins. Co., 318 F.R.D. 275 fn. 8 (E.D. Pa. 2016) (“justifiable reliance must be shown-individually-and thus UTPCPL claims will fail to meet class action requirements.”). Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 15 of 29 13 preserves application of California and Florida consumer claims because barring those remedies “would be contrary to a fundamental policy” of both Florida and California. These latter two primary points are discussed more fully below. 1. The choice of law provision here is inapplicable to the California and Florida consumer protection claims. The mere existence of the choice of law provision does not, without more, render it facially valid. “Pennsylvania courts will uphold choice-of-law provisions in contracts to the extent that the transaction bears a reasonable relation to the chosen forum. Ordinarily the law chosen must be that of a jurisdiction where a significant enough portion of the making or performance of the contract is to occur or occurs. We are not entirely certain that the choice-of- law provision in this contract is valid. The choice-of-law clause … was not bargained-for by Churchill or Transmedia. Nor do the contracts, which were negotiated, signed and performed in Pennsylvania, bear a significant reasonable relation to Missouri.” Churchill Corp. v. Third Century, Inc., 578 A.2d 532, 537 (1990) app. denied, 527 Pa. 628, 592 A.2d 1296 (1991). Here, as in Churchill Corp., the choice of law provision was not bargained-for, it was imposed. 8 Nor were the Gold Cards marketed, sold, signed, negotiated, 9 or performed in Pennsylvania (other than as to Mr. Eberhart and the putative Pennsylvania class). In fact, the choice of law provision was buried in a webpage that required class members who may not even own a computer to search an entire website to locate the provision. More specifically, GNC admits that the terms and conditions were “website” terms and conditions. Decl. Kevin Macken ¶ 2 (May 23, 2017) (“These Terms and Conditions were available on GNC’s public website at www.gnc.com.”). Furthermore, “www.gnc.com” is just Defendant’s homepage. The choice of 8 Having filed in Pennsylvania, application of the forum selection clause is not at issue. 9 Terms for the Gold Card were adhesion drafted by GNC rather than arms-length. There was no negotiation other than the option to purchase a one or two-year membership, and even that did not occur in Pennsylvania for the named Plaintiffs and putative class members from California and Florida. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 16 of 29 14 law provision was not there either, but instead buried down several additional layers. Thus, not only was the choice of law provision unilaterally drafted and imposed by Defendant, Plaintiffs and class members had to search an entire website to even find it. 2. Application of Sections 187 and/or 145(2)(a)-(d) of the Restatement (Second) Conflict of Law Precludes Dismissal of the California and Florida Consumer Protection Claims and Dictates Application of California and Florida Law Thereto. If the choice of law provision is facially valid, Plaintiffs dispute that it is enforceable. Accordingly, when a party challenges the enforceability of a choice of law provision the Court turns to the framework of Sections 187 and/or 145(2)(a)-(d) of the Restatement (Second) Conflict of Laws. Under either approach, the result here is the same, California and Florida law apply to the respective consumer protection claims and dismissal of those claims is improper. Under § 187, the analysis would essentially be the same as that performed by Judge McVerry in Alcantarilla v. State Farm Mut. Auto. Ins. Co., 2015 U.S. Dist. LEXIS 167623 *38-39 (W.D. Pa. 2015). Alcantarilla involved an insurance policy for underinsured motorist coverage containing a broad North Carolina choice of law provision that provided “any and all claims or disputes in any way related to this policy shall be governed by the law of North Carolina.” Id. at *2. The choice of law provision here is similar. The Court found an actual conflict between North Carolina and Pennsylvania law as to underinsured motorist coverage. 10 Accordingly, the Court applied § 187(2) of the Restatement, and explained: [t]he policy states that North Carolina law will apply. That provision must be given effect unless: "(a) the chosen state has no substantial relationship to the parties or 10 If North Carolina law applied, “Plaintiffs would not be entitled to any UIM benefits under the North Carolina law and terms of the policy. If, however, Pennsylvania law applies, Plaintiffs would be entitled to an additional $100,000 because Pennsylvania is an ‘excess’ coverage jurisdiction.” ” (Id. at 37-38). Here, there is likewise a direct conflict between Pennsylvania law and both California and Florida. Similar to the situation in Alcantarilla, here, the UTPCPL is unavailable and affords no remedy whatsoever whereas both California and Florida’s consumer claims afford substantial remedies. Accordingly, governmental interests of Florida and California would be impaired by application of Pennsylvania law, thus creating a false conflict and rendering those states the only interested jurisdictions. Budget Rent-A-Car v. Chappell, 407 F.3d 166, 170 (3 rd Cir. 2005). Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 17 of 29 15 the transaction and there is no other reasonable basis for the parties' choice, or (b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties." As the discussion to this point has indicated, North Carolina had a substantial relationship to the policy - at least when the policy was issued - since that is where the policy was negotiated and issued and where Plaintiffs resided at the time they purchased the policy. Thus, the Court will focus on whether part (b) is satisfied. This requires the Court to consider three separate questions: (1) whether the application of North Carolina law would be contrary to a fundamental policy of Pennsylvania, (2) whether Pennsylvania has a materially greater interest than North Carolina when it comes to the issue of UIM coverage under the policy, and (3) whether Pennsylvania's law would apply in the absence of the parties' choice-of-law provision. The latter two inquiries are related insofar as Pennsylvania takes governmental interest into account when deciding which state's law to apply. Id. at 38-39 (emphasis added). The Court found in the affirmative on all three questions and therefore applied Pennsylvania law despite the broad North Carolina choice of law provision. Furthermore, if a deeper choice of law analysis were necessary here, even a cursory examination of those same three questions leads to preserving the California and Florida consumer protection claims and applying those respective state laws. (a) Whether application of Pennsylvania law would be contrary to a fundamental policy of Florida or California. Florida courts are uniform in their holding that Fla. Stat Ann. § 501.201 et seq., the Florida Deceptive and Unfair Trade Practices Act (“FDUTPA”) is a fundamental policy of the state of Florida enacted to protect Floridians. In fact, Florida has such a substantial interest in application of FDUTPA that the Florida Legislature has declared that any attempt to limit its application is against public policy. Further, if merely a remedy under FDUTPA is not available because of a contractual provision, the contractual provision is deemed unenforceable. The FDUTPA "is designed to protect not only the rights of litigants, but also the rights of the consuming public at large." Id. Any attempt to limit FDUTPA liability is contrary to public policy. Rollins, Inc. v. Heller, 454 Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 18 of 29 16 So. 2d 580 (Fla. 3d DCA 1984). "[A]n individual cannot waive the protection of a statute that is designed to protect both the public and the individual." Coastal Caisson Drill Co. v. Am. Cas. Co., 523 So. 2d 791, 793 (Fla. 2d DCA 1988), approved, 542 So. 2d 957 (Fla. 1989). Holt v. O'Brien Imps. of Fort Myers, Inc., 862 So. 2d 87, 89 (Fla. 2 nd DCA 2003) (emphasis added); Motmanco, Inc. v. McDonald's Corp., 2005 U.S. Dist. LEXIS 33965 *28 (M.D. Fla. 2005) (“Florida courts have consistently permitted FDUTPA claims to proceed in the face of contract provisions to the contrary or pleading inadequacies.”). California has likewise made clear that its consumer protection statutes are important public policies of that state and attempts to limit their application will be struck down. For example, in Net2Phone, Inc. v. Superior Court, 109 Cal.App.4th 583, 592-593 (2003) review denied, 2003 Cal. LEXIS 6407 (Cal., Aug. 27, 2003) the court refused to enforce a forum selection clause that would have circumvented application of California’s UCL. In so doing the court first explained, “the UCL constitutes an important public policy of the State of California.” The court additionally explained, “the protections of a statute such as the UCL generally may not be waived by contract because the public interest is involved.” The court further explained that any contrary position would “allow parties to conduct business in California but provide themselves with immunity from one important and widely used procedure to deter certain proscribed conduct.” Ultimately, the court ruled, “It is established that forum selection clauses that violate public policy are not enforced, and statutes are a principal reflection of public policy.” Id. at 593. See also McGill v. Citibank, N.A., 2 Cal.5 th 945, 393 P.3d 85 (2017) (Waivers of public protections under the consumer protection statutes are void; any waiver by a consumer of the CLRA’s provisions is unenforceable and void.) In short, application of Pennsylvania law to bar Florida or California consumer protection statutes, as GNC suggests, would directly conflict with fundamental policies of those states. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 19 of 29 17 (b) Whether California and Florida have materially greater interests in the application of their consumer protection statutes to this case than Pennsylvania in application of its consumer protection statute. Similar to Judge McVerry’s analysis in Alcantarilla, both California and Florida have “a strong interest in insuring that [their] injured residents are afforded the greatest possible [relief].” Id. at 41. Pennsylvania has no known policy interest in preventing California or Florida residents from availing themselves to their respective state consumer statutes and Pennsylvania has no alternative statute in which it has a policy interest of applying. Analyzing this step under California and Florida law leads to the same result. “In determining which state has a materially greater interest in a case, California courts consider the place of negotiation of the contract, the place of performance of the contract, the location where the alleged wrong occurred, and the residence of the parties.” In re DirecTV Early Cancellation Fee Litig., 2009 U.S. Dist. LEXIS 88139 * 14 (C.D. Cal. 2009). Here, as to the Florida and California plaintiffs, they were solicited and offered Gold Cards in their respective states, entered into the Gold Card program in Florida and California, paid their membership fees in those states, obtained their actual Gold Cards in Florida and California, purchased product from GNC with their Gold Cards in those respective states (the places of performance), lost their membership fees and were denied benefits and the use of their Gold Cards at GNC stores in Florida and California (injured in those states). Accordingly, Florida and California have a materially greater interest in the application of their consumer protection statutes. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 20 of 29 18 (c) Whether California and Florida law would apply in the absence of the choice-of-law provision. In the absence of a Pennsylvania choice of law provision, California and Florida consumer protection statutes would apply to named Plaintiffs and putative class members from those states. “When the underlying issues involves a contract [ ] the court looks to the contacts each state has with the underlying transaction involving the [Gold Card], not the contacts with the tort giving rise to the dispute.” Alcantarilla, 2015 U.S. Dist. LEXIS at 42. The general contacts test is set forth in § 188 of the Restatement. “In determining which state has the most significant relationship, § 188 instructs courts to evaluate each state’s contacts, ‘according to their relative importance,” such as the place of contracting and performance, the location of the subject matter of the contract, and the domicile, residence, nationality, place of incorporation and place of business of the parties.” Id. at 42 quoting Amica Mut. Ins. Co. v. Fogel, 656 F.3d 167, 172 (3 rd Cir. 2011). Significantly, § 188 (3) provides, “If the place of negotiating the contract and the place of performance are in the same state, the local law of this state will usually be applied.” Here, other than the fact that Defendant GNC is headquartered in Pennsylvania, no other aspect of the § 188 contacts test involves Pennsylvania. Rather, and as indicated above, GNC solicited and offered the Florida and California plaintiffs Gold Cards in their respective states. These Plaintiffs entered into the Gold Card program in Florida and California, paid their membership fees in those states, obtained their Gold Cards in Florida and California, purchased product from GNC with their Gold Cards in those respective states and were denied benefits and the use of their Gold Cards at GNC stores in Florida and California. Furthermore, like in Alcantarilla where a specific provision of the Restatement provided additional guidance for the type of contract at issue (insurance in that case), here, § 196 applies Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 21 of 29 19 to service contracts like the Gold Card. That provision likewise directs that Florida and California law apply to the respective consumer protection claims of Plaintiffs from those states. Specifically, § 196 indicates, “The validity of a contract for the rendition of services and the rights created thereby are determined, in the absence of an effective choice of law by the parties, by the local law of the state where the contract requires that the services, or a major portion of the services, be rendered.” Here, with respect to the Florida and California plaintiffs, benefits of the Gold Card were principally to be made available to them in Florida and California. Indeed, as GNC acknowledged, the back of the Gold Card itself directs customers to “Call 1-800-477- 4662 for the location nearest you or visit us at www.gnc.com.” Ex. B. to Macken Decl. Accordingly, California and Florida law would apply in the absence of the choice-of-law provision. In summary, applying the required analysis of § 187 (2), irrespective of the choice of law provision, directs that California and Florida laws apply to the California and Florida consumer protection claims asserted by Plaintiffs and putative class members from those states. (d) Analysis of the § 145(2)(a)-(d), § 148 and § 156 Factors Results in Application of California and Florida Law To The Consumer Claims. Under §§ 145, 148 and 157, the analysis leads to the same result. Taylor v. Mooney Aircraft Corp., 265 F. App'x 87, 91 fn. 4 (3d Cir. 2008) (§ 145 factors); Maniscalco v. Brother Int'l (USA) Corp., 709 F.3d 202, 207 (3 rd Cir. 2013) (§ 148 factors). Here, with respect to the Florida and California Plaintiffs, they: (i) were solicited and offered Gold Cards in stores in their respective states (the place where GNC made, and those Plaintiffs received, representations); (ii) entered into the Gold Card Program in Florida and California (situs of the transaction); (iii) paid their membership fees in those states (the place where reliance occurred [Doc. 23 ¶¶ 63, 74-75]); (iv) obtained their actual Gold Cards in Florida and California; (v) purchased product from GNC with their Gold Cards in those respective states (the places of their performance as well as Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 22 of 29 20 GNC’s); and (vi) were denied benefits, the use of their Gold Cards and loss of membership fees at GNC stores in Florida and California (the place where the injury, and conduct directly causing the injury, occurred). The only tie to Pennsylvania vis-à-vis these Plaintiffs is that GNC is headquartered in this District, though the California and Florida Plaintiffs never had any interaction with headquarters or Pennsylvania. That attenuated tie is negligible. California and Florida have the stronger interests. Section 156 of the Restatement applies on this point, providing that ‘the applicable law [under § 145] will usually be the local law of the state where the injury occurred.” Similarly, federal courts applying Pennsylvania choice of law rules have recognized that where the injury is pecuniary in nature, the plaintiff's residence/principal place of business is generally considered the place of injury and represents a contact of substantial significance. CAT Internet Servs., Inc. v. Magazines.com Inc., 2001 U.S. Dist. LEXIS 8 *10(E.D. Pa. Jan 4, 2001); Maniscalco v. Brother Int'l (USA) Corp., 709 F.3d at 208 (“in cases of pecuniary loss, [ ] the domicile, residence and place of business of the plaintiff are more important than are similar contacts on the part of the defendant because financial loss will usually be of greatest concern to the state with which the person suffering the loss has the closest relationship.”); Apple v. Ford Motor Co., 69 Pa. D. & C.4th 236, 241 (Com. Pl. 2004) ("If the injury occurred out of state, Pennsylvania will apply the law of that state even if the law is detrimental to a Pennsylvania resident suing in Pennsylvania. The only exception appears to be where the state in which the injury occurred has a lack of interest in the measure of damages to be recovered.") Here, the injuries were felt in California and Florida as to named Plaintiffs and class members in those states. Thus, under the analysis of these factors, California and Florida clearly have a stronger interest in applying their laws to their consumer protection claims asserted here. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 23 of 29 21 V. Plaintiffs Allege Unlawful Conduct Under California And Florida Consumer Protection Laws, And The Issue Is Improperly Raised On A Motion To Dismiss. Defendant next contends that no unlawful conduct is alleged under California or Florida consumer protection law. Def.’s Br. p 15. GNC’s argument is not only incorrect under both California and Florida law, but the issue is not appropriate for determination on a motion to dismiss. As the Ninth Circuit has explained: California's Unfair Competition Law ("UCL") prohibits any "unlawful, unfair or fraudulent business act or practice." Cal. Bus. and Prof. Code § 17200. The false advertising law prohibits any "unfair, deceptive, untrue, or misleading advertising." Cal. Bus. and Prof. Code § 17500. "'[A]ny violation of the false advertising law . . . necessarily violates' the UCL." California's Consumer Legal Remedies Act ("CLRA") prohibits "unfair methods of competition and unfair or deceptive acts or practices." Cal. Civ. Code § 1770. Appellants’ claims under these California statutes are governed by the "reasonable consumer" test. Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9 th Cir. 2008) (internal citations omitted). In reversing a motion to dismiss, the Ninth Circuit additionally explained, “The California Supreme Court has recognized "that these laws prohibit `not only advertising which is false, but also advertising which[,] although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.'" Id. As the Ninth Circuit further explained, it is well-established that “Whether a practice is deceptive, fraudulent, or unfair is generally a question of fact which requires consideration and weighing of evidence from both sides and which usually cannot be made on demurrer.” Id. Accordingly, the court also explained that it is “the rare situation in which granting a motion to dismiss is appropriate.” Id. at 939; Linear Technology Corp. v. Applied Materials, Inc., 152 Cal. App. 4th 115, fn 9 (2007) (“it is really quite impossible if only the plaintiff has been heard from, as is the case when it is sought to decide the issue of unfairness on demurrer.”) Florida court have uniformly ruled the same with regard to the FDUTPA: Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 24 of 29 22 Because an objective test is employed in determining whether the practice was likely to deceive a consumer acting reasonably, a plaintiff need not show actual reliance on the representation or omission at issue. In determining whether a representation is likely to mislead consumers acting reasonably, courts consider the net impression created. If the statements are likely to mislead reasonable consumers, then it makes no difference if the statements are technically or literally true. The determination of how a reasonable consumer would interpret a term is an issue of fact. Zamber v. Am. Airlines, Inc., 2017 U.S. Dist. LEXIS 49299 (S.D. Fla. 2017) (internal citations and quotations omitted); FTC v. Peoples Credit First, LLC, 244 F. App'x 942, 944 (11th Cir. 2007) (same). VI. Plaintiffs Sufficiently Plead Their California Consumer Protection Claims With Particularity. Defendant next contends that Plaintiffs fail to plead their California consumer protection claims with the particularity required of Rule 9(b). 11 This Court has already addressed the threshold necessary to sustain the three California consumer protection claims asserted here in another class action. In re Milo’s Kitchen Dog Treats, 9 F. Supp. 3d 523 (W.D. Pa. 2014). “Defendants argue that Plaintiff’s CLRA, FAL and UCL claims should be dismissed because Plaintiff has not plead the falsity of Defendants’ alleged misrepresentations with the specificity required under Federal Rule of Civil Procedure 9(b).” Id. at 532-533. More specifically, the Court explained and ruled: To meet this standard, the pleading must provide the who, what, when, where, and how of the misconduct charged. A plaintiff must set forth what is false or misleading about a statement and why it is false. Plaintiff has alleged that Defendants (the who), have engaged in a continuous course of conduct since 2007 (the when), whereby they have made misrepresentations on the jerky treat packaging and on their websites (the where), that their products are wholesome, safe, and that they otherwise have characteristics and qualities that they do not have which is likely to mislead the public (the what), and that these misrepresentations are false because many of the packages of jerky treats contain 11 Defendant does not raise this argument with respect to the FDUTPA claim. Guerrero v. Target Corp., 889 F. Supp. 2d 1348, 1355 (S.D. Fla. 2012) ("[T]he heightened pleading requirements of Rule 9(b) cannot serve as a basis to dismiss FDUTPA claims.") Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 25 of 29 23 contaminants (the how). These allegations appear specific enough to apprise Defendants of the particular misconduct with which they are being charged and thus satisfy the heightened pleading standard set forth in Rule 9(b). Id. at 533 (internal citations and quotations omitted) (emphasis supplied). Here, Plaintiffs have alleged relevant facts in far more detail than the factual allegations found sufficient in Milo’s Kitchen. Specifically, that GNC (the who) sold one and two-year Gold Card memberships in 2015 and up through December 18, 2016, then terminated the program on December 28, 2016 (the when). Plaintiffs also allege that “GNC advertised and described the benefits of membership in its Member Price Program…” on its website, in stores and throughout California (the where) (“Defendant knew its advertisements and representations, including those on its website and throughout California as to the benefits and duration of the Gold Card membership, were not accurate.” [Doc 23 ¶¶ 18, 62(b)]. Plaintiffs further allege in detail that GNC advertised and represented in stores throughout California and on its website that “the Gold Card Program would provide benefits to consumers for a one year period from purchase when in fact it did not,” and that “all members of the California Subclass would receive a rebate, discount, or other economic benefit, but in fact, the earning of the benefit was contingent on GNC not terminating the program prior to the expiration of the one year membership period,” and much more. [Id. ¶¶ 18, 62-96] (the what). Finally, Plaintiffs allege that the advertisements and representations were misleading and false because the stated benefits were not available as and for the duration represented. (the how). More specifically and among other allegations, Plaintiffs asserted that “Defendant continued to falsely advertise and sell Gold Card memberships up through on or about December 18, 2016 by, among other things, failing to disclose and concealing that the Program term and benefits would be unilaterally terminated before the completion of the one-year period and in Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 26 of 29 24 fact was discontinued and terminated on or about December 28, 2016” and that “at least from the time when defendant made the decision to terminate the program, it knew that its continued representations and advertisements that Gold Card members would receive membership benefits for one year were false when made.” Plaintiffs further asserted “Mr. Mayfield, a reasonable consumer, the California Subclass, and the public would be likely to be, and, in fact were, deceived and mislead by defendant’s advertising as they would, and did, interpret the representations in accord with their ordinary usage, that the membership benefits would be provided for a period of one year as advertised, when, in fact, they were not.” [Doc. 23 ¶¶ 83, 86, 88]. In light of these and other detailed allegations of the First Amended Complaint in relation to the specificity required to satisfy Rule 9(b), GNC’s argument that it does not have sufficient “notice of the particular misconduct ... so that they can defend against the charge and not just deny that they have done anything wrong” strains credibility beyond the breaking point. Milo’s Kitchen, 9 F. Supp. 3d at 533. VII. Defendant’s Contention That Plaintiffs Failed to Comply With CLRA Pre-Suit Notice Requirements Misconstrues Those Requirements. Defendant is correct that the CLRA contains a pre-suit notice requirement. Cal. Civil Code § 1782. Under California law, however, leave to amend is afforded to cure the timing of the notice. Whelan v. BDR Thermea, 2011 U.S. Dist. LEXIS 143129 *18-19 (N.D. Cal. Dec. 13, 2011) (denying defendant’s motion to dismiss plaintiff’s claim for failure to comply with CLRA notice requirements, where, although plaintiff filed original complaint seeking damages without giving notice, plaintiff subsequently gave notice and, after defendants responded, filed an amended complaint; the issue of notice was moot because the “proper remedy” for plaintiff’s filing a complaint for damages before sending notice would have been leave to amend.”); Deitz Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 27 of 29 25 v. Comcast Corp., 2006 U.S. Dist. LEXIS 94333 & 16 (“the goal of the legislature would best be served by allowing amendment.”). 12 Here, amending the First Amended Complaint by filing a verbatim copy (or otherwise amending), cures the CLRA’s thirty day notice requirement. 13 CONCLUSION For the reasons set forth herein, Defendant’s motion to dismiss should be denied. Respectfully submitted this 13 th day of June, 2017. JONES, GREGG, CREEHAN GERACE, LLP /s/ David A. Borkovic David A. Borkovic Pa. I.D. No. 23005 Of Counsel 411 Seventh Ave, Suite 1200 Pittsburgh, PA 15219 Tel: (412) 261-6400/ Fax: (412) 261-2652 dab@jgcg.com COMPLEX LAW GROUP, LLC David M. Cohen Admitted Pro Hac Vice 40 Powder Springs Street Marietta, GA 30064 Tel: (770) 200-3100/ Fax: (770) 200-3101 dcohen@complexlaw.com 12 It should also be noted that the FAC contains a claim for injunctive relief (Count III). Pursuant to Cal Civ. Code § 1782(c), “An action for injunctive relief brought under the specific provisions of Section 1770 may be commenced without compliance with subdivision (a). Not less than 30 days after the commencement of an action for injunctive relief, and after compliance with subdivision (a), the consumer may amend his or her complaint without leave of court to include a request for damages.” 13 Defendant criticizes Plaintiffs for sending a copy of their pre-suit notice letter to GNC’s headquarters. The letter was sent to GNC’s counsel in California and to its headquarters in Pittsburgh to properly comply with the notice requirements of the statute. Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 28 of 29 26 CERTIFICATE OF SERVICE I hereby certify that a true and correct copy of the foregoing Plaintiffs’ Memorandum of Law in Opposition to Defendant’s Motion to Dismiss the First Amended Complaint was served this 13 th day of June, 2017, upon all counsel of record through the Court’s electronic filing system to: Sean M. Sullivan, Esquire seansullivan@dwt.com Zana Z. Bugaighis, Esquire zanabugaighs@dwt.com Jordan Clark, Esquire jordanclark@dwt.com /s/ David A. Borkovic David A. Borkovic Pa. I.D. No. 23005 Case 2:17-cv-00135-NBF Document 36 Filed 06/13/17 Page 29 of 29