McKinnon v. Dollar Thrifty Automotive Group, Inc. et al

Filing 47

ORDER by Judge Samuel Conti denying 33 Defendants' Motion to Strike ; granting in part and denying in part 34 Defendants' Motion to Dismiss. The status conference now scheduled for Friday, March 15, 2013 is hereby VACATED and rescheduled for Friday, May 24, 2013. (sclc2, COURT STAFF) (Filed on 3/4/2013)

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1 2 3 4 5 6 IN THE UNITED STATES DISTRICT COURT 7 FOR THE NORTHERN DISTRICT OF CALIFORNIA 8 9 United States District Court For the Northern District of California 10 11 12 13 14 15 16 17 18 19 ) ) SANDRA McKINNON and KRISTEN ) TOOL, individually and on behalf ) of all others similarly ) situated, ) ) Plaintiffs, ) v. ) ) DOLLAR THRIFTY AUTOMOTIVE GROUP, ) INC. d/b/a DOLLAR RENT A CAR; ) DOLLAR RENT A CAR, INC.; DTG ) OPERATIONS, INC. d/b/a DOLLAR ) RENT A CAR; and DOES 1-10, ) inclusive, ) ) Defendants. ) ) ) Case No. 12-4457 SC ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS AND DENYING DEFENDANTS' MOTION TO STRIKE 20 21 22 I. INTRODUCTION Plaintiffs Sandra McKinnon ("Ms. McKinnon") and Kristen Tool 23 ("Ms. Tool") (collectively "Plaintiffs") bring this putative class 24 action against Dollar Thrifty Automotive Group, Inc., a Delaware 25 corporation headquartered in Oklahoma, and its subsidiaries Dollar 26 Rent A Car, Inc. and DTG Operations, Inc. (collectively 27 "Defendants"), both Oklahoma corporations. 28 of Defendants, allege that Defendants defrauded Plaintiffs and Plaintiffs, customers 1 other customers in California and Oklahoma, and potentially 2 elsewhere as well. 3 dismiss Plaintiffs' FAC and strike Plaintiffs' class allegations. 4 ECF No. 33 ("MTS"); ECF No. 34 ("MTD"). 5 briefed,1 and are suitable for determination without oral argument, 6 Civ. L.R. 7-1(b). 7 motion to dismiss is GRANTED in part and DENIED in part, and 8 Defendants' motion to strike is DENIED. ECF No. 26 ("FAC"). Defendants now move to The motions are fully For the reasons explained below, Defendants' 9 United States District Court For the Northern District of California 10 II. BACKGROUND Defendants are car rental companies. 11 FAC ¶¶ 5-7. Named 12 Plaintiffs were customers of Defendants who rented cars in 13 California (Ms. Tool) and Oklahoma (Ms. McKinnon). 14 Plaintiffs allege that Defendants organized a scheme to defraud 15 consumers either by fraudulently signing customers up for collision 16 damage waivers, car insurance, and other added services, or by 17 misleading customers into signing up for such services. 18 Plaintiffs claim that Defendants' conduct amounted to a systematic, 19 nationwide program through which Defendants' employees and agents 20 would dupe customers into buying services that those customers had 21 specifically declined or attempted to decline. Id. ¶¶ 3-4. Id. ¶ 1. Id. ¶ 12. Ms. McKinnon, a California resident, alleges that she made an 22 23 online reservation through Defendants' reservation system and 24 specifically declined all available optional add-ons at that time. 25 Id. ¶ 13. 26 up her car from Defendants' facility in the Tulsa airport, However, Plaintiffs aver that when Ms. McKinnon picked 27 28 1 ECF No. 40 ("Opp'n to MTD"); ECF No. 41 ("Opp'n to MTS"); ECF No. 44 ("Reply ISO MTS"); ECF No. 45 ("Reply ISO MTD"). 2 1 Defendants' agent tried to offer her a variety of additional 2 services, all of which she orally declined. 3 was asked to sign an electronic signature pad to complete her 4 transaction, Defendants' agent told her to initial certain areas in 5 order to decline the add-ons. 6 folded-up copy of her rental contract, though the agent allegedly 7 did not discuss the total amount charged. 8 returned the car to Defendants, she was allegedly charged an 9 additional $359.65, almost the total cost of the rental car. Id. Id. When Ms. McKinnon She did so and was handed a Id. When Ms. McKinnon Id. United States District Court For the Northern District of California 10 Defendants' manager at the Tulsa airport would not discuss the 11 charges with her, and Defendants' other employees allegedly said in 12 reference to Defendants, "They never give the money back. 13 not going to get your money back." 14 contacting Defendants after that, including by sending them a 15 written demand for the return of her money, but to no avail. 16 Ms. Tool's experience was substantially similar, though she (unlike 17 Ms. McKinnon) allegedly disputed her charges with her credit 18 company. 19 consumers' reviews of Defendants' services, all reporting 20 experiences similar to Ms. McKinnon's and Ms. Tool's. 21 17-20. 22 See id. ¶ 15. Id. ¶ 14. You are Ms. McKinnon tried Id. Plaintiffs' FAC includes a litany of other See id. ¶¶ In both Ms. Tool and Ms. McKinnon's cases, Defendants' records 23 allegedly show that Plaintiffs' electronic signatures and checked 24 boxes from the touchpads they were offered when picking up their 25 cars indicate that Plaintiffs accepted Defendants' additional 26 services instead of declining them, as Defendants' agents allegedly 27 led Plaintiffs to believe. 28 Plaintiffs that, since their records indicate that Plaintiffs opted See id. 3 Defendants therefore told 1 into all charges, Plaintiffs have no recourse against Defendants. 2 Id. ¶¶ 16-17. 3 any of these charges and that Defendants' agents instructed them 4 that signing and checking the electronic forms they were offered 5 would decline the add-ons. 6 allege that Defendants never reviewed the final contract or final 7 charges with them, suggesting that Defendants rely on the hustle 8 and rush of airports to send their customers away without having 9 reviewed their rental charges. Plaintiffs aver that they never intended to accept See id. ¶¶ 15-20. Id. ¶¶ 19-20. Plaintiffs further According to United States District Court For the Northern District of California 10 Plaintiffs, Defendants' business model is built on incentivizing 11 this sort of fraud, because Defendants' employees are paid minimum 12 wage but make commissions of up to 12 percent on the sales of add- 13 ons, while employees who fail to obtain "an average 30 per day up- 14 sales of additional options for three months" may be terminated 15 without eligibility for unemployment. Id. ¶ 18. 16 Plaintiffs therefore brought this action on behalf of 17 themselves and other similarly situated customers of Defendants, 18 asserting the following causes of action: (1) violations of 19 California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code 20 §§ 17200 et seq., for unlawful, unfair, and fraudulent business 21 acts and practices; (2) violations of California's Consumers Legal 22 Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750 et seq.; (3) 23 violation of the Oklahoma Consumer Protection Act ("OCPA"), Okla. 24 Stat. tit. 15, § 751 et seq.; (4) breach of contract; (5) breach of 25 the covenant of good faith and fair dealing; (6) unconscionability; 26 and (7) common counts, assumpsit, unjust enrichment, and 27 restitution. 28 Plaintiffs' FAC and strike Plaintiffs' class allegations. Id. ¶¶ 29-78. Defendants now move to dismiss 4 1 III. LEGAL STANDARD 2 A. Motions to Dismiss 3 A motion to dismiss under Federal Rule of Civil Procedure 4 12(b)(6) "tests the legal sufficiency of a claim." Navarro v. 5 Block, 250 F.3d 729, 732 (9th Cir. 2001). 6 on the lack of a cognizable legal theory or the absence of 7 sufficient facts alleged under a cognizable legal theory." 8 Balistreri v. Pacifica Police Dep't, 901 F.2d 696, 699 (9th Cir. 9 1988). "Dismissal can be based "When there are well-pleaded factual allegations, a court United States District Court For the Northern District of California 10 should assume their veracity and then determine whether they 11 plausibly give rise to an entitlement to relief." 12 Iqbal, 556 U.S. 662, 664 (2009). 13 must accept as true all of the allegations contained in a complaint 14 is inapplicable to legal conclusions. 15 elements of a cause of action, supported by mere conclusory 16 statements, do not suffice." 17 Twombly, 550 U.S. 544, 555 (2007)). 18 complaint must be both "sufficiently detailed to give fair notice 19 to the opposing party of the nature of the claim so that the party 20 may effectively defend against it" and "sufficiently plausible" 21 such that "it is not unfair to require the opposing party to be 22 subjected to the expense of discovery." 23 1191, 1204 (9th Cir. 2011). 24 dismiss is generally "limited to the complaint, materials 25 incorporated into the complaint by reference, and matters of which 26 the court may take judicial notice." 27 F.3d 989, 994 n.2 (9th Cir. 2005). 28 /// Ashcroft v. However, "the tenet that a court Threadbare recitals of the Id. at 663 (citing Bell Atl. Corp. v. The allegations made in a Starr v. Baca, 633 F.3d A court's review of a motion to 5 See Kourtis v. Cameron, 419 1 B. 2 Federal Rule of Civil Procedure 12(f) provides that a court Motions to Strike 3 may, on its own or on a motion, "strike from a pleading an 4 insufficient defense or any redundant, immaterial, impertinent, or 5 scandalous matter." 6 . . . [and] are generally not granted unless it is clear that the 7 matter sought to be stricken could have no possible bearing on the 8 subject matter of the litigation." 9 Supp. 2d 1177, 1180 (N.D. Cal. 2001). Motions to strike "are generally disfavored Rosales v. Citibank, 133 F. United States District Court For the Northern District of California 10 11 IV. DISCUSSION 12 A. 13 Defendants argue that all of Plaintiffs' claims, except Ms. Defendants' Motion to Dismiss 14 Tool's UCL claims, should be dismissed because (1) the presumption 15 against extraterritorial application of statutes means that 16 Plaintiffs' UCL, CLRA, and OCPA claims all fail where Plaintiffs' 17 allegations would cause these statutes to operate 18 extraterritorially; (2) Plaintiffs' OCPA claims are barred by the 19 voluntary payment doctrine, a defense that a payment knowingly made 20 may not be recovered; and (3) Plaintiffs' common law claims fail 21 because Plaintiffs fail to plead essential elements of those 22 claims. 23 about whether Plaintiffs have sufficiently pled elements of the 24 UCL, CLRA, and OCPA, but since Defendants' arguments concern 25 whether Plaintiffs' claims are barred for threshold reasons, the 26 Court does not address the substance of Plaintiffs' claims at this 27 point. 28 /// Plaintiffs' opposition brief includes extensive argument 6 1 a. OCPA and the Voluntary Payment Doctrine OCPA prohibits, among other things, knowingly making false or 2 3 misleading statements or trade practices concerning consumer 4 transactions. 5 Plaintiffs claim that Defendants' acts in the Tulsa airport violate 6 OCPA because Defendants' agents allegedly "knowingly made false and 7 misleading statements, and engaged in deceptive trade practices" 8 when they misled Ms. McKinnon into paying for services she did not 9 want. Okla. Stat. tit. 15, §§ 751, 753, 753(13). FAC ¶ 58. Defendants argue that Ms. McKinnon's claim under United States District Court For the Northern District of California 10 OCPA is foreclosed by the "voluntary payment doctrine, under which 11 money voluntarily paid with full knowledge of the facts under which 12 it was demanded cannot be recovered." 13 and quotations omitted). 14 MTD at 7 (internal citations California law treats the voluntary payment doctrine as an 15 affirmative defense. See, e.g., Ellsworth v. U.S. Bank, N.A., -- 16 F. Supp. 2d. --, No. C 12–02506 LB, 2012 WL 6176905, *14 (N.D. Cal. 17 Dec. 11, 2012). 18 can be granted if the complaint's allegations, with all inferences 19 drawn in the plaintiff's favor, nonetheless show that the 20 affirmative defense is obvious on the face of the complaint. 21 Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 22 969 (9th Cir. 2010). 23 defense of the voluntary payment doctrine was obvious on the face 24 of the FAC. 25 made "with full knowledge of the facts," and the cases Defendants 26 cite to resolve this issue, C9 Ventures v. SVC-West, L.P., 202 Cal. 27 App. 4th 1483, 1501 (Cal. Ct. App. 2012), and Marin Storage & 28 Trucking, Inc. v. Benco Contracting & Eng'g, Inc., 89 Cal. App. 4th Motions to dismiss based on affirmative defenses See The Court does not find that the affirmative The parties dispute whether Ms. McKinnon's payment was 7 1 1042, 1049 (Cal. Ct. App. 2001), are inapposite because they state 2 the rule that parties to a valid contract must be held to the 3 provisions of that contract regardless of whether they were aware 4 of those provisions. 5 party actually had knowledge of those provisions for purposes other 6 than contract enforcement. 7 Plaintiffs' OCPA claims as to Ms. McKinnon are therefore 8 undisturbed. 9 below. 10 United States District Court For the Northern District of California That is a different question from whether a b. 11 12 Plaintiffs' OCPA claims as to Ms. Tool are discussed Extraterritorial Application of the UCL, CLRA, and OCPA The UCL makes actionable any "unlawful, unfair or fraudulent 13 business act or practice." 14 Similarly, the CLRA prohibits "unfair methods of competition and 15 unfair or deceptive acts or practices." 16 OCPA prohibits, among other things, knowingly making false or 17 misleading statements or trade practices concerning consumer 18 transactions. 19 Cal. Bus. & Prof. Code § 17200. Cal. Civ. Code § 1770. Okla. Stat. tit. 15, §§ 751, 753, 753(13). California law presumes that the Legislature did not intend a 20 statute to be "operative, with respect to occurrences outside the 21 state, . . . unless such intention is clearly expressed or 22 reasonably to be inferred from the language of the act or from its 23 purpose, subject matter or history." 24 Cal. 4th 1191, 1207 (Cal. 2011) (citations and quotations omitted). 25 With regard to the UCL and CLRA, non-California residents' claims 26 are not supported "where none of the alleged misconduct or injuries 27 occurred in California." 28 Cal. App. 3d 605, 612–13 (1987) (citing Norwest Mortg. Inc. v. Sullivan v. Oracle Corp., 51 Clothesrigger, Inc. v. GTE Corp., 191 8 1 Superior Court, 72 Cal. App. 4th 214, 222 (Cal. Ct. App. 1999)); 2 Banks v. Nissan N. Am., Inc., 2012 U.S. Dist. LEXIS 37754, *3 (N.D. 3 Cal. Mar. 20, 2012). 4 presumption against extraterritoriality. 5 & Rubber Co., 164 P.3d 1028, 1037 (Okla. 2007) ("Courts have 6 generally determined that the focus of the inquiry concerning 7 application of [consumer protection statutes] to out-of-state 8 consumers is whether the offending consumer transaction occurred 9 with[in] the state.") United States District Court Harvell v. Goodyear Tire Defendants argue that Ms. McKinnon's UCL and CLRA claims are 10 For the Northern District of California Oklahoma law is in accord with the 11 barred by the presumption against extraterritoriality since they 12 "depend on actions and alleged injuries occurring in Oklahoma," 13 because Plaintiffs allege that Defendants' agents "tried to up- 14 sell" Ms. McKinnon in the Tulsa airport, that she was fraudulently 15 charged by Defendants in Tulsa, and that she paid Defendants in 16 Tulsa.2 17 injuries took place in Oklahoma, then no California statute can 18 encompass those injuries. 19 argument as to Ms. Tool's OCPA claim, since the core of Ms. Tool's 20 allegations about Defendants' behavior is located in California, 21 not Oklahoma. See MTD at 7. Defendants conclude that if Ms. McKinnon's Defendants make the same territorial Id. at 7-8. Plaintiffs allege that Defendants do business in California 22 23 through their website and at California airports, thereby linking 24 Defendants to this jurisdiction. FAC ¶¶ 5-7. Further, as to Ms. 25 26 27 28 2 Defendants' footnotes also raise the argument, which Plaintiffs join, that applying California statutes to an Oklahoma transaction would violate the Dormant Commerce Clause. See MTD at 7 n.7; Opp'n to MTD at 8 n.2; Reply ISO MTD at 4 n.3. The Court declines to address this argument at this point, because the Court finds that the presumption against extraterritoriality bars Plaintiffs' claims as to Ms. McKinnon as pled in Plaintiffs' FAC. 9 1 McKinnon's injuries, Plaintiffs argue that "even though [Ms. 2 McKinnon] picked up the vehicle in Oklahoma, she made the 3 reservation for the rental, where she specifically placed 4 [Defendants] on notice that she specifically declined all available 5 additional optional add-ons, in California. 6 also occurred in the State of California." 7 As such her injury Opp'n to MTD at 8. With regard to Ms. McKinnon, Plaintiffs also argue that 8 "California residents . . . may bring claims under the UCL and CLRA 9 regardless of where the 'injury' took place." Opp'n to MTD at 7. United States District Court For the Northern District of California 10 In support of this, Plaintiffs cite Allstate Ins. Co. v. Hague, 449 11 U.S. 302, 315 (1981), for the principle that "[n]umerous cases have 12 applied the law of a jurisdiction other than the alleged situs of 13 the injury where there existed some other link between that 14 jurisdiction and the occurrence." 15 holding correctly, but the issue in Allstate involved choice of 16 law, not the reach of one particular state's statute. 17 does not support Plaintiffs' broad claim that California residents 18 can bring UCL and CLRA claims regardless of where their injuries 19 take place. 20 Id. Plaintiffs cite Allstate's Allstate Plaintiffs further cite Stop Youth Addiction v. Lucky Stores, 21 Inc., 17 Cal. 4th 553, 570 (Cal. Ct. App. 1998), to argue that 22 because the California Legislature deleted the language "in this 23 state" from the UCL in 1992, they meant for the UCL to encompass 24 past activity and out-of-state activity. 25 courts have already rejected this argument. 26 4th at 223-24 ("The 1992 amendment did not expand the conduct 27 regulated by the UCL. It clarified the scope of injunctive relief 28 available to a plaintiff who was already entitled to pursue a claim 10 Id. However, California Norwest, 72 Cal. App. 1 2 under the UCL."). None of Plaintiffs' other cases are apposite. Both Yu v. 1999), and Speyer v. Avis Rent A Car System, Inc., 415 F. Supp. 2d 5 1090, 1099 (S.D. Cal. 2005), affirm the rule that California 6 residents can bring claims against out-of-state defendants if their 7 injuries occurred in California. 8 similarly situated plaintiffs could state a UCL claim if they were 9 harmed at the moment they received unlawful online rental quotes 10 United States District Court Signet Bank/Virginia, 69 Cal. App. 4th 1377, 1381-82 (Cal. Ct. App. 4 For the Northern District of California 3 from the out-of-state car rental defendants, but that is not what 11 Plaintiffs pled here. 12 underlying California statute that specifically prohibited car 13 rental companies from offering misleading quotes to customers. 14 F. Supp. 2d at 1095. 15 Moreover, Speyer noted that In any event, Speyer partly concerned an 415 The Court finds that Plaintiffs' UCL and CLRA claims are too 16 attenuated as to Ms. McKinnon. Everything Plaintiffs plead 17 regarding Ms. McKinnon suggests that any harms actually arose in 18 Oklahoma, when Defendants' agents allegedly tricked Ms. McKinnon 19 into purchasing unwanted add-ons at the point of sale. 20 McKinnon's online reservation, made from California, was not enough 21 to bring Defendants' Oklahoma activity within the scope of the UCL 22 and CLRA, since Plaintiffs did not plead, for example, that 23 Defendants engaged in any injurious or fraudulent activity at the 24 time Ms. McKinnon made her reservation. Ms. 25 Similarly, as to Ms. Tool's OCPA claims, the injuries in 26 question took place in California, and there is no indication that 27 OCPA encompasses injury to a non-Oklahoma-resident occurring 28 outside Oklahoma. Plaintiffs argue that Oklahoma courts do not 11 1 follow the "lex loci delicti" rule,3 but rather the "most 2 significant relationship" test, in determining which jurisdiction's 3 law should govern a dispute. 4 Brickner, 525 P.2d at 635-37). 5 choice of law but rather whether a state consumer protection 6 statute should apply extraterritorially -- and the answer is that 7 it cannot. 8 inquiry concerning the application of [a consumer protection 9 statute] to out-of-state consumers is whether the offending United States District Court For the Northern District of California 10 Opp'n to MTD at 12-13 (citing However, the issue here is not See Harvell, 164 P.3d at 1037 ("[T]he focus of the consumer transaction occurred with[in] the state."). Plaintiffs' CLRA and UCL claims as to Ms. McKinnon are 11 12 DISMISSED with leave to amend. 13 plead that Ms. McKinnon's injuries occurred within those statutes' 14 territorial scopes. 15 DISMISSED with leave to amend for the same reasons. 16 OCPA claims as to Ms. McKinnon remain undisturbed, as do 17 Plaintiffs' UCL and CLRA claims as to Ms. Tool. 18 c. Plaintiffs may amend if they can Plaintiffs' OCPA claims as to Ms. Tool are Plaintiffs' Notice Under the CLRA Consumers bringing actions under CLRA provisions must give 19 20 notice to the alleged offender at least thirty days prior to the 21 commencement of an action for damages, demanding that the offender 22 "correct, repair, replace, or otherwise rectify the goods or 23 services alleged to be in violation of [the CLRA]." 24 § 1782. 25 opportunity to cure their alleged violations before they may be Cal. Civ. Code The purpose of this requirement is to give defendants the 26 27 28 3 The lex loci delicti rule is a choice of law rule. It states that "the law of the place of the injury or where the cause of action arose[] determines the substantive rights and liabilities of the parties." Brickner v. Gooden, 525 P.2d 632, 634 (Okla. 1974). 12 1 held liable for damages. 2 Cal. App. 3d 30, 41 (Cal. Ct. App. 1975). 3 Outboard Marine Corp. v. Super. Ct., 52 Plaintiffs pled, as to the notice requirement, that "[w]ritten 4 notice pursuant to the provisions of the CLRA was provided to 5 [Defendants] by Ms. McKinnon on behalf of all Class members on June 6 6, 2012." 7 lacks standing to bring a CLRA claim (per the arguments addressed 8 in Section IV.A.b, supra), her notice is insufficient to allow Ms. 9 Tool or other putative class members to bring a CLRA action, FAC ¶ 56. Defendants argue that because Ms. McKinnon United States District Court For the Northern District of California 10 because no class has yet been certified, and Plaintiffs' prayer for 11 damages under the CLRA as to Ms. Tool would be impermissible 12 without her having filed a CLRA notice of her own. 13 at 6-7 (citing Cattie v. Wal-Mart Stores, Inc., 504 F. Supp. 2d 14 939, 949 (S.D. Cal. 2007) (holding that CLRA claims for damages 15 must be dismissed with prejudice if a plaintiff does not comply 16 with CLRA notice procedures)). 17 Defendants' arguments are unavailing. Reply ISO MTD First, the Court has 18 not determined that Ms. McKinnon definitively lacks status to bring 19 a CLRA claim. 20 yet plead a CLRA claim that is not barred by California's 21 presumption against extraterritoriality. 22 As noted in Section IV.A.b supra, Ms. McKinnon may Second, Defendants' allegations that the named Plaintiffs 23 cannot give notice on behalf of a class that does not exist yet 24 raises an irrelevant issue. 25 State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1022-23 (9th Cir. 26 2003), and Boyle v. Madigan, 492 F.2d 1180, 1182 (9th Cir. 1974)), 27 rightly state that named plaintiffs in a putative class action who 28 lack standing to bring certain claims cannot litigate those claims The cases Defendants cite, Lierboe v. 13 1 on behalf of those not present. 2 Plaintiffs lack standing to bring a CLRA claim, and moreover, those 3 cases do not state that plaintiffs cannot give notice under the 4 CLRA on a class's behalf. 5 But the Court has not held that Third, the CLRA's notice function is in place to ensure that 6 Defendants are aware of alleged wrongdoing and given an opportunity 7 to correct it before they are sued. 8 Ms. McKinnon gave notice to Defendants of an impending class action 9 lawsuit concerning Defendants' add-on service sales practices. That purpose was served when United States District Court For the Northern District of California 10 Defendants were "on notice that [they were] being sued by a 11 putative class, and thus the notice was sufficient 'to facilitate 12 pre-complaint settlement,' which is the purpose of the CLRA notice 13 requirements." 14 Supp. 2d 1030, 1038 (N.D. Cal. 2012) (quoting Outboard Marine, 52 15 Cal. App. 3d at 41). See In re Apple In-App Purchase Litig., 855 F. 16 Therefore the Court declines to dismiss Plaintiffs' CLRA 17 claims for lack of notice, though as stated above, Plaintiffs' CLRA 18 claims as to Ms. McKinnon are dismissed with leave to amend for 19 other reasons. 20 d. Plaintiffs' Common Law Claims 21 Defendants also argue that Plaintiffs' common law claims must 22 fail primarily because Plaintiffs fail to plead requisite elements 23 of those claims. 24 25 i. Breach of Contract "To state a cause of action for breach of contract, a party 26 must plead [1] the existence of a contract, [2] his or her 27 performance of the contract or excuse for nonperformance, [3] the 28 defendant's breach, and [4] resulting damage." 14 Mora v. U.S. Bank, 1 N.A., No. 11-6598 SC, 2012 WL 2061629, *6 (N.D. Cal. June 7, 2012) 2 (citing Harris v. Rudin, Richman & Appel, 74 Cal. App. 4th 299, 307 3 (Cal. Ct. App. 1999)). 4 existence of a contract, the plaintiff may set forth the contract 5 verbatim, attach it as an exhibit, or plead it according to its 6 legal effect. 7 2011 WL 3607608, at *2 (N.D. Cal. Aug. 15, 2011). 8 9 Additionally, if the plaintiff alleges the See Lyons v. Bank of America, N.A., No. 11-01232 CW, Plaintiffs point to the contracts that Ms. McKinnon and Ms. Tool signed when they picked up their rental cars in Oklahoma and United States District Court For the Northern District of California 10 California, arguing that Defendants breached those contracts by 11 tricking Plaintiffs into checking boxes in order to claim that 12 Plaintiffs ordered unwanted products and services, or by "inputting 13 [Plaintiffs'] signature without authorization." 14 Plaintiffs do not cite, attach, or explain in real detail the 15 contract provisions that Defendants allegedly breached. 16 Plaintiffs' allegations appear to align more with a 17 misrepresentation claim or some other cause of action sounding in 18 fraud. 19 this claim is DISMISSED with leave to amend so that Plaintiffs can 20 specify exactly which contract provisions Defendants breached. 21 22 FAC ¶ 66. Plaintiffs have failed to plead a breach of contract, so ii. Breach of the Implied Covenant of Good Faith and Fair Dealing 23 "The covenant of good faith and fair dealing, implied by law 24 in every contract, exists merely to prevent one contracting party 25 from unfairly frustrating the other party's right to receive the 26 benefits of the agreement actually made." 27 Inc., 24 Cal. 4th 317, 349 (Cal. 2000). 28 a contracting party from taking an action that, although 15 Guz v. Bechtel Nat. The covenant thus prevents 1 technically not a breach, frustrates the other party's right to the 2 benefit of the contract. 3 3d 1136, 1153 (Cal. Ct. App. 1990). 4 substantive duties or limits on the contracting parties beyond 5 those incorporated in the specific terms of their agreement." 6 24 Cal. 4th at 349-50. 7 covenant of good faith and fair dealing are: 8 10 United States District Court The covenant "cannot impose Guz, The elements of a claim for breach of the (1) the plaintiff and the defendant entered into a contract; (2) the plaintiff did all or substantially all of the things that the contract required him to do or that he was excused from having to do; (3) all conditions required for the defendant's performance had occurred; (4) the defendant unfairly interfered with the plaintiff's right to receive the benefits of the contract; and (5) the defendant's conduct harmed the plaintiff. 9 For the Northern District of California Love v. Fire Ins. Exchange, 221 Cal. App. 11 12 13 14 Woods v. Google, Inc., -- F. Supp. 2d --, 2012 WL 3673319, at *8 15 (N.D. Cal. 2012) (citing Judicial Counsel of California Civil Jury 16 Instructions § 325 (2011)). Plaintiffs allege that Defendants breached the covenant of 17 18 good faith and fair dealing by implementing systemic policies and 19 practices meant to trick or mislead customers into buying unwanted 20 services, despite having been placed on notice that those practices 21 were taking place nationwide. 22 a specific part of the contract that serves as the premise for 23 their claim. 24 given their identity with Plaintiffs' breach of contract claims 25 would be superfluous. 26 DISMISSED with leave to amend to correct these errors. 27 /// 28 /// Plaintiffs do not, however, point to The Court finds that allowing these claims to proceed Accordingly Plaintiffs' claims here are 16 1 iii. Common Counts, Unjust Enrichment, 2 Restitution, and Assumpsit Count 8 of the FAC pleads a cause of action "[u]nder common 3 4 law principles of common counts, assumpsit, unjust enrichment, 5 and/or restitution," based on Defendants' alleged receipt of money 6 charged to Plaintiffs with the knowledge that those charges were 7 improper or illegal. 8 is no cause of action for 'unjust enrichment' in California." 9 at 13 (citing Wolph v. Acer Am. Corp., No. C 09-0314 JSW, 2009 WL FAC ¶¶ 75-78. Defendants argue that "there MTD United States District Court For the Northern District of California 10 2969467 (N.D. Cal. Sept. 14, 2009). 11 even if there were, the Court should dismiss that claim -- as well 12 as claims for assumpsit, common counts, and common law restitution 13 -- because they would be duplicative of other theories of relief. 14 MTD at 13. 15 enrichment can be an alternative claim to breach of contract when, 16 for example, "the parties have a contract that was procured by 17 fraud or is for some reason unenforceable." 18 (citing Monet v. Chase Home Fin. LLC, No. C 10–0135 RS, 2010 WL 19 2486376, at *8-9 (N.D. Cal. June 16, 2010)). 20 that their remaining claims under Count 8 do not fail because they 21 are pled as equitable alternatives to the breach of contract claim. 22 Id. 23 Defendants further argue that Plaintiffs respond that this Court has held that unjust Opp'n to MTD at 21 Plaintiffs continue Plaintiffs are correct that this Court has recognized unjust 24 enrichment as an equitable alternative to breach of contract 25 claims. 26 Boughton, 123 Cal. App. 4th 379, 388 (Cal. Ct. App. 2004) 27 (construing a claim for "unjust enrichment" as an attempt to plead 28 a cause of action giving rise to restitution). See, e.g., Monet, 2010 WL 2486376, at *8-9; McBridge v. 17 Construing the 1 pleadings liberally, Plaintiffs have pled that the contracts they 2 signed were obtained essentially through fraud, in which case 3 restitution under an unjust enrichment theory could be an 4 appropriate remedy. 5 sufficiently pled an equitable unjust enrichment claim insofar as 6 it is an equitable alternative to and not duplicative of 7 Plaintiffs' other claims. 8 assumpsit, common law restitution, and common counts are DISMISSED 9 because Plaintiffs fail to state a legal basis for those claims, The Court finds that Plaintiffs have However, Plaintiffs' claims for United States District Court For the Northern District of California 10 and they would be duplicative of Plaintiffs' unjust enrichment 11 claim. 12 13 iv. Unconscionability Plaintiffs plead that the contracts they have with Defendants 14 are procedurally and substantively unconscionable, because 15 Defendants did not disclose to Plaintiffs that they would be 16 charged for unwanted add-ons or obtain Plaintiffs' "free and proper 17 affirmative consent" prior to these charges, and because Defendants 18 allegedly forged Plaintiffs' signatures to the rental agreements. 19 FAC ¶¶ 70-75. 20 signed were contracts of adhesion, and the parties' disparate 21 bargaining positions combined with the contracts' unfair terms 22 suffice to make Plaintiffs' claims here actionable under California 23 and Oklahoma statutes allowing Courts to refuse to enforce 24 unconscionable statutes. 25 1670.5 and Okla. Stat. Tit. 12A, § 2-302. 26 Further, Plaintiffs allege that the agreements they Id. ¶ 73 (citing Cal. Civ. Code section Plaintiffs' claim must be dismissed because it fails to set 27 forth a cognizable legal theory. Unconscionability under both 28 statutes Plaintiffs cite, as well as under common law, is a defense 18 1 to the enforcement of a contract, not an independent cause of 2 action. 3 prejudice. Plaintiffs' claim for unconscionability is DISMISSED with 4 B. 5 Plaintiffs bring this action on behalf of all of Defendants' Defendants' Motion to Strike 6 customers in California and Oklahoma who, within the last four 7 years, paid for add-ons that they either declined or did not 8 authorize with free consent. 9 all of Plaintiffs' class allegations pursuant to Rule 12(f), FAC ¶ 21. Defendants move to strike United States District Court For the Northern District of California 10 arguing that "it is apparent from the face of the [FAC] that no 11 class can be certified." 12 on the grounds that it is premature. MTS at 4. Plaintiffs oppose this motion Opp'n to MTS at 1. Class allegations typically are tested on a motion for class 13 14 certification, not at the pleading stage. See Collins v. Gamestop 15 Corp., C 10–1210–TEH, 2010 WL 3077671, at *2 (N.D. Cal. Aug. 6, 16 2010). 17 pleadings to determine whether the interests of the absent parties 18 are fairly encompassed within the named plaintiff's claim." 19 Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982). 20 courts have struck class allegations where it is clear from the 21 pleadings that class claims cannot be maintained. 22 Apple Inc., 672 F. Supp. 2d 978, 990 (N.D. Cal.2009). However, "[s]ometimes the issues are plain enough from the Gen. Thus, some E.g., Sanders v. Defendants argue that Plaintiffs' class allegations should be 23 24 stricken because (1) the class is not ascertainable; (2) individual 25 inquiries predominate; (3) Plaintiffs' rental agreements 26 demonstrate the absence of any uniform, class-wide proof; and (4) 27 Plaintiffs cannot show class-wide injury and causation. 28 11. Defendants' arguments on the first three points are 19 MTS at 4- 1 essentially the same: they claim that the Court would have to 2 conduct individualized inquiries or "mini-trials" to decide whether 3 Plaintiffs were really eligible for class membership. 4 4-9. 5 claims sound in fraud, since they involve face-to-face interactions 6 and oral representations between Defendants' employees and 7 Plaintiffs, and that fraud-based claims are generally not amenable 8 to class-wide proof of injury and causation. See MTS at Defendants' argument on the last point is that Plaintiffs' Id. at 9-10. Whatever the merits of Defendants' claims, they are premature 9 United States District Court For the Northern District of California 10 at the pleading stage. The parties have had no time to develop a 11 factual record, and so it is unclear whether Defendants' arguments 12 on this point have any merit. 13 Plaintiffs' pleadings that no class can be maintained. 14 v. Apple, 672 F. Supp. 2d at 990. 15 therefore DENIED. Moreover, it is not clear from See Sanders Defendants' motion to strike is 16 17 18 V. CONCLUSION As explained above, the Court GRANTS IN PART and DENIES IN 19 PART Defendants Dollar Thrifty Automotive Group, Inc., Dollar Rent 20 A Car, Inc., and DTG Operations, Inc.'s motion to dismiss Sandra 21 McKinnon and Kristen Tool's complaint, and DENIES their motion to 22 strike. The Court orders as follows: 23 Plaintiffs' UCL claims are DISMISSED with leave to amend as to 24 Ms. McKinnon, but undisturbed as to Ms. Tool. 25 Plaintiffs' CLRA claim is DISMISSED with leave to amend as to 26 Ms. McKinnon, but undisturbed as to Ms. Tool. 27 Plaintiffs' OCPA claim is DISMISSED with leave to amend as to 28 Ms. Tool, but undisturbed as to Ms. McKinnon. 20 1 Plaintiffs' breach of contract claim is DISMISSED with leave 2 to amend. 3 Plaintiffs' claim for breach of the covenant of good faith and 4 fair dealing is DISMISSED with leave to amend. 5 Plaintiffs' unconscionability claim is DISMISSED WITH 6 PREJUDICE. 7 Plaintiffs' common counts, common law restitution, and 8 assumpsit claims are DISMISSED WITH PREJUDICE, but Plaintiffs' 9 equitable unjust enrichment claim is undisturbed. United States District Court For the Northern District of California 10 Plaintiffs have thirty (30) days from the signature date of this 11 Order to file an amended complaint curing the defects described in 12 Section III.A supra, or the Court may dismiss their defective 13 claims with prejudice. 14 Friday, March 15, 2013, is hereby VACATED and rescheduled for 15 Friday, May 24, 2013. The status conference now scheduled for 16 17 18 IT IS SO ORDERED. 19 20 4 Dated: MARCH ___, 2013 21 UNITED STATES DISTRICT JUDGE 22 23 24 25 26 27 28 21

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