Parham v. McDonald's Corporation et al

Filing 28

MOTION to Dismiss Plaintiff's Amended Class Action Complaint For Violations of The Unfair Competition Law, The Consumers Legal Remedies Act and Declaratory and Injunctive Relief; Memorandum of Points and Authorities in Support Thereof filed by McDonald's Corporation, McDonalds USA, LLC. Motion Hearing set for 6/24/2011 09:00 AM in Courtroom 7, 19th Floor, San Francisco before Hon. Maxine M. Chesney. (Attachments: #1 Proposed Order)(Thorpe, Jane) (Filed on 4/18/2011)

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RANDALL L. ALLEN (SBN 264067)
[e-mail]
PALANI P. RATHINASAMY (SBN 269852)
[e-mail]
ALSTON & BIRD LLP
275 Middlefield Road, Suite 150
Menlo Park, CA 94025-4008
Telephone:
650-838-2000
Facsimile:
650-838-2001
JANE FUGATE THORPE (Pro Hac Vice)
[e-mail]
SCOTT A. ELDER (Pro Hac Vice)
[e-mail]
ALSTON & BIRD LLP
1201 West Peachtree Street
Atlanta, GA 30309
Telephone:
404-881-7000
Facsimile:
404-881-7777
Attorneys for Defendants
MCDONALD’S CORPORATION and
MCDONALD’S USA, LLC.

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SAN FRANCISCO DIVISION

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MONET PARHAM, on behalf of herself and
those similarly situated,
Plaintiff,

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v.
McDONALD’S CORPORATION, and
McDONALD’S USA, LLC.,
Defendants.

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Case No.: 11-cv-00511-MMC
NOTICE OF MOTION AND MOTION
TO DISMISS PLAINTIFF’S AMENDED
CLASS ACTION COMPLAINT FOR
VIOLATIONS OF THE UNFAIR
COMPETITION LAW, THE
CONSUMERS LEGAL REMEDIES ACT
AND DECLARATORY AND
INJUNCTIVE RELIEF;
MEMORANDUM OF POINTS AND
AUTHORITIES IN SUPPORT
THEREOF
DATE:
TIME:
CTRM:
JUDGE:

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June 24, 2011
9:00 a.m.
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Maxine M. Chesney

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NOTICE OF MOTION AND MOTION TO DISMISS

Case No. 11-cv-00511 MMC

NOTICE OF MOTION AND MOTION

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TO PLAINTIFF AND HER ATTORNEYS OF RECORD:

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PLEASE TAKE NOTICE that defendants McDonald’s Corporation and McDonald’s

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USA, LLC (collectively “McDonald’s”) will and hereby do move this Court for an order

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dismissing Plaintiff’s Amended Class Action Complaint For Violations of the Unfair Competition

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Law, the Consumer Legal Remedies Act and Declaratory and Injunctive Relief (“Amended

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Complaint”) pursuant to Fed. R. Civ. P. 12(b)(6), on June 24, 2011 at 9:00 a.m., or as soon

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thereafter as this matter may be heard, in Courtroom 7 of this Court, located at 450 Golden Gate

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Avenue, San Francisco, California 94102.
ISSUES TO BE DECIDED

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McDonald’s requests that the Court dismiss the Amended Complaint in its entirety on the

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grounds that Plaintiff has not stated a claim upon which relief can be granted under California’s

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Unfair Competition Law, the Consumer Legal Remedies Act, or California’s False Advertising

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Law. Accordingly, Plaintiff’s claims should be dismissed pursuant to Fed. R. Civ. P 12(b)(6).

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This motion is based upon this Notice of Motion, the Memorandum of Points and Authorities, and

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other papers and pleadings on file and on such other argument and evidence as may be presented

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to the Court at or prior to the hearing on this motion.

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DATED: April 18, 2011

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Respectfully submitted,
ALSTON & BIRD LLP

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By:

/s/ Jane Fugate Thorpe
Jane Fugate Thorpe
Attorneys for Defendants
McDONALD’S CORPORATION and
McDONALD’S USA, LLC

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NOTICE OF MOTION AND MOTION TO DISMISS

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Case No. 11-cv-00511 MMC

TABLE OF CONTENTS
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Page
TABLE OF CONTENTS........................................................................................................... ii
I.

INTRODUCTION ..............................................................................................1

II.

STATEMENT OF FACTS .................................................................................5

III.

ARGUMENT ......................................................................................................7

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A.

Motion to Dismiss Standard....................................................................7

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B.

Plaintiff Fails to State a Claim for Relief Under the
UCL.........................................................................................................7

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1.

Plaintiff does not have standing to pursue her
UCL claim because she has not alleged that she
lost money or property as required by the UCL..........................7

2.

Plaintiff does not have standing to pursue her
UCL claim because she has not alleged that
McDonald’s practices caused her alleged loss
of money. ..................................................................................10

3.

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Plaintiff fails to state a claim because she has
not alleged that McDonalds’s marketing
practices are “unfair” as defined by the UCL ...........................11

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(i)

Ms. Parham has not adequately alleged
that McDonald’s marketing practices
are “unfair,” because she has not tied
McDonald’s practices to a legislatively
declared policy ..............................................................11

(ii)

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Alternately, Plaintiff has not alleged
that McDonald’s practices are “unfair”
because Plaintiff has not alleged that
McDonald’s practices are immoral,
unethical, or unscrupulous and that any
alleged injury outweighs the benefits of
the practice. ...................................................................13

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C.

Plaintiff Fails to State a Claim for Relief under the
CLRA ....................................................................................................15
1.

Plaintiff lacks standing to pursue her CLRA
claim, because she has not alleged that she
suffered damages as required by the CLRA .............................15

2.

Plaintiff fails to state a claim under the CLRA
because she does not allege that McDonald’s

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MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

made a material misrepresentation or that she
relied on a material misrepresentation. .....................................16

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D.

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1.

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IV.

Plaintiff lacks standing to pursue a violation of
the FAL .....................................................................................19

2.

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Plaintiff Fails to State a Claim for Relief under the
FAL .......................................................................................................18

Plaintiff does not state a claim for violation of
the FAL because Plaintiff has not alleged that a
reasonable consumer would be deceived by a
specific McDonald’s advertisement..........................................19

CONCLUSION .................................................................................................20

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MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

TABLE OF AUTHORITIES
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CASES

PAGE(S)

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Arevalo v. Bank of Am. Corp.,
2011 WL 1195973 (N.D. Cal. Mar. 29, 2011)........................................................................ 19

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Aron v. U-Haul Co. of Cal.,
143 Cal. App. 4th 796 (Cal. Ct. App. 2006) ........................................................................... 15

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Ashcroft v. Iqbal,
129 S. Ct. 1937 (2009) .............................................................................................................. 7

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Baba v. Hewlett-Packard Co.,
2010 U.S. Dist. LEXIS 59747 (N.D. Cal. June 16, 2010) ...................................................... 13

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Bell Atl. v. Twombly,
550 U.S. 544 (2007) ............................................................................................................ 7, 18

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Caro v. Procter & Gamble,
18 Cal. App. 4th 644 (1993).............................................................................................. 16, 17

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Carrea v. Dryer’s Grand Ice Cream, Inc.,
2011 U.S. Dist. LEXIS 6371 (N.D. Cal. Jan. 10, 2011) ......................................................... 15

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13

Cattie v. Wal-Mart Stores, Inc.,
504 F. Supp. 2d 939 (S.D. Cal. 2007) ......................................................................... 16, 17, 19

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Cel-Tech Commc’ns., Inc. v. Los Angeles Cellular Tel. Co.,
973 P.2d 527, 541 (Cal. 1999) ................................................................................................ 11

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Chavez v. Blue Sky Natural Beverage Co.,
340 Fed. App’x. 359 (9th Cir. 2009)................................................................................... 8, 15

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Ferrington v. McAfee, Inc.,
2010 U.S. Dist. LEXIS 106600 (N.D. Cal. Oct. 5, 2010)....................................................... 13

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Hall v. Time, Inc.,
158 Cal. App. 4th 847 (2008).......................................................................................... 8, 9, 10

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Hinjos v. Kohl’s Corp.,
2010 WL 4916647, at *2 (C.D. Cal. Dec. 1, 2010) ............................................................ 9, 18

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In re Steroid Hormone Product Cases,
181 Cal. App. 4th 145 (2010).................................................................................................. 16

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Kearns v. Ford Motor Co.,
567 F.3d 1120 (9th Cir. 2009)................................................................................................. 17

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Kent v. Hewlett-Packard Co.,
2010 WL 2681767, at *8 (N.D. Cal. July 6, 2010) ................................................................. 16

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Koh v. S.C. Johnson & Son, Inc.,
2010 WL 94265 (N.D. Cal. Jan. 6, 2010) ................................................................................. 8

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Kowalsky v. Hewlett-Packard Co.,
2010 U.S. Dist. LEXIS 131711 (N.D. Cal. Dec. 13, 2010) .............................................. 11, 13
Kwikset Corp. v. Super. Ct. of Orange Cnty.,
246 P.3d 877 (Cal. 2011) ................................................................................................ 7, 8, 10

MEMORANDUM OF POINTS AND AUTHORITIES

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Laster v. T-Mobile U.S.A., Inc.,
407 F. Supp. 2d 1181 (S.D. Cal. 2005) ................................................................................... 10

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Leong v. Square Enix of Am. Holdings, Inc.,
2010 WL 1641364 (C.D. Cal. 2010)....................................................................................... 18

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London v. New Albertson’s Inc.,
2008 WL 4492642 (S.D. Cal. 2008) ....................................................................................... 18

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Lozano v. AT&T Wireless Servs., Inc.,
504 F.3d 718 (9th Cir. 2007)................................................................................................... 11

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McKinniss v. Kellogg U.S.A.,
2007 U.S. Dist. LEXIS 96106 (C.D. Cal. Sept. 21, 2007)...................................................... 16

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Morgan v. Harmonix Mus. Sys.,
2009 U.S. Dist. LEXIS 57528 (N.D. Cal. July 7, 2009) ................................................... 12, 13

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Morris v. BMW of N. Am.,
2007 U.S. Dist. LEXIS 85513 (N.D. Cal. Nov. 7, 2007).................................................. 11, 12

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Peterson v. Cellco P’ship,
164 Cal. App. 4th 1583 (2008).................................................................................................. 9

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Roling v. E*Trade Sec., LLC,
2010 U.S. Dist. LEXIS 123714 (N.D. Cal. Nov. 22, 2010).................................................... 13

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Sarbaz v. Wachovia,
U.S. Dist. LEXIS 21552 (N.D. Cal. Mar. 3, 2011)C ........................................................ 12, 14

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Similia v. Am. Sterling Bank,
2010 U.S. Dist LEXIS 108440 (S.D. Cal. Oct. 12, 2010)....................................................... 12

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Troyk v. Farmers Grp., Inc.,
171 Cal. App. 4th 1305 (2009).................................................................................................. 7

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Videtto v. Kellogg U.S.A.,
2009 WL 1439086 (E.D. Cal. May 21, 2009)......................................................................... 19

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Von Koenig v. Snapple Beverage Corp.,
713 F. Supp. 2d 1066 (E.D. Cal. 2010)................................................................................... 15

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Weberl ex rel. v. Pepsico, Inc.,
2010 WL 2673860 (N.D. Cal. July 2, 2010)........................................................................... 19

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RULES

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Rule 12(b)(6)........................................................................................................................... 4, 5, 7

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STATUTES

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Cal. Bus. & Prof. Code § 17204 ............................................................................................... 7, 10

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Cal. Bus. & Prof. Code § 17535 ................................................................................................... 18
Cal. Civ. Code § 1780................................................................................................................... 15
California Business and Professions Code § 17200 et seq. ............................................................ 6

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California Business and Professions Code § 17500 et. seq. ..................................................... 6, 18

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California Civ. Code § 1750 et. seq. ............................................................................................... 6

MEMORANDUM OF POINTS AND AUTHORITIES

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MEMORANDUM OF POINTS AND AUTHORITIES

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I.

INTRODUCTION

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The Center for Science in the Public Interest (CSPI), the public interest group sponsoring

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this action, has decided that McDonald’s should not be allowed to sell Happy Meals containing

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toys in the State of California. This lawsuit is CSPI’s attempt to distort state consumer protection

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law beyond recognition in order to impose that decision on California parents. Specifically,

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Plaintiff Monet Parham, who is represented by CSPI’s “Director of Litigation,” alleges that

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Defendants McDonald’s Corporation and McDonald’s USA, LLC (collectively “McDonald’s”)

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violated California’s consumer protection statutes by advertising McDonald’s Happy Meals with

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toys to children and by selling those Happy Meals to parents – an unquestionably legal practice

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that has occurred for decades in thousands of restaurants (of numerous brands) in California and

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across the country.
Beyond referencing the California Unfair Competition Law and the Consumers Legal

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Remedies Act in summary fashion,1 Plaintiff’s Amended Complaint bears little resemblance to a

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lawsuit, instead favoring a policy paper outlining CSPI’s political views and regulatory agenda.

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For example, Plaintiff devotes paragraph after paragraph to the issue of childhood obesity and its

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impact on children’s health and healthcare costs. See, e.g., Am. Compl. ¶¶ 34-60. But Plaintiff

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does not allege that her children suffered any physical harm from eating at McDonald’s. Plaintiff

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similarly devotes paragraph after paragraph in her amended complaint to the allegedly deceptive

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nature of any advertising directed toward children, but Plaintiff does not allege that her own

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children saw any particular advertisement or made a single purchase from McDonald’s. Her only

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allegation is that she purchased Happy Meals for her children on occasion, while at other times

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telling her children no because Ms. Parham prefers not to purchase Happy Meals. Am. Compl. ¶¶

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112-114. In other words, her allegations confirm that Ms. Parham decided whether to purchase

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Happy Meals independent of any information provided in McDonald’s advertising.

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As discussed below, Plaintiff also refers to California’s False Advertising Law, but Plaintiff
does not devote any of the three counts of the Amended Complaint to an alleged violation of that
statute.
MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

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In fact, Plaintiff’s allegations of violations of California’s consumer protection statutes are

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remarkable for the things she does not allege. For instance, Plaintiff in this false advertising case

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does not identify one single McDonald’s advertisement (or other statement) that was allegedly

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false or misleading. Plaintiff also does not allege that (i) the food provided in the Happy Meal was

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unsatisfactory at the time it was eaten by her children; (ii) that McDonald’s made any

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misrepresentations or omissions about the Happy Meal food; (iii) that she did not understand or

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could not find the nutritional value of the food; or (iv) as noted above, that her children suffered

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any injury or other ill effects from eating the food. And although the Amended Complaint

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contains numerous paragraphs outlining alleged harms to children of advertising and Happy

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Meals, Plaintiff does not assert any claims on behalf of her children; she is the only plaintiff and

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asserts claims only on her own behalf and on behalf of a class of other parents. Am. Compl. ¶ 27.

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What then is Plaintiff’s claim arising from the advertising and sale of Happy Meals?

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Plaintiff contends that the advertising of Happy Meals containing a toy to children is an inherently

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“unfair” trade practice, because the advertising causes children to “pester” their parents to

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purchase a Happy Meal, and “these requests sometimes lead parents to purchase poor-nutrition

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Happy Meal items they would otherwise not buy.” Am. Compl. ¶ 55. As Plaintiff succinctly

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restates the theory in paragraph 112 of the Amended Complaint, “[b]ecause of McDonald’s

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marketing, Ms. Parham’s daughters frequently pester Ms. Parham into purchasing Happy Meals,

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thereby spending money on a product she would not have otherwise purchased.” Am. Compl. ¶

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112. Thus, the Amended Complaint alleges that McDonald’s has “undermined Parham’s parental

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authority,” (Am. Compl. ¶ 115), and, on those occasions when Ms. Parham has not purchased a

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Happy Meal, has “caus[ed] needless and unwarranted dissension in their parent-child

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relationship.” Am. Compl. ¶ 114.

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The scope of the conduct that would qualify as a violation of California’s consumer

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protection statutes under Plaintiff’s novel theory is vast to say the least. In short, advertising to

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children any product that a child asks for but the parent does not want to buy would constitute an

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unfair trade practice. If a child sees an ad for a doll, but the parent thinks it is too expensive and

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decides to say no, then the company is violating California law. If a child wants a video game

MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

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advertised on television, but the parent does not want the child to play video games, then the

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company is violating California law. Indeed, Plaintiff, in her allegations related to the alleged

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misleading nature of advertising to children, provides her own illustration of conduct that would

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now violate California law under this theory when she refers to a study that “observed high rates

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of child disappointment and anger in response to the majority of parent refusals for cereal requests

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at the supermarket.” Am. Compl. ¶ 44. Advertising any product to children would now be a per

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se violation of California consumer protection laws if the parent’s decision not to buy the product

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“place[s] a strain on parent-child interaction.” Am. Compl. ¶ 44.2
Not surprisingly, Plaintiff’s theory is as legally deficient as it is novel, and established

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principles of law require the dismissal of the Amended Complaint in its entirety on multiple

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independent grounds. As a threshold matter, under California’s Unfair Competition Law

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(“UCL”), Plaintiff does not have standing to pursue her claim. Although Plaintiff alleges the

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“loss” of money she spent on Happy Meals, her allegations confirm that she knew what she was

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purchasing – in fact, she went to McDonald’s specifically to purchase a Happy Meal – and she

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received the benefit of her bargain. A plaintiff who receives exactly what she bargained for has no

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standing to sue under the UCL.
Plaintiff’s UCL claim also fails because she does not allege the required causal connection

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between McDonald’s alleged conduct and her loss of the purchase price of a Happy Meal.

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Plaintiff admits that the decision to purchase a Happy Meal is well within her control, and she

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frequently tells her daughters “no” when they ask for Happy Meals. She was not misled by any

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advertising, nor did she rely on any information from McDonald’s. Plaintiff’s understanding of

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the relevant facts, and her decision as a parent to purchase a Happy Meal, negate any causal link

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To the extent Plaintiff suggests that only allegedly “unhealthy” products would fall under this
theory, that distinction fails. First, consumer protection laws do not provide any protections
against allegedly “unhealthy” products absent a claimed misrepresentation, e.g., a claim that a
product is low fat when in fact it is not. No such claim is even suggested here. Second, there is no
requirement that businesses advertise only “healthy” products, including food. Ice cream, cookies,
candy, etc. are all perfectly legal products to advertise. Third, despite its rhetoric, this lawsuit
does not seek to recover for any alleged harm from purportedly “unhealthy” products. The alleged
harm stems entirely from purchasing a product to avoid the purported “family rancor” that might
result from saying no, and such “rancor” could exist with any product a child might want.
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Case No. 11-cv-00511 MMC

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between McDonald’s alleged unlawful conduct and Plaintiff’s “loss” of the money she spent on

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Happy Meals.

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Also under the UCL, Plaintiff does not allege any conduct that, if proven true, would

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actually violate that statute. Plaintiff repeatedly invokes the UCL’s prohibition of “unfair”

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conduct, but her allegations do not tether that claim to any statutory or regulatory policy or to any

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conduct that would constitute immoral, unethical, or unscrupulous business practices under the

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UCL. In the absence of those allegations, Plaintiff is left only with her subjective belief that

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McDonald’s has acted “unfairly,” but a plaintiff’s subjective belief is not sufficient to state a claim

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under the UCL.

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Plaintiff’s Consumer Legal Remedies Act (“CLRA”) claim fails for similar reasons.

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Plaintiff lacks standing under the CLRA, because she does not allege that she suffered damage or

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that she relied on misrepresentations made by McDonald’s. On the contrary, Plaintiff alleges that

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she purchased Happy Meals despite her belief that Happy Meals are nutritionally inappropriate for

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her children. Thus, Plaintiff does not even suggest that McDonald’s made a misrepresentation to

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her about the food, and she certainly does not come close to pleading reliance. Further, Plaintiff

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also does not allege any conduct by McDonald’s that would actually constitute a violation of the

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CLRA. Instead, she simply lists the two CLRA subsections she claims McDonald’s violated, but

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she does not include any underlying facts in connection with those allegations. Repeating the

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words of the CLRA falls well short of stating a viable claim under Rule 12(b)(6).

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Additionally, Plaintiff does not allege conduct that violates California’s False Advertising

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Law (“FAL”). Because the FAL carries the same standing requirements as the UCL, and because

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Plaintiff fails to identify any McDonald’s advertisement at all, much less one that is likely to

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deceive a reasonable consumer, Plaintiff’s passing references in the Amended Complaint to

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violations of the FAL are insufficient to state a viable claim under Rule 12(b)(6).

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Plaintiff and CSPI ask this Court to rid Plaintiff of the potentially unpleasant experience of

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having to tell her children “no” when they ask for something that she does not want them to have.

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However, this is not a legally protected right under the UCL, the CLRA or the FAL. In addition,

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no matter how convinced CSPI is of the correctness of its views related to advertising and Happy

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Meals, those views do not entitle Plaintiff to relief under California’s consumer protection laws.

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Accordingly, pursuant to Fed. R. Civ. P. 12(b)(6), McDonald’s requests that the Court dismiss

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Plaintiff’s Amended Complaint in its entirety for failure to state a claim upon which relief can be

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granted.

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II.

STATEMENT OF FACTS

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Plaintiff Monet Parham is the mother of two daughters, ages two and six. Am. Compl. ¶

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27. Plaintiff’s basic claim is that McDonald’s advertises Happy Meals to children, who in turn

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“pester” their parents to purchase Happy Meals, and “these requests sometimes lead parents to

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purchase poor-nutrition Happy Meal items they would otherwise not buy.” Am. Compl. ¶¶ 52-55.
Plaintiff’s Amended Complaint alleges that marketing to children is inherently deceptive

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(Am. Compl. ¶ 39-51), and Plaintiff contends that “advertising Happy Meals to children by using

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the lure of a toy directly and proximately inculcates poor dietary habits in California children,

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placing them at a lifelong risk of developing a myriad of health problems.” Am. Compl. ¶ 62.
Despite these allegations, Plaintiff does not assert any claims on behalf of her children or

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allege that her children (or any other children) have suffered any injuries. Rather, “Parham brings

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this action on her own behalf,” (Am. Compl. ¶ 27), and on behalf of a purported class of other

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California parents of children under the age of 8. Am. Compl. ¶ 116.

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Plaintiff’s Amended Complaint includes multiple allegations regarding the allegedly

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unhealthy nature of the food in Happy Meals. While McDonald’s vigorously disputes those

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allegations, the Court is required to accept them as true for purposes of this motion to dismiss.

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Importantly, however, Plaintiff does not contend that McDonald’s misled her (either by

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misrepresentation or omission) in any respect regarding the nutritional value of its food or any

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other fact. On the contrary, Plaintiff claims that she did not want to purchase Happy Meals for her

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children precisely because she believed them to be nutritionally poor. Am. Compl. ¶¶ 55, 104-

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115.

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Despite Plaintiff’s alleged desire not to purchase Happy Meals, she contends that

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McDonald’s somehow forced her to make those purchases by advertising Happy Meals to her

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children, although Plaintiff does not identify any particular advertisement that did so.

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Nevertheless, Plaintiff alleges that McDonald’s has “subvert[ed] [her] parental authority,” (Am.

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Compl. ¶ 110), and “unfairly interfered with Parham’s relationship with her children.” Am.

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Compl. ¶ 111. Although Plaintiff “frequently denies her daughters’ repeated requests for Happy

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Meals, these denials have angered and disappointed her daughters, thus causing needless and

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unwarranted dissension in their parent-child relationship.” Am. Compl. ¶ 114. As a result,

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“sometimes Parham, not wishing to cause family rancor, purchases such meals.” Am. Compl. ¶

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55.

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Plaintiff does not allege that she identified anything wrong with the Happy Meals at the
time they were purchased and eaten or that McDonald’s gave her anything less than what she was

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promised. She also does not allege that McDonald’s should have provided her with more or

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different information about the Happy Meal, nor does she claim that she overpaid for the Happy

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Meals. Plaintiff’s only claimed injury is the money she spent on Happy Meals that she allegedly

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was forced to purchase but did not actually want to buy. Am. Compl. ¶ 112.

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Based on these allegations, Plaintiff asserts three counts in the Amended Complaint. In

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Count I, Plaintiff alleges that McDonald’s conduct constitutes an unfair practice in violation of the

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California Unfair Competition Law pursuant to California Business and Professions Code § 17200

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et seq. Am. Compl. ¶ 126-128. In Count II, Plaintiff alleges a violation of the Consumer Legal

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Remedies Act pursuant to California Civil Code § 1750 et. seq. Specifically, Plaintiff alleges a

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violation of two CLRA subsections: § 1770(a)(5), which prohibits “representing that goods or

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services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities

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which they do not have . . .,” and §1770(a)(7), which prohibits “representing that goods or services

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are of a particular standard, quality, or grade, or that goods are of a particular style or model, if

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they are of another.” Am. Compl. ¶¶ 129-140. In Count III, Plaintiff alleges that the violation of

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the CLRA in turn constitutes an unlawful practice under the UCL, (Am. Compl. ¶¶ 141-143), thus

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Plaintiff contends that McDonald’s actions are both unfair (Count I) and unlawful (Count III)

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under the UCL. Finally, Plaintiff refers in paragraphs 1 and 119 to California’s False Advertising

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Law, California Business and Professions Code § 17500 et. seq. Although Plaintiff does not plead

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a specific count under this statute, McDonald’s nevertheless addresses this theory below as well.

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As discussed in detail below, each of Plaintiff’s claims is deficient in multiple respects,

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and Plaintiff’s Amended Complaint should be dismissed in its entirety.
III.

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ARGUMENT
A.

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Motion to Dismiss Standard.

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Plaintiff must meet the requirements of Fed. R. Civ. P. 12(b)(6) to survive a motion to

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dismiss for failure to state a claim. A motion to dismiss should be granted if a plaintiff fails to

7

plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. v. Twombly,

8

550 U.S. 544, 547 (2007). While facts alleged in a complaint are deemed to be true, the court

9

need not accept as true pleadings that are no more than legal conclusions or the “formulaic

10

recitation of the elements” of a cause of action. Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949 (2009)

11

(stating that “[t]hreadbare recitals of the elements of a cause of action, supported by mere

12

conclusory statements, do not suffice.”)). “Determining whether a complaint states a plausible

13

claim for relief . . . [is] a context-specific task that requires the reviewing court to draw on its

14

judicial experience and common sense.” Iqbal, 129 S. Ct. at 1950.
B.

15
16

Plaintiff Fails to State a Claim for Relief Under the UCL.
1.

17

Plaintiff does not have standing to pursue her UCL claim because
she has not alleged that she lost money or property as required by
the UCL.

18

“A litigant’s standing to sue is a threshold issue to be resolved before the matter can be

19

reached on the merits.” Troyk v. Farmers Grp., Inc., 171 Cal. App. 4th 1305, 1345 (2009). To

20

allege standing and to survive McDonald’s motion to dismiss, Plaintiff must allege that she “lost

21

money or property”3 under the UCL. See Cal. Bus. & Prof. Code § 17204 (stating that an

22

individual may pursue a claim under the UCL only if she has “suffered an injury in fact and has

23

lost money as a result of the unfair competition.”). Here, Plaintiff’s alleged loss is the money she

24

spent on purchasing McDonald’s Happy Meals for her children: “Because of McDonald’s

25
26
27
28

3

The UCL also requires a Plaintiff to allege an “injury in fact.” However, because the
Supreme Court of California has held “[i]f a party has alleged or proven a personal, individualized
loss of money or property in any nontrivial amount, he or she has also alleged or proven an injury
in fact,” the following discussion will focus on whether Plaintiff has alleged a loss of money or
property sufficient to satisfy the standing requirements of the UCL. See Kwikset Corp. v. Super.
Ct. of Orange Cnty., 246 P.3d 877 (Cal. 2011).
MEMORANDUM OF POINTS AND AUTHORITIES

7

Case No. 11-cv-00511 MMC

1

marketing, Parham’s daughters frequently pester Parham into purchasing Happy Meals, thereby

2

spending money on a product she would not have otherwise purchased.” Am. Compl. ¶ 112; see

3

also Am. Compl. ¶ 139-40. Because these allegations fail to establish an actionable “loss of

4

money,” Plaintiff lacks standing to pursue her UCL claims, and Counts I and III of the Amended

5

Complaint must be dismissed.
Under California law, a plaintiff has standing when he or she does not receive the benefit

6
7

of the bargain.4 See Kwikset Corp. v. Super. Ct. of Orange Ctny., 246 P.3d 877 (Cal. 2011)

8

(holding that because seller allegedly misrepresented that the product was “Made in America,” the

9

plaintiff alleged a loss of money sufficient to confer standing in that he paid more than he

10

otherwise might have been willing to pay). The case law reveals three ways in which a plaintiff

11

can allege an actionable loss of money under a benefit of the bargain theory: (1) the product

12

purchased was worth less than the amount paid for it; (2) the product was unsatisfactory in that it

13

differed from what was promised; or (3) an affirmative misrepresentation caused the consumer to

14

value the product higher than he or she would have but for the misrepresentation. See Kwikset,

15

246 P.3d at 888-92; see also Chavez v. Blue Sky Natural Beverage Co., 340 Fed. App’x. 359 (9th

16

Cir. 2009) (finding standing where beverage company falsely represented that product was bottled

17

and produced in New Mexico); Koh v. S.C. Johnson & Son, Inc., No. C-09-00927 RMW, 2010

18

WL 94265 (N.D. Cal. Jan. 6, 2010) (finding standing based on allegation that defendant falsely

19

represented its products as being more environmentally friendly than they actually were).
California courts have refused to hold, however, that simply being induced to purchase a

20
21

product one would not otherwise have purchased, without a misrepresentation or omission on the

22

part of the seller, qualifies as a loss of money or property sufficient to confer standing under the

23

UCL. See Hall v. Time, Inc., 158 Cal. App. 4th 847, 853-55 (2008) (finding that plaintiff did not

24

allege an injury in fact sufficient to confer standing because, although the plaintiff expended

25
26
27
28

4

Kwikset Corp. v. Super. Ct. of Orange Cnty., 246 P.3d 877 (Cal. 2011) holds that a “loss of
money” occurs under the UCL in several circumstances. See also Hall v. Time, Inc., 158 Cal.
App. 4th 847, 854-55 (2008). Because the benefit of the bargain theory is the only one that
appears even potentially applicable to the instant case, McDonald’s focuses on whether Plaintiff
received the benefit of the bargain.
MEMORANDUM OF POINTS AND AUTHORITIES

8

Case No. 11-cv-00511 MMC

1

money, he received everything that was promised in the transaction); see also Hinjos v. Kohl’s

2

Corp., No. CV 10-07590 ODW AGRX, 2010 WL 4916647, at *2 (C.D. Cal. Dec. 1, 2010)

3

(granting motion to dismiss for lack of standing because plaintiff did not allege that the

4

merchandise he purchased was unsatisfactory or that the merchandise was worth less than he paid

5

for it); Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583, 1592 (2008) (dismissing UCL claims

6

because plaintiffs did not allege that they were uninformed about the insurance price or that the

7

insurance provided was unsatisfactory and rejecting plaintiff’s argument that a person has lost

8

money under the UCL when the “money is no longer in their possession.”).

9

Here, Plaintiff’s alleged “loss of money” – paying for Happy Meals she now claims she

10

did not want – is not sufficient to confer standing, because Plaintiff does not include a single

11

allegation that, if true, would establish that she failed to receive the benefit of her bargain.

12

Specifically, Plaintiff does not (and could not) allege that: (1) she overpaid for Happy Meals; (2)

13

the Happy Meals were worth less than what she paid for them; (3) the Happy Meals were

14

unsatisfactory because they differed from the product that was promised; or (4) McDonald’s made

15

any misrepresentation or provided her with information that caused her to place a higher value on

16

the Happy Meals than she otherwise would have.

17

In short, Plaintiff has not alleged – and could not allege – that she “lost money,” because

18

she received everything she was promised by McDonald’s. McDonald’s promised Plaintiff Happy

19

Meals, including food items and a toy, and McDonald’s provided those products. In fact, the

20

entire theory underlying Plaintiff’s Amended Complaint is that McDonald’s advertised Happy

21

Meals, Plaintiff went to McDonald’s for the express purpose of purchasing Happy Meals, the

22

Happy Meals were exactly as advertised, and Plaintiff’s children enjoyed them. The fact that

23

Plaintiff is now asserting belatedly that she did not want to buy those meals does not demonstrate

24

that she did not receive the benefit of her bargain. On the contrary, Ms. Parham received exactly

25

what she was promised and, therefore, has not alleged facts sufficient to confer standing under the

26

UCL. Hall, 158 Cal. App. 4th at 853-55; Hinjos, 2010 WL 4916647, at *2; Peterson, 164 Cal.

27

App. 4th at 1592.

28

MEMORANDUM OF POINTS AND AUTHORITIES

9

Case No. 11-cv-00511 MMC

1
2
3

2.

Plaintiff does not have standing to pursue her UCL claim because
she has not alleged that McDonald’s practices caused her alleged
loss of money.

In addition to a loss of money, Plaintiff must allege that her loss was “as a result of”

4

McDonald’s actions in order to establish standing under the UCL. See Cal. Bus. & Prof. Code §

5

17204; see also Kwikset, 246 P.3d at 887; Hall, 158 Cal.App.4th at 855. “The phrase ‘as a result

6

of’ in its plain and ordinary sense means ‘caused by’ and requires a showing of a causal

7

connection or reliance on the alleged misrepresentation.” Kwikset, 246 P.3d at 887.

8

Plaintiff has not adequately alleged causation, because she has not alleged that

9

McDonald’s marketing caused her to purchase Happy Meals for her daughters. To the extent

10

Plaintiff includes any allegations related to causation, Plaintiff appears to rely on her “pester

11

power” theory, i.e., McDonald’s advertises to her children, and her children’s request for a Happy

12

Meal in turn causes her to buy one. Am. Compl. ¶ 110-12. This theory fails, because Plaintiff

13

alleges that she as the parent made the decision to purchase Happy Meals, and that she made an

14

informed purchase and understood what she was purchasing. See Am. Compl. ¶ 98, 105, 112. In

15

other words, even assuming McDonald’s misled her children, an allegation which McDonald’s

16

vigorously disputes, Ms. Parham’s knowledge negates any causal connection between that

17

misrepresentation and Ms. Parham’s purchase of a Happy Meal.

18

Absent an allegation that McDonald’s misrepresented its products or failed to provide full

19

and accurate information regarding its products to Ms. Parham, Ms. Parham cannot satisfy the

20

causation requirement for standing under the UCL. Her own choice, motivated by her desire to

21

not have to tell her children “no,” severs any potential causal connection between McDonald’s

22

marketing and her alleged loss of money. See Hall, 158 Cal. App. 4th at 857 (finding that plaintiff

23

did not allege causation as required by the UCL); Laster v. T-Mobile U.S.A., Inc., 407 F. Supp. 2d

24

1181, 1194 (S.D. Cal. 2005) (finding that plaintiffs failed to allege causation because they did not

25

allege that they saw, read, or in any way relied on the allegedly misleading advertisements).

26
27
28

MEMORANDUM OF POINTS AND AUTHORITIES

10

Case No. 11-cv-00511 MMC

3.

2

Plaintiff fails to state a claim because she has not alleged that
McDonalds’s marketing practices are “unfair” as defined by the
UCL.

3

As recognized by the Ninth Circuit Court of Appeals, “California’s unfair competition law,

1

4

as it applies in consumer suits, is currently in flux.” See Lozano v. AT&T Wireless Servs., Inc.,

5

504 F.3d 718, 735 (9th Cir. 2007). Specifically, “California courts have not yet determined how

6

to define ‘unfair’ in the consumer action context,” and two tests have emerged, the “legislative

7

policy” test and the balancing test. Id. at 736. Thus, absent further guidance from the California

8

Supreme Court, the Ninth Circuit Court has held that district courts evaluating allegations of

9

“unfair” acts or practices under the UCL can look to both the “legislative policy” test and to the

10

“balancing test” applied by California courts. Id.; see also Morris v. BMW of N. Am., No. C 07-

11

02827 WHA, 2007 U.S. Dist. LEXIS 85513, at *18-22 (N.D. Cal. Nov. 7, 2007); Kowalsky v.

12

Hewlett-Packard Co., No. 10-CV-02176-LHK, 2010 U.S. Dist. LEXIS 131711, at *31-33 (N.D.

13

Cal. Dec. 13, 2010).

14

Key to these claims, both tests require that an allegedly “unfair” practice must consist of

15

more than a plaintiff’s subjective belief that he or she has been treated unfairly. Accordingly, no

16

matter which standard is applied to Ms. Parham’s allegations, Ms. Parham fails to adequately

17

allege that McDonald’s marketing practices are “unfair” under the UCL.

18

(i)

19
20

Ms. Parham has not adequately alleged that McDonald’s
marketing practices are “unfair,” because she has not tied
McDonald’s practices to a legislatively declared policy.

In Cel-Tech Commc’ns., Inc. v. Los Angeles Cellular Tel. Co., the California Supreme

21

Court defined “unfair” under the UCL for purposes of claims involving competitors. 973 P.2d

22

527, 541 (Cal. 1999). Prior to Cel-Tech, all UCL unfairness claims were evaluated under a

23

balancing test discussed below in section III.B.3.ii. Wary of the level of subjectivity invited by

24

the balancing test, the California Supreme Court held that an alleged violation of the UCL’s

25

unfairness prong must be tied to a legislatively declared policy. Id. The court, however, noted

26

that its decision involved only actions by competitors, resulting in confusion among California

27

courts regarding the standard necessary to allege an unfair practice in UCL actions brought by

28

consumers. See Lozano, 504 F.3d at 735.
MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

1

Recognizing that the same policy considerations present in Cel-Tech are present in

2

consumer actions, several California courts have found that, in consumer cases, an allegation that

3

a defendant has violated the unfairness prong of the UCL requires the plaintiff to tether the

4

challenged practice to conduct that violates a legislatively declared policy, “otherwise [] courts

5

will roam across the landscape of consumer transactions picking and choosing which

6

[transactions] they like and which they dislike.”5 Morris, 2007 U.S. Dist. LEXIS 85513, at *22;

7

see also Similia v. Am. Sterling Bank, No. 09-CV-781JLS(CAB), 2010 U.S. Dist LEXIS 108440,

8

at *16 (S.D. Cal. Oct. 12, 2010) (finding that the “tether” test is more in line with the California

9

Supreme Court’s reasoning in Cel-Tech, and that the balancing test is “too amorphous and

10

provide[s] too little guidance to the courts.”).

11

In the wake of Cel-Tech, several district courts have been unwilling to sustain allegations

12

of unfairness when a plaintiff fails to identify a declared legislative policy and fails to allege how

13

defendant’s conduct violates that policy. See Morgan v. Harmonix Mus. Sys., 2009 U.S. Dist.

14

LEXIS 57528, at *16 (N.D. Cal. July 7, 2009) (dismissing plaintiffs’ unfairness claim despite

15

allegations of a CLRA violation because plaintiffs did not alleged facts sufficient to show that

16

defendants’ conduct violated a declared legislative policy); Sarbaz v. Wachovia, No. C 10-03462

17

CB, 2011 U.S. Dist. LEXIS 21552, at *11-12 (N.D. Cal. Mar. 3, 2011) (dismissing plaintiff’s

18

UCL claims, in part, because plaintiff did not set forth a legislatively declared policy that

19

defendant violated); Similia, 2010 U.S. Dist LEXIS 108440, at *16 (dismissing plaintiff’s “unfair”

20

UCL claims because plaintiffs did not sufficiently tether their allegations to any underlying law).
Applying this standard, Plaintiff has failed to plead a violation of the “unfairness” prong of

21
22

the UCL, because, to the extent that Plaintiff even identifies the practice being challenged

23

(presumably the practice of advertising Happy Meals with toys), she does not allege that

24

McDonald’s marketing practices violate a declared legislatively policy. Rather, Plaintiff simply

25

alleges a subjective belief that McDonald’s has treated her unfairly by marketing and advertising a

26

meal that contains a toy. While Plaintiff includes multiple allegations related to the alleged harms

27
28

5

The California Supreme Court in Cel-Tech held that “unfair” practices, for the purposes of
establishing a violation of the UCL, must be limited so that “[c]ourts may not simply impose their
own notions of the day as to what is fair or unfair.” Cel-Tech, 973 P.2d at 541.
MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

1

of advertising to children and childhood obesity, Plaintiff does not rely on any authority

2

suggesting that advertising children’s products violates a declared legislative policy of the State of

3

California. Because Plaintiff’s Amended Complaint does not tether her “unfairness” claims to a

4

declared legislative policy, her subjective belief that she has been treated unfairly is insufficient to

5

sustain a claim for unfairness under the UCL.

6

(ii)

7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27

Alternately, Plaintiff has not alleged that McDonald’s
practices are “unfair” because Plaintiff has not alleged that
McDonald’s practices are immoral, unethical or
unscrupulous and that any alleged injury outweighs the
benefits of the practice.

In determining whether a plaintiff has stated a claim that a particular business practice is
“unfair” under the UCL, other California courts apply a balancing test. Under this test, “the
determination of whether a particular business practice is unfair necessarily involves an
examination of its impact on its alleged victim, balanced against the reasons, justifications, and
motives of the alleged wrongdoer.” Morgan, 2009 U.S. Dist. LEXIS 57528, at *14. Generally,
district courts utilizing the balancing test have held that allegations of “unfair” practices constitute
immoral, unethical and unscrupulous conduct and involve allegations that a party engaged in
deceptive or misleading acts. See Roling v. E*Trade Sec., LLC, No. C 10-0488 MHP, 2010 U.S.
Dist. LEXIS 123714, at *30-31 (N.D. Cal. Nov. 22, 2010) (finding that plaintiffs stated a claim
under the “unfair” prong of the UCL when they alleged that defendant charged a fee without
contractual authorization); Ferrington v. McAfee, Inc., No. 10-CV-01455-LHK, 2010 U.S. Dist.
LEXIS 106600, at *36-38 (N.D. Cal. Oct. 5, 2010) (finding that plaintiffs’ allegations that they
were “tricked” into purchasing a product based on a corporation’s allegedly deceptive practices
were sufficient to allege a violation of the “unfair” prong of the UCL); compare Kowalsky, 2010
U.S. Dist. LEXIS 131711, at *29 (holding that plaintiff failed to state a claim because plaintiff
failed to provide any support suggesting that an unknowing distribution of defective products
should be considered unethical, immoral, oppressive or unscrupulous).
California courts, moreover, have refused to find sufficient allegations of “unfairness”
when a plaintiff provides nothing more than legal conclusions and a subjective belief of being

28

MEMORANDUM OF POINTS AND AUTHORITIES

13

Case No. 11-cv-00511 MMC

1

treated unfairly. See Baba v. Hewlett-Packard Co., No. C09-05946, 2010 U.S. Dist. LEXIS 59747

2

(N.D. Cal. June 16, 2010) (finding that a cursory listing of statutes combined with vague

3

allegations that defendant’s conduct offends public policy and is unethical, oppressive and

4

unscrupulous were insufficient to state a claim for a violation of the “unfair” prong of the UCL);

5

Sarbaz, 2011 U.S. Dist. LEXIS 21552 (dismissing plaintiff’s UCL claims, in part, because

6

plaintiff relied on conclusory allegations of unfairness and did not allege that the defendant acted

7

unfairly when balancing the alleged acts against the alleged harm).

8

Here, Ms. Parham similarly fails to allege that McDonald’s engaged in immoral, unethical,

9

or unscrupulous acts that could constitute unfair conduct under the UCL. Ms. Parham and CSPI

10

attempt to satisfy this standard by referencing the alleged ills of advertising to children and laying

11

the blame for childhood obesity at McDonald’s feet. But the fact that CSPI might prefer less

12

advertising to children and less alleged “strain on parent-child interaction[s]” does not remotely

13

render McDonald’s alleged conduct immoral, unethical, or unscrupulous. McDonald’s is engaged

14

in an unquestionably legal practice – advertising and selling food – that is commonplace in our

15

society. Indeed, there is no question that millions of customers happily choose to eat at

16

McDonald’s and similar restaurants in California and across the country every day. Attempting to

17

place this conduct into the realm of the immoral and the unethical simply robs those words of any

18

meaningful definition.

19

In addition, Plaintiff’s apparent theory ignores the actual claims in this case. Plaintiff’s

20

alleged harm is not childhood obesity or any other alleged harm to her children. Ms. Parham’s

21

harm is the cost of Happy Meals that she went to McDonald’s for the express purpose of

22

purchasing. Thus, Ms. Parham’s Amended Complaint cannot survive any balancing of the alleged

23

harm against the utility of McDonald’s conduct, even assuming the Court needs to get that far.

24

Ms. Parham’s alleged harm is zero – she paid for the product she went to McDonald’s to purchase

25

and received that product. Ms. Parham does not claim that she was misled, and she could have

26

avoided purchasing Happy Meals by simply not going to McDonald’s or selecting other items on

27

McDonald’s menu. Ms. Parham, in other words, does not include a single fact that would tip the

28

balance in her favor. And while CSPI might dispute the utility of McDonald’s conduct, the fact

MEMORANDUM OF POINTS AND AUTHORITIES

14

Case No. 11-cv-00511 MMC

1

remains that McDonald’s is a popular restaurant selling a product customers enjoy, and CSPI

2

cannot erase that fact by imposing its own views of which legal, non-misleading commercial

3

activity has utility. In fact, this case is the perfect example of the dangers of allowing the “unfair”

4

prong of the UCL to be based entirely on the plaintiff’s subjective beliefs, or in this case the

5

beliefs of the public interest group backing her litigation.
Accordingly, because Ms. Parham cannot reasonably allege that McDonald’s marketing

6
7

practices are immoral, unethical or unscrupulous or that the alleged harm suffered outweighs the

8

benefits of the practice, Ms. Parham has not alleged a violation of the “unfair” prong of the UCL.
C.

9
10

Plaintiff Fails to State a Claim for Relief under the CLRA.
1.

11

Plaintiff lacks standing to pursue her CLRA claim, because she
has not alleged that she suffered damages as required by the
CLRA.

12

To establish standing under the CLRA, Plaintiff must allege that she suffered “damages.”

13

Cal. Civ. Code § 1780 (stating that “[a]ny consumer who suffers any damage as a result of . . . a

14

method, act, or practice declared to be unlawful by Section 1770 may bring an action…”). The

15

CLRA’s “damages” requirement is similar to the UCL’s “lost money” standing requirement, and

16

Plaintiff lacks standing under the CLRA for essentially the same reasons discussed in the UCL

17

section above.6 Thus, because Plaintiff does not adequately allege that she suffered damages as a

18

result of McDonald’s Happy Meal advertising, Plaintiff does not have standing to pursue her

19

claims under the CLRA, and Count II of the Amended Complaint should be dismissed.

20

As with the UCL, standing under the CLRA results from purchasing a product that was not

21

delivered as promised or that was not worth the purchase price as a result of the defendant’s

22

affirmative misrepresentation. See Chavez, 340 Fed. App’x. at 361; Von Koenig v. Snapple

23

Beverage Corp., 713 F. Supp. 2d 1066, 1078 (E.D. Cal. 2010); Aron v. U-Haul Co. of Cal., 143

24

Cal. App. 4th 796, 802 (2006). Also consistent with the UCL, a plaintiff has not suffered damages

25
26
27
28

6

See Carrea v. Dryer’s Grand Ice Cream, Inc., No. C 10-01044 JSW, 2011 U.S. Dist. LEXIS
6371 (N.D. Cal. Jan. 10, 2011) (applying the same standing analysis to plaintiff’s UCL, FAL, and
CLRA claims); see also Aron v. U-Haul Co. of Cal., 143 Cal. App. 4th 796, 802 (Cal. Ct. App.
2006) (applying the same economic injury standing analysis to plaintiff’s UCL and CLRA
claims).
MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

1

under the CLRA if the plaintiff receives the benefit of the bargain. Von Koenig, 713 F. Supp. 2d

2

at 1078.
Here, Plaintiff’s claim that she suffered damages by purchasing Happy Meals she allegedly

3
4

did not want cannot establish standing under the CLRA. As discussed above, Plaintiff has not

5

alleged that she failed to receive the benefit of her bargain. Her allegations, in fact, establish that

6

she knew exactly what she was buying – a Happy Meal with a toy – and received exactly what

7

was promised. Alleged buyer’s remorse is not sufficient to establish damages under the CLRA (or

8

the UCL), unless that remorse results from a failure to receive the product that was promised.

9

Because Plaintiff does not allege any such failure in this case, she has not adequately alleged

10

damages and lacks standing to pursue her CLRA claim.

11

2.

12
13

Plaintiff fails to state a claim under the CLRA because she does
not allege that McDonald’s made a material misrepresentation or
that she relied on a material misrepresentation.

“California requires a plaintiff suing under the CLRA for misrepresentations in connection

14

with a sale to plead and prove she relied on a material misrepresentation.” Kent v. Hewlett-

15

Packard Co., No. 09-5341 JF(PVT), 2010 WL 2681767, at *8 (N.D. Cal. July 6, 2010) (quoting

16

Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 939, 946 (S.D. Cal. 2007) (emphasis added)).

17

“[A] misrepresentation is deemed material if a reasonable man would attach importance to its

18

existence or nonexistence in determining his choice of action in the transaction in question.” In re

19

Steroid Hormone Product Cases, 181 Cal. App. 4th 145, 157 (2010) (internal quotes omitted); see

20

also McKinniss v. Kellog U.S.A., No. CV 07-2611 ABC (RCx), 2007 U.S. Dist. LEXIS 96106, at

21

*8-12 (C.D. Cal. Sept. 21, 2007) (dismissing plaintiffs CLRA claim because defendant’s alleged

22

misrepresentations were not likely to mislead a reasonable consumer). A material

23

misrepresentation does not exist (and obviously could not be relied upon) when a plaintiff does not

24

believe the alleged misrepresentation. Caro v. Procter & Gamble, 18 Cal. App. 4th 644, 668

25

(1993).

26

Ms. Parham’s Amended Complaint is entirely devoid of any allegations of a material

27

misrepresentation or of reliance on a misrepresentation. As discussed above, Plaintiff actually

28

pleads the opposite, i.e., she had all of the relevant information about the Happy Meals, and, as a
MEMORANDUM OF POINTS AND AUTHORITIES

16

Case No. 11-cv-00511 MMC

1

result, she was allegedly reluctant to make her purchase. Those allegations undeniably negate the

2

required elements of a CLRA claim.

3

The only allegations in the Amended Complaint that purport to identify misrepresentations

4

concern the alleged misrepresentations to Ms. Parham’s children, but those allegations cannot save

5

her CLRA claim for two reasons. First, even those allegations, while using the word

6

“misrepresentation,” do not actually point to any specific statements by McDonald’s, much less

7

any statement that were misleading or untrue. Although the Amended Complaint contains

8

numerous allegations about the alleged nutritionally poor nature of the food,7 the complaint does

9

not identify any inaccurate or misleading statements about nutrition or any other topic. The

10

closest Plaintiff comes is alleging that “Parham’s daughters do not understand that McDonald’s

11

marketing efforts are intended to make them want to eat Happy Meals. The girls interpret this

12

marketing as good advice for proper eating.” Am. Compl. ¶ 101. But this allegation is simply a

13

statement of the alleged interpretation of McDonald’s unspecified “marketing efforts” and is not

14

connected at all to any identified statement or advertisement.8
Second, any alleged statements to Ms. Parham’s children cannot satisfy the CLRA’s

15
16

reliance requirement. To demonstrate reliance under the CLRA, Ms. Parham must allege “that

17

without the misrepresentation, plaintiff would not have acted as [s]he did.” Caro, 18 Cal. App.

18

4th at 668; see also Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d. 939 (S.D. Cal. 2007). Thus,

19

even assuming that Ms. Parham’s children were misled regarding the nutritional quality of

20

McDonald’s food (and the Amended Complaint provides no factual basis for that conclusion), Ms.

21

Parham, by her own admission, did not rely on those alleged misrepresentations. Ms. Parham is

22
23
24
25
26
27
28

7

Plaintiff makes these allegations despite the fact that McDonald’s offers a selection of items
parents can choose as part of a Happy Meal purchase, including Apple Dippers and low-fat milk.
In fact, Plaintiff’s allegations are premised on the assumption that once at McDonald’s “children
are likely to receive a meal that is too high in calories, saturated fat, added sugars, and sodium, and
devoid of whole grains.” Am. Compl. ¶ 70 (emphasis added).
8

To the extent Plaintiff is attempting to allege a fraudulent statement under the CLRA, that
allegation would also fail to satisfy Rule 9(b)’s requirement of pleading with particularity. See
Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. 2009).
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the plaintiff in this case, and she cannot state a claim under the CLRA. See Caro, 18 Cal. App. 4th

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at 668.

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The deficiency of Plaintiff’s CLRA claim is further confirmed by the fact that Plaintiff

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simply lists two subsections of the CLRA that McDonald’s allegedly violated without providing

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any facts connecting either subsection to the claims in this case. First, she alleges that

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McDonald’s violates subsection 1770(a)(5) by representing that its Happy Meals “have

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sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not

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have.” Am. Compl. ¶ 136. Plaintiff’s Amended Complaint, however, makes no mention of

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sponsorships, approvals, characteristics, ingredients, uses, benefits, or quantities associated with

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the Happy Meal. Plaintiff simply does not provide any facts related to this claim. The same is

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true of Plaintiff’s allegation that McDonald’s violates subsection 1770(a)(7) by representing that

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its products “are of a particular standard, quality or grade, or that [Happy Meals] are of a particular

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style or model” when in fact, they are of another. Am. Compl. ¶ 137. There is absolutely no

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reference to any statement that qualifies its Happy Meals as of a particular standard, quality or

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grade. Plaintiff’s Amended Complaint offers nothing more than legal conclusions that do not

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provide McDonald’s sufficient notice of the claims against it and, therefore, should be dismissed

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as a matter of law. See Twombly, 550 U.S. at 555; see also Leong v. Square Enix of Am. Holdings,

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Inc., No. CV09-4484 PSGVBKX, 2010 WL 1641364 (C.D. Cal. 2010); London v. New

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Albertson’s Inc., No. 08-CV-1173H(CAB), 2008 WL 4492642 (S.D. Cal. 2008).

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D.

Plaintiff Fails to State a Claim for Relief under the FAL.

In Paragraphs 1 and 119(d) of Plaintiff’s Amended Complaint, Plaintiff refers to

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California’s False Advertising Law, Cal. Bus. & Prof. Code § 17500 et seq. However, Plaintiff’s

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“Claims for Relief,” contained in paragraphs 126-140, do not actually allege violations of the

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FAL. Assuming Plaintiff intended to allege a violation of the FAL, Plaintiff’s FAL claim, like her

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UCL and CLRA claims, fails because Plaintiff does not have standing to pursue a FAL claim, and

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because Plaintiff has not alleged that McDonald’s advertising deceives reasonable consumers.

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MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC

1.

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Plaintiff lacks standing to pursue a violation of the FAL.

The standing requirements of the FAL and UCL are the same. See Cal. Bus. & Prof. Code

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§ 17535 (stating that actions under this chapter may be brought by anyone “who has suffered

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injury in fact and lost money or property as a result of a violation of this chapter.”); see also

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Arevalo v. Bank of Am. Corp., No. CIO-4959 TEH, 2011 WL 1195973, at *11 (N.D. Cal. Mar. 29,

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2011 (stating that the “FAL carries the same standing requirements as the UCL.”); Cattie v. Wal-

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Mart Stores, Inc., 504 F.Supp.2d 939 (S.D. Cal. 2007) (dismissing UCL and FAL claims under the

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same analysis for failure to adequately allege standing); Hinjos, 2010 WL 4916647 (C.D. Cal.

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Dec. 1, 2010) (same). Accordingly, for the reasons discussed above in connection with Plaintiff’s

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UCL claim, Plaintiff cannot demonstrate standing under the FAL. Plaintiff did not allege that she

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“lost money,” because she admittedly received the benefit of her bargain.

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2.

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Plaintiff does not state a claim for violation of the FAL because
Plaintiff has not alleged that a reasonable consumer would be
deceived by a specific McDonald’s advertisement.

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The FAL makes it unlawful to disseminate any statement concerning property or services

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that is untrue or misleading, and to establish a violation of the FAL, Plaintiff must allege that

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members of the public are likely to be deceived by the allegedly false advertising. See Weberl ex

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rel. v. Pepsico, Inc., No. C 09-04456SBA, 2010 WL 2673860 (N.D. Cal. July 2, 2010); Videtto v.

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Kellogg U.S.A., No. 2:08CV01324-MCEDAD, 2009 WL 1439086 (E.D. Cal. May 21, 2009).

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Plaintiff fails to state a claim under the FAL, because she has not alleged that McDonald’s

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advertising is likely to deceive a reasonable consumer. Plaintiff fails to identify any

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advertisements that are false, deceptive, or misleading to her – the consumer – and she makes no

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allegations that McDonald’s advertising is deceptive to other reasonable consumers. Instead,

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Plaintiff again hopes that her allegations that McDonald’s advertising inherently deceives children

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will support a finding that she has alleged a violation of the FAL. However, as discussed above,

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Plaintiff does not identify any particular advertising that allegedly deceived her children, nor are

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her children plaintiffs in this case. Because Plaintiff has not alleged that either she, or reasonable

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consumers, are likely to be deceived by particular advertising, Plaintiff’s FAL claim fails as a

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matter of law.
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Case No. 11-cv-00511 MMC

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IV.

CONCLUSION

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Plaintiff’s attempt to circumvent established law in the hopes of promoting CSPI’s

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legislative and regulatory agenda should not be permitted. Plaintiff lacks standing to pursue any

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of her claims, because she admittedly received the benefit of her bargain. She also fails to

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sufficiently allege the requisite causal connection between her “loss” and McDonald’s practice of

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advertising Happy Meals with toys, and Plaintiff offers no allegations sufficient to establish an

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unfair practice under California law. In her CLRA claims, Plaintiff fails to identify any alleged

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misrepresentation and admits that she did not rely on any information from McDonald’s when

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deciding to purchase Happy Meals. She also relies entirely on quotes of the two CLRA

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subsections she claims McDonald’s violated, but neglects to include any factual allegations that

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could support those claims. For all of these reasons, McDonald’s respectfully requests that

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Plaintiff’s claims be dismissed in their entirety.

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DATED: April 18, 2011

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Respectfully submitted,
ALSTON & BIRD LLP

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By:

/s/ Jane Fugate Thorpe
Jane Fugate Thorpe
Attorneys for Defendants
McDONALD’S CORPORATION and
McDONALD’S USA, LLC

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MEMORANDUM OF POINTS AND AUTHORITIES

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Case No. 11-cv-00511 MMC