Clerkin et al v. Mylife.com Inc. et al

Filing 80

AMENDED ORDER re 79 GRANTING DEFENDANT GORALLS RULE 12(B)(2) 39 MOTION TO DISMISS, GRANTING IN PART AND DENYING IN PART DEFENDANTS RULE 12(B)(6) 42 MOTION TO DISMISS AND GRANTING IN PART PLAINTIFFS 47 MOTION TO APPOINT INTERIM CLASS COUNSEL. **CASE NO. CORRECTED ON PAGE 18 IS THE ONLY CHANGE (HIGHLIGHTED ON ORDER)**. ***CONSOLIDATING CASES C-11-2353-CW and C-11-3073-CW. ALL FUTURE FILING SHALL BE FILED IN THIS CASE C-11-527-CW*** Signed by Judge CLAUDIA WILKEN on 8/16/2011. (ndr, COURT STAFF) (Filed on 8/16/2011) Modified on 8/16/2011 (cp, COURT STAFF).

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1 IN THE UNITED STATES DISTRICT COURT 2 FOR THE NORTHERN DISTRICT OF CALIFORNIA 3 4 5 JOHN CLERKIN and VERONICA MENDEZ, individually and on behalf of all others similarly situated, 6 7 8 9 United States District Court For the Northern District of California 10 No. C 11-00527 CW Plaintiffs, v. MYLIFE.COM, INC.; JEFFREY TINSLEY; RACHEL GLASER; W. DWIGHT GORALL; ARMEN AVEDISSIAN; MICHAEL SOH; SHARYN ELES; and OAK INVESTMENT PARTNERS, Defendants. 11 / 12 13 14 AMENDED ORDER GRANTING DEFENDANT GORALL’S RULE 12(B)(2) MOTION TO DISMISS, GRANTING IN PART AND DENYING IN PART DEFENDANTS’ RULE 12(B)(6) MOTION TO DISMISS AND GRANTING IN PART PLAINTIFFS’ MOTION TO APPOINT INTERIM CLASS COUNSEL (Docket Nos. 39, 42 and 47) 15 16 Defendant W. Dwight Gorall moves to dismiss Plaintiffs John 17 Clerkin and Veronica Mendez’s claims against him for lack of 18 personal jurisdiction. 19 Jeffrey Tinsley; Rachel Glaser; Armen Avedissian; Michael Soh; 20 Sharyn Eles; and Oak Investment Partners move to dismiss 21 Plaintiffs’ action for failure to state a claim. 22 these motions and move to appoint their counsel as interim class 23 counsel. 24 Plaintiffs’ motion. 25 Having considered oral argument and the papers submitted by the 26 parties, the Court GRANTS Gorall’s Rule 12(b)(2) motion to dismiss, 27 GRANTS in part Defendants’ Rule 12(b)(6) motion to dismiss and 28 DENIES it in part and GRANTS in part Plaintiffs’ motion to appoint Gorall and Defendants MyLife.com, Inc.; Plaintiffs oppose Non-parties Cynthia McCrary and Cody Brock oppose The motions were heard on June 9, 2011. 1 their counsel as interim class counsel. 2 BACKGROUND 3 4 5 The following allegations are contained in Plaintiffs’ complaint. MyLife.com, Inc., operates mylife.com, an Internet website. 6 MyLife presents those who sign up for its service with “a list of 7 fake names of people supposedly ‘searching for you.’” 8 To show that the website-generated lists are false, Plaintiffs 9 point to a testimonial posted on the Internet by an individual who Compl. ¶ 1. United States District Court For the Northern District of California 10 registered on the website as “sfsf sdgfsdgs.” 11 website then returned a result, indicating that seven people were 12 looking for “sfsf sdgfsdgs.” 13 individual’s Internet testimonial stating that, irrespective of the 14 zip code entered, the website indicated that “Grovia Paxton” was 15 residing in that zip code area and was looking for the individual. 16 Id. at 3:11-17. 17 Id. Id. at 3:4. The Plaintiffs cite another In mid-2010, Clerkin began receiving emails from MyLife, 18 stating that people were searching for him on the website. 19 about September 25, 2010, Clerkin signed up for MyLife “at $21.95 20 for one month.” 21 realized “that no one he knew was looking for him.” 22 discovered that he had been charged $155.40. 23 full refund. 24 balance. 25 Compl. ¶ 7. On or After using the website, Clerkin Id. He then Clerkin requested a However, MyLife refunded only $104.55 and kept the In early 2010, Mendez received an email from MyLife stating 26 that someone was searching for her. 27 discovered “that no one she knew was actually searching for her.” 28 2 Like Clerkin, she subsequently 1 Compl. ¶ 8. 2 was charged $60.00. 3 requested a refund, MyLife refused to return any money. Mendez signed up for a $5.00 “trial subscription,” but Id. When she canceled the service and 4 The individual Defendants hold the following positions: 5 Tinsley is MyLife’s founder, chairperson and chief executive 6 officer; Glaser is MyLife’s chief operating and financial officer; 7 Gorall, a Florida resident, is MyLife’s Vice President of Emerging 8 Business; Avedissian is a MyLife employee who develops business 9 strategies; Soh is MyLife’s Senior Vice President for Marketing; United States District Court For the Northern District of California 10 and Eles is MyLife’s Vice President of Marketing Operations. 11 Glaser, Gorall, Avedissian, Soh and Eles “conspired with MyLife, 12 Mr. Tinsley, and others to perpetrate” the alleged fraudulent 13 scheme. 14 Compl. ¶¶ 11-15. Oak Investment Partners, a venture capital firm, provided $25 15 million to MyLife. 16 and others to perpetrate” the alleged fraudulent scheme. 17 ¶ 16. 18 It, too, “conspired with MyLife, Mr. Tinsley, Compl. Plaintiffs bring the following claims against Defendants: 19 (1) common count for money had and received; (2) violation of 20 California’s Consumer Legal Remedies Act (CLRA), Cal. Civ. Code 21 §§ 1750, et seq.; (3) violation of the fraud prong of California’s 22 Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et 23 seq.; (4) violation of the UCL’s unlawful prong; (5) violation of 24 the UCL’s unfair prong; and (6) unjust enrichment and common law 25 restitution. 26 Plaintiffs contend that the individual Defendants and Oak 27 Investment Partners should be held liable for MyLife’s conduct 28 3 1 because “each of them personally performed acts” giving rise to the 2 first through fifth causes of action. 3 89. 4 and conspired with MyLife and the other Defendants, and furnished 5 the means to accomplish the alleged misconduct, all of which also 6 supports liability against them. 7 superior liability against Tinsley, Glaser and Gorall for 8 Avedissian’s, Soh’s and Eles’s conduct. 9 contend that Tinsley and Glaser can be held personally liable for Compl. ¶¶ 33, 47, 63, 76 and Plaintiffs also argue that each Defendant aided and abetted Plaintiffs seek respondeat Finally, Plaintiffs United States District Court For the Northern District of California 10 the conduct of MyLife and other Defendants based on an agency 11 theory. 12 13 14 DISCUSSION I. Gorall’s Rule 12(b)(2) Motion to Dismiss Under Rule 12(b)(2) of the Federal Rules of Civil Procedure, a 15 defendant may move to dismiss for lack of personal jurisdiction. 16 The plaintiff then bears the burden of demonstrating that the court 17 has jurisdiction. 18 F.3d 797, 800 (9th Cir. 2004). 19 demonstrate facts that if true would support jurisdiction over the 20 defendant.” 21 Uncontroverted allegations in the complaint must be taken as true. 22 AT&T v. Compagnie Bruxelles Lambert, 94 F.3d 586, 588 (9th Cir. 23 1996). 24 allegations if they are contradicted by affidavit. 25 v. Systems Technology Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 26 1977). 27 conflicts in the evidence must be resolved in the plaintiff's 28 Schwarzenegger v. Fred Martin Motor Co., 374 The plaintiff “need only Ballard v. Savage, 65 F.3d 1495, 1498 (9th Cir. 1995). However, the court may not assume the truth of such Data Disc, Inc. If the plaintiff also submits admissible evidence, 4 1 2 favor. AT&T, 94 F.3d at 588. There are two independent limitations on a court’s power to 3 exercise personal jurisdiction over a non-resident defendant: the 4 applicable state personal jurisdiction rule and constitutional 5 principles of due process. 6 (9th Cir. 1990); Data Disc, Inc., 557 F.2d at 1286. 7 jurisdictional statute is co-extensive with federal due process 8 requirements; therefore, jurisdictional inquiries under state law 9 and federal due process standards merge into one analysis. United States District Court For the Northern District of California 10 11 Sher v. Johnson, 911 F.2d 1357, 1361 California’s Rano v. Sipa Press, Inc., 987 F.2d 580, 587 (9th Cir. 1993). The exercise of jurisdiction over a non-resident defendant 12 violates the protections created by the due process clause unless 13 the defendant has “minimum contacts” with the forum state so that 14 the exercise of jurisdiction “does not offend traditional notions 15 of fair play and substantial justice.” 16 Washington, 326 U.S. 310, 316 (1945). Int’l Shoe Co. v. 17 A. 18 General jurisdiction exists when a defendant maintains 19 “continuous and systematic” contacts with the forum state even if 20 the cause of action has no relation to those contacts. 21 Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 22 414 (1984). 23 “fairly high.” 24 not count in the minimum contacts calculus. 25 Rudzewicz, 471 U.S. 462, 475 (1985). 26 evaluating the extent of contacts include whether the defendant 27 makes sales, solicits or engages in business, designates an agent 28 General Jurisdiction The standard for establishing general jurisdiction is Id. Random, fortuitous or attenuated contacts do 5 Burger King v. Factors considered in 1 for service of process, holds a license, or is incorporated in the 2 forum state. 3 F.3d 1082, 1086 (9th Cir. 2000). 4 Bancroft & Masters, Inc. v. Augusta Nat’l, Inc., 223 Plaintiffs plead only that Gorall has aided and abetted 5 MyLife’s alleged misconduct and worked with other Defendants to 6 perpetrate the alleged fraud. 7 action taken by Gorall. 8 offer no factual background, are not sufficient to support general 9 jurisdiction over Gorall. They do not allege any particular Plaintiffs’ unadorned allegations, which United States District Court For the Northern District of California 10 B. 11 A court has specific jurisdiction over a defendant when the Specific Jurisdiction 12 cause of action arises out of or relates to the defendant's 13 activities within the forum. 14 The “minimum contacts” required to assert specific jurisdiction are 15 analyzed using a three-prong test: (1) the non-resident defendant 16 must purposefully direct its activities towards, or consummate some 17 transaction with, the forum or a resident thereof, or perform some 18 act by which it purposefully avails itself of the privilege of 19 conducting activities in the forum, thereby invoking the benefits 20 and protections of its laws; (2) the claim must be one which arises 21 out of or results from the defendant’s forum-related activities; 22 and (3) the exercise of jurisdiction must be reasonable. 23 Lake, 817 F.2d 1416, 1421 (9th Cir. 1987). 24 conditions is required for asserting jurisdiction. 25 Am. v. Marina Salina Cruz, 649 F.2d 1266, 1270 (9th Cir. 1981). 26 Plaintiffs argue that Gorall purposefully directed his Data Disc, Inc., 557 F.2d at 1286. 27 28 6 Lake v. Each of these Ins. Co. of N. 1 activities toward California residents.1 2 to demonstrate purposeful direction, the defendant must “allegedly 3 have (1) committed an intentional act, (2) expressly aimed at the 4 forum state, (3) causing harm that the defendant knows is likely to 5 be suffered in the forum state.” 6 (quoting Dole Food Co., Inc. v. Watts, 303 F.3d 1104, 1111 (9th 7 Cir. 2002)). 8 9 For a defendant’s conduct Schwarzenegger, 374 F.3d at 802 As noted above, Plaintiffs make only broad, general allegations against Gorall. Without more, the fiduciary shield United States District Court For the Northern District of California 10 doctrine applies to him. 11 association with a corporation that causes injury in the forum 12 state is not sufficient in itself to permit that forum to assert 13 jurisdiction over the person.” Davis v. Metro Prods., Inc., 885 14 F.2d 515, 520 (9th Cir. 1989). The doctrine is subject to two 15 exceptions: “(1) where the corporation is the agent or alter ego of 16 the individual defendant; or (2) by virtue of the individual’s 17 control of, and direct participation in the alleged activities.” 18 Wolf Designs, Inc. v. DHR & Co., 322 F. Supp. 2d 1065, 1072 (C.D. 19 Cal. 2004) (citations omitted). 20 MyLife is the alter ego of Gorall, and their averments do not 21 afford any insight into how Gorall controlled or directly 22 participated in the alleged fraudulent scheme. Under this doctrine, “a person’s mere Plaintiffs do not allege that Plaintiffs’ 23 1 24 25 26 27 28 In a heading, Plaintiffs contend that Gorall purposefully availed himself of the privilege of conducting activities in California. However, the purposeful availment analysis generally pertains to contract claims. See Schwarzenegger, 374 F.3d at 802 (“A purposeful availment analysis is most often used in suits sounding in contract. A purposeful direction analysis, on the other hand, is most often used in suits sounding in tort.”). Plaintiffs have not alleged that Gorall entered into a contract. 7 1 pleadings do not support specific jurisdiction over Gorall. 2 Accordingly, Plaintiffs’ claims against Gorall are dismissed 3 without leave to amend for lack of personal jurisdiction. 4 Plaintiffs seek to conduct jurisdictional discovery, they do not 5 justify their request and it is denied. 6 No. 498, United Food & Commercial Workers v. SDC Inv., Inc., 788 7 F.2d 535, 540 (9th Cir. 1986) (concluding that plaintiffs’ belief 8 that discovery will reveal additional contacts is not sufficient to 9 justify granting jurisdictional discovery). Although See Butcher’s Union Local If, in the course of United States District Court For the Northern District of California 10 otherwise permissible discovery in this case, Plaintiffs learn of 11 information that would support specific personal jurisdiction over 12 Gorall, they may promptly move for leave to amend to add him as a 13 Defendant. 14 II. 15 Defendants’ Rule 12(b)(6) Motion to Dismiss A complaint must contain a “short and plain statement of the 16 claim showing that the pleader is entitled to relief.” 17 Civ. P. 8(a). 18 claim is appropriate only when the complaint does not give the 19 defendant fair notice of a legally cognizable claim and the grounds 20 on which it rests. 21 (2007). 22 state a claim, the court will take all material allegations as true 23 and construe them in the light most favorable to the plaintiff. 24 Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). 25 However, this principle is inapplicable to legal conclusions; 26 “threadbare recitals of the elements of a cause of action, 27 supported by mere conclusory statements,” are not taken as true. 28 Fed. R. Dismissal under Rule 12(b)(6) for failure to state a Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 In considering whether the complaint is sufficient to 8 NL 1 Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (citing Twombly, 2 550 U.S. at 555). 3 When granting a motion to dismiss, the court is generally 4 required to grant the plaintiff leave to amend, even if no request 5 to amend the pleading was made, unless amendment would be futile. 6 Cook, Perkiss & Liehe, Inc. v. N. Cal. Collection Serv. Inc., 911 7 F.2d 242, 246-47 (9th Cir. 1990). 8 would be futile, the court examines whether the complaint could be 9 amended to cure the defect requiring dismissal “without In determining whether amendment United States District Court For the Northern District of California 10 contradicting any of the allegations of [the] original complaint.” 11 Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990). 12 Leave to amend should be liberally granted, but an amended 13 complaint cannot allege facts inconsistent with the challenged 14 pleading. 15 A. Id. at 296-97. Plaintiffs’ Claims Against the Individual Defendants and Oak Investment Partners 16 Plaintiffs base their claims against the individual Defendants 17 and Oak Investment Partners on allegations that these Defendants 18 performed acts that facilitated MyLife’s alleged misconduct, 19 conspired with each other to advance the challenged scheme and 20 “furnished the means” to accomplish any alleged wrongdoing. 21 Further, Plaintiffs seek to hold Tinsley, Glaser and Gorall on 22 respondeat superior grounds, asserting that they authorized and 23 directed their subordinates to engage in misconduct. 24 These general allegations are not sufficient to state claims 25 against the individual Defendants or Oak Investment Partners. 26 Plaintiffs’ complaint does not explain what these Defendants did to 27 28 9 1 participate in the alleged scheme. 2 Plaintiffs allege that these Defendants personally performed acts, 3 they do not identify any particular conduct.2 4 sufficient “if it tenders ‘naked assertion[s]’ devoid of ‘further 5 factual enhancement.’” 6 U.S. at 557). 7 For instance, although A complaint is not 129 S. Ct. at 1949 (quoting Twombly, 550 Accordingly, Plaintiffs’ claims against the individual 8 Defendants and Oak Investment Partners are dismissed. 9 are granted leave to amend to allege the acts each Defendant United States District Court For the Northern District of California 10 Plaintiffs performed to advance the alleged fraudulent scheme. 11 B. 12 The CLRA imposes liability for “unfair methods of competition 13 and unfair or deceptive acts or practices undertaken by any person 14 in a transaction intended to result or which results in the sale or 15 lease of goods or services to any consumer.” 16 § 1770(a). 17 Plaintiffs’ CLRA Claim Against MyLife Cal. Civ. Code Plaintiffs acknowledge that their CLRA claim is based on fraud 18 and that they must satisfy the heightened pleading requirements of 19 Federal Rule of Civil Procedure 9. 20 mistake, the circumstances constituting fraud or mistake shall be 21 stated with particularity.” 22 allegations must be “specific enough to give defendants notice of 23 the particular misconduct which is alleged to constitute the fraud 24 charged so that they can defend against the charge and not just 25 deny that they have done anything wrong.” “In all averments of fraud or Fed. R. Civ. Proc. 9(b). The Semegen v. Weidner, 780 26 2 27 28 Indeed, it is not clear how Oak Investment Partners, an entity, could “personally perform” an action. 10 1 F.2d 727, 731 (9th Cir. 1985). 2 nature of the alleged fraudulent activities are sufficient, id. at 3 735, provided the plaintiff sets forth “what is false or misleading 4 about a statement, and why it is false.” 5 Secs. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994). 6 averred generally, simply by saying that it existed. 7 see Fed. R. Civ. Proc. 9(b) (“Malice, intent, knowledge, and other 8 condition of mind of a person may be averred generally.”). 9 Statements of the time, place and In re GlenFed, Inc., Scienter may be Id. at 1547; Plaintiffs contend that their CLRA claim has two bases: United States District Court For the Northern District of California 10 (1) MyLife’s representations in its email solicitations to 11 Plaintiffs that “someone” was looking for them and (2) MyLife’s 12 billing practices. 13 1. 14 The Court considers each in turn. Email Solicitations The gravamen of Plaintiffs’ complaint about MyLife’s email 15 solicitations is that the emails represented that someone was 16 searching for Plaintiffs, even though no one was. 17 purportedly received such emails in early to mid-2010. 18 that the website produces “a list of fake names” for those who sign 19 up. 20 the Internet recounting tests of the mylife.com website suggesting 21 that these names are fake. Plaintiffs They plead As noted above, Plaintiffs cite several testimonials posted on 22 Plaintiffs’ allegations, which must be taken as true, satisfy 23 their pleading burden under Rule 9 and, if proved, could show that 24 MyLife violated the CLRA.3 Their allegations suggest that MyLife’s 25 3 26 27 28 Specifically, MyLife’s alleged actions could be found to fall within the following categories of conduct proscribed the CLRA, 11 1 statement that people were looking for them was false or deceptive. 2 Defendants argue that Plaintiffs’ inability to recognize the names 3 of the people looking for them does not demonstrate that its emails 4 were false or deceptive. 5 plead that the names of the people purportedly looking for them are 6 fictitious and they allege a sufficient factual basis to support 7 this assertion. 8 9 This is beside the point. Plaintiffs Defendants contend that Plaintiffs have failed to plead any damage based on the alleged misrepresentations. This is incorrect. United States District Court For the Northern District of California 10 Plaintiffs allege that, based on MyLife’s refusal to offer a full 11 refund, Clerkin effectively paid $50.85. 12 any portion of the $60.00 Mendez paid. 13 reflect Plaintiffs’ damages. 14 not plead that they did not receive value from their use of the 15 site. 16 website presented lists of fake names and provided information “of 17 no conceivable value to anyone.” 18 they did not receive value from their subscriptions. 19 MyLife declined to refund These alleged amounts Defendants contend that Plaintiffs do This argument is also unavailing. Plaintiffs aver that the Compl. ¶ 1. This suggests that Accordingly, Defendants’ motion to dismiss Plaintiffs’ CLRA 20 claim against MyLife, to the extent it is based on the email 21 solicitations, must be denied. 22 23 24 25 26 27 28 (3) Misrepresenting the affiliation, connection, or association with . . . another. . . . (5) Representing that . . . services have . . . uses [and] benefits . . . which they do not have . . . . (9) Advertising . . . services with intent not to sell them as advertised. Cal. Civ. Code § 1770. 12 1 2. 2 Billing Practices Plaintiffs contend that MyLife’s billing practices violated 3 the CLRA. 4 $21.95 for one month” but was billed $155.40. 5 also allege that Mendez signed up for a “trial subscription . . . 6 for $5.00” but was charged $60.00. 7 most favorable to Plaintiffs, these allegations state a CLRA claim. 8 The averments suggest that, based on MyLife’s representations, 9 Plaintiffs signed up for a particular subscription, but that MyLife United States District Court For the Northern District of California 10 Id. ¶ 8. Compl. ¶ 7. They Viewed in the light billed for another. 11 12 They allege that Clerkin signed up for services “at Accordingly, Plaintiffs’ CLRA claim against MyLife will not be dismissed in any respect. 13 C. 14 California’s UCL prohibits any “unlawful, unfair or fraudulent Plaintiffs’ UCL Claims Against MyLife 15 business act or practice.” 16 UCL incorporates other laws and treats violations of those laws as 17 unlawful business practices independently actionable under state 18 law. 19 (9th Cir. 2000). 20 law may serve as the basis for a UCL claim. Saunders v. Superior 21 Court, 27 Cal. App. 4th 832, 838-39 (1994). In addition, a 22 business practice may be “unfair or fraudulent in violation of the 23 UCL even if the practice does not violate any law.” 24 Scripps Health, 30 Cal. 4th 798, 827 (2003). Cal. Bus. & Prof. Code § 17200. The Chabner v. United Omaha Life Ins. Co., 225 F.3d 1042, 1048 Violation of almost any federal, state or local Olszewski v. 25 To assert standing under the UCL, plaintiffs must allege that 26 they “suffered an injury in fact” and “lost money or property as a 27 result of the unfair competition.” 28 13 Cal. Bus. & Prof. Code § 17204. 1 The purpose of section 17204 is to “eliminate standing for those 2 who have not engaged in any business dealings with would-be 3 defendants.” 4 (2011). Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 317 5 Plaintiffs’ allegations support standing under the UCL. 6 plead facts suggesting that MyLife deceived them through its email 7 solicitations and representations about its billing practices and 8 that they lost money as a result. 9 supporting their CLRA claim against MyLife likewise support their Further, Plaintiffs’ allegations 10 United States District Court For the Northern District of California They claims against MyLife under the UCL’s unlawful and fraudulent 11 prongs. 12 their claim against MyLife under the UCL’s unfair prong. Below, the Court considers whether Plaintiffs have stated 13 In Cel-Tech Communications, Inc. v. Los Angeles Cellular 14 Telephone Company, 20 Cal. 4th 163 (1999), the California Supreme 15 Court enunciated the elements of a UCL claim brought by competitors 16 under the UCL’s unfair prong. 17 appeal have reached varying conclusions as to the elements 18 consumers must plead and prove to prevail under the UCL’s unfair 19 prong. 20 718, 735-736 (9th Cir. 2007); Drum v. San Fernando Valley Bar 21 Ass’n, 182 Cal. App. 4th 247, 256 (2010). 22 used. 23 must allege a “violation or incipient violation of any statutory or 24 regulatory provision, or any significant harm to competition.” 25 Under the second test, a consumer is required to plead that a 26 defendant’s conduct “is immoral, unethical, oppressive, 27 unscrupulous or substantially injurious to consumers” and 28 Since then, California courts of See, e.g., Lozano v. AT&T Wireless Servs., Inc., 504 F.3d Drum, 182 Cal. App. 4th at 256. 14 Three tests have been Under one test, a consumer Id. 1 demonstrate how “the utility of the defendant’s conduct” is not 2 outweighed by “the gravity of the harm to the alleged victim.” 3 (citation and internal quotation marks omitted). 4 which is based on the Federal Trade Commission’s definition of 5 unfair business practices, requires that “(1) the consumer injury 6 must be substantial; (2) the injury must not be outweighed by any 7 countervailing benefits to consumers or competition; and (3) it 8 must be an injury that consumers themselves could not reasonably 9 have avoided.” United States District Court For the Northern District of California 10 11 Id. The third test, Id. at 257 (citation and internal quotation marks omitted). Under any of these tests, Plaintiffs allege sufficient facts 12 to support their claim against MyLife under the UCL’s unfair prong. 13 Defendants do not dispute that, if Plaintiffs are able to state a 14 CLRA claim, they satisfy the first test stated above. 15 allegations also satisfy the second test because they have alleged 16 misconduct without utility that outweighs injury to consumers. 17 Finally, Plaintiffs allege facts indicating that they have lost 18 money based on MyLife’s alleged misconduct, that they did not 19 benefit from this alleged misconduct and that, based on MyLife’s 20 purported deception, they could not reasonably have avoided the 21 injury. 22 23 24 Plaintiffs’ Accordingly, Plaintiffs’ claims against MyLife under the unlawful, unfair and fraud prongs of the UCL are cognizable. D. Plaintiffs’ Claim Against MyLife for Money Had and Received 25 A claim under the common count for money had and received is 26 stated if it is alleged that “the defendant is indebted to the 27 28 15 1 plaintiff in a certain sum for money had and received by the 2 defendant for the use of the plaintiff.” 3 Cal. App. 4th 1611, 1623 (1994) (citation and internal quotation 4 marks omitted). 5 viability of Plaintiffs’ other claims. 6 stated CLRA and UCL claims based on MyLife’s alleged email 7 solicitations, their common count against MyLife for money had and 8 received is cognizable. 9 United States District Court For the Northern District of California 10 E. Schultz v. Harney, 27 Defendants contend that this claim rests on the Because Plaintiffs have Unjust Enrichment and Restitution California courts appear to be split as to whether there is an 11 independent cause of action for unjust enrichment. 12 Hewlett-Packard Co., 582 F. Supp. 2d 1261, 1270-71 (C.D. Cal. 2007) 13 (applying California law). 14 not a cause of action, or even a remedy, but rather a general 15 principle, underlying various legal doctrines and remedies. 16 McBride v. Boughton, 123 Cal. App. 4th 379, 387 (2004). 17 McBride, the court construed a “purported” unjust enrichment claim 18 as a cause of action seeking restitution. 19 two potential bases for a cause of action seeking restitution: 20 (1) an alternative to breach of contract damages when the parties 21 had a contract which was procured by fraud or is unenforceable for 22 some reason; and (2) where the defendant obtained a benefit from 23 the plaintiff by fraud, duress, conversion, or similar conduct and 24 the plaintiff chooses not to sue in tort but to seek restitution on 25 a quasi-contract theory. 26 implies a contract, or quasi-contract, without regard to the 27 parties’ intent, to avoid unjust enrichment. 28 Baggett v. One view is that unjust enrichment is Id. at 388. 16 Id. In There are at least In the latter case, the law Id. 1 Another view is that a cause of action for unjust enrichment 2 exists and its elements are receipt of a benefit and unjust 3 retention of the benefit at the expense of another. 4 SeoulBank, 77 Cal. App. 4th 723, 726 (2000); First Nationwide Sav. 5 v. Perry, 11 Cal. App. 4th 1657, 1662-63 (1992). 6 Lectrodryer v. Even under McBride’s more stringent view, Plaintiffs state an 7 unjust enrichment claim. 8 adequately that MyLife obtained money from them based on deceptive 9 email soliciations. As already explained, they have alleged Thus, Plaintiffs’ unjust enrichment claim United States District Court For the Northern District of California 10 against MyLife is cognizable. 11 III. Plaintiffs’ Motion to Appoint Their Counsel as Interim Lead Counsel 12 Federal Rule of Civil Procedure 23(g)(3) permits a court to 13 “designate interim counsel to act on behalf of a putative class 14 before determining whether to certify the action as a class 15 action.” Plaintiffs ask the Court to appoint their counsel, Bursor 16 & Fisher P.A., as interim lead class counsel. As noted above, 17 McCrary and Brock, who are not parties to this action, oppose 18 Plaintiffs’ motion. They ask the Court to deny Plaintiffs’ motion 19 as premature or, in the alternative, to appoint their counsel as 20 interim co-lead class counsel. McCrary is the plaintiff in McCrary 21 v. MyLife.com, Inc., Case No. C 11-2353 CW (N.D. Cal.), and Brock 22 is the plaintiff in Brock v. MyLife.com, Inc., Case No. C 11-3073 23 CW (N.D. Cal.). 24 Plaintiffs’ action will go forward. Having considered the 25 parties’ submissions, the Court appoints Plaintiffs’ counsel and 26 McCrary and Brock’s counsel as co-interim class counsel. 27 28 17 1 2 CONCLUSION For the foregoing reasons, the Court GRANTS without prejudice Gorall’s Rule 12(b)(2) motion to dismiss for lack of personal 4 jurisdiction (Docket No. 39), GRANTS in part Defendants’ Rule 5 12(b)(6) motion to dismiss and DENIES it in part (Docket No. 42) 6 and GRANTS in part Plaintiffs’ motion to appoint their counsel as 7 interim class counsel (Docket No. 47). 8 otherwise permissible discovery in this case, Plaintiffs learn of 9 information that would support specific personal jurisdiction over 10 United States District Court For the Northern District of California 3 Gorall, they may promptly move for leave to amend to add him as a 11 Defendant. 12 and Oak Investment Partners are dismissed for failure to state a 13 claim. 14 supporting personal liability against these Defendants. 15 Defendants’ Rule 12(b)(6) motion to dismiss is denied in all other 16 respects. 17 If, in the course of Plaintiffs’ claims against the individual Defendants Plaintiffs are granted leave to amend to plead facts This case, along with McCrary and Brock, shall proceed as a 18 consolidated action. 19 0527 case, the lowest numbered of the three lawsuits. 20 shall close the files on the 11-2353 and 11-3073 cases. 21 All future filings shall be filed in the 11The Clerk Defendants MyLife.com and Oak Investment Partners’ motions 22 concerning Plaintiffs’ Consolidated Amended Class Action complaint 23 are set to be heard on September 1, 2011 at 2:00 p.m. 24 25 IT IS SO ORDERED. Dated: 8/16/2011 CLAUDIA WILKEN United States District Judge 26 27 28 18