Awadan et al v. Reebok Corporate Headquarter

Filing 21

FINDINGS AND RECOMMENDATIONS signed by Magistrate Judge Allison Claire on 8/8/2017 RECOMMENDING that the plaintiffs' First, Second, Fifth, Sixth, and Eighth causes of action be dismissed with prejudice and that the plaintiffs' Seventh cause of action be dismissed without prejudice; RECOMMENDING that Faizal Awadan be dismissed from this case with prejudice; REFERRING this matter to Judge Kimberly J. Mueller; ORDERING that any objections be filed and served within twenty-one days. (Michel, G.)

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UNITED STATES DISTRICT COURT

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FOR THE EASTERN DISTRICT OF CALIFORNIA

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FAIZAL AWADAN and SHAINAZ
AWADAN,
Plaintiffs,

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No. 2:17-cv-01148-KJM-AC

FINDINGS AND RECOMMENDATIONS
v.
REEBOK CORPORATE
HEADQUARTER,
Defendant.

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This matter is before the court on defendant’s second amended motion to dismiss. ECF

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No. 10. Plaintiffs are proceeding in this matter pro se, and this action was accordingly referred to

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the undersigned for pretrial matters pursuant to Local Rule 302(c)(21). The hearing on

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defendant’s motion was scheduled for August 9, 2017. ECF No. 18. Plaintiffs did not file a

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response to the motion in accordance with the Local Rules, and so the court extended the hearing

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to August 16, 2016. ECF No. 19. The court cautioned plaintiffs that failure to submit a timely

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response could be construed as a statement of non-opposition and a recommendation that this

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action be dismissed. Id. Plaintiffs again failed to respond to defendant’s motion. The

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undersigned thus construes plaintiffs position as one of non-opposition, and having fully

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considered defendants motion on its merits, recommends that defendant’s motion be GRANTED

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in part and that the First, Second, Fifth, Sixth, and Eighth causes of action, as well as all claims of
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plaintiff Faizal Awadan, be DISMISSED with prejudice. Plaintiffs’ Seventh cause of action

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should be dismissed without prejudice.

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I.

Relevant Background

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This action was removed from state court on May 31, 2017. ECF No. 1. Plaintiffs’

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complaint alleges that on December 17, 2016, plaintiff Shainaz Awadan went to the Reebok store

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in Vacaville, California to purchase goods offered for sale. ECF No. 1-2 at 6. After selecting her

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shoes and paying in full, plaintiff left the store with her merchandise and receipt. Id. On January

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14, 2017, Ms. Awadan returned to the Reebok store in order to return the shoes. Id. She went to

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the register, and gave the items to the cashier, who asked for her driver’s license. Id. After

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typing in the computer, the cashier allegedly told Ms. Awadan that the items had already been

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returned, and that the cashier was the one that helped her with the return. Id. at 7. After Ms.

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Awadan protested, the cashier again said the shoes could not be returned. Id. Before plaintiff

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could leave with the shoes, the cashier grabbed the shoes and said he needed to check with loss

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prevention. Id. Approximately 30 minutes later, the cashier returned without the shoes and

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refused to give the shoes back to Ms. Awadan. Id.

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The complaint alleges that Faizal Awadan was shopping elsewhere in the shopping center

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at the time. Id. Ms. Awadan called him and asked him to bring security and the police. Id. The

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Reebok store manager told Mr. Awadan that the shoes had already been returned, and refused to

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give the shoes back to Mr. Awadan. Id. Mr. Awadan told the store manager that it was not

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possible that the shoes had already been returned because the Awadans had just returned from

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vacation, and had not previously returned the shoes. Id. at 8. By this time a police officer had

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arrived. Id. The police officer said he could not help plaintiffs, and asked them to leave the store.

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Id. Plaintiffs allege that these events caused Ms. Awadan emotional distress, and she feels

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shamed by the experience of being discriminated against and stereotyped for her ethnicity. Id.

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Plaintiffs bring numerous, vaguely stated causes of action. They allege as follows: (1)

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“defendants caused and/or permitted the violation of denying the customer her constitutional

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rights and discriminated against her ethnicity after looking at her driver’s license;” (2) “violation

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of civil rights, stereotyped its customer and treated her like a common criminal in public in front
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of other customers and her parents;” (3) “stealing from its customer the first pair of shoes;” (4)

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“stealing from its customer the second pair of shoes;” (5) “engaging in unethical and unfair

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business practice that leads to discrimination and theft in a public place of business;” (6) “making

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false statement to the police to cover up the theft of the shoes;” (7) “false advertising about their

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return policy;” (8) “unethical and unfair ejection of plaintiffs from a public place of business

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during store hours.” Id. at 9-10.

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II.

Motion

Defendant moves to dismiss plaintiffs’ First, Second, Fifth, Sixth, Seventh, and Eighth
causes of action pursuant to Fed. R. Civ. P. 12(b)(6), with prejudice, asserting that plaintiffs do

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not make cognizable legal claims. ECF No. 10 at 10. Defendants also move to dismiss with

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prejudice the claims of Faizal Awadan for lack of standing. Id. As discussed above, plaintiffs’

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failure to respond to defendant’s motion is construed as non-opposition to the motion.

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III.

Analysis

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A. Legal Standard

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The purpose of a motion to dismiss pursuant to Rule 12(b)(6) is to test the legal

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sufficiency of the Complaint. N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578, 581 (9th Cir.

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1983). “Dismissal can be based on the lack of a cognizable legal theory or the absence of

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sufficient facts alleged under a cognizable legal theory.” Balistreri v. Pacifica Police Dep’t, 901

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F.2d 696, 699 (9th Cir. 1990). In order to survive dismissal for failure to state a claim, a

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complaint must contain more than a “formulaic recitation of the elements of a cause of action;” it

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must contain factual allegations sufficient to “raise a right to relief above the speculative level.”

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Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). It is insufficient for the pleading to

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contain a statement of facts that “merely creates a suspicion” that the pleader might have a legally

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cognizable right of action. Id. (quoting 5 C. Wright & A. Miller, Federal Practice and Procedure

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§ 1216, pp. 235 35 (3d ed. 2004)). Rather, the complaint “must contain sufficient factual matter,

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accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556

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U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). “A claim has facial plausibility when

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the plaintiff pleads factual content that allows the court to draw the reasonable inference that the
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defendant is liable for the misconduct alleged.” Id.
In reviewing a complaint under this standard, the court “must accept as true all of the

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factual allegations contained in the complaint,” construe those allegations in the light most

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favorable to the plaintiff, and resolve all doubts in the plaintiffs’ favor. See Erickson v. Pardus,

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551 U.S. 89, 94 (2007); Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954,

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960 (9th Cir. 2010), cert. denied, 131 S. Ct. 3055 (2011); Hebbe v. Pliler, 627 F.3d 338, 340 (9th

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Cir. 2010). However, the court need not accept as true legal conclusions cast in the form of

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factual allegations, or allegations that contradict matters properly subject to judicial notice. See

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Western Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981); Sprewell v. Golden State

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Warriors, 266 F.3d 979, 988 (9th Cir.), as amended, 275 F.3d 1187 (2001).
Pro se pleadings are held to a less stringent standard than those drafted by lawyers.

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Haines v. Kerner, 404 U.S. 519, 520 (1972). Pro se complaints are construed liberally and may

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only be dismissed if it appears beyond doubt that the plaintiff can prove no set of facts in support

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of his claim which would entitle him to relief. Nordstrom v. Ryan, 762 F.3d 903, 908 (9th Cir.

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2014). A pro se litigant is entitled to notice of the deficiencies in the complaint and an

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opportunity to amend, unless the complaint's deficiencies could not be cured by amendment. See

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Noll v. Carlson, 809 F.2d 1446, 1448 (9th Cir. 1987).

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B. First and Second Causes of Action Cannot State Discrimination Claims

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Taking plaintiffs’ allegations as true, plaintiffs do not allege facts to support a cognizable

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civil rights claim under 42 U.S.C. § 1981 or § 1983. Although plaintiffs do not specifically allege

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§1981’s right to contract clause or equal benefit clause, or §1983, the language plaintiffs use

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appears to invoke these federal laws. Section 1981’s “equal benefit” clause provides that all

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persons shall have the same right to “make and enforce contracts.” See 42 U.S.C. § 1981(a).

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Congress subsequently expanded the scope of Section 1981 to include the right to “the enjoyment

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of all benefits, privileges, terms, and conditions of the contractual relationship.” See 42 U.S.C. §

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1981(b). Section 1981’s “right to contract” clause provides that all persons shall have the right to

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“the full and equal benefit of all laws and proceedings for the security of persons and property.”

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42 U.S.C. § 1981(a). Section 1983 provides a civil action for the deprivation of constitutional
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rights, but only state actors can be held liable under § 1983. See Adickes v. S.H. Kress & Co.,

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398 U.S. 144, 150 (1970). A private party who willfully participates in joint activity with the

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State or its agents is considered a state actor. See id. at 152.

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Plaintiffs’ First and Second causes of action, which state that (1) “defendants caused

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and/or permitted the violation of denying the customer her constitutional rights and discriminated

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against her ethnicity after looking at her driver’s license;” and (2) “violation of civil rights,

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stereotyped its customer and treated her like a common criminal in public in front of other

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customers and her parents,” cannot find grounding in § 1981 or §1983. There is no §1981 “right

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to contract” when a patron of a store purchases goods and receives them, even if the purchased

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merchandise is subsequently taken away. See Youngblood v. Hy-Vee Food Stores, Inc., 266 F.3d

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851, 854 (8th Cir. 2001) (“Once Youngblood paid the cashier and received the beef jerky from

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the cashier, neither party owed the other any duty under the retail-sale contract.”) The “equal

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benefits” clause likewise provides no avenue for relief because it is limited to challenges to law,

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not private store policies. See, Judie v. Hamilton, 872 F.2d 919, 923 (9th Cir. 1989) (“Judie’s job

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description, however, is not a law”); Youngblood, 266 F.3d at 855.

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Similarly, only state actors can be held liable under §1983, though a private party who

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willfully participates in a joint activity with the state or its agents is considered a state actor.

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Adickes, 398 U.S. at 150. Here, plaintiffs allege very minimal involvement of a state actor. As

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alleged, the police officer was not involved in the primary confrontation between plaintiffs and

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Reebok employees, and defendants cannot be said to have been engaging in a joint activity with

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the police officer such that relief could be afforded under § 1983. ECF No. 1-2 at 8.

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Because the facts of this case cannot state cognizable legal claims of discrimination under

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either §1981 or §1983, and amendment would be futile given the facts as alleged, plaintiffs’

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discrimination claims (the First and Second causes of action) should be dismissed with prejudice.

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C. Sixth Cause of Action is Barred Under California Law

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Plaintiff’s Sixth cause of action, which states defendants made a “false statement to the

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police to cover up the theft of the shoes,” is barred under California law. “[U]nder California

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law, reports to police of suspected criminal activities—even false reports made with malice—are
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absolutely privileged and may not serve as predicates for tort claims, except the tort of malicious

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prosecution.” Lauter v. Anoufrieva, 642 F. Supp. 2d 1060, 1090 (C.D. Cal. 2009); see also,

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Hagberg v. California Fed. Bank FSB, 32 Cal. 4th 39, 360 (2004). Plaintiffs’ claim against

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defendant is based on an allegedly false report to police and it is therefore barred under California

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law. Plaintiffs’ Sixth cause of action should be dismissed with prejudice.

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D. Fifth and Eighth Causes of Action are Dependent on Discrimination Claims

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Plaintiff’s Fifth and Eighth causes of action, which claim that defendants engaged “in

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unethical and unfair business practice that leads to discrimination and theft in a public place of

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business,” and in “unethical and unfair ejection of plaintiffs from a public place of business

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during store hours,” fail because they are not connected to a viable discrimination claim.

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“California’s [Unfair Competition Law] prohibits unlawful, unfair, or fraudulent business acts or

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practices. California Bus. & Prof. Code § 17200. To state a California state law claim for

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unlawful or unfair business practices in a discrimination case, a plaintiff is required to establish a

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viable discrimination claim. Gardner v. Fed. Express Corp., 114 F. Supp. 3d 889, 905 (N.D. Cal.

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2015). Plaintiffs fail to state a viable discrimination claim for the reasons already explained, and

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the facts underlying their complaint demonstrate that they cannot do so. Plaintiffs’ Fifth and

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Eighth causes of action therefore cannot be saved by amendment, and should be dismissed with

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prejudice.

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E. Seventh Cause of Action Does Not State a Claim

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Plaintiffs’ Seventh cause of action, that defendants engaged in “false advertising about

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their return policy” is not supported by the facts as alleged and should be dismissed without

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prejudice. California’s “false advertising law [(“FAL”)] prohibits any ‘unfair, deceptive, untrue,

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or misleading advertising.’ Cal. Bus. and Prof. Code § 17500.” Williams v. Gerber Prod. Co.,

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552 F.3d 934, 938 (9th Cir. 2008). The “California Supreme Court has recognized ‘that these

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laws prohibit ‘not only advertising which is false, but also advertising which [,] although true, is

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either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse

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the public’. . . . California courts, however, have recognized that whether a business practice is

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deceptive will usually be a question of fact not appropriate for decision on demurrer.” Id.
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Federal Rule of Civil Procedure 9(b) requires that “[i]n all averments of fraud or mistake,

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the circumstances constituting fraud or mistake shall be stated with particularity.” “It is

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established law, in this circuit and elsewhere, that Rule 9(b)’s particularity requirement applies to

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state-law causes of action.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1103 (9th Cir.

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2003). “District courts in California have consistently held in addition that claims under

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California’s FAL are grounded in fraud.” Yumul v. Smart Balance, Inc., 733 F. Supp. 2d 1117,

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1122–23 (C.D. Cal. 2010) (collecting cases).

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The facts alleged in this case are legally insufficient, even under the ordinary pleading
standard, to state a false advertising claim. Plaintiffs do not allege the content of any

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advertisement regarding defendant’s return policy, or that they relied on the policy in making

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their purchase. See ECF No. 1-2. Exhibit C to the complaint, provided as documentation of the

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return/exchange policy, id. at 18, appears to be a reproduction of the bottom portion of the receipt

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for purchase of the shoes, id. at 14 (Exhibit A). Because the complaint and its attachments do not

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identify any advertisement or pre-purchase knowledge of the policy, it cannot state a claim for

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false advertising and Claim Seven should be dismissed. Defendants, however, do not make a

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compelling argument that leave to amend on this claim would be futile. Unlike the claims

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discussed above, which are not viable given the nature of the dispute, this claim could

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conceivably be remedied by allegation of additional facts about defendant’s advertisement of its

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return policy. For that reason, plaintiffs’ Seventh cause of action should be dismissed with leave

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to amend.

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F. Faizal Awadan Lacks Standing

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The claims of Faizal Awadan should be dismissed with prejudice because, based on the

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facts alleged, Mr. Awadan lacks standing. “[T]he irreducible constitutional minimum of standing

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contains three elements. First, the plaintiff must have suffered an ‘injury in fact’—an invasion of

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a legally protected interest which is (a) concrete and particularized, and (b) ‘actual or imminent,

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not ‘conjectural’ or ‘hypothetical[.]’’ Second, there must be a causal connection between the

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injury and the conduct complained of—the injury has to be ‘fairly ... trace[able] to the challenged

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action of the defendant, and not ... th[e] result [of] the independent action of some third party not
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before the court.’ Third, it must be ‘likely,’ as opposed to merely ‘speculative,’ that the injury

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will be ‘redressed by a favorable decision.’” Lujan v. Defs. of Wildlife, 504 U.S. 555, 560–61,

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(1992) (internal citations omitted).

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The transactions giving rise to this dispute primarily involve plaintiff Shainaz Awadan;

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the complaint mentions Faizal Awadan only tangentially. ECF 1-2 at 6-8. The complaint alleges

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that Shainaz Awadan made the initial purchase of shoes; there is no indication that her husband

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was involved. Id. at 6. Faizal Awadan was not present for the primary confrontation with

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Reebok sales associates related to the attempted return of merchandise. Id. 1t 6-7. In discussing

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emotional harm suffered as a result of the incident alleged, the complaint mentions only harm to

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Shainaz Awadan. Id. at 8. Mr. Awadan does not allege that he personally suffered any injury.

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Because Faizal Awadan cannot meet the first element required for standing, that he suffered an

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“injury in fact,” it is recommended that claims brought by Faizal Awadan be dismissed with

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prejudice for lack of standing.

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IV.

Conclusion

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Based on the foregoing, the undersigned recommends as follows:

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1. That plaintiffs’ First, Second, Fifth, Sixth, and Eighth causes of action be

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DISMISSED with prejudice;

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2. That plaintiffs’ Seventh cause of action be DISMISSED without prejudice; and

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3. That the claims of Faizal Awadan be DISMISSED from this case with prejudice.

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These findings and recommendations are submitted to the United States District Judge

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assigned to the case, pursuant to the provisions of 28 U.S.C. § 636(b)(1). Within twenty one days

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after being served with these findings and recommendations, any party may file written

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objections with the court and serve a copy on all parties. Id.; see also Local Rule 304(b). Such a

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document should be captioned “Objections to Magistrate Judge’s Findings and

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Recommendations.” Any response to the objections shall be filed with the court and served on all

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parties within fourteen days after service of the objections. Local Rule 304(d). Failure to file

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objections within the specified time may waive the right to appeal the District Court’s order.

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Turner v. Duncan, 158 F.3d 449, 455 (9th Cir. 1998); Martinez v. Ylst, 951 F.2d 1153, 1156-57

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(9th Cir. 1991).

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DATED: August 8, 2017

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