Howard v. DJI Technology, Inc.

Filing 23

ORDER granting in part and denying in part 17 Motion to Dismiss signed by District Judge Leslie E. Kobayashi on 9/20/17. (Kaminski, H)

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21

IN THE UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF CALIFORNIA
)
)
)
)
Plaintiff,
)
)
)
vs.
)
DJI TECHNOLOGY, INC., aka SZ )
DJI TECHNOLOGY CO., LTD.,
)
)
Defendant.
)
_____________________________ )
TYSON HOWARD, individually,
and on behalf of all others
similarly situated,

2:16-CV-02292 LEK

ORDER GRANTING IN PART AND DENYING IN PART
DEFENDANT’S MOTION TO DISMISS THE FIRST AMENDED COMPLAINT
On January 24, 2017, Defendant DJI Technology, Inc.

22

(“Defendant”) filed its Motion to Dismiss the First Amended

23

Complaint (“Motion”).1

24

(“Plaintiff”) filed his memorandum in opposition on February 14,

25

2017, and Defendant filed its reply on February 20, 2017.

26

nos. 19, 20.]

27

disposition without a hearing pursuant to L.R. 230(g) of the

28

Local Rules of the United States District Court for the Eastern

29

District of California (“Local Rules”).

30
31
32
33
34
35
36
37
38

1

[Dkt. no. 17.]

Plaintiff Tyson Howard

[Dkt.

The Court finds this matter suitable for

Defendant’s Motion is

Plaintiff identifies the defendant as “DJI Technology,
Inc., aka SZ DJI Technology Co., Ltd.,” and describes it as “a
California corporation.” [Amended Complaint at ¶¶ 1-2.]
Defendant states that SZ DJI Technology Co., Ltd. “is a separate
entity, and it is not a business name of DJI Technology, Inc.”
[Mem. in Supp. of Motion at 2 n.2.] Because DJI Technology, Inc.
“is the American branch of . . . SZ DJI Technology Co., Ltd.,”
SZ DJI Technology Co., Ltd. has not appeared in this case. [Id.
at 2 & n.2.]

1

hereby granted in part and denied in part for the reasons set

2

forth below.

3
4

BACKGROUND
Plaintiff filed his original Class Action Complaint

5

(“Complaint”) on September 26, 2016.

[Dkt. no. 1.]

6

November 22, 2016, Defendant moved to dismiss the Complaint

7

(“First Motion to Dismiss”), and Plaintiff filed his First

8

Amended Class Action Complaint (“Amended Complaint”) on

9

December 13, 2016.

[Dkt. nos. 9, 11.]

On

In light of the filing of

10

the Amended Complaint, this Court denied the First Motion to

11

Dismiss as moot.

12

[Dkt. no. 13.]

Because the issue of class certification is not

13

currently before this Court, it will only consider Plaintiff’s

14

individual allegations for purposes of the instant Motion.

15

According to the Amended Complaint, Defendant is a California

16

corporation that maintains, sells, and distributes drones and

17

video recording devices.

18

“conducts a large share of its business within California” and

19

“Plaintiff alleges, on information and belief, that Defendant’s

20

marketing campaigns, as pertains to this matter, were created by

21

Defendant at its principle place of business in California, and

22

were disseminated from California.”

23
24

[Amended Complaint at ¶ 2.]

It

[Id. at ¶¶ 11-12.]

Around September 2015, Plaintiff purchased a DJI
Phantom III Standard drone from Defendant’s website for

2

1

approximately $800.

Later that month, he purchased a DJI

2

Phantom III Pro drone from Defendant’s website for approximately

3

$1300.2

4

“Defendant advertised through written representations that

5

Plaintiff would receive [the Drones] with high definition

6

[(“HD”)] recording capabilities.”

7

Plaintiff, Defendant’s website for the DJI Phantom III Standard

8

drone “prominently advertises the ability of the camera on the

9

drone to capture ‘2.7K HD Video,’” and its website for the DJI

[Id. at ¶¶ 16-19, 21-22.]

According to Plaintiff,

[Id. at ¶ 20.]

According to

10

Phantom III Pro drone “prominently advertises the ability of the

11

camera on the drone to capture ‘4K HD Video.’”

12

22.]

13

that the Drones “would meet his needs and expectations as to the

14

quality of the video recordings,” and he purchased the Drones

15

based on Defendant’s representations.

[Id. at ¶¶ 21-

Based on Defendant’s representations, Plaintiff believed

16

[Id. at ¶¶ 23-24.]

After he purchased the Drones, Plaintiff learned that

17

they were not capable of recording at the definition level

18

advertised, and they “recorded video at inferior qualities

19

significantly below 2.7K and 4K.”

20

to Plaintiff, the prices of the Drones were higher than they

21

would have been without the advertised recording capabilities, as

22

evidenced by the fact that the DJI III Pro – which advertised “a

23
24
25

2

[Id. at ¶¶ 25-26.]

According

This Court will refer to the DJI Phantom III Standard
drone and the DJI Phantom III Pro drone that Plaintiff purchased
collectively as “the Drones.”
3

1

‘significantly improved’ 4K camera” – was more expensive than the

2

DJI III Standard.

3

Defendant’s “sales tactics rely on falsities and have a tendency

4

to mislead and deceive a reasonable consumer.”

5

Plaintiff alleges that Defendant’s false representations about

6

the Drones’ HD recording features “were part of a common scheme

7

to mislead [Plaintiff] and incentivize [him] to purchase [the

8

Drones] in spite of the lack of the promised” HD recording

9

capabilities.

[Id. at ¶¶ 33-34.]

[Id. at ¶¶ 29-30.]

Plaintiff alleges that

[Id. at ¶ 27.]

Plaintiff would not have

10

purchased the Drones if he knew that Defendant’s representations

11

about the HD recording capabilities were false and if he had

12

known what the Drones’ actual recording capabilities were.

13

at ¶¶ 31-32.]

14

[Id.

The Amended Complaint alleges the following claims:

15

violation of the California False Advertising Law (“FAL”), Cal.

16

Bus. & Prof. Code § 17500, et seq. (“Count I”); [id. at ¶¶ 52-

17

62;] and violation of the Unfair Competition Law (“UCL”), Cal.

18

Bus. & Prof. Code § 17200, et seq. (“Count II”), [id. at ¶¶ 63-

19

81].

20

engage in corrective advertising”; [id. at ¶ 83.d;] actual,

21

punitive, and statutory enhanced damages; restitution of sale

22

prices paid; reasonable attorneys’ fees and costs; pre- and post-

23

judgment interest; and any other appropriate relief.

24

//

Plaintiff prays for: an order requiring Defendant “to

4

1

In the instant Motion, Defendant seeks dismissal of the

2

Amended Complaint, with prejudice, pursuant to Fed. R. Civ. P.

3

9(b) and 12(b)(6).

4

DISCUSSION

5

This district court has recognized that the Fed. R.

6

Civ. P. 9(b) heightened pleading standard applies to claims

7

brought under Cal. Bus. & Prof. Code §§ 17200 and 17500.

8

e.g., Handy v. LogMeIn, Inc., No. 1:14–cv–01355–JLT, 2015 WL

9

4508669, at *5 (E.D. Cal. July 24, 2015) (some citations omitted)

See,

10

(citing Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir.

11

2009) (holding “Rule 9(b)’s particularity requirement applies” to

12

claims raised under Cal. Bus. & Prof. Code § 17200); VP Racing

13

Fuels, Inc. v. General Petroleum Corp., 673 F. Supp. 2d 1073,

14

1085-86 (E.D. Cal. 2009) (where the plaintiff alleged the

15

defendant knowingly made misrepresentations to the public and

16

“engaged in a fraudulent course of conduct,” the plaintiff was

17

required to meet the heightened requirements of Rule 9(b) to

18

state a claim under Cal. Bus. & Prof Code § 17500)).3

19
20
21
22
23
24
25
26

27
28

Rule 9(b) requires that, “[i]n alleging fraud or
mistake, a party must state with particularity the
circumstances constituting fraud or mistake.”
Fed. R. Civ. P. 9(b). “‘Fraud can be averred by
specifically alleging fraud, or by alleging facts
that necessarily constitute fraud (even if the
word “fraud” is not used).’” Kearns v. Ford Motor
Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting

3

This Court will refer to the July 24, 2015 order as
“Handy II.”
5

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23

Agha-Khan v. Bank of Am., No. 1:17-cv-00011-DAD, 2017 WL 2833399,

24

at *5 (E.D. Cal. June 30, 2017) (alteration in Agha-Khan).

25

Further,

26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44

Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1105
(9th Cir. 2003)). “When an entire complaint, or
an entire claim within a complaint, is grounded in
fraud and its allegations fail to satisfy the
heightened pleading requirements of Rule 9(b), a
district court may dismiss the complaint or
claim.” Vess, 317 F.3d at 1107 (9th Cir. 2003)
(citing Bly-Magee v. California, 236 F.3d 1014,
1019 (9th Cir. 2001)). Under Rule 9(b), the
circumstances constituting the alleged fraud must
be specific enough to give each defendant notice
of its particular misconduct so that the defendant
can defend against the charge instead of merely
denying that it did anything wrong. Kearns, 567
F.3d at 1124 (citing Bly-Magee, 236 F.3d at 1019).
To satisfy the particularity standard of
Rule 9(b), the plaintiff must set forth more than
the neutral facts necessary to identify the
transaction at issue. Id. (citing In re GlenFed,
Inc. Sec. Litig., 42 F.3d 1541, 1548 (9th Cir.
1994), superseded by statute on other grounds).

The heightened pleading standard of Rule 9(b)
requires that “[a] complaint would need to state
the time, place, and specific content of the false
representations as well as the identities of the
parties to the misrepresentation.” Edwards v.
Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir.
2004); see also Kearns, 567 F.3d at 1126 (the
plaintiff must articulate the “who, what, when,
where, and how” of the fraud alleged[]). Only
factual allegations, rather than mere conclusions
satisfy this pleading burden. Moore v. Kayport
Package Express, Inc., 885 F.2d 531, 540 (9th Cir.
1989). If the factual allegations do not meet the
heightened pleading standard, the “averments . . .
should be disregarded, or stripped from the claim
for failure to satisfy Rule 9(b).” Kearns, 567
F.3d at 1124 (quotations omitted).
Handy II, 2015 WL 4508669, at *5 (some alterations in Handy II).

6

1
2
3
4
5
6
7
8
9
10
11

Many courts in California have applied a
relatively straightforward test for the
application of Rule 9(b) to label-based fraud
claims. The “who” are the defendants; the “what”
are their allegedly misleading claims; the “when”
is the . . . period[] during which those claims
were made; the “where” is the offending label; and
the “how” is the plaintiff’s explanation why the
defendant’s claims are misleading.
Handy v. LogMeIn, Inc., No. 1:14–cv–01355–JLT, 2015 WL 1729681,

12

at *4 (E.D. Cal. Apr. 15, 2015) (citation and quotation marks

13

omitted).4

14

I.

Count I

15

Count I alleges that Defendant made misrepresentations

16

about the Drones’ recording capabilities.

17

based on Defendant’s omissions, but Plaintiff does not clearly

18

identify what information was omitted.

19

¶¶ 55-56.]

20

Defendant omitted what the Drones’ actual recording capabilities

21

were.

22

advertised, and represented the [Drones] as lacking high

23

definition recording, Plaintiff would not have purchased the

24

product.”).

[Amended Complaint at

Read as a whole, the Amended Complaint alleges that

See, e.g., id. at ¶ 32 (“Had Defendant properly marketed,

25
26
27
28
29
30

31
32

The claim is also

California’s False Advertising Law prohibits
any person or entity from making an untrue and
misleading statement in advertising. Cal. Bus. &
Prof. Code § 17500. It is unlawful for any
company to make any statement concerning products
offered, which is known or should be known, to be

4

The Court will refer to the April 15, 2015 order as
“Handy I.”
7

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
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46

untrue or misleading. Cal. Bus. & Prof. Code
§ 17500. A false advertising claim under this
section may be brought “where the advertising
complained of is not actually false, but thought
likely to mislead or deceive, or is in fact
false.” Day v. AT&T Corp., 63 Cal. App. 4th 325,
332, 74 Cal. Rptr. 2d 55 (1998). Thus, the FAL
proscribes “not only those advertisements which
have deceived or misled because they are untrue,
but also those which may be accurate on some
level, but will nonetheless tend to mislead or
deceive.” Id. (emphasis omitted). In addition, a
plaintiff may state a claim under the FAL for
fraudulent omissions by a defendant. See Ehrlich
v. BMW of North Am., 801 F. Supp. 2d 908, 916
(C.D. Cal. 2010).

Handy II, 2015 WL 4508669, at *5-6.

47

//

To state a cognizable claim for a fraudulent
omission, a plaintiff must allege the defendant’s
omission was “contrary to a representation
actually made by the defendant, or an omission of
a fact the defendant was obligated to disclose.”
Ehrlich, 801 F. Supp. 2d at 916 (quoting Falk v.
Gen. Motors Corp., 496 F. Supp. 2d 1088, 1094–95
(N.D. Cal. 2007)); see also Daugherty v. Am. Honda
Motor Co., Inc., 144 Cal. App. 4th 824, 835, 51
Cal. Rptr. 3d 118 (2006). Under California law,
There are four circumstances in which
nondisclosure or concealment may constitute
actionable fraud: (1) when the defendant is
in a fiduciary relationship with the
plaintiff; (2) when the defendant had
exclusive knowledge of material facts not
known to the plaintiff; (3) when the
defendant actively conceals a material fact
from the plaintiff; and (4) when the
defendant makes partial representations but
also suppresses some material facts.
LiMandri v. Judkins, 52 Cal. App. 4th 326, 336, 60
Cal. Rptr. 2d 539 (1997) (quoting Heliotis v.
Schuman, 181 Cal. App. 3d 646, 651, 226 Cal. Rptr.
509 (1986)). . . .

8

1
2

A.

Misrepresentation
As to the alleged misrepresentation, the Amended

3

Complaint alleges: the who – Defendant DJI Technology, Inc.; the

4

what – the statements that the Drones were capable of HD

5

recording; the where – the claims were made on the pages of

6

Defendant’s website for the Drones; and the how – Plaintiff’s

7

explanation that the Defendant’s claims were misleading because

8

the Drones were not in fact capable of HD recording.

9

the Amended Complaint’s factual allegations about the when are

However,

10

insufficient.

Plaintiff does allege that he bought the Drones

11

around September 2015, [Amended Complaint at ¶¶ 16, 18,] and that

12

he was “drawn to” the Drones because of Defendant’s

13

representations, which he relied upon when he decided to purchase

14

the Drones [id. at ¶¶ 23-24].

15

true for purposes of the Motion, are sufficient to support a

16

reasonable inference that Plaintiff viewed Defendant’s

17

representations about the Drones’ recording capabilities by

18

September 2015.

19

(“To survive a motion to dismiss, a complaint must contain

20

sufficient factual matter, accepted as true, to ‘state a claim to

21

relief that is plausible on its face.’” (quoting Bell Atlantic

22

Corp. v. Twombly, 550 U.S. 544, 570, 127 S. Ct. 1955 (2007)));

23

id. (“A claim has facial plausibility when the plaintiff pleads

24

factual content that allows the court to draw the reasonable

These allegations, taken to be

See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)

9

1

inference that the defendant is liable for the misconduct

2

alleged.” (citing Twombly, 550 at 556, 127 S. Ct. 1955)).

3

allegations, however, do not satisfy the heightened pleading

4

standard because they do not sufficiently allege when Plaintiff

5

was exposed to Defendant’s alleged misrepresentations.

6

portion of Count I based on the alleged misrepresentations about

7

the Drones’ recording capabilities must be dismissed.

The

The

8

Defendant also argues that Plaintiff’s allegations are

9

implausible because, after he allegedly learned that the DJI III

10

Standard did not have the advertised HD recording capability, he

11

purchased the DJI III Pro.

12

credibility issues, which are beyond the scope of the instant

13

motion to dismiss.

14

PC, 2015 WL 5159412, at *3 (E.D. Cal. Sept. 2, 2015) (citing

15

Albino v. Baca, 747 F.3d 1162, 1169 (9th Cir. 2014)), report and

16

recommendation adopted, 2015 WL 6438150 (Oct. 22, 2015).

However, this argument raises

See Ransom v. McCabe, No. 1:13cv01779 AWI DLB

17

Further, Defendant contends that Plaintiff has failed

18

to plead sufficient allegations regarding Defendant’s knowledge

19

that its representations about the Drones’ recording capabilities

20

were false/misleading.

21

their representations and omissions were untrue and misleading,

22

and deliberately made the aforementioned representations and

23

omissions in order to deceive reasonable Purchasers like

24

Plaintiff.”

Plaintiff alleges “Defendant knew that

[Amended Complaint at ¶ 56.]

10

Plaintiff’s general

1

allegation of Defendant’s knowledge and intent are sufficient.

2

See Comm. to Protect Our Agric. Water v. Occidental Oil & Gas

3

Corp., 235 F. Supp. 3d 1132, 1177 (E.D. Cal. 2017) (“While

4

plaintiffs must plead the factual circumstances of fraud itself

5

with particularity, they may allege specific intent to defraud

6

through general allegations.” (citing In re GlenFed, Inc. Sec.

7

Litig., 42 F.3d 1541, 1547 (9th Cir. 1994) (en banc))).

8
9

Defendant argues that the dismissal should be with
prejudice because it is not possible for Plaintiff to cure the

10

defect in this portion of Count I by further amendment.

See

11

Rodriguez v. Brown, 1:15-cv-01754-LJO-EPG-PC, 2016 WL 6494705, at

12

*3 (E.D. Cal. Nov. 1, 2016) (“Whether dismissal is with or

13

without prejudice will depend upon whether it is possible for

14

Plaintiff to cure any defects.” (citing Vess v. Ciba-Geigy Corp.

15

USA, 317 F.3d 1097, 1107–08 (9th Cir. 2003) (collecting cases))),

16

report and recommendation adopted, 2016 WL 7104173 (E.D. Cal.

17

Dec. 6, 2016).

18

raised the same issues raised in the instant Motion, and

19

Plaintiff failed to cure the defects when he filed the Amended

20

Complaint.

21

be possible for Plaintiff to cure any defects in a second amended

22

complaint.

23

this portion of Count I is the failure to allege when Plaintiff

24

viewed Defendant’s alleged misrepresentations, and it is possible

Defendant argues that the First Motion to Dismiss

Defendant contends that this shows that it would not

This Court disagrees.

11

The only identified defect in

1

for Plaintiff to cure this defect by amendment.

2

the portion of Count I based on Defendant’s alleged

3

misrepresentations about the Drones’ recording capabilities is

4

without prejudice.

5
6

B.

The dismissal of

Omission
Plaintiff also pleads a related allegation that

7

Defendant omitted information about what the Drones’ actual

8

recording capabilities were.

9

could support a claim based on fraudulent nondisclosure.

Plaintiff’s allegations, if proven,
See

10

LiMandri, 52 Cal. App. 4th at 336.

11

exclusive knowledge of the Drones’ recording capabilities that

12

was not known to Plaintiff when he purchased them.

13

also alleges that: Defendant deliberately concealed the Drones’

14

actual recording capabilities, which were material features of

15

the products.

16

Defendant arguably made a partial representation, i.e. that the

17

Drones were capable of video recording, but suppressed the

18

material fact that the Drones were not capable of HD recording.

19

Defendant arguably had

[Amended Complaint at ¶¶ 23, 56.]

Plaintiff

Similarly,

The portion of Count I based on Defendant’s alleged

20

omission, however, fails to state a plausible claim for the same

21

reason as the portion based on Defendant’s alleged

22

misrepresentation.

23

Defendant’s materials which he alleges omitted information about

24

the Drones’ actual recording capabilities.

Plaintiff has not alleged when he viewed

12

For the same reasons

1

set forth as to the portion of Count I based on Defendant’s

2

alleged misrepresentation, the portion of Count I based on

3

Defendant’s alleged omission is also dismissed without prejudice.

4

II.

5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42

Count II
Count II alleges that Defendant’s actions, omissions,

misrepresentations, and practices violate § 17200.
Under § 17200, unfair competition includes
any “unlawful, unfair, or fraudulent business act
or practice.” Cal. Bus. & Prof. Code § 17200.
Therefore, there are three prongs under which a
claim may be established under § 17200. Daro v.
Superior Court, 151 Cal. App. 4th 1079, 1093, 61
Cal. Rptr. 3d 716 (2007) (“Because section 17200
is written in the disjunctive, a business act or
practice need only meet one of the three
criteria-unlawful, unfair, or fraudulent-to be
considered unfair competition”); Lozano v. AT&T
Wireless Servs., 504 F.3d 718, 731 (9th Cir. 2007)
(“[e]ach prong . . . is a separate and distinct
theory of liability”).
Actions prohibited by § 17200 include “any
practices forbidden by law, be it civil or
criminal, federal, state, or municipal, statutory,
regulatory, or court-made.” Saunders v. Superior
Court, 27 Cal. App. 4th 832, 838-39, 33 Cal. Rptr.
2d 438 (1994). Thus, the “unlawful” prong
requires an underlying violation of law. Krantz
v. BT Visual Images, 89 Cal. App. 4th 164, 178,
107 Cal. Rptr. 2d 209 (2001). An “unfair”
practice under section 17200 is one “whose harm to
the victim outweighs its benefits.” Saunders v.
Superior Court, 27 Cal. App. 4th 832, 839, 33 Cal.
Rptr. 2d 438 (1994). Finally, a “fraudulent” act
or practice under § 17200 is “one which is likely
to deceive the public,” and “may be based on
misrepresentations . . . which are untrue, and
also those which may be accurate on some level,
but will nonetheless tend to mislead or deceive.”
McKell v. Washington Mutual, Inc., 142 Cal. App.
4th 1457, 1474, 49 Cal. Rptr. 3d 227 (2006).

13

1
2
3
4
5
6
7
8
9
10
11

Handy I, 2015 WL 1729681, at *8 (some alterations in Handy I).

12

Count II relies all three prongs.

13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45

Significantly, as with a False Advertising
Law claim, a plaintiff may demonstrate a violation
of the “fraudulent” prong of the UCL by showing
that reasonable “members of the public are likely
to be deceived.” Sybersound Records, Inc. v. UAV
Corp., 517 F.3d 1137, 1151-52 (9th Cir. 2008); see
also Bardin v. DaimlerChrysler Corp., 136 Cal.
App. 4th 1255, 1261, 39 Cal. Rptr. 3d 634
(2006). . . .

A.

Unfair
[T]his court has previously summarized the various
definitions of “unfair” under the UCL as provided
by the California courts:
1.
“An act or practice is unfair if the
consumer injury is substantial, is not
outweighed by any countervailing benefits to
consumers or to competition, and is not an
injury the consumers themselves could
reasonably have avoided.” Daugherty v. Am.
Honda Motor Co., Inc., 144 Cal. App. 4th 824,
839 (2006).
2.
“‘[U]nfair’ business practice occurs
when that practice offends an established
public policy or when the practice is
immoral, unethical, oppressive, unscrupulous
or substantially injurious to consumers.”
Smith v. State Farm Mut. Auto. Ins. Co., 93
Cal. App. 4th 700, 719 (2001) (internal
citation and quotation marks omitted).
3.
An unfair business practice means “the
public policy which is a predicate to the
action must be ‘tethered’ to specific
constitutional, statutory or regulatory
provisions.” Scripps Clinic v. Superior
Court, 108 Cal. App. 4th 917, 940 (2003).
Vincent v. PNC Mortgage, Inc., No. 14-00833, 2014
WL 2766116, at *8 (E.D. Cal. June 18, 2014).

14

1

Wilkins v. Bank of Am., N.A., No. 2:15-cv-02341-KJM-EFB, 2016 WL

2

5940082, at *8 (E.D. Cal. Aug. 19, 2016) (some alterations in

3

Wilkins).

4

Count II alleges unfair business practices based the

5

first two definitions.

As to the second definition, Plaintiff

6

merely alleges, in conclusory fashion, that “Defendant’s acts,

7

omissions, misrepresentations, and practices” are “substantially

8

injurious . . . offend[] public policy, and [are] immoral,

9

unethical, oppressive, and unscrupulous as the gravity of the

10

conduct outweighs any alleged benefits attributable to such

11

conduct.”

12

sufficiently alleged unfair business practices based on the first

13

definition.

14

[Amended Complaint at ¶ 65.]

However, Plaintiff has

The Amended Complaint alleges that Plaintiff has

15

suffered a substantial injury because he paid valuable

16

consideration for the Drones, which had higher prices because of

17

the advertised HD recording features, but which did not have

18

advertised features.

19

Plaintiff also alleges that Defendant’s practice of falsely

20

advertising and representing that the Drones were capable of HD

21

recording in order to induce consumers to purchase them did not

22

provide any benefit to Plaintiff or any other consumer.

23

the injury that Plaintiff suffered is not outweighed by any

24

countervailing benefits to consumers.

[Amended Complaint at ¶¶ 16-25, 33-35, 67.]

15

Thus,

[Id. at ¶¶ 35, 68.]

1

Finally, Plaintiff alleges that the injury he suffered is not one

2

that consumers could have avoided because, based on the

3

information Defendant made available about the Drones, consumers

4

would not have realized that Defendant’s representations about

5

the Drones’ ability to record HD video were false.

6

¶ 69.]

7

sufficient facts to state a § 17200 claim against Defendant.

8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29

B.

[Id. at

With respect to the unfair prong, Plaintiff has pled

Fraudulent
[T]he fraudulent prong of the UCL is “governed by
the reasonable consumer test: a plaintiff may
demonstrate a violation by show[ing] that
[reasonable] members of the public are likely to
be deceived.” Rubio v. Capital One Bank, 613 F.3d
1195, 1204 (9th Cir. 2010) (citation omitted). A
UCL “plaintiff need not show that he or she or
others were actually deceived or confused by the
conduct or business practice in question.”
Schnall v. Hertz Corp., 78 Cal. App. 4th 1144,
1167 (2000). Whether a business practice is
deceptive will usually be a question of fact not
appropriate for decision on a motion to dismiss.
Williams v. Gerber Products Co., 552 F.3d 934, 938
(9th Cir. 2008). At the same time, an unfair
practice claim grounded in fraud must be pled with
the particularity required by Federal Rule of
Civil Procedure 9(b). Vess, 317 F.3d at 1103.

Wilkins, 2016 WL 5940082, at *8 (some alterations in Wilkins).
Reading the Amended Complaint as a whole, Plaintiff

30

alleges that Defendant falsely represented that the Drones had HD

31

recording capabilities and failed to disclose what the Drones’

32

actual recording capabilities were.

33

the public is likely to be deceived by Defendant’s practices

34

because, as evidenced by Plaintiff’s reasonable reliance on
16

Plaintiff also alleges that

1

Defendant’s statements, Defendant had unequal bargaining power

2

over the public, [Amended Complaint at ¶ 73,] and the information

3

Defendant made available about the Drones prevented Plaintiff and

4

other consumers from learning until after purchase that the

5

representations about the HD recording capabilities were false.

6

Although Plaintiff alleges that he was actually deceived, see,

7

e.g., id. at ¶ 73, because actual deception is not required, he

8

is not required to allege when he was exposed to Defendant’s

9

representations, as he is in his § 17500 claim.

Thus, his

10

failure to plead the “when” with particularity that was fatal to

11

Count I is not fatal to this portion of Count II.

12

to the fraudulent prong, Plaintiff has pled sufficient facts to

13

state a § 17200 claim against Defendant.

14

C.

With respect

Unlawful

15

As to the unlawful practices prong,

16
17
18
19
20
21
22
23
24
25
26
27
28
29
30

a plaintiff must show a violation of some
independent law. See Farmers Ins. Exch. v.
Superior Court, 2 Cal. 4th 377, 383 (1992). The
predicate violation may be federal, state, local,
or common law. Id. (section 17200 “borrows”
violations of other laws and treats them as
unlawful practices actionable separately under
section 17200). Because the statute borrows
violations of other laws, a failure to state a
claim under the underlying law translates to a
failure to state a claim under the unlawful prong.
See Saunders v. Superior Court, 27 Cal. App. 4th
832, 838 (Cal. Ct. App. 1994).
Wilkins, 2016 WL 5940082, at *8.

31

the unlawful prong on the alleged violation of § 17500.

17

Plaintiff bases his claim under
[Amended

1

Complaint at ¶ 78.]

However, because Count I fails to state a

2

claim, Plaintiff has also failed to state a claim as to the

3

portion of his § 17200 claim based on the unlawful prong, and

4

must be dismissed.

5

without prejudice because it is possible for Plaintiff to cure

6

the defects in Count I by amendment.

The dismissal of this portion of Count II is

7

CONCLUSION

8
9

On the basis of the foregoing, Defendant’s Motion to
Dismiss the First Amended Complaint, filed January 24, 2017, is

10

HEREBY GRANTED IN PART AND DENIED IN PART.

11

insofar as Count I and the portion of Count II based on the

12

“unlawful” prong of Cal. Bus. & Prof. Code § 17200 are HEREBY

13

DISMISSED.

14

based on the “unfair” and “fraudulent” prongs of § 17200 and

15

insofar as the dismissal of Count I and the portion of Count II

16

based on the “unlawful” prong is WITHOUT PREJUDICE.

17

The Motion is GRANTED

The Motion is DENIED as to the portion of Count II

The Court GRANTS Plaintiff leave to file a second

18

amended complaint by October 30, 2017.

19

file his second amended complaint by October 30, 2017, this case

20

will proceed on the remaining portions of the First Amended Class

21

Action Complaint – the portions of Count II based on the unfair

22

and fraudulent prongs of § 17200.

23

IT IS SO ORDERED.

24
18

If Plaintiff fails to

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
29
30
31
32
33
34
35
36
37
38
39
40
41
42

DATED AT HONOLULU, HAWAII, September 20, 2017.

/s/ Leslie E. Kobayashi
Leslie E. Kobayashi
United States District Judge

TYSON HOWARD VS. DJI TECHNOLOGY, INC.; 2:16-CV-02292 LEK

19