Wang v. OCZ Technology Group, Inc

Filing 46

ORDER by Judge Paul S. Grewal granting in part and denying in part 16 Motion to Dismiss (psglc2, COURT STAFF) (Filed on 10/14/2011)

Download PDF
1 2 3 4 5 6 7 UNITED STATES DISTRICT COURT 8 NORTHERN DISTRICT OF CALIFORNIA 9 SAN JOSE DIVISION United States District Court For the Northern District of California 10 11 JAMES WANG, Plaintiff, 12 13 v. OCZ TECHNOLOGY GROUP, INC., 14 Defendant. 15 ) ) ) ) ) ) ) ) ) Case No.: C 11-1415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE (Re: Docket No. 16) Plaintiff James Wang (“Wang”) brings the instant putative class action on behalf of himself 16 17 and purchasers of OCZ Technology Agility 2 and Vertex 2 solid state drives (“SSDs”) during the 18 relevant class period, beginning sometime after January 1, 2011. 1 Wang alleges that Defendant 19 OCZ Technology Group, Inc. (“OCZ”) made material misrepresentations as to the capacity and 20 performance of the Agility 2 and Vertex 2 SSD products, and that Wang relied upon these 21 misrepresentations in purchasing an inferior product of less value than what was advertised. Wang 22 23 alleges deceptive advertising practices, unfair business practices, negligent misrepresentation, 24 breach of warranty, unjust enrichment, and violation of California Consumers Legal Remedy Act 25 (“CLRA”). 26 1 27 28 Wang states that the exact date in which OCZ began marketing the SSDs at issue remains unknown, because OCZ did not publicly disclose the change in components. Wang pledges to amend the pleading and conform the Class Period identified in the complaint to reflect evidence obtained through discovery. See Docket No. 1 n.5. 1 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE Defendant OCZ Technology Group, Inc. (“OCZ”) moves to dismiss the complaint pursuant 1 2 to Fed. R. Civ. P. 12(b)(6) and 12(b)(1) and also moves to strike certain allegations pursuant to 3 Fed. R. Civ. P. 12(f). Wang opposes both motions. On August 2, 2011, the parties appeared for 4 hearing. Having reviewed the parties’ briefs and considered the arguments of counsel, Defendant’s 5 motion to dismiss is GRANTED, with leave to amend, and Defendant’s motion to strike is 6 DENIED. 7 I. BACKGROUND 8 OCZ is a Delaware corporation that maintains its principal place of business in San Jose, 9 United States District Court For the Northern District of California 10 California. 2 It markets, distributes, and sells SSDs throughout California and the United States. 3 11 SSDs are a type of digital data storage device, similar to the commonly known hard disk drive, but 12 functionally distinguished by the use of flash memory chips for the storage of information. 4 SSDs 13 14 are comprised of three basic components – flash memory, controller, and circuit board – which OCZ sources from various vendors and assembles by way of a third party. 5 Storage capacity and 15 16 performance are two key specifications considered by consumers who are looking to purchase SSD 17 products. 6 Due to the high cost per gigabyte of storage capacity, the storage capacity specification 18 is especially important to the consumer purchase decision. 7 19 20 Sometime prior to January 1, 2011, OCZ marketed a predecessor line of “Agility 2” and “Vertex 2” SSDs. 8 Both the predecessor and next generation (currently-at-issue) line of products 21 2 Docket No. 1 ¶ 12. 3 Id. 4 Id. ¶ 14. 5 Id. ¶¶ 14, 17. 6 Id. ¶¶ 22, 33. 7 Id. ¶¶ 24-25. 8 Id. ¶¶ 24-25. 22 23 24 25 26 27 28 2 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 use a controller that interacts with the flash memory in such a way that one or more modules of 2 memory are rendered inaccessible to the user. 9 In marketing the predecessor SSDs, OCZ took this 3 memory capacity reduction into account, consistent with industry standards, 10 and advertised, for 4 example, 60GB for an OCZ Vertex 2 device with 64GB of raw capacity, whereby one memory 5 (4GB) was reserved to the controller. 11 Wang alleges that sometime before releasing the next 6 generation Agility 2 and Vertex 2 SSDs, OCZ made material alterations to the drives using a 7 8 9 different quantity of flash memory chips and different type of flash memory than the predecessor units. 12 This change allegedly resulted in substantially decreased performance, and increased the United States District Court For the Northern District of California 10 amount of flash memory reserved to the controller. 13 For example, the capacity available to the 11 user in a drive advertised as a 60GB Vertex 2 or Agility 2 allegedly dropped to 55GB with an 12 average 25 percent drop in performance. 14 13 14 Wang alleges that in contravention of the industry standard and OCZ’s own marketing practice for the predecessor SSDs, OCZ failed to disclose the material changes in capacity and 15 16 performance of the Agility 2 and Vertex 2 SSDs. 15 Instead, OCZ allegedly continued to use the 17 same advertising, marketing materials, and packaging it had used for the predecessor units, and 18 maintained the same model number scheme and specifications on the OCZ products website. 16 19 20 9 21 10 22 Id. ¶ 28. Plaintiff references the standards of the International Disk Drive Equipment and Materials Association (IDEMA) used in marketing disk drives. Docket No. 1 ¶¶ 27, 36. 11 Id. ¶ 28. 12 Id. ¶¶ 34, 42-44. 13 Id. ¶¶ 42-45, 49-53. 14 Id. ¶¶ 45, 49-50. 15 Id. ¶¶ 29, 34. 16 Id. ¶¶ 35-41, 47, 55-57. 23 24 25 26 27 28 3 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 Wang alleges that OCZ was fully aware of the material nature of the changes and their effect on 2 user accessible capacity, and chose to retain the marketing scheme and advertising materials 3 notwithstanding the inability of consumers to discover the differences prior to purchasing a SSD 4 unit. 17 Wang allegedly relied upon the misleading advertising and marketing materials when he 5 purchased a 120GB OCZ Agility 2 SSD during the relevant period; the purchased product had a 6 lower user accessible capacity and inferior performance than advertised by OCZ. 18 7 On March 24, 2011, Wang filed the instant action. He asserts six causes of action: (1) 8 9 deceptive advertising under the False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 17500, United States District Court For the Northern District of California 10 et seq.; (2) unfair business practices under the California Unfair Competition Law (“UCL”), Bus. 11 & Prof. Code § 17200, et seq.; (3) negligent misrepresentation; (4) breach of express warranty in 12 violation of the Song-Beverly Consumer Warranty Act, Cal. Civ. Code § 1790, et seq. and Cal. 13 Comm. Code § 2313; (5) unjust enrichment; and (6) violation of the California Consumers Legal 14 Remedy Act (“CLRA”), Civ. Code § 1750, et seq. 15 OCZ moves to dismiss on the grounds of constitutional standing, failure to meet Fed. R. 16 17 Civ. P. 9(b)’s heightened pleading requirements for the applicable causes of action, and failure to 18 allege facts that sustain any causes of action under California law. OCZ also moves to strike certain 19 allegations, including class allegations and references to third-party review of OCZ SSD products. 20 II. LEGAL STANDARDS 21 A. Motion to Dismiss Pursuant to Rule 12(b)(6) 22 A complaint must contain “a short and plain statement of the claim showing that the pleader 23 24 is entitled to relief.” 19 If a plaintiff fails to proffer “enough facts to state a claim to relief that is 25 17 Id. ¶¶ 58-63. 18 Id. ¶¶ 66-67. 19 Fed. R. Civ. P. 8(a)(2). 26 27 28 4 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 plausible on its face,” the complaint may be dismissed for failure to state a claim upon which relief 2 may be granted. 20 A claim is facially plausible “when the pleaded factual content allows the court 3 to draw the reasonable inference that the defendant is liable for the misconduct alleged.” 21 4 Accordingly, under Fed. R. Civ. P. 12(b)(6), which tests the legal sufficiency of the claims alleged 5 in the complaint, “[d]ismissal can based on the lack of a cognizable legal theory or the absence of 6 sufficient facts alleged under a cognizable legal theory.” 22 7 On a motion to dismiss, the court must accept all material allegations in the complaint as 8 9 true and construe them in the light most favorable to the non-moving party. 23 The court’s review is United States District Court For the Northern District of California 10 limited to the face of the complaint, materials incorporated into the complaint by reference, and 11 matters of which the court may take judicial notice. 24 However, the Court need not accept as true 12 allegations that are conclusory, unwarranted deductions of fact, or unreasonable inferences. 25 13 14 “Dismissal with prejudice and without leave to amend is not appropriate unless it is clear that the complaint could not be saved by amendment.” 26 15 16 B. Federal Rule of Civil Procedure 9(b) requires that a pleading alleging fraud or mistake state 17 18 Motion to Dismiss Pursuant to Rule 9(b) “with particularity the circumstances constituting fraud or mistake.” This requires the plaintiff to 19 20 20 Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). 21 21 Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937, 1940, 173 L.Ed.2d 868 (2009). 22 22 Balistreri v. Pacifica Police Dep’t., 901 F.2d 696, 699 (9th Cir. 1990). 23 23 See Metzler Inv. GMBH v. Corinthian Colls, Inc., 540 F.3d 1049, 1061 (9th Cir. 2008). 24 24 See id. at 1061. 25 25 26 27 28 See Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); see also Twombly, 550 U.S. at 561 (“a wholly conclusory statement of [a] claim” will not survive a motion to dismiss). 26 Eminence Capital, LLC v. Aspeon, Inc., 316 F. 3d 1048, 1052 (9th Cir. 2003). 5 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 allege the details of the underlying transaction – the “who, what, when, where, and how” of the 2 conduct averred – in a manner sufficient to provide defendants with adequate notice to defend 3 against the charge. 27 The heightened pleading requirement applies to state law causes of action 4 where fraud is a necessary element of the claim, as well as where plaintiff alleges a “unified course 5 of fraudulent conduct,” such that the entire claim “sounds in fraud.” 28 A court treats a motion to 6 7 8 9 dismiss a claim based on failure to allege fraudulent conduct with sufficient particularity “as the functional equivalent of a motion to dismiss under [Fed. R. Civ. P.] 12(b)(6).” 29 Where plaintiff alleges additional claims not sounding in fraud, the court reviews those claims on a motion to United States District Court For the Northern District of California 10 dismiss under the ordinary notice pleading standards of Fed. R. Civ. P. 8(a). 30 11 C. Motion to Strike Pursuant to Rule 12(f) 12 Under Fed. R. Civ. P. 12(f), a party may move to strike “any redundant, immaterial, 13 impertinent, or scandalous matter.” 31 The essential function of a Rule 12(f) motion is “to avoid the 14 expenditure of time and money that must arise from litigating spurious issues by dispensing with 15 16 17 those issues prior to trial.” 32 A motion to strike “should not be granted unless it is clear that the matter to be stricken could have no possible bearing on the subject matter of the litigation.” 33 18 27 19 20 See Kearns v. Ford Motor Co., 567 F.3d 1120, 1126 (9th Cir. 2009); Vess v, Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997)). 28 Kearns at 1103. 29 Id. at 1107. 30 Id. at 1105. 31 Fed. R. Civ. P. 12(f). 21 22 23 24 32 25 26 Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (quoting Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev’d on other grounds, Fogerty v. Fantasy, Inc., 510 U.S. 517 (1994)). 33 27 28 Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D. Cal. 1991) (citing Naton v. Bank of California, 72 F.R.D. 550, 551 n. 4 (N.D. Cal. 1976)). 6 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE III. DISCUSSION 1 2 A. Motion to Dismiss Article III Standing and Dismissal under 12(b)(1) or 12(b)(6) 34 3 1. 4 Wang must meet the jurisdictional threshold for standing under Article III of the 5 6 Constitution by establishing (1) injury-in-fact, (2) causation, and (3) redressability. As set forth by the Supreme Court in Lujan v. Defenders of Wildlife, this requires Wang to have suffered “an 7 8 9 invasion of a legally protected interest which is (a) concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical,” and for which there is “a causal connection between the United States District Court For the Northern District of California 10 injury and the conduct complained of” and a likelihood that the injury “will be redressed by a 11 favorable decision.” 35 12 13 OCZ argues that Wang’s allegations of injury are conclusory and speculative, and fail to establish the necessary “causal connection” between the alleged injury and OCZ’s conduct. 14 Specifically, OCZ contends that Wang’s general allegations of economic harm are insufficient to 15 16 establish concrete and particularized injury: “Plaintiff does not allege that he overpaid for the OCZ 17 SSD; he does not allege how much he paid for the drive, or how that price was in error. For all we 18 know, Plaintiff could have paid one-cent – or nothing – for the SSD.” 36 OCZ further contends that 19 Wang fails to allege actual injury under a “benefit of the bargain” theory, because the materials 20 submitted by Wang in his request for judicial notice – revealing OCZ’s disclaimer regarding 21 potential variations in SSD speed and discrepancies between reported and actual capacity – 22 23 24 25 34 Due to purportedly conflicting decisions in the Ninth Circuit regarding the proper form for a challenge to constitutional standing, OCZ seeks to dismiss Wang’s claim for lack of standing under both Fed. R. Civ. P. 12(b)(1) and 12(b)(6). See Docket No. 16 at 5 n.2 (comparing White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000) with Vaughn v. Bay Envtl. Mgmt., 567 F.3d 1021, 1024 (9th Cir. 2009)). 26 35 504 U.S. 555, 560-61 (1992) (citations omitted). 27 36 Docket No. 36 at 2. 28 7 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 confirm that Wang “got exactly what he paid for.” 37 In addition, OCZ argues that Wang does not 2 properly plead reliance upon OCZ’s alleged misrepresentations, and thus lacks fails to satisfy the 3 causation element of standing. 38 4 Wang does allege that he purchased the Agility 2 SSD based upon OCZ’s representations as 5 to its performance and capacity, and that as a result of the alterations to the product made by OCZ, 6 he “did not receive the full value of the product as marketed by OCZ.” 39 Moreover, he alleges not 7 8 9 only that he paid more for the product than he would have, but that he, and other putative class members, would not have purchased their SSDs had they been marketed truthfully. 40 For the United States District Court For the Northern District of California 10 purpose of establishing injury-in-fact at the pleading stage, these allegations are sufficient. At this 11 stage, the court “‘presume[s] that general allegations embrace those specific facts that are 12 necessary to support the claim.’” 41 The fact that Wang does not state the purchase price of his 13 14 Agility 2 SSD, allege an exact dollar amount in lost value, or point to the specific advertisements relied upon in his purchase is not determinative. The “precise dollar value of [] losses” is not 15 16 17 required at pleading, so long as the plaintiff “allege[s] a tangible loss that can be proved or disproved upon discovery.” 42 It is therefore sufficient that Wang has alleged that OCZ 18 37 19 20 Id. at 8:9-22 (quoting Docket No. 35-2 at 1). Wang has submitted a request for judicial notice covering a range of documents and images, including screenshots of OCZ’s SSD product packaging, OCZ webpages with product specs & webpages posting third-party reviews, and OCZ website source code. The court GRANTS Wang’s request for judicial review. 21 38 Docket No. 16 at 7 (quoting Lujan at 560). 22 39 See, e.g., Docket No. 1 ¶¶ 11, 66-68. 23 40 24 25 See i.d. ¶ 82 (alleging that OCZ’s misrepresentations harmed Wang and the class members by causing them to “pay[] more money for the Product than they would have” and/or to “purchase the Product which they would not have purchased”). See also, i.d. ¶ 93 (“Had Plaintiff and the Class members known of the true facts about the Products, they would either have not purchased them, or would have not purchased the Products at inflated prices.”). 26 41 27 42 28 Lujan at 561 (quoting Lujan v. National Wildlife Fed’n, 497 U.S. 871, 889 (1990)). In re Toyota Motor Corp. Unintended Acceleration Marketing, Sales Practices, and Products Liability Litig., 754 F. Supp. 2d 1145, 1166 (C.D. Cal. 2010). 8 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 misrepresented SSD performance and capacity characteristics through its product packaging, 2 marketing materials, and website, and that this conduct caused him either to buy a product that he 3 would not have bought, or to buy a product that was inferior, of lower quality and less value, than 4 that offered. 43 5 6 Those cases cited by OCZ are readily distinguishable. In Degelmann v. Advanced Medical Optics, Inc., the court granted summary judgment for defendants, because plaintiffs’ claim that 7 8 9 they would not have purchased a certain contact lens solution had they been apprised of the solution’s defect was insufficient to establish actual injury. 44 But in Degelmann, the plaintiffs did United States District Court For the Northern District of California 10 not claim any harm from the later-recalled lens solution, whereas Wang alleges actual injury to 11 based on the SSD’s failure to perform with the speed or capacity marketed. 45 OCZ also cites the 12 conclusion in Loreto v. The Proctor & Gamble Co. that “[a]scertainable loss is insufficiently plead 13 14 where a plaintiff simply contends that the price charged” was higher than it would have been due to the defendant’s misrepresentations. 46 This conclusion, however, was based on an analysis of New 15 16 17 18 19 20 21 22 23 Jersey statutory and common law unjust enrichment claims, not Article III standing. 47 Moreover, the court in Loreto found that the plaintiffs had received the benefit of their bargain because the 43 See Docket No. 1 ¶¶ 11, 89-91. Other courts have found similarly general allegations of economic harm and reliance to be sufficient for the purpose Article III standing. For example, in Toyota Motor Corp., the court found allegations of economic injury, based on actual or perceived reduction in value to plaintiffs’ vehicles due to the prevalence of sudden, unintended acceleration problems in a significant percentage of those vehicles, to constitute a redressable injury fairly traceable to Toyota’s conduct. See 754 F. Supp. 2d 1145, 1161-62. The same court affirmed a “benefit of the bargain” theory, whereby plaintiffs contracted to purchase their vehicles to perform in one manner, and those vehicles sometimes performed in another, substandard manner. See id. at 1162, 1165-66. The losses resulting from the alleged overpayment or loss in value because of the later-discovered defect conferred standing. See id. at 1166. 44 24 Degelmann v. Advanced Medical Optics, Inc., C 07-31707 PJH, 2010 WL 55874, at *3-4 (N.D. Cal. Jan. 4, 2010). 25 45 See id. at *4. 26 46 737 F. Supp. 2d 909, 922 (S.D. Ohio 2010). 27 47 See id. 28 9 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 ingredients found in the multi-symptom cold medicine purchased were those same ingredients 2 advertised, and thus, plaintiff got what he paid for. 48 In contrast, Wang alleges that he bargained to 3 purchase a product with a certain advertised capacity and performance, but received a product with 4 inferior capabilities and of less value. 49 5 6 The disclaimers on OCZ’s website product pages alerting consumers to potential discrepancies in capacity and variations in rated speeds may ultimately discredit Wang’s claims 7 8 9 that OCZ’s marketing materials misled him and that he did not receive the benefit of the bargain. However, for the purpose of establishing standing, Wang has sufficiently pled injury in fact on the United States District Court For the Northern District of California 10 basis of reduced product value and usefulness, and reliance on a wide range of marketing material 11 and product information, including the SSD product packaging, making the alleged loss of value 12 fairly traceable to OCZ’s alleged conduct. 13 2. Standing for Injunctive Relief and Dismissal of Equitable Claims 14 OCZ also argues that Wang does not have standing to sue for injunctive relief because he 15 16 has not demonstrated a likelihood of future injury. In addition to the minimum threshold 17 requirements for Article III standing when seeking damages, a plaintiff seeking equitable relief 18 must further demonstrate a likelihood of future injury. 50 This requires a showing that plaintiff is 19 “‘realistically threatened by a repetition of the violation.’” 51 Allegations that a defendant’s 20 21 48 22 Id. at 922-23. 49 23 24 25 Wang’s “benefit of the bargain” claim bears a substantial resemblance to the claim in Toyota Motor Corp. As noted earlier, there the plaintiffs alleged that they had bargained for vehicles with certain safety features, but due to the propensity of some cars to suffer from the sudden acceleration problem, the value of their vehicles had dropped. See Toyota Motor Corp., 754 F. Supp. 2d 1145 at 1162. 50 26 See Hodgers-Durgin v. De La Vina, 199 F.3d 1037, 1039 (9th Cir. 1999). 51 27 28 Gest v. Bradbury, 443 F.3d 1177, 1181 (9th Cir, 1999) (quoting Armstrong v. Davis, 275 F.3d 849, 860-61 (9th Cir. 2001) (emphasis in original)). 10 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 2 continuing conduct subjects unnamed class members to the alleged harm is insufficient if the named plaintiffs are themselves unable to demonstrate a likelihood of future injury. 52 3 Wang has not shown that he faces any future harm. To be sure, Wang alleges that 4 notwithstanding the alterations to the Agility 2 and Vertex 2 SSD drives, OCZ maintains the same 5 marketing materials and website pages and thereby continues to violate the false advertising laws, 6 creating a likelihood of ongoing and future injury. But any loss of value to Wang’s Agility 2 SSD 7 8 9 has already occurred. If Wang paid an inflated price for the product based on OCZ’s alleged misrepresentations, he is in no danger of doing so again. Wang also alleges that there is a United States District Court For the Northern District of California 10 likelihood of future harm based on the competitive advantage gained by OCZ from its alleged 11 misrepresentations, as well as the increased risk of harm to Wang and consumers like him who 12 cannot know of the misrepresentations before purchasing the product and are denied “the ability to 13 ably select competitive products in the marketplace.” 53 Yet any competitive advantage obtained by 14 OCZ does not qualify as actual or concrete harm that is threatened or imminent because Wang has 15 16 not alleged even a likelihood that he would once again purchase a SSD at issue from OCZ. 54 The 17 possibility of future harm to Wang based on an inability to select competitive products is thus 18 speculative at best, and certainly insufficient to warrant injunctive relief. 55 19 20 52 See Hodgers-Durgin, 199 F.3d at 1044-45. 21 53 See Docket No. 34 at 8. 22 54 23 24 25 26 27 28 Wang cites Meyer v. Sprint Spectrum L.P., 45 Cal 4th 634 (2009) for the proposition that the CLRA allows plaintiffs to enjoin deceptive practices on behalf of the general public. But Meyer is inapposite to this inquiry. Only if Wang succeeds in amending his CLRA claims to survive a motion to dismiss might Meyer’s analysis assist Wang in seeking injunctive relief under the statute. Even then, the court in Meyer limited the ability of plaintiffs to allege a cause of action for injunctive relief under the CLRA unless a low damage “threshold” could be met. See 45 Cal. 4th at 645-46. 55 See Stickrath v. Globalstar, Inc., 527 F. Supp. 2d 992, 997 (N.D. Cal. 2007) (finding former subscribers to a satellite telephone service failed to allege a likelihood of future harm); Deitz v. Comcast Corp., C 06-6352 WHA, 2006 WL 3782902, at *3 (N.D. Cal. Dec. 21, 2006) (finding claims of “possible future injury” to be too speculative and attenuated unless former cable service 11 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 2 3. Heightened Pleading Requirement According to OCZ, five of Wang’s six asserted causes of action sound in fraud and are 3 subject to the more stringent pleading standards imposed by Fed. R. Civ. P. 9(b). These are: false 4 advertising under the FAL; unfair competition under the UCL; violations of the CLRA; negligent 5 misrepresentation, and unjust enrichment. OCZ argues that Wang’s allegations underlying these 6 claims lack sufficient detail and specificity, particularly with respect to the details surrounding 7 8 9 United States District Court For the Northern District of California 10 Wang’s purchase of his Agility 2 SSD. OCZ further argues that the materials appended in Wang’s request for judicial notice are inadequate to repair the deficiencies. Wang does not dispute that these claims must satisfy Rule 9, but contends that the 11 complaint more than adequately answers the “who, what, when, where and how” of OCZ’s 12 conduct. Wang relies specifically on his allegations identifying (1) OCZ as the source of the 13 alleged misrepresentations, (2) an approximate time period during which the alleged 14 misrepresentations began, (3) the location and content of deceptive and misleading statements, 15 16 including on product packaging, in the model numbers, and on OCZ’s product webpages, and (4) 17 the substance of the misrepresentations. Additionally, Wang also argues that the web screenshots 18 and product packaging images included with the request for judicial notice the Rule 9 requirements 19 by depicting a representative sample of the misrepresentation claimed and its location. 20 21 Wang’s allegations do provide OCZ with notice of a general nature, but they do not provide the level of detail needed to satisfy Rule 9(b). For example, Wang provides a time frame in which 22 OCZ allegedly engaged in deceptive conduct, but fails to allege when in that period he viewed, 23 24 25 read, or otherwise came to rely upon OCZ’s representations. Similarly, he refers to a wide range of marketing materials and provides representative examples in the appended request for judicial 26 27 28 subscriber could demonstrate “a definitive likelihood that he [would] once again become a subscriber of defendants’ cable services). 12 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 notice, but does not specify the material that caused him to rely on OCZ’s representations. On this 2 same basis, in Kearns v. Ford Motor Co., the Ninth Circuit dismissed plaintiffs’ UCL and CLRA 3 claims relating to Ford’s promotion of its Certified Pre-Owned vehicle program after concluding 4 that 5 Kearns fails to allege in any of his complaints the particular circumstances surrounding such representations. Nowhere … does Kearns specify what the television advertisements or other sales material specifically stated. Nor did Kearns specify when he was exposed to them or which ones he found material. Kearns also failed to specify which sales material he relied upon in making his decision to buy a CPO vehicle. Kearns does allege that he was specifically told “CPO vehicles … were individually hand-picked and rigorously inspected used vehicles with a Ford-backed extended warranty.” Kearns does not, however, specify who made this statement or when this statement was made. Kearns failed to articulate the who, what, when, where, and how of the misconduct alleged. The pleading of these neutral facts fails to give Ford the opportunity to respond to the alleged misconduct. 56 6 7 8 9 United States District Court For the Northern District of California 10 11 12 13 As in Kearns, Wang does not allege these key details that would allow OCZ to respond to the 14 allegations of falsity upon which Wang himself relied. In addition, the complaint lacks any 15 indication of the specific ways in Wang’s purchase falls short of its advertised qualities, e.g., 16 actual versus expected capacity of his drive and actual versus expected performance speed. These 17 general assertions of capacity and performance gaps as to the next generation SSD products 57 is 18 insufficient to meet plaintiff’s burden of alleging how he was harmed by the alleged false 19 20 advertising and misrepresentations. 58 The decisions cited by Wang are not persuasive. In Pom Wonderful LLC v. Ocean Spray 21 22 Cranberries, Inc., the court upheld the sufficiency of the complaint under Rule 9(b) where the 23 56 567 F.3d at 1126. 57 See Docket No. 1 ¶¶ 3, 34-57. 24 25 58 26 27 28 See Marolda v. Symantec Corp., 672 F. Supp. 2d 992, 1001 (N.D. Cal. 2009) (finding plaintiff’s allegations of a falsely advertised “either/ or” choice between two software products fell short of Rule 9 standard where plaintiff did not describe the exact language used or the location of the misrepresentation (e.g., online, company website, email message, bundled software application)). 13 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 complaint included a picture of the beverage label stating “Cranberry and Pomegranate” for a juice 2 that contained little or no pomegranate juice, the month and year in which the defendant 3 introduced the misleading label, and the URL website address where the defendant marketed the 4 beverage. 59 Unlike the instant action, however, Pom Wonderful involved one company suing 5 another company for false advertising and unfair competition based on the effect of the 6 misrepresentation on consumers generally 60 – a claim markedly different from that of an 7 8 9 individual consumer who must plead his own exposure to and reliance upon the alleged misrepresentation. Similarly, in Germain v. J.C. Penny Co., the court upheld the sufficiency of United States District Court For the Northern District of California 10 generalized allegations relating to the role of the various defendants in perpetrating a fraudulent 11 marketing scheme, because “[i]t would be unreasonable for the Court to require plaintiffs to plead 12 the specific involvement of each defendant in the scheme prior to discovery.” 61 Wang has not 13 14 alleged conduct for which it is unreasonable to require specificity. In contrast to the plaintiff in Germain, Wang does not lack information on the nature of the misrepresentation as it affected 15 16 him. Only by identifying the particular circumstances in which Wang viewed and relied upon OCZ 17 marketing materials does Wang meet the threshold pleading standard wherein the defendant “can 18 prepare an adequate answer from the allegations.” 62 Nor do the materials submitted for judicial 19 20 21 22 23 59 Pom Wonderful LLC v. Ocean Spray Cranberries, Inc., 642 F. Supp 2d 1112, 1124 (C.D. Cal. 2009). 60 24 See id. (citing plaintiff’s complaint which alleged that Ocean Spray’s drink labeling had “the result of deceiving consumers”). 25 61 26 Germain v. J.C. Penny Co., CV 09-28472009 CAS, 2009 WL 1971336, at *5 (C.D. Cal. July 6, 2009). 62 27 28 Id. at *4 (quoting Walling v. Beverly Enterprises, 476 F.2d 393, 397 (9th Cir. 1973)). See also Vess at 1108. 14 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 2 notice fill the heightened pleading gap because Wang has not indicated in the pleadings which materials contain the relied-upon misrepresentations or omissions or when he relied upon them. 63 3 4. Application of California Law 4 OCZ contends that Wang improperly seeks to apply California law to a transaction that 5 presumably took place out-of-state, in violation of these well-established constitutional 6 principles. 64 “California law embodies a presumption against the extraterritorial application of its 7 8 9 statutes.” 65 Moreover, the application of state law to a non-resident’s claims that lack a sufficient nexus to the forum state raises due process problems under the 14th Amendment. 66 State remedies United States District Court For the Northern District of California 10 may extend to out-of-state parties, however, when the parties are harmed by wrongful conduct 11 occurring in California. 67 12 13 Because Wang is a Washington resident, and the complaint does not allege where he purchased his Agility 2 drive, OCZ argues that it is reasonable to assume Wang also purchased the 14 device in Washington. OCZ relies on numerous court decisions dismissing out-of-state plaintiffs’ 15 16 17 18 19 20 21 22 23 63 See Von Grabe v. Sprint PCS, 312 F. Supp. 2d 1285, 1305, n. 19 (S.D. Cal. 2003) (directing plaintiff to “specifically identify which [judicially noticed] exhibits he is relying on containing the alleged misrepresentations or omissions” in his next amended complaint); Marolda at 1001 (finding inadequate plaintiff’s reference to the falsity of the choice between two products, because “it remains a matter of conjecture when exactly plaintiff faced this choice or where the representation was displayed”); Von Koenig v. Snapple Beverage Corp., 09-cv-606 FCD, 2011 WL 43577 at *2-3 (E.D. Cal., Jan. 26, 2011) (dismissing allegations regarding “unspecified ‘commercial advertisements’ and ‘other promotional materials’” based on plaintiffs’ failure to identify the specific advertisements and materials and when plaintiffs were exposed, but upholding previous finding that example beverage labels were sufficient to support heightened pleading standard for allegations arising out of defendants’ labeling practice). 64 Docket No. 34 at 14-16 (citing Philips Petroleum at 817-21; John Hancock Mut. Life Ins. Co. v. Yates, 299 U.S. 178, 182 (1936)). 65 24 Churchill Village, L.L.C. v. General Electric Co., 169 F. Supp. 2d 1119, 1126 (N.D. Cal. 2000) (citing Diamond Multimedia Sys., Inc. v. Superior Court, 19 Cal. 4th 1036, 1060 n.20 (1999)). 25 66 26 67 27 28 See id. (citing Phillips Petroleum Co. v. Shutts, 472 U.S. 797, 810-11 (1985)). See Diamond Multimedia Sys., Inc. v. Superior Court, 19 Cal. 4th 1036, 1063-64 (1999); Norwest Mortgage, Inc. v. Superior Court, 72 Cal. App. 4th 214, 224 (1999); Morgan, et al. v. Harmonix Music Sys., Inc., C 08-5211 BZ, 2009 WL 2031765, at *2 (N.D. Cal. July 30, 2009). 15 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 state law claims under California’s UCL, FAL, and CLRA for out-of-state conduct or injuries. 68 2 Particularly in the context of unfair competition claims under California’s UCL, OCZ argues that 3 the requisite jurisdictional nexus is best assessed by where the injury took place, based on the local 4 nature of the individual consumer transaction at issue. 69 5 6 The court agrees, and Wang has not disputed, that it is reasonable to presume the purchase of Wang’s OCZ SSD product – and thus Wang’s alleged injury – took place in Washington. 70 7 8 9 However, whether the injury occurred in California is not solely determinative in evaluating the application of California law, if the alleged misrepresentations by OCZ took place in California. 71 United States District Court For the Northern District of California 10 Similarly, the constitutional bar against application of state law to extraterritorial transactions and 11 occurrences may not be an issue where there are significant allegations of the defendant’s conduct 12 having taken place in the forum state. This analysis is distinct and apart from the analysis of 13 sufficient contacts for the purpose of establishing personal jurisdiction over the defendant. 72 14 Courts evaluating the sufficiency of a state’s contacts with the individual class plaintiffs’ 15 16 claims look to the offending activity alleged to have taken place in the state, not solely whether a 68 17 18 19 20 Id. at 15-16 (citing Doe v. Nestle, S.A., 748 F. Supp. 2d 1057, 1122 (C.D. Cal. 2010); Morgan at *6 & n.4; Tidenberg v. Bidz.com, Inc., CV 08-5553 PSG, 2009 WL 605249 (C.D. Cal. March 4, 2009); Standfacts Credit Servs., Inc. v. Experian Info. Solutions, Inc., 405 F. Supp. 2d 1141, 1148 (C.D. Cal. 2005)). 69 See In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1022, 1028 (N.D. Cal. 2007). 70 21 22 See Tidenberg v. Bidz.com, Inc., CV 08-5553 PSG, 2009 WL 605249, at *11 (C.D. Cal. March 4, 2009) (determining the “more reasonable inference” regarding location of plaintiff’s alleged injury – incurred from an online purchase – to be in the state in which she resides). 71 23 24 See Diamond Multimedia Sys., Inc. v. Superior Court, 19 Cal. 4th 1036, 1063-64 (1999); Norwest Mortgage, Inc. v. Superior Court, 72 Cal. App. 4th 214, 224 (1999); Morgan, et al. v. Harmonix Music Sys., Inc., C 08-5211 BZ, 2009 WL 2031765, at *2 (N.D. Cal. July 30, 2009). 72 25 26 27 28 See In re Hitachi Television Optical Block Cases, No. 08cv1746 DMS, 2011 WL 9403, at *10 (S.D. Cal. Jan. 3, 2011) (“Unlike the contacts analysis for purposes of personal jurisdiction, which measures the defendant’s contacts with the forum state, the contacts analysis here measures the forum state’s contacts with the individual claims.”). See also Tidenberg, 2009 WL 605249, at *4 (“[t]he existence of personal jurisdiction over a defendant does not alone permit application of the forum law to the claims of non-resident plaintiffs.”). 16 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 defendant is incorporated or headquartered there. In cases upholding the application of California 2 law to claims of nationwide or out-of-state class members, courts have found the consumers’ 3 claims to have significant contacts with the state. 73 For example, in In re Mattel, the court held that 4 non-California plaintiffs may assert California state law causes of action against the defendant toy 5 companies where plaintiffs’ allegations of misrepresentations made in reports, company 6 7 8 9 statements, and advertising were “reasonably likely to have come from or been approved by Mattel corporate headquarters in California.” 74 The court similarly found that the connections between Fisher-Price and California were “weaker,” but sufficient at the motion to dismiss stage based on United States District Court For the Northern District of California 10 the location of the defendant company’s executives and VP of Consumer Products in California. 75 11 Similarly in Chavez v. Blue Sky Natural Beverage Co., the court concluded that the fact of 12 defendants were headquartered in California and “their misconduct allegedly originated in 13 14 California” constituted “significant contacts” between California and the state law claims asserted by the class sufficient to maintain those class claims. 76 15 In contrast, the court in Jones-Boyle v. Washington Mutual Bank determined that dismissal 16 17 with leave to amend plaintiff’s claims under the UCL was warranted because she had failed to 18 allege any activity of defendant bank JPMorgan in California during the relevant time period. 77 In 19 In re Hitachi Television, the court found it insufficient that Hitachi’s marketing efforts for the 20 products at issue allegedly originated at their headquarters in California, because the employee 21 responsible for coordinating the marketing efforts had testified that Hitachi itself did not promote 22 23 73 See, e.g., Chavez v. Blue Sky Natural Beverage Co., 268 F.R.D. 365, 379 (N.D. Cal. 2010). 24 74 588 F. Supp. 2d 1111, 1119 (C.D. Cal. 2008). 25 75 Id. 26 76 See 268 F.R.D. 365, 379 (N.D. Cal. 2010). 27 77 No. CV 08-2142 JF, 2010 WL 2724287, at *11 (N.D. Cal. July 8, 2010). 28 17 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 the products directly to consumers, but encouraged its retail dealers to do so. 78 The fact that the 2 marketing coordinator’s office was in California was “of little significance” because “any 3 representations about the quality of the products would have originated with the individual 4 retailers, not Hitachi employees in California.” 79 Other courts similarly have dismissed UCL and 5 other state law claims on like grounds. 80 6 Though Wang’s allegations of OCZ’s California-based conduct are general, they provide a 7 8 9 sufficient basis at the pleading stage for the invocation of California law. Similar to In re Mattel, the facts alleged are that the misleading marketing, advertising, and product information are United States District Court For the Northern District of California 10 “conceived, reviewed, approved or otherwise controlled from [OCZ’s] headquarters in 11 California.” 81 These allegations find support in Wang’s further allegations that OCZ’s executive 12 offices are in California and that the company itself selects California law as its forum to address 13 14 website-based complaints. Taken as true for the purpose of a motion to dismiss, these allegations are more than sufficient to sustain Wang’s California-based claims. 82 15 16 78 See 2011 WL 9403, at *7-8. 17 79 Id. at 9. 18 80 19 20 See, e.g., Doe I v. Nestle S.A., 748 F. Supp. 2d 1057, 1122-23 (C.D. Cal. 2010) (pleading failed to allege harm to plaintiffs caused by California-based conduct); Morgan, 2009 WL 2031765, at *2 & n.5 (dismissing CLRA and UCL claims in part because plaintiff alleged only that one defendant was headquartered in California, but did not allege what conduct in California, if any, violated those laws). 21 81 22 82 23 24 25 26 27 28 See Docket No. 1 ¶¶ 12. The court is not persuaded by OCZ’s assertion that in the context of unfair competition claims, the requisite jurisdictional nexus is best assessed where the injury took place. OCZ’s reliance on In re Graphics Processing Units Antitrust Litig., 527 F. Supp. 2d 1011, 1028 (N.D. Cal. 2007) (rejecting allegations that “conduct in furtherance of the [antitrust and unfair competition] conspiracy,” including meetings between the defendant companies, took place in California, were insufficient to apply California law to “transactions that, for individual consumers, are local in nature”) and In re Relafen Antitrust Litig., 221 F.R.D. 260, 266-67 (D. Mass. 2004) (concluding the “primary aim of antitrust and consumer protection laws generally … is compensating consumers, not policing corporate conduct” such that applying Pennsylvania law to “wholly out-of-state transactions” most often involving purchases from wholesale distributers would be “at best a ‘novelty,’ and at worst a violation of constitutional limitations”) in support of this proposition overlooks the fact that in the context of consumer purchase transactions that are “local in nature,” 18 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 B. Motion to Strike OCZ moves to strike two sets of allegations pursuant to Fed. R. Civ. P. 12(f) as “immaterial 2 3 matter [] which has no essential or important relationship to the claim for relief or the defenses 4 being pleaded.” 83 Rule 12(f) provides that a court may strike from the pleading “any redundant, 5 immaterial, impertinent, or scandalous matter.” However, motions to strike are generally 6 7 8 disfavored and rarely granted “unless it is clear that the material to be stricken “has no possible bearing on the subject matter of the litigation.” 84 1. 9 Third-Party Online Reviews United States District Court For the Northern District of California 10 Wang alleges that OCZ maintained website pages that marketed and advertised the SSD 11 products by quoting third-party reviews and testimonials and by linking directly to these outside 12 sources. 85 He further alleges that these reviews, testimonials, and listed awards were based on the 13 14 older versions of the Agility2 and Vertex2 SSD drives, and therefore were false and misleading as to the next generation products because they failed to disclose the changes affecting performance 15 16 and capacity. 86 OCZ urges the court to strike these allegations as immaterial because the third party 17 reviews and testimonials are not statements made by OCZ and therefore do not give rise to any of 18 Wang’s claims of misrepresentations by OCZ. OCZ further argues that the references may be 19 stricken because the federal Communications Decency Act (“CDA”), 47 U.S.C. ' 230, “immunizes 20 providers of interactive computer services against liability arising from content created by third 21 22 23 there is wide-ranging precedent and a statutory basis for at least equal consideration of defendant’s misconduct, and whether such alleged misconduct is linked closely to the alleged injury, e.g., development and execution in California of a misleading marketing campaign that causes injury to consumers in other states. 83 24 See Docket No. 16 at 19. 84 25 See Colaprico v. Sun Microsystems, Inc., 758 F. Supp. 1335, 1339 (N.D. Cal. 1991); Smith v. Levine Leichtman Capital Partners, Inc., 723 F. Supp. 2d 1205, 1212 (N.D. Cal. 2010). 26 85 See Docket No. 1 ¶ 55. 27 86 See id. ¶¶ 56, 57, 80. 28 19 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 2 parties.” 87 OCZ points to various cases in which courts have found mere linking to third party websites to be an insufficient basis for establishing liability. 88 3 Wang responds that the allegations of third-party content are material to the claims of 4 misrepresentation and unfair business practices, and any determination by the court regarding 5 immunity under the CDA would be premature at this time and would improperly effect a dismissal 6 of part of Wang’s complaint. 89 Wang also argues that OCZ’s contention of non-liability under the 7 8 CDA is essentially an affirmative defense, around which he is not required to plead. Under the CDA, “[n]o provider … of an interactive computer service shall be treated as the 9 United States District Court For the Northern District of California 10 publisher or speaker of any information provided by another information content provider.” 90 The 11 crux of the parties’ dispute is whether OCZ’s website qualifies for immunity as an “interactive 12 computer service” or is subject to liability as an “information content provider.” OCZ argues that 13 14 precedent in this circuit establishes websites as interactive computer services, especially considering the Ninth Circuit’s determination that “courts have treated § 230(c) immunity as quite 15 16 robust, adopting a relatively expansive definition of ‘interactive computer service’ and a relatively 91 17 restrictive definition of ‘information content provider.’” OCZ asserts that this includes websites 18 that selectively edit or choose the content published from a third party source. 92 19 20 21 87 See Docket No. 16 at 19 (quoting Fair Hous. Council v. Roomates.com, LLC, 521 F.3d 1157, 1162 (9th Cir. 2008)). 88 22 23 See, e.g, Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1161 (9th Cir. 2007) (holding that Google’s act of directing a user’s browser to a website with infringing photographic content “does not constitute direct infringement”). 89 See Docket No. 34 at 18. 90 47 U.S.C. § 230(c)(1). 24 25 91 26 See Docket No. 36 at 12 (quoting Carafano v. Metrosplash.com, Inc., 339 F.3d 1119, 1123 (9th Cir. 2003)). 27 92 28 See id. at 12-13 (citing Batzel v. Smith, 333 F.3d 1018, 1031 n. 18 (9th Cir. 2003)). See also Carafano, 339 F.3d at 1124 (“[S]o long as a third party willingly provides the essential published 20 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE Whether OCZ falls within the CDA’s definition of “interactive computer service,” and 1 2 whether the third-party content allegedly displayed on OCZ’s website was reproduced by OCZ in a 3 manner potentially subjecting it to liability, raise factual questions unfit for disposition pursuant to 4 a motion to strike. 93 Material should not be stricken from the pleadings, particularly before 5 discovery has afforded the parties the opportunity to determine the material’s relevance to claims 6 or defenses, if there is a possibility that it may have bearing on the litigation. 94 Based on the 7 8 9 United States District Court For the Northern District of California 10 arguments of the parties and evidence provided, the court at this point is unable to determine that the alleged third party content has no bearing on Wang’s claims of misrepresentation. On this basis, the court finds OCZ’s motion to strike those allegations to be premature. 11 2. 12 OCZ also moves to strike allegations about Vertex drives and all Agility drive models that 13 14 Models Not Purchased Wang did not purchase, arguing that “Wang does not allege that he suffered any injury, or experienced any loss of money or value, in connection with products that he did not purchase.” 95 15 16 Wang contends that the factual allegations concerning the Vertex and Agility 2 drives add detail 17 and context to Wang’s claim that OCZ uniformly designed, constructed, and advertised its SSD 18 products in such as way as to mislead consumers. Short of showing that these allegations are 19 immaterial or impertinent under Rule 12(f), Wang argues that this motion actually seeks to strike 20 class allegations at the pleading stage, which would constitute an improper application of the 21 22 23 content, the interactive service provider receives full immunity regardless of the specific editing or selection process.”). 93 24 25 See Whittlestone, 618 F.3d at 974 (finding that defendant’s argument to strike certain claims for damages as precluded as a matter of law as “really an attempt to have certain portions of [plaintiff’s] complaint dismissed or to obtain summary judgment against [plaintiff] as to those portions of the suit-actions better suited for a Rule 12(b)(6) motion or a Rule 5 motion”). 26 94 See Colaprico., 758 F. Supp. at 1339. 27 95 See Docket No. 16 at 22. 28 21 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 rule. 96 Wang further argues that classes have been permitted to include product models that the 2 representative did not purchase. 97 OCZ responds that the more persuasive line of cases follows the 3 reasoning of Johns v. Bayer Corp., which held that a plaintiff “cannot expand the scope of his 4 claims to include a product he did not purchase.” 98 5 6 In dicta, the court in Bayer Corp. explains that the plaintiff has standing to proceed with claims under the UCL and CLRA only with respect to the particular Men’s Health vitamin product 7 8 9 that he purchased in reliance on Bayer’s representations; claims relating to the Men’s 50+ vitamin could not be sustained. 99 Other district courts in this Circuit recently have followed the principle United States District Court For the Northern District of California 10 set forth in Bayer Corp. 100 Other recent court decisions, however, have drawn the opposite 11 conclusion. For example, in Carideo v. Dell, Inc., the court upheld claims by the named plaintiffs 12 for computer models that they had not purchased, but that were “subject to the same core factual 13 allegations and causes of action.” 101 And in Hewlett-Packard v. Superior Ct., the court upheld class 14 certification for UCL, CLRA, express warranty and unjust enrichment claims relating to display 15 16 17 18 failures in several models, even though the named plaintiff only purchased one of those models. 102 96 See Docket No. 34 at 22-23 (Vinole v. Countrywide Home Loans, Inc., 571 F.3d 935, 942 (9th Cir. 2009). 97 19 See id. at 23 (citing Von Koenig v. Snapple Beverage Corp., 2011 WL 43577, at *3 (E.D. Cal. Jan. 26, 2011); Carideo v. Dell, Inc., 706 F. Supp. 2d 1122 (W.D. Wash. 2010)). 20 98 No. 09-1935, 2010 WL 476688 (S.D. Cal. Feb. 9, 2010). 21 99 Id. at *5. 22 100 23 24 25 26 See Carrea v. Dreyer’s Grand Ice Cream, Inc., C 10-1044 JSW, 2011 WL 159380, at *3 (N.D. Cal. Jan. 10, 2011) (holding that plaintiff has standing to bring UCL and CLRA claims for the Drumstick ice cream products purchased, but dismissing plaintiff’s claims for the Dibs ice cream product, which plaintiff never alleged he purchased or suffered a loss); Mlejnecky v. Olympus Imaging Am., Inc., No. 2-10-cv-2630, 2011 WL 1497096, at *4 (E.D. Cal. April 19, 2011) (dismissing plaintiff’s claims relating to a camera model that has the “same underlying defects” and used the same advertisements as the model she purchased, but for which she did not allege any economic injury). 101 706 F. Supp. 2d 1122, 1134 (W.D. Wash. 2010). 102 167 Cal. App. 4th 87, 89-91 (2008). 27 28 22 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE 1 These cases are instructive insofar as they illuminate the need to differentiate a plaintiff’s 2 alleged economic injury under the UCL or CLRA as it relates to a product actually purchased from 3 claims for related products that may have been subject to the same misrepresentation, but for which 4 the named plaintiff suffered no loss or economic harm. Here, OCZ moves to strike allegations 5 relating to SSD drives apart from the Agility 2 model that Wang purchased, not to dismiss the 6 claims or allegations based on standing. As a result, OCZ improperly relies upon reasoning related 7 8 9 to standing, rather than reasoning related to whether the allegations are “redundant, immaterial, [or] impertinent.” Although Wang’s inability to allege injury based on products that he did not purchase United States District Court For the Northern District of California 10 may ultimately subject those claims to proper dismissal pursuant to a Rule 12(b) motion or motion 11 for summary judgment, inclusion of those products at the pleading stage and prior to a motion for 12 class certification is not improper. 13 IV. CONCLUSION 14 Based on the foregoing, the court hereby GRANTS OCZ’s motion to dismiss Wang’s 15 16 claims for prospective injunctive relief WITH LEAVE TO AMEND, as well as Wang’s claims 17 subject to heightened pleading under Fed. R. Civ. P. 9(b): false advertising under the FAL; unfair 18 competition under the UCL; violations of the CLRA; negligent misrepresentation, and unjust 19 enrichment. The court DENIES OCZ’s motion to dismiss Wang’s complaint for lack of standing 20 and DENIES OCZ’s motion to strike allegations concerning third-party website content and 21 products not purchased. 22 IT IS SO ORDERED. 23 24 25 26 Dated: 10/14/2011 _________________________________ PAUL S. GREWAL United States Magistrate Judge 27 28 23 Case No.: 11-01415 PSG ORDER GRANTING-IN-PART DEFENDANT’S MOTION TO DISMISS WITH LEAVE TO AMEND; ORDER DENYING DEFENDANT’S MOTION TO STRIKE