Devin Rose v. Zara USA, Inc et al

NOTICE OF MOTION AND MOTION to Dismiss Case

C.D. Cal.November 7, 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP CHRISTOPHER CHORBA, SBN 216692 cchorba@gibsondunn.com TIMOTHY W. LOOSE, SBN 241037 tloose@gibsondunn.com MIGUEL LOZA JR., SBN 258197 mlozajr@gibsondunn.com NICOLE GUZMAN, SBN 297266 nguzman@gibsondunn.com GIBSON, DUNN & CRUTCHER LLP 333 South Grand Avenue Los Angeles, CA 90071-3197 Telephone: 213.229.7000 Facsimile: 213.229.7520 Attorneys for Defendant, ZARA USA, INC. UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION DEVIN ROSE, Plaintiff, v. ZARA USA, INC., Defendant. CASE NO. 2:16-cv-06229-DSF (RAOx) DEFENDANT ZARA USA, INC.’S NOTICE OF MOTION AND MOTION TO DISMISS PLAINTIFF’S COMPLAINT; SUPPORTING MEMORANDUM OF POINTS AND AUTHORITIES Hearing: January 9, 2017 Time: 1:30 p.m. Place: Courtroom 840 255 East Temple St. Los Angeles, CA 90012 Judge: Hon. Dale S. Fischer Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 1 of 35 Page ID #:105 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP NOTICE OF MOTION AND MOTION TO DISMISS TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: PLEASE TAKE NOTICE that on Monday, January 9, 2017, at 1:30 p.m., or as soon thereafter as the matter may be heard before the Honorable Dale S. Fischer, Courtroom 840, 255 East Temple Street, Los Angeles, CA 90012, Defendant Zara USA, Inc. will, and hereby does, move for an order dismissing Plaintiff Devin Rose’s Complaint (Dkt. 1) with prejudice pursuant to Rules 8(a), 9(b), and 12(b)(6) of the Federal Rules of Civil Procedure. In his Complaint, Plaintiff claims that he was “defrauded” because Zara charged him for his purchase at the U.S. retail price that rang up at the cash register, rather than at the price in Euros (€) that was on the price tag (and which Zara charges in some overseas markets). Zara moves to dismiss on the grounds that Plaintiff: (i) cannot state a claim under California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.) because he has not “lost money or property as a result of” paying the U.S. retail price, nor can he establish any causal link between Zara’s purported conduct and his alleged “harm”; (ii) did not allege the necessary elements of his fraud by misrepresentation claim, much less with the requisite particularity; (iii) cannot state a claim for unjust enrichment; and (iv) has not pleaded facts to state a claim for negligence or negligence per se-nor can he, because the economic loss rule bars those claims as a matter of law. Because Plaintiff’s defective theory cannot be cured, Zara respectfully requests that the Court dismiss this action with prejudice. This Motion is based upon this Notice of Motion and Motion, the attached Memorandum of Points and Authorities, the papers on file, any oral argument that may be heard by the Court, and all other material that the Court deems appropriate. / / / / / / / / / / / / Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 2 of 35 Page ID #:106 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP This Motion is made following the conference of counsel pursuant to L.R. 7-3 which took place on October 31, 2016. The parties stipulated to a proposed briefing schedule and hearing date on this Motion. (See Dkt. 20.) DATED: November 7, 2016 GIBSON, DUNN & CRUTCHER LLP By: _________________________________ Christopher Chorba Attorneys for Defendant ZARA USA, INC. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 3 of 35 Page ID #:107 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP TABLE OF CONTENTS Page I. INTRODUCTION AND SUMMARY OF ARGUMENT .................................. 1 II. SUMMARY OF ALLEGED FACTS .................................................................. 3 III. THE LEGAL STANDARDS GOVERNING THIS MOTION ........................... 4 IV. ARGUMENT ........................................................................................................ 5 A. The Alleged Pricing Practices Do Not Violate The Unfair Competition Law ........................................................................................ 6 1. Plaintiff Cannot Assert A UCL Claim Because He Did Not Lose Any “Money Or Property As A Result Of” Zara’s Alleged Pricing Practices. ............................................................... 6 2. Plaintiff Does Not Allege Facts To Establish Any “Unlawful,” “Fraudulent,” Or “Unfair” Business Practices. ..... 12 B. The Complaint Does Not State A Claim For Intentional Misrepresentation ..................................................................................... 19 C. Plaintiff Cannot State A Claim For Unjust Enrichment .......................... 21 D. The Alleged Facts Do Not Support Any Negligence Claim .................... 23 V. CONCLUSION .................................................................................................. 24 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 4 of 35 Page ID #:108 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP TABLE OF AUTHORITIES Page(s) Cases Aas v. Super. Ct., 24 Cal. 4th 627 (2000) .............................................................................................. 23 Abarca v. Merck & Co., No. 07-388, 2010 WL 1054010 (E.D. Cal. Mar. 17, 2010) ..................................... 20 Anderson v. Deloitte & Touche LLP, 56 Cal. App. 4th 1468 (1997) ................................................................................... 19 Andren v. Alere, Inc., No. 16-1255, 2016 WL 4761806 (S.D. Cal. Sept. 13, 2016) ................................... 21 Apple Inc. v. Super. Ct., 56 Cal. 4th 128 (2013) .............................................................................................. 13 Ashcroft v. Iqbal, 556 U.S. 662 (2009) .......................................................................................... 4, 5, 19 Bell Atl. Corp. v. Twombly, 550 U.S. 544 (2007) ................................................................................................ 4, 5 Berger v. Home Depot USA, Inc., 741 F.3d 1061 (9th Cir. 2014) .................................................................................. 22 Birdsong v. Apple, Inc., 590 F.3d 955 (9th Cir. 2009) .................................................................................... 11 Bower v. AT&T Mobility, LLC, 196 Cal. App. 4th 1545 (2011) ............................................................................... 7, 8 Branca v. Nordstrom, Inc., No. 14-2062, 2015 WL 1841231 (S.D. Cal. Mar. 20, 2015) .......................... 9, 14, 17 Bullard v. Wastequip, Inc., No. 14-1309-MMM, 2014 WL 10987394 (C.D. Cal. Sept. 11, 2014) ..................... 20 Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163 (1999) ........................................................................................ 12, 18 In re Century Aluminum Co. Sec. Litig., 729 F.3d 1104 (9th Cir. 2013) .................................................................................. 10 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 5 of 35 Page ID #:109 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Coyotzi v. Countrywide Fin. Corp., No. 09-1036, 2009 WL 2985497 (E.D. Cal. Sept. 16, 2009) ................................... 24 CSI Elec. Contractors, Inc. v. Zimmer Am. Corp., No. 12-10876-CAS, 2013 WL 1249021 (C.D. Cal. Mar. 25, 2013) ........................ 22 Dahlia v. Rodriguez, 735 F.3d 1060 (9th Cir. 2013) .................................................................................... 5 Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677 (9th Cir. 2009) .............................................................................. 21, 22 Donohue v. Apple, Inc., 871 F. Supp. 2d 913 (N.D. Cal. 2012) ...................................................................... 21 Doose v. IRS, No. 07-06223-DSF, 2009 WL 764523 (C.D. Cal. Mar. 19, 2009) ............................ 5 Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350 (2010) ............................................................................. 9, 10 Ebner v. Fresh, Inc., No. 13-5644, 2016 WL 5389307 (9th Cir. 2016) ..................................................... 16 ESG Cap. Partners, LP v. Stratos, 828 F.3d 1023 (9th Cir. 2016) .................................................................................. 22 Fabozzi v. StubHub, Inc., No. 11-4385, 2012 WL 506330 (N.D. Cal. Feb. 15, 2012) ...................................... 18 Figy v. Frito-Lay N. Am., Inc., 67 F. Supp. 3d 1075 (N.D. Cal. 2014) ........................................................................ 8 First Nationwide Sav. v. Perry, 11 Cal. App. 4th 1657 (1992) ................................................................................... 22 Forouzesh v. Starbucks Corp., No. 16-3830-PA, 2016 WL 4443203 (C.D. Cal. Aug. 19, 2016) ...................... 17, 22 Glen Holly Entm’t, Inc. v. Tektronix, Inc., 100 F. Supp. 2d 1086 (C.D. Cal. 1999) .......................................................... 5, 12, 20 Hall v. Time Inc., 158 Cal. App. 4th 847 (2008) ........................................................................... 7, 9, 10 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 6 of 35 Page ID #:110 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013) .................................................................................. 14 Hurley v. Loma Linda Univ. Med. Ctr., No. 12-5688-DSF, 2014 WL 580202 (C.D. Cal. Feb. 12, 2014) ............................. 24 Jackson v. Carey, 353 F.3d 750 (9th Cir. 2003) ...................................................................................... 5 Junod v. Mortg. Elec. Regis. Sys., Inc., 584 F. App’x 465 (9th Cir. 2014) ............................................................................... 6 Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009) .................................................................................... 5 Khoury v. Maly’s of Cal., Inc., 14 Cal. App. 4th 612 (1993) ..................................................................................... 18 Klein v. Earth Elements Inc., 59 Cal. App. 4th 965 (1997) ..................................................................................... 18 Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310 (2011) ................................................................................................ 9 Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496 (2003) ............................................................................. 15, 16 Lazar v. Hertz Corp., 69 Cal. App. 4th 1494 (1999) ................................................................................... 12 McCann v. Lucky Money, Inc., 129 Cal. App. 4th 1382 (2005) ..................................................................... 11, 15, 16 McKinniss v. General Mills, No. 07-2521-GAF, 2007 WL 4762172 (C.D. Cal. Sept. 18, 2007) ......................... 18 McKinniss v. Kellogg USA, No. 07-2611-ABC, 2007 WL 4766060 (C.D. Cal. May 21, 2007) .......................... 18 Medina v. Safe-Guard Prods., Int’l, Inc., 164 Cal. App. 4th 105 (2008) ..................................................................................... 8 Myers-Armstrong v. Actavis Totowa, LLC, 382 F. App’x 545 (9th Cir. 2010) ............................................................................. 21 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 7 of 35 Page ID #:111 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964 (N.D. Cal. 2008) ...................................................................... 22 Patriot Sci. Corp. v. Korodi, 504 F. Supp. 2d 952 (S.D. Cal. 2007) ...................................................................... 20 Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583 (2008) ................................................................................... 7 Punian v. Gillette Co., No. 14-05028, 2016 WL 1029607 (N.D. Cal. Mar. 15, 2016) ................................. 22 Quiroz v. Seventh Ave. Ctr., 140 Cal. App. 4th 1256 (2006) ................................................................................. 24 Rheem Mfg. Co. v. United States, 57 Cal. 2d 621 (1962) ............................................................................................... 22 Rojas-Lozano v. Google, Inc., 159 F. Supp. 3d 1101 (N.D. Cal. 2016) .................................................................... 21 Rubenstein v. Neiman Marcus Grp. LLC, No. 14-07155-SJO, 2015 WL 1841254 (C.D. Cal. Mar. 2, 2015) ....................... 9, 17 Sanders v. Apple Inc., 672 F. Supp. 2d 978 (N.D. Cal. 2009) ...................................................................... 22 Seely v. White Motor Co., 63 Cal. 2d 9 (1965) ................................................................................................... 23 Sevidal v. Target Corp., 189 Cal. App. 4th 905 (2010) ................................................................................... 10 Sierra-Bay Fed. Land Bank Ass’n v. Super. Ct., 227 Cal. App. 3d 318 (1991) .................................................................................... 24 Smith v. Nationstar Mortg. LLC, No. 15-2498-DSF, 2015 WL 4652699 (C.D. Cal. Aug. 4, 2015) .......................... 6, 8 In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 903 F. Supp. 2d 942 (S.D. Cal. 2012) .................................................................. 7, 23 Spokeo, Inc. v. Robins, 136 S. Ct. 1540 (2016) .............................................................................................. 11 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 8 of 35 Page ID #:112 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 vi DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Stanwood v. Mary Kay, Inc., 941 F. Supp. 2d 1212 (C.D. Cal. 2012) .................................................................... 10 Starr v. Baca, 652 F.3d 1202 (9th Cir. 2011) .................................................................................... 5 Sugawara v. PepsiCo, No. 08-01335, 2009 WL 1439115 (E.D. Cal. May 21, 2009) .................................. 18 Swartz v. KPMG LLP, 476 F.3d 756 (9th Cir. 2007) .................................................................................... 20 Vavak v. Abbott Labs., Inc., No. 10-1995-JVS, 2011 WL 10550065 (C.D. Cal. June 17, 2011) ......................... 23 Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097 (9th Cir. 2003) .............................................................................. 5, 12 Videtto v. Kellogg USA, No. 08-1324, 2009 WL 1439086 (E.D. Cal. May 21, 2009) .................................... 18 Werbel v. PepsiCo, No. 09-4456, 2010 WL 2673860 (N.D. Cal. July 2, 2010) ...................................... 17 Williamson v. Reinalt-Thomas Corp., No. 11-3548, 2012 WL 1438812 (N.D. Cal. Apr. 25, 2012) ......................... 8, 18, 23 Statutes, Rules, & Regulations Cal. Bus. & Prof. Code § 12024.2 ................................................................................. 13 Cal. Bus. & Prof. Code § 17200 ................................................................................ 4, 12 Cal. Bus. & Prof. Code § 17204 ...................................................................................... 6 Cal. Bus. & Prof. Code § 17501 .................................................................................... 14 Cal. Evid. Code § 669 .................................................................................................... 24 Fed. R. Civ. P. 9(b) .............................................................................................. 5, 12, 20 16 C.F.R. § 238.0 ........................................................................................................... 14 16 C.F.R. § 238.2(a) ...................................................................................................... 14 16 C.F.R. §§ 238.3-238.4 .............................................................................................. 14 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 9 of 35 Page ID #:113 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 vii DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Other Authorities U.S. Dep’t of Agriculture Economic Research Service, Real Annual Country Exchange Rates, http://www.ers.usda.gov/data- products/agricultural-exchange-rate-data-set.aspx ................................................... 19 U.S. Dep’t of the Treasury, Bureau of Fiscal Service, Treasury Reporting Rates of Exchange as of Sept. 30, 2016, http://www.fiscal.treasury.gov/fsreports/rpt/treasRptRateExch/current Rates.htm .................................................................................................................. 19 Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 10 of 35 Page ID #:114 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION AND SUMMARY OF ARGUMENT This lawsuit rests on the flawed premise that American consumers are somehow “deceived” or “misled” if they are shopping in a mall on American soil and happen to encounter a few price tags displaying a foreign currency, even though the cash register rings up and displays a price in U.S. dollars, and the customer tenders U.S. currency to complete the purchase. Specifically, Plaintiff Devin Rose bases his proposed nationwide class action on the dubious theory that he was defrauded because Defendant Zara USA, Inc. charged $58.53 for three shirts he bought in Sherman Oaks, California. Because those shirts displayed a price in Euros (€), Mr. Rose contends that Zara should have used an unspecified exchange rate to “convert” the Euro price to U.S. dollars. (Compl. [Dkt. 1] ¶¶ 8, 12-13, 17, 87.) Perhaps recognizing that his experience of encountering Zara apparel tagged in a U.S. store with only a Euro price is the exception and not the rule, Plaintiff argues that even when the price tag displays only U.S. dollars, Zara nonetheless “deceives” consumers because the U.S. dollar price appears on a sticker that completely covers over the Euro price. (Id. ¶¶ 7.b, 44.) In essence, Plaintiff appears to contend that Zara should not be allowed to charge a different price in the U.S. than it charges in Europe-notwithstanding different tariffs, taxes, labor and transportation costs, supply-and-demand considerations, and many other factors that lead companies to charge different prices across the globe. This is not a viable legal theory, and all of Plaintiff’s claims should be dismissed with prejudice for several reasons: First, Plaintiff cannot assert a violation of California’s Unfair Competition Law (“UCL”) because he cannot allege that he was injured and lost money or property as a result of being charged in U.S. dollars for a purchase that he made in California. Although Plaintiff claims that he was “initially attracted” by tags on the shirts showing a Euro price of €9.95 (Compl. ¶ 39), he admits that when he brought the three shirts to Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 11 of 35 Page ID #:115 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP the register, the cashier quoted the U.S. dollar price, for an after-tax total of $58.53. (Id. ¶¶ 37, 42.) Upon hearing this U.S. dollar price, Plaintiff tendered $60.00 in cash, completed the purchase, and received $1.47 in change. (Id.) Plaintiff nevertheless attempts to manufacture an “injury” by claiming that after he made his purchase, Zara employees allegedly told him that the U.S. price was the result of a “euro-to-dollar conversion rate.” (Id. ¶ 40.) But to state a UCL claim, Plaintiff must allege that he actually relied on those statements and bought the shirts because of them. Plaintiff cannot do that here, because he admits making his decision and completing the purchase before the alleged misstatements were made. That is especially so when Plaintiff does not dispute that $17.90 was Zara’s U.S. price for each shirt, and he does not allege that he was ever quoted a lower U.S. dollar price. Nor may Plaintiff premise any claim based on his alternative theory that a U.S. dollar price cannot be “stickered over” a Euro price. Plaintiff does not assert that he encountered this situation, and it is implausible to claim that reasonable consumers would be “deceived” by a price tag that simply set forth an amount in U.S. dollars. (See id. ¶ 44.) Plaintiff cites no law to support the proposition that retailers are barred from placing new pricing stickers on merchandise, and this Court should reject his attempt to use the UCL to manufacture such a requirement. Second, Plaintiff’s common-law fraud claim fails for similar reasons. Again, the alleged misrepresentation that the price he paid was the result of converting Euros-to- dollars occurred only after the transaction was completed. As such, Plaintiff could not have relied on any alleged misstatements about conversion rates when making his purchasing decision, which is confirmed by the fact that Plaintiff does not allege that he ever attempted to return the shirts (which he was free to do on the spot, or up to one month after his purchase). In addition to failing to establish any justifiable reliance or harm, Plaintiff fails to allege how Zara knowingly misled him when he admits that Zara quoted him a price in U.S. dollars, and he accepted that price and tendered an appropriate amount of U.S. currency to cover the quoted charge. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 12 of 35 Page ID #:116 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Third, Plaintiff cannot pursue a claim for “unjust enrichment” when he wanted three shirts and received them at the quoted U.S. price. There is no “restitution” to award in these circumstances, and certainly no “unjust enrichment” to Zara. Fourth, Plaintiff cannot state a claim for negligence (or “negligence per se”) because the Complaint only attempts to assert an economic harm, and California law forecloses a negligence claim in these circumstances. Even more fundamentally, Plaintiff could not assert a negligence claim because he does not allege how Zara breached any duty of care or caused him any harm by charging the U.S. dollar price. In sum, Plaintiff received and paid for the Zara merchandise he wanted, and he cannot base a putative nationwide class action on isolated instances in which garments displayed a Euro price. That practice could not possibly deceive anyone, and Zara requests that the Court dismiss this lawsuit with prejudice. II. SUMMARY OF ALLEGED FACTS Zara started as a single retail shop in northwest Spain in 1975, and the company now has grown into a global retailer that provides fashionable and affordable clothing options in nearly 100 countries, including the United States. (Compl. ¶¶ 2, 3, 31, 32.) Zara’s success is built on revolutionary design, manufacturing, and distribution systems that allow the company to deliver the latest runway and celebrity trends at affordable prices. (Id.) Plaintiff Devin Rose is a California resident who purchased three T-shirts from a Zara store in Sherman Oaks in May 2016. (Id. ¶¶ 11, 39.) The shirts were tagged with a price in Euros (€9.95), and were allegedly not marked with a retail price in U.S. dollars. (Id. ¶¶ 12, 42.) Mr. Rose asserts that he was “initially attracted” to the shirts because of the Euro price tag. (Id. ¶ 39.) When he brought the shirts to the cash register, he was quoted $17.90 per shirt (for a total of $58.53, including sales tax). (Id. ¶¶ 39, 42.) Plaintiff tendered $60.00 in U.S. currency. (Id.) After completing his purchase, Plaintiff allegedly asked two store employees why he had been charged $17.90 per shirt rather than €9.95. He alleges one employee Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 13 of 35 Page ID #:117 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP said that the price reflected a “euro-to-dollar conversion rate.” (Id. ¶ 40.) Plaintiff also allegedly overheard an employee make a similar statement on the phone while he happened to be in the store. (Id.) He does not contend that he sought to return the shirts at that point. The following day, Mr. Rose alleges that he posed the same question to “a Zara customer service hotline,” and a “customer service operator … told him that the conversion rate that was applied to his purchases was that which had prevailed at the time that each item was manufactured.” (Id. ¶¶ 16, 41.) Plaintiff also does not allege that he sought to return the shirts at this point (or at any other time).1 Based on his alleged experience, Plaintiff brings several claims for purported violations of California’s Unfair Competition Law (Cal. Bus. & Prof. Code § 17200, et seq. (“UCL”)), common law fraud, unjust enrichment, and negligence (and “negligence per se”). He asserts that Zara violates California law and deceives customers by providing Euro prices on its tags (so-called “Bait-and-Switch Pricing”) and, alternatively, by affixing a sticker over the Euro price with a U.S. dollar price (so- called “Cover-Up Pricing”). (Id. ¶ 7.) Plaintiff seeks compensatory damages, “restitution and disgorgement,” punitive damages, and declaratory and injunctive relief on behalf of a putative nationwide class. (Compl. ¶ 49; id. at 24-25.) III. THE LEGAL STANDARDS GOVERNING THIS MOTION 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, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). “A pleading that offers labels and conclusions or a formulaic recitation of the elements of a cause of action will not do.” Id. at 678 (quotation marks and citations omitted). After stripping 1 Although Zara accepts-as it must-the truth of Plaintiff’s allegations for purposes of this Motion, it vigorously contests the Complaint’s mischaracterization of its pricing practices, and Zara intends to demonstrate the true facts if this matter continues beyond the pleadings. Plaintiff’s counsel know that these allegations are false. For example, after filing this action, Plaintiff’s counsel posted a video on their YouTube Channel in which a store clerk explained that Zara does not convert prices from some other currency, and that it only charges the U.S. dollar prices that appear on store registers. (See GeragosTube, Zara representative and the hunt for the elusive “conversion device,” http://www.youtube.com/watch?v=AzUgX9QuIIU (posted Aug. 29, 2016).) Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 14 of 35 Page ID #:118 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP away the “conclusory statement[s]” in a complaint, the remaining factual allegations must “raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555, 561 (citation and quotations omitted); Dahlia v. Rodriguez, 735 F.3d 1060, 1076 (9th Cir. 2013) (“[I]t is within [the court’s] wheelhouse to reject, as implausible, allegations that are too speculative to warrant further factual development.”); Doose v. IRS, No. 07-06223-DSF, 2009 WL 764523, at *6 (C.D. Cal. Mar. 19, 2009) (“Dismissal without leave to amend is appropriate when it is clear that the deficiencies in the complaint could not possibly be cured by amendment.”) (citing Jackson v. Carey, 353 F.3d 750, 758 (9th Cir. 2003)). In making this “context-specific” determination, a court must “draw on its judicial experience and common sense.” Iqbal, 556 U.S. at 679. This analysis provides a critical gatekeeping function, because claims must be sufficiently plausible such “that it is not unfair to require the opposing party to be subjected to the expense of discovery and continued litigation.” Starr v. Baca, 652 F.3d 1202, 1216 (9th Cir. 2011). Rule 9(b) requires Plaintiff to plead his fraud-based claims (i.e., UCL, fraud, and unjust enrichment) with particularity, including the “who, what, when, where, and how” of the alleged fraudulent conduct and “what is false or misleading about a statement, and why it is false.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quotation marks and citations omitted); Kearns v. Ford Motor Co., 567 F.3d 1120, 1126-27 (9th Cir. 2009) (claims of nondisclosure and omissions are subject to the heightened pleading standard of Rule 9(b)); Glen Holly Entm’t, Inc. v. Tektronix, Inc., 100 F. Supp. 2d 1086, 1093 (C.D. Cal. 1999) (same). IV. ARGUMENT All five of Plaintiff’s claims fail because the only thing that Plaintiff alleges induced his purchase was a price tag stating “€9.95.” Plaintiff did not lose “money or property as a result of” paying the prevailing U.S. price, nor can he articulate why it is fraudulent, unjust, or injurious for a multinational retailer to charge a U.S. dollar price that may be higher than the equivalent price in Europe or other markets. And, because Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 15 of 35 Page ID #:119 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Plaintiff concedes that any statements regarding a Euro-to-dollar conversion rate were made only after the sale, the statements were immaterial to his purchasing decision and cannot support fraud-based claims for violation of the UCL, misrepresentation, and unjust enrichment. In fact, Plaintiff acknowledges that the alleged pricing discrepancy and explanation may be a result of “negligence” rather than fraud, but the negligence claim also fails, as Plaintiff pleads only an economic loss and California law does not allow a negligence claim in such circumstances. In short, there is no plausible claim, and the Court should dismiss this entire action with prejudice. A. The Alleged Pricing Practices Do Not Violate The Unfair Competition Law 1. Plaintiff Cannot Assert A UCL Claim Because He Did Not Lose Any “Money Or Property As A Result Of” Zara’s Alleged Pricing Practices. As this Court has explained, “UCL standing requires a showing that plaintiff suffered ‘a loss or deprivation of money or property sufficient to qualify as injury-in- fact, i.e., economic injury,’ that ‘was the result of, i.e., caused by, the unfair business practice.’” Smith v. Nationstar Mortg. LLC, No. 15-2498-DSF, 2015 WL 4652699, at *7 (C.D. Cal. Aug. 4, 2015) (quoting Junod v. Mortg. Elec. Regis. Sys., Inc., 584 F. App’x 465, 468-69 (9th Cir. 2014) (emphases in original)). See also Cal. Bus. & Prof. Code § 17204 (requiring a private plaintiff to establish that he/she has “suffered injury in fact and has lost money or property as a result of the [alleged] unfair competition”). Here, neither of Plaintiff’s alleged theories (displaying only a Euro price, and, alternatively, “stickering over” the Euro price with a U.S. dollar price) establishes these essential elements: (a) Plaintiff’s Euro-Only Price Theory (so-called “Bait-and-Switch Pricing”) Fails. As to his first theory, Plaintiff alleges that there was only a Euro price on the shirts that he wanted to purchase. (Compl. ¶¶ 7.a, 12, 42.) Although Plaintiff claims that he was “initially attracted to the[] tag price of ‘€9.95,’” he does not explain what the “attraction” was, nor does he allege that he saw or heard any statement about what price Zara would charge for the shirts in U.S. dollars up to that point. (Id. ¶ 39.) After Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 16 of 35 Page ID #:120 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP seeing the tag, Plaintiff took the shirts to the register, where a Zara associate scanned the UPC bar codes and quoted a U.S. dollar price of $17.90 for each garment. (Id. ¶¶ 39, 42.) The total charge, including sales tax, was $58.53. (Id.) In response, Plaintiff tendered $60.00 in cash, and he received $1.47 in change to complete the transaction. (Id. ¶ 42.) Plaintiff does not allege that he was dissatisfied with the quality, fit, style, or fashion of the shirts, nor does he claim that he sought to return the garments at any time. (Id. ¶¶ 40-41.) As an initial matter, not one of these allegations describes a transaction in which money or property was “lost”: Plaintiff was quoted the proper retail price, willingly purchased the shirts at the price quoted, received the shirts, and retained them. Several courts have rejected attempts to manufacture a UCL claim where there is no actual harm or deception. For example, the California Court of Appeal affirmed the dismissal of a UCL claim on the grounds that there is no “loss” for purposes of the UCL where plaintiffs do not allege that “they were dissatisfied with the [purchase] or were uninformed of its price.” Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583, 1591-92 (2008). As another court explained in affirming the dismissal of a UCL claim with prejudice, “[t]his is not a case in which the defendant’s alleged misrepresentation caused a consumer to purchase a product that he or she would not have bought but for the misrepresentation and the product was worth less than represented by the defendant or was different from what the consumer wanted and expected to buy.” Bower v. AT&T Mobility, LLC, 196 Cal. App. 4th 1545, 1554-55 (2011). Many other state and federal decisions are in accord. See, e.g., Hall v. Time Inc., 158 Cal. App. 4th 847, 855 (2008) (affirming order granting judgment on the pleadings because plaintiff’s UCL claim failed to allege that he did not want the item he paid for or that defendant’s alleged unfair acts induced him to keep an item he otherwise would have returned); In re Sony Gaming Networks & Customer Data Sec. Breach Litig., 903 F. Supp. 2d 942, 966 (S.D. Cal. 2012) (dismissing complaint for failure to allege loss of money or property because “none of the named Class members assert their consoles are Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 17 of 35 Page ID #:121 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP somehow defective … nor do any Class members assert they value their consoles less as a result of” the alleged misconduct). Plaintiff’s purported post-purchase “dismay” that individuals in Europe might be charged less in their currency than he was charged in U.S. dollars (Compl. ¶ 13) is no different than the non-actionable disappointment in Bower, where the plaintiff had to pay sales tax on the original price, rather than the sale price, of a deeply discounted cellular telephone. 196 Cal. App. 4th at 1554-55. In both instances, the appropriate price was charged, paid, and accepted by the plaintiff, confirming that there was no lost money or property. (Id.; Compl. ¶¶ 37-42.) The “buyer’s remorse” described in the Complaint simply is not an “injury” that gives rise to a claim under the UCL. See, e.g., Williamson v. Reinalt-Thomas Corp., No. 11-3548, 2012 WL 1438812, at *8, *10 (N.D. Cal. Apr. 25, 2012) (dismissing UCL claim for failing to allege an injury because the “parties agreed prior to the [transaction]” on the price, the “Plaintiff actually paid” that price, and did not raise any complaints “until well after the transaction had been completed.”). Next, Plaintiff also cannot salvage his UCL claim by citing alleged post-sale explanations from Zara employees about a purported “discrepancy” between the Euro and U.S. dollar prices. In consumer transactions like this one, courts have held that the UCL requires plaintiffs to plead that the sale “‘was the result of, i.e., caused by,’” the challenged sales practice. Smith, 2015 WL 4652699, at *7 (citations omitted); Medina v. Safe-Guard Prods., Int’l, Inc., 164 Cal. App. 4th 105, 115 (2008) (explaining that the UCL’s “‘as a result’ language imports a reliance or causation element into” the statute); Figy v. Frito-Lay N. Am., Inc., 67 F. Supp. 3d 1075, 1088 (N.D. Cal. 2014) (holding that the UCL requires plaintiff to “plead actual reliance on the misrepresentations at issue,” and the “mere alleged violation of the underlying regulations is insufficient”) (citation and quotation marks omitted).2 2 Conclusory allegations of reliance are insufficient; plaintiff must allege that he “was motivated to act or refrain from action based on the truth or falsity of a defendant’s Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 18 of 35 Page ID #:122 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Here, Plaintiff cannot plausibly allege that his purchase was caused by a €9.95 price tag. For starters, no reasonable consumer would expect to pay Euros in a U.S. retail store, nor would any reasonable consumer expect that a particular conversion rate would be applied to a price expressed in Euros, and Plaintiff makes no allegations to support a contrary conclusion. Other courts have rejected similar claims in which the plaintiffs attempted to rely on alleged “deception” resulting from price tags. For example, Judge Otero dismissed a UCL claim based on allegedly misleading price tags precisely because the “tags [we]re not sufficient to support [a] UCL” claim. Rubenstein v. Neiman Marcus Grp. LLC, No. 14-07155-SJO, 2015 WL 1841254, at *5-6 (C.D. Cal. Mar. 2, 2015). In that case, the plaintiff alleged that price tags caused customers to believe that the items sold at Neiman Marcus’ “Last Call” outlet stores had previously been sold at Neiman Marcus flagship stores, when the outlet items were actually of lower quality and had not been offered for sale at a flagship store. Id. at *5. The court nonetheless concluded that these inferences were unwarranted, because the price tags would not mislead a reasonable consumer and there was nothing “to substantiate Plaintiff’s UCL” allegations. Id. at *6. Likewise, in Branca v. Nordstrom, Inc., No. 14-2062, 2015 WL 1841231, at *1 (S.D. Cal. Mar. 20, 2015), the plaintiff claimed that the “Compare At” price tag at a Nordstrom Rack store “enticed” him to purchase clothing that he thought was at a “significantly” lower price than at other Nordstrom stores. But the court rejected the UCL claim because the plaintiff did not allege that the price tag caused any particular belief about the product, much less “that he purchased the item based on this assumption.” Id. at *7 (emphasis added). Plaintiff’s assertion that he was “misled” by Zara’s price tags is no different than the allegations that were dismissed in Rubenstein and Branca. Because Plaintiff was quoted Zara’s correct U.S. price of $17.90 per shirt before the transaction, it would be statement, not merely on the fact it was made.” Kwikset Corp. v. Super. Ct., 51 Cal. 4th 310, 327 n.10 (2011) (emphasis added); accord Hall, 158 Cal. App. 4th at 855 (same); Durell v. Sharp Healthcare, 183 Cal. App. 4th 1350, 1363 (2010) (same). Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 19 of 35 Page ID #:123 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP unreasonable for him to believe, at the time of purchase, that each shirt cost something less than $17.90. That is especially true in a case like this, where Plaintiff paid cash, and thus had to count out an appropriate number of bills to cover the full purchase price. (Compl. ¶ 42 (photo of receipt showing $58.53 total (post-tax) and $60.00 cash tendered).) Nor can Plaintiff claim that his purchase was caused by the alleged explanations he received regarding conversion rates. The Complaint makes clear that all of these explanations occurred after Plaintiff’s purchase, and as a matter of law, the post-sale statements were therefore immaterial. As in Hall, Plaintiff “did not allege he did not want the [item] or [defendant]’s alleged acts of unfair competition induced him to keep [an item] he otherwise would have returned…. Thus, [plaintiff] did not allege [defendant]’s acts of alleged unfair competition caused him to lose money or property.” Hall, 158 Cal. App. 4th at 857; see also Stanwood v. Mary Kay, Inc., 941 F. Supp. 2d 1212, 1218 (C.D. Cal. 2012) (holding that plaintiff had no standing to sue based on a website where “[s]he has not alleged that she viewed any of those sources, and therefore cannot link her injuries to those misrepresentations”); Durell, 183 Cal. App. 4th at 1363 (affirming dismissal of UCL claim because plaintiff did not rely on hospital’s misstatements when choosing to seek care at the hospital); Sevidal v. Target Corp., 189 Cal. App. 4th 905, 929 (2010) (holding that class members who did not view an alleged misrepresentation prior to purchase could not recover under the UCL).3 Ultimately, the timing of these statements is immaterial, because courts also have rejected attempts to use the UCL to mandate a particular exchange rate. For 3 Plaintiff also does not allege any facts that would exclude alternative explanations for why the garments he purchased had Euro price tags, as he is required to do. See, e.g., In re Century Aluminum Co. Sec. Litig., 729 F.3d 1104, 1108 (9th Cir. 2013) (plaintiffs must allege “facts tending to exclude the possibility that the alternative explanation is true … to render plaintiffs’ allegation plausible within the meaning of Iqbal”). For example, he acknowledges that Zara’s items are routinely affixed with stickers displaying only a U.S. price (Compl. ¶¶ 7.b, 38, 44), which suggests that Plaintiff’s three shirts were not priced with U.S. stickers as the result of simple human error. Plaintiff also pleads a negligence claim, conceding that inadvertence is a plausible explanation. (See id. ¶¶ 65-68.) Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 20 of 35 Page ID #:124 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP example, in McCann v. Lucky Money, Inc., 129 Cal. App. 4th 1382 (2005), plaintiff alleged that the defendant (a money exchange business) violated the UCL because it charged customers a “higher ‘fictional’ rate of exchange” that was not the “lower ‘actual’ rate of exchange [defendant] actually gets from the bank.” Id. at 1390. The court emphatically rejected this argument: “The absurdity of [plaintiff’s] contention is obvious,” because defendant was not obliged to use a particular exchange rate, nor was it obliged to disclose to its customers the exchange rate that it actually received from the bank. Id. at 1397. Because each customer was told the exchange rate being used, and because they accepted that rate, “[n]othing in this transaction smacks of fraud[.]” Id. at 1396 (quotation marks and citation omitted). The Court of Appeal affirmed the order dismissing plaintiff’s UCL claim with prejudice. Id. at 1399. Thus, even if Plaintiff here had been told before his purchase that the difference in price was due to an exchange rate (notwithstanding his allegations to the contrary), there is no legal basis to require Zara to use what Plaintiff deems to be the “correct conversion rate.” (b) Plaintiff’s “Stickered Over” Price Theory (so called “Cover-Up Pricing”) Fails. Plaintiff’s alternate theory that the U.S. dollar price was improperly placed on a sticker “covering up” the Euro price also is meritless. (See Compl. ¶¶ 7.b, 44, 79.) This theory fails as a threshold matter because Plaintiff does not allege purchasing anything tagged with a U.S. dollar sticker-his complaint is that the items he purchased only had Euro prices (id. ¶¶ 39, 42), so there are no allegations to establish any injury based on the “stickered over” price tags. See generally Spokeo, Inc. v. Robins, 136 S. Ct. 1540, 1548 (2016) (Article III requires an injury that “affect[s] the plaintiff in a personal and individual way.”) (emphasis added); Birdsong v. Apple, Inc., 590 F.3d 955, 960-61 (9th Cir. 2009) (upholding dismissal of UCL claim because allegations failed to establish that plaintiffs personally suffered any harm). This theory fails for the additional reason that it is implausible to contend that customers are harmed by the display of a U.S. dollar price. (See cases cited supra pp. 9-11; and infra pp. 16-17.) Zara is not aware of any rule or regulation prohibiting Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 21 of 35 Page ID #:125 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP “stickering over” other prices, and Plaintiff has not cited any such authority. There is no reason to adopt Plaintiff’s limitless theory of “injury,” and doing so would effectively prohibit retailers from ever changing their prices-even in circumstances in which a retailer handwrites or re-stickers a “clearance” price. 2. Plaintiff Does Not Allege Facts To Establish Any “Unlawful,” “Fraudulent,” Or “Unfair” Business Practices. In addition to his failure to plead the essential elements of injury and causation, Plaintiff also does not allege any facts to establish that anything Zara did (or failed to do) violates the UCL. In order to state a UCL claim, plaintiffs must allege facts showing that the defendant was engaged in either an “unlawful,” “fraudulent,” or “unfair” business practice. See generally Cal. Bus. & Prof. Code § 17200; Cel-Tech Commc’ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (UCL “establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent.”) (internal quotation marks and citation omitted). Although Rule 9(b) requires Plaintiff to plead his UCL claim with particularity,4 his Complaint does not even make clear which “prong” of the UCL he is pursuing (“unlawful,” “fraudulent,” and/or “unfair”), much less plead particularized facts to support a claim. That alone is grounds for dismissal. Moreover, as Zara illustrates below, the UCL claim must be dismissed because regardless of which prong Plaintiff might seek to pursue, there are no alleged facts that would identify an actionable “unlawful,” “fraudulent,” or “unfair” practice: (a) Not “Unlawful.” Plaintiff does not plausibly allege that Zara violated any underlying statute, as is required to state a claim for “unlawful” business practices. See, e.g., Lazar v. Hertz Corp., 69 Cal. App. 4th 1494, 1505 (1999). The Complaint asserts that Zara “failed to comply” with a California law regulating commodities labeling and a federal regulation related to so-called “bait-and- switch” advertising (Compl. ¶ 70), but neither law applies to this case or requires Zara 4 See Vess, 317 F.3d at 1106; Glen Holly Entm’t, 100 F. Supp. 2d at 1093. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 22 of 35 Page ID #:126 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP to charge the same price in its U.S. transactions as it does in overseas markets: First, Plaintiff cites to a provision of California’s Business & Professions Code that makes it unlawful to: Charge an amount greater than the lowest price posted on the commodity itself or on a shelf tag that corresponds to the commodity, notwithstanding any limitation of the time period for which the posted price is in effect. Cal. Bus. & Prof. Code § 12024.2(a)(2) (cited in Compl. ¶ 70). Plaintiff contends that this law requires Zara to either charge him in Euros, or to convert the Euro pricing to dollars using Plaintiff’s preferred exchange rate. (Compl. ¶¶ 17-19, 87.) But there is nothing in the text of the statute, or the few cases that have considered it, to suggest that this law applies when an imported product inadvertently displays a foreign currency instead of the U.S. dollar price. In fact, the penalties provision of Section 12024.2 demonstrates a singular focus on dollar pricing, providing the punishments for any “overcharge” in terms of “when the overcharge is more than one dollar ($1)” versus “when the overcharge is one dollar ($1) or less.” Cal. Bus. & Prof. Code § 12024.2(b)-(c) (emphases added). In addition, no provision in the “Weights and Measures” division of the Business and Professions Code discusses pricing in foreign currencies. See id. §§ 12001-13800. If Section 12024.2 were intended to apply when an imported product is tagged with only a foreign currency, the Code would provide guidelines for which particular exchange rates would be used (e.g., exchange rate at time of design, manufacture, import, display on the sales floor, sale, etc.). No such provisions exist, and for obvious reasons. Section 12024.2 only applies to situations where a dollar price is advertised, and a higher dollar price is charged at the register. There is no basis for this Court to extend California law to apply to foreign currency pricing, especially when there is nothing to suggest that the legislature intended Section 12024.2 to govern the unique situation here. See generally Apple Inc. v. Super. Ct., 56 Cal. 4th 128, 150 (2013) (“Our role is to determine what the Legislature intended by Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 23 of 35 Page ID #:127 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP the statute it enacted. … [W]e cannot make a square peg fit a round hole[.]”).5 Next, Plaintiff contends that Zara “failed to comply” with 16 C.F.R. § 238.2 (Compl. ¶ 70), which prohibits any statement or illustration from being made in “any advertisement” which creates a: [F]alse impression of the grade, quality, make, value, currency of model, size, color, usability, or origin of the product offered, or which may otherwise misrepresent the product in such a manner that later, on disclosure of the true facts, the purchaser may be switched from the advertised product to another. 16 C.F.R. § 238.2(a) (Nov. 8, 1967) (emphasis added). As with his reliance on California’s law, Plaintiff’s interpretation of this federal regulation would stretch it past the breaking point: The regulation is part of a larger section of the Federal Trade Commission’s “Guides Against Bait Advertising,” which describes the prohibited practice as “an alluring but insincere offer to sell a product or service which the advertiser in truth does not intend or want to sell,” with the ultimate goal to “switch consumers from buying the advertised merchandise, in order to sell something else[.]” 16 C.F.R. § 238.0 (Nov. 8, 1967) (emphasis added). But here, Plaintiff cannot allege that Zara intended to sell “something else” to him. Moreover, the federal regulation identifies ten examples of the types of “bait and switch” tactics the law is designed to counter, none of which aligns with Plaintiff’s allegations in this case regarding price tags, foreign currencies, or post-sale representations regarding conversion rates. See id. §§ 238.3-238.4 (Nov. 8, 1967). Plaintiff does not allege Zara enticed him to enter the store by advertising Euro prices for its U.S. products, or advertising that its U.S. prices bore any relation to a currency exchange rate. Nor does Plaintiff contend that Zara intended to, or ever did, advertise 5 For similar reasons, Hinojos v. Kohl’s Corp., 718 F.3d 1098 (9th Cir. 2013), is inapplicable here. That decision hinged on a specific California law that prohibits advertising a “discount” from an item’s “former price.” Id. at 1103 (quoting Cal. Bus. & Prof. Code § 17501.) In this case, Plaintiff does not allege that Zara advertised any “discount” to induce his purchase, nor is there any suggestion that he was not quoted the proper U.S. dollar price at the register before he paid. See also Branca, 2015 WL 1841231, at *4-5 (distinguishing Hinojos and dismissing UCL claim). Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 24 of 35 Page ID #:128 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP one product for the purpose of moving him to a different piece of merchandise once he was inside the store. Plaintiff alleges that he and/or his counsel reviewed “advertising and marketing materials,” and other publications in preparing his Complaint, but he does not mention a single advertisement using Euro pricing, confirming that Plaintiff cannot truthfully allege that Zara intended to “bait” him or any other customer. (See Compl. ¶ 25.) In sum, Plaintiff fails to cite any law forbidding a retailer from using tags with a foreign price. Nor does he cite any law requiring a retailer to accept foreign currency in those situations, or requiring a retailer to use a particular conversion rate. With no plausible violation of the law alleged, Plaintiff cannot sustain a claim of “unlawful” conduct under the UCL. McCann, 129 Cal. App. 4th at 1398 (not unlawful for defendant to use an exchange rate that was higher than the “actual” conversion rate). (b) Not “Fraudulent.” Plaintiff also cannot state a UCL claim for “fraudulent” business practices. This claim requires a plausible allegation that a “reasonable consumer” is “likely to be deceived” by the defendant’s alleged conduct, which in turn requires identifying some act of deception by the defendant. Lavie v. Procter & Gamble Co., 105 Cal. App. 4th 496, 504 (2003). There was no possibility of deception here, and Plaintiff cannot proceed into discovery on the implausible suggestion that reasonable consumers were misled by the price tags that he encountered. (See Compl. ¶¶ 42, 44.) Plaintiff acknowledges that Zara’s U.S. retail prices (in U.S. dollars) are reiterated to shoppers at the time of sale, and before the purchase is completed, no matter what foreign price may appear on the item’s label. (Id. ¶ 37.) Because Plaintiff cannot plausibly contend that “a significant portion of the general consuming public … acting reasonably in the circumstances, could be misled” by Zara’s tags, he cannot state a UCL claim for “fraudulent” business practices. See, e.g., Lavie, 105 Cal. App. 4th at 508 (explaining that the proper standard is the “the normally credulous consumer,” not the “least sophisticated consumer”). Zara anticipates that Plaintiff’s counsel will argue that the UCL claim is Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 25 of 35 Page ID #:129 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP immunized from scrutiny on a motion to dismiss. Not true-other courts have rejected such far-fetched theories of “deception” on the pleadings:  Most factually analogous to the situation here, the California Court of Appeal has held it is “absurd” for a plaintiff to argue he has been harmed because a defendant allegedly profited by using a foreign currency exchange rate that was higher than the “true exchange rate.” McCann, 129 Cal. App. 4th at 1397.  In Lavie, the court explained that “‘[l]ikely to deceive’ implies more than a mere possibility that the [conduct] might conceivably be misunderstood. … Rather, the phrase indicates that the [conduct] is such that it is probable that a significant portion of the general consuming public or of targeted consumers, acting reasonably in the circumstances, could be misled.” 105 Cal. App. 4th at 508 (emphasis added). The court cited a comical example to illustrate this point: Perhaps a few misguided souls believe, for example, that all “Danish pastry” is made in Denmark. Is it, therefore, an actionable deception to advertise “Danish pastry” when it is made in this country? Of course not. A representation does not become “false and deceptive” merely because it will be unreasonably misunderstood by an insignificant and unrepresentative segment of the class of persons to whom the representation is addressed. Id. at 507 (emphasis added, quotation marks and citation omitted).  Earlier this year, the Ninth Circuit affirmed the dismissal of UCL claims on the pleadings because it concluded that plaintiff’s “claim that the reasonable consumer would be deceived as to the amount of lip product in a tube of [defendant’s lip balm product] is not plausible,” because “[t]he reasonable consumer understands the general mechanics of these dispenser tubes and further understands that some product may be left in the tube to anchor the [lip balm] in place.” Ebner v. Fresh, Inc., No. 13-5644, 2016 WL 5389307, at *5 (9th Cir. 2016).  Courts also have used this logic to dismiss lawsuits involving allegedly deceptive price tags. As discussed above, in Branca the plaintiff claimed that a Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 26 of 35 Page ID #:130 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 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Nordstrom Rack price tag was misleading and confusing because it had both a sale price and a “Compare At” price. 2015 WL 1841231, at *7. The district court dismissed on the pleadings, holding that no reasonable consumer would be confused by the tag. Id. The court also observed that “Plaintiff does not allege that he believed the ‘Compare At’ price represented a former price,” or “that he purchased the item based on this assumption.” Id.  Likewise, Judge Otero rejected similar price-tag claims in Rubenstein, because a “reasonable consumer” would not interpret the words “Compare to” on a price tag to mean that items sold at Neiman Marcus’ outlet stores were the same as those sold at Neiman Marcus “flagship stores.” 2015 WL 1841254, at *5-6.  In yet another example, on the same day that this action was filed, Judge Anderson dismissed a UCL claim asserting that customers were “systematically defrauded” about the size of Starbucks’ cold beverages given the use of ice: “If children have figured out that including ice in a cold beverage decreases the amount of liquid they will receive, the Court has no difficulty concluding that a reasonable consumer would not be deceived” by ordering an iced tea that “include[s] both ice and tea and that for a given size cup, some portion of the drink will be ice rather than whatever liquid beverage the consumer ordered.” Forouzesh v. Starbucks Corp., No. 16-3830-PA, 2016 WL 4443203, at *3 (C.D. Cal. Aug. 19, 2016). Similarly, in this case, reasonable consumers understand that merchandise offered for sale in the United States will be sold for U.S. dollars, and the presence of a few examples with Euro price tags is neither an express or implied representation of any particular conversion rate or promise to sell goods at the exact same price across the globe.  Several district courts emphatically rejected claims that “reasonable consumers” would be deceived that whimsical names of breakfast cereals (such as “Cap’n Crunch’s Crunch Berries” or “Froot Loops”) suggested the presence of “real, nutritious fruit.” See, e.g., Werbel v. PepsiCo, No. 09-4456, 2010 WL 2673860, at *5 (N.D. Cal. July 2, 2010); Sugawara v. PepsiCo, No. 08-01335, 2009 WL 1439115, Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 27 of 35 Page ID #:131 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 18 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP at *3 (E.D. Cal. May 21, 2009); Videtto v. Kellogg USA, No. 08-1324, 2009 WL 1439086, at *3 (E.D. Cal. May 21, 2009); McKinniss v. Kellogg USA, No. 07-2611- ABC, 2007 WL 4766060, at *4 (C.D. Cal. May 21, 2007); McKinniss v. General Mills, No. 07-2521-GAF, 2007 WL 4762172, at *3 (C.D. Cal. Sept. 18, 2007).6 As in these cases, a “reasonable consumer” understands that a shirt tagged with a Euro price, when displayed in a U.S. dollar price at the register in a store located in the U.S., is offered for sale in U.S. dollars at the price given at the register. Plaintiff’s attempt to claim that he was “misled” is implausible. (c) Not “Unfair.” Finally, Plaintiff cannot assert a claim under the final prong of the UCL because none of the challenged practices “threatens an incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition.” Cel-Tech, 20 Cal. 4th at 184-85. A plaintiff alleging an unfair business practice “must state with reasonable particularity the facts supporting” the claim. Khoury v. Maly’s of Cal., Inc., 14 Cal. App. 4th 612, 619 (1993). There is no plausible claim for a UCL “unfairness” claim where, as here, “Plaintiff received exactly what he paid for, at a price he was willing to pay.” Williamson, 2012 WL 1438812, at *8, *10 (dismissing UCL claim for “unfair” business practices because plaintiff paid the quoted price, which included a “recycling fee” that plaintiff only sought to challenge after the purchase); see also Fabozzi v. StubHub, Inc., No. 11-4385, 2012 WL 506330, at *7 (N.D. Cal. Feb. 15, 2012) (dismissing UCL claim alleging that tickets sold on StubHub failed to disclose a markup over the retail price: “So long as purchasers of tickets are getting exactly what they paid for-genuine tickets-at a price they are willing to pay, it is hard to 6 The California Court of Appeal even held that selling potentially tainted animal feed was not likely to deceive reasonable consumers. Klein v. Earth Elements Inc., 59 Cal. App. 4th 965, 970 (1997). The court recognized that “[w]hile we expect that food we buy will not be rotten or contaminated, we know that sometimes it is.” Id. In those situations, the company is not misleading customers to accept contaminated food where the unhappy consumer could have returned the product or contacted the manufacturer to determine the nature of the contamination. Id. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 28 of 35 Page ID #:132 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 19 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP understand how such a transaction could be deemed unfair.”). Plaintiff has failed to allege any facts on which to plausibly conclude that Zara violated antitrust laws or significantly threatened competition. To the contrary, his own model example of a “legitimate conversion” price tag by an international retailer demonstrates that Zara’s competitors also price clothes differently depending on the destination market. (Compl. ¶ 45.) The exemplar tag that Plaintiff cites depicts a price of $19.95 in both Singapore dollars and U.S. dollars. (Compl. ¶ 45.) But 19.95 Singapore dollars equates to just $14.63 U.S. dollars. (U.S. Dep’t of the Treasury, Bureau of Fiscal Service, Treasury Reporting Rates of Exchange as of Sept. 30, 2016, http://www.fiscal.treasury.gov/ fsreports/rpt/treasRptRateExch/currentRates.htm; U.S. Dep’t of Agriculture Economic Research Service, Real Annual Country Exchange Rates, http://www.ers.usda.gov/data-products/agricultural-exchange-rate-data- set.aspx.)7 B. The Complaint Does Not State A Claim For Intentional Misrepresentation Plaintiff also asserts a claim for common-law fraud/ intentional misrepresentation. (Compl. ¶¶ 86-91.) The elements of an intentional misrepresentation claim are (1) a misstatement by defendant (either a false representation, or concealment, or nondisclosure); (2) knowledge of its falsity (scienter); (3) an intent to defraud (i.e., to induce reliance by the plaintiff upon the misrepresentation); (4) justifiable reliance by the plaintiff; and (5) resulting damage. Anderson v. Deloitte & Touche LLP, 56 Cal. App. 4th 1468, 1474 (1997). Plaintiff has not alleged sufficient facts to support this claim-nor can he, because Zara has not made any misrepresentations on which Plaintiff relied to his detriment. State-law fraud claims are subject to the heightened pleading requirements of 7 As noted, Plaintiff also fails to state with reasonable particularity what Zara’s “deceptive” behavior entails, especially when he concedes that Zara provided a U.S. dollar price at the register before the sale was completed. (Compl. ¶¶ 37, 42.) Plaintiff’s UCL claims rest on “naked assertions,” and are devoid of any factual allegations supporting his theory regarding Zara’s supposed deceptive pricing practices, Iqbal, 556 U.S. at 678, and the Court should dismiss them. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 29 of 35 Page ID #:133 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 20 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP Rule 9(b). See, e.g., Patriot Sci. Corp. v. Korodi, 504 F. Supp. 2d 952, 964-65 (S.D. Cal. 2007); Glen Holly Entm’t, 100 F. Supp. 2d at 1093. Thus, a fraud claim must specifically allege the “time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (emphases added, citation and quotation marks omitted). The specificity requirements are necessary to “provide defendants with adequate notice to allow them to defend the charge,” to “deter plaintiffs from the filing of complaints as a pretext for the discovery of unknown wrongs,” to “protect those whose reputation would be harmed,” and to prohibit plaintiffs from “unilaterally imposing upon the court, the parties and society enormous social and economic costs absent some factual basis.” Abarca v. Merck & Co., No. 07-388, 2010 WL 1054010, at *1 (E.D. Cal. Mar. 17, 2010) (citation and quotation marks omitted). Here, Plaintiff has not alleged the required elements of a fraud claim. It is insufficient to plead that “Defendants intentionally and willfully represented that Zara products could be bought for particular prices expressed in euros” (Compl. ¶ 87), when he has not alleged any such representation by Zara, much less the time, place, manner, specific content, speaker, authority of the speaker, method of communication, and/or receipt of any such representation. See, e.g., Bullard v. Wastequip, Inc., No. 14-1309- MMM, 2014 WL 10987394, at *5 (C.D. Cal. Sept. 11, 2014) (holding that plaintiff’s “conclusory” description of alleged misrepresentations was insufficient to withstand a motion to dismiss). Nor is it sufficient to allege that Zara “represented tag prices in dollars as being accurate conversions of original euro prices of garments” (Compl. ¶ 87), because the shirts that Plaintiff bought had no “tag prices in dollars,” and he alleges receiving different accounts from distinct (unnamed) Zara employees regarding the differences in Zara’s European and U.S. prices only after he made his purchase (id. ¶¶ 40, 41). Compounding this problem is Plaintiff’s similarly unsupported-and often conflicting-references to “[Zara’s] uniform written misrepresentations,” “[Zara’s] Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 30 of 35 Page ID #:134 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 21 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP misrepresentations of low prices,” “[Zara’s] pricing scheme,” and Plaintiff’s “Cover- Up Pricing” theory that Zara misleads customers by placing a U.S. dollar price label on its tags which completely covers the European price (thus the exact opposite of the labels Plaintiff himself claims to have been misled by). (Compl. ¶¶ 7.b, 88, 89.) None of these allegations comes close to providing Zara adequate notice to answer or defend against Plaintiff’s claims, and Plaintiff’s fraud claim should therefore be dismissed. Plaintiff’s fraud claim should also be dismissed because, as explained earlier (supra pp. 9-11, 16-17), he does not allege facts to establish the remaining elements of justifiable reliance and resulting damages. C. Plaintiff Cannot State A Claim For Unjust Enrichment Plaintiff asserts that Zara was “unjustly enriched” by his purchase of three shirts at the U.S. retail price because he “would have paid less” had he known that “Zara’s products were inaccurately and deceptively priced.” (Compl. ¶ 82.) This claim should be dismissed for at least two reasons: First, the remedy for unjust enrichment is restitution, but this relief cannot be awarded without a showing of fraud or wrongdoing. See, e.g., Doe I v. Wal-Mart Stores, Inc., 572 F.3d 677, 684 (9th Cir. 2009). If, as here, plaintiffs cannot state a claim for the underlying fraud or unfair business practice on which they base their unjust enrichment claim, that unjust enrichment claim also should be dismissed. See, e.g., Rojas-Lozano v. Google, Inc., 159 F. Supp. 3d 1101, 1120 (N.D. Cal. 2016) (“[W]hen a plaintiff fails ‘to sufficiently plead an actionable misrepresentation or omission, his [or her] restitution claim must be dismissed.’”) (quoting Donohue v. Apple, Inc., 871 F. Supp. 2d 913, 933 (N.D. Cal. 2012)).8 Here, Plaintiff cannot assert 8 See also Myers-Armstrong v. Actavis Totowa, LLC, 382 F. App’x 545, 548 (9th Cir. 2010) (affirming dismissal of UCL, fraud, and unjust enrichment claims because plaintiff “fail[ed] to plead that the drugs she received were of any lesser value than those for which she paid” and therefore “she fail[ed] to sufficiently plead an entitlement to relief under quasi-contract law”); Andren v. Alere, Inc., No. 16-1255, 2016 WL 4761806, at *8 (S.D. Cal. Sept. 13, 2016) (dismissing unjust enrichment claim where UCL and fraud claims also failed); Forouzesh, 2016 WL 4443203, at *5 (“Because all of Plaintiff’s substantive claims fail, he has no viable basis for invoking Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 31 of 35 Page ID #:135 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 22 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP an unjust enrichment claim because he has not stated any claim for any underlying “wrongdoing,” nor has he established an economic injury that resulted from that alleged wrong. Second, “[t]o allege unjust enrichment as an independent cause of action, a plaintiff must show that the defendant received and unjustly retained a benefit at the plaintiff’s expense.” ESG Cap. Partners, LP v. Stratos, 828 F.3d 1023, 1038 (9th Cir. 2016). “This equitable test does not turn merely on the transfer of money or other benefits from one party to another-it requires injustice.” Berger v. Home Depot USA, Inc., 741 F.3d 1061, 1070 (9th Cir. 2014) (emphasis added); see also Doe I, 572 F.3d at 684 (“‘The person receiving the benefit is required to make restitution only if the circumstances are such that, as between the two individuals, it is unjust for the person to retain it.’”) (quoting First Nationwide Sav. v. Perry, 11 Cal. App. 4th 1657, 1663 (1992)). Here, Plaintiff’s allegations do not establish these elements, because he does not allege that Zara “unjustly” received any “benefit,” that Zara “unjustly” retained any “benefit,” or that Plaintiff was harmed by his transaction with Zara. Admittedly, Plaintiff understood the U.S. retail price of the shirts he purchased before he tendered payment (Compl. ¶¶ 37, 42), and he did not seek to return the items at any time. See Rheem Mfg. Co. v. United States, 57 Cal. 2d 621, 626 (1962) (reversing trial court award of unjust enrichment because plaintiff had paid fair market value for parcel of land); CSI Elec. Contractors, Inc. v. Zimmer Am. Corp., No. 12-10876-CAS, 2013 WL 1249021, at *5 (C.D. Cal. Mar. 25, 2013) (dismissing unjust enrichment claim because “plaintiff does not allege what benefit, if any, plaintiff conferred upon [the defendant] entitlement to either unjust enrichment or injunctive relief as remedies.”); Sanders v. Apple Inc., 672 F. Supp. 2d 978, 989 (N.D. Cal. 2009) (dismissing unjust enrichment claim because its resolution “will depend upon the viability of the Plaintiffs’ other claims,” including UCL claim); Punian v. Gillette Co., No. 14-05028, 2016 WL 1029607, at *18 (N.D. Cal. Mar. 15, 2016) (dismissing unjust enrichment claim with prejudice because the court also dismissed a UCL claim based on the “same factual allegations”); Oestreicher v. Alienware Corp., 544 F. Supp. 2d 964, 975 (N.D. Cal. 2008) (same). Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 32 of 35 Page ID #:136 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 23 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP such that restitution would be appropriate”). In sum, Plaintiff cannot have been victimized by unspecified injustices where he (1) understood the U.S. retail price of the items he was purchasing, (2) chose to purchase the items at that price, and (3) retained the benefit of the items in the exchange. The Court should dismiss the unjust enrichment claim with prejudice. D. The Alleged Facts Do Not Support Any Negligence Claim Finally, the negligence claims should be dismissed because the “economic loss rule” limits negligence claims to recovery for physical damages; tort law does not recognize a generic “duty” to protect a customer from purely economic losses. See, e.g., Aas v. Super. Ct., 24 Cal. 4th 627, 636 (2000) (as a “general principle” of negligence actions, “no recovery is allowed for economic loss alone”) (citing Seely v. White Motor Co., 63 Cal. 2d 9 (1965)). Accordingly, “in actions for negligence, liability is limited to damages for physical injuries and recovery of economic loss is not allowed.” In re Sony, 903 F. Supp. 2d at 961. Here, Plaintiff alleges a purely economic harm-that he purportedly paid too much for the three shirts he purchased. That is precisely the type of alleged economic loss that cannot be addressed with a claim for negligence. See, e.g., Vavak v. Abbott Labs., Inc., No. 10-1995-JVS, 2011 WL 10550065, at *6 (C.D. Cal. June 17, 2011) (“[T]o the extent Plaintiff’s negligence claims are based solely on money damages incurred from the purchase price, the claims are barred.”); Williamson, 2012 WL 1438812, at *7 (dismissing negligence claim with prejudice because “Plaintiff does not dispute that he has suffered no physical injury, to himself or to any property, and that Plaintiff’s sole claim is for economic loss”; “the economic loss rule bars Plaintiff from bringing a negligence claim for his economic losses”). In short, the economic loss doctrine forecloses any negligence claims here, because Zara had no duty to protect Plaintiff from a solely economic loss. But those claims also fail for the independent reason that Plaintiff fails to allege the remaining essential elements of breach, causation, and damages. Here, there are no allegations to Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 33 of 35 Page ID #:137 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 24 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP establish breach-Zara could not “breach” any “duty” by tagging merchandise with a foreign currency because, before the sale was completed, Plaintiff was quoted and paid the proper prevailing U.S. dollar price. (See Compl. ¶¶ 39, 42.) Moreover, as explained above, Plaintiff has not plausibly alleged Zara’s conduct “caused” his supposed harm. (Supra pp. 7-10.) Finally, Plaintiff did not suffer any damages because he received the exact items that he expected to purchase at the exact price that he was quoted at the register. (Supra pp. 10-12, 16-17.) Plaintiff’s attempt to assert a separate cause of action for “negligence per se” also fails: First, as this Court has recognized, “negligence per se” is not a stand-alone cause of action, but merely an evidentiary doctrine. See Hurley v. Loma Linda Univ. Med. Ctr., No. 12-5688-DSF, 2014 WL 580202, at *12 (C.D. Cal. Feb. 12, 2014); see also Cal. Evid. Code § 669 (codifying negligence per se). This alone is reason to dismiss this claim. See Coyotzi v. Countrywide Fin. Corp., No. 09-1036, 2009 WL 2985497, at *6 (E.D. Cal. Sept. 16, 2009) (“The negligence per se doctrine does not establish a cause of action distinct from negligence.”); Quiroz v. Seventh Ave. Ctr., 140 Cal. App. 4th 1256, 1285 (2006) (negligence per se is not an independent claim). Second, this purported “claim” rests entirely on the same statute and regulation as the UCL claim, which fails for the reasons discussed. (Supra pp. 12-15.)9 Third, Plaintiff’s attempt to assert a negligence per se theory fails for all the same reasons as his “negligence” claim. (Supra pp. 23.) V. CONCLUSION Reasonable consumers understand that when they visit a store in the United States, they will pay in U.S. dollars at that store. Plaintiff’s entire Complaint rests on 9 California courts have rejected attempts (like Plaintiff’s attempt here) to recast the alleged violations of consumer protection laws as a “negligence per se” claim to avoid the existing statutory and regulatory structure. See, e.g., Sierra-Bay Fed. Land Bank Ass’n v. Super. Ct., 227 Cal. App. 3d 318, 333-34 (1991) (“Nearly all the cases in which the presumption of negligence under [negligence per se] has been applied involve what may be termed ‘safety’ statutes, ordinances or regulations, that is, governmentally designed standards of care intended to protect a particular class of persons from the risk of particular accidental injuries.”). Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 34 of 35 Page ID #:138 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 25 DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Gibson, Dunn & Crutcher LLP the fundamentally flawed premise that encountering a few T-shirts labeled in Euros obligated Zara to use an unspecified exchange rate to “convert” the Euro price to U.S. dollars. Plaintiff cannot plead any plausible claim from this core theory, and no further amendments or additional facts could change that conclusion. For these and all of the foregoing reasons, Zara respectfully requests that the Court dismiss this action with prejudice. DATED: November 7, 2016 GIBSON, DUNN & CRUTCHER LLP By: ________________________________ Christopher Chorba Attorneys for Defendant ZARA USA, INC. Case 2:16-cv-06229-DSF-RAO Document 21 Filed 11/07/16 Page 35 of 35 Page ID #:139 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 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA WESTERN DIVISION DEVIN ROSE, Plaintiff, v. ZARA USA, INC., Defendant. CASE NO. 2:16-cv-06229-DSF (RAOx) [PROPOSED] ORDER GRANTING DEFENDANT ZARA USA, INC.’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT Case 2:16-cv-06229-DSF-RAO Document 21-1 Filed 11/07/16 Page 1 of 2 Page ID #:140 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 [PROPOSED] ORDER Having fully reviewed and considered Defendant Zara USA, Inc.’s Motion to Dismiss Plaintiff’s Complaint, including all supporting and opposing papers, and the arguments presented at the hearing on the Motion, IT IS HEREBY ORDERED that the Motion is GRANTED, and that this action is hereby DISMISSED in its entirety and WITH PREJUDICE pursuant to the Federal Rules of Civil Procedure 8(a), 9(b), and 12(b)(6). IT IS SO ORDERED. DATED: ______________________ ________________________________ The Honorable Dale S. Fischer United States District Court Judge Case 2:16-cv-06229-DSF-RAO Document 21-1 Filed 11/07/16 Page 2 of 2 Page ID #:141