Johnson et al v. Trumpet Behavioral Health, LLC et al
Filing
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Order by Judge William H. Orrick granting 41 Motion to Dismiss the eighth cause of action without prejudice. (jmd, COURT STAFF) (Filed on 1/7/2022)
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UNITED STATES DISTRICT COURT
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NORTHERN DISTRICT OF CALIFORNIA
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JASMINE JOHNSON, et al.,
Plaintiffs,
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United States District Court
Northern District of California
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Case No. 3:21-cv-03221-WHO
ORDER GRANTING MOTION TO
DISMISS
v.
TRUMPET BEHAVIORAL HEALTH,
LLC, et al.,
Re: Dkt. No. 41
Defendants.
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The plaintiffs in this putative wage-and-hour class action seek, among other remedies,
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equitable restitution under California’s Unfair Competition Law (“UCL”). I previously dismissed
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the claim with leave to amend for failure to plead a lack of adequate remedies at law, as required
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by Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020). The amended complaint still
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does not plead that the plaintiffs lack adequate remedies at law, again requiring dismissal. But that
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dismissal is without prejudice to the plaintiffs’ ability to seek leave to amend if they later learn
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that they do lack adequate remedies at law.
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BACKGROUND
Plaintiffs Jasmine Johnson, Jade Khodar-Fisher, and Brittnie Boruff—who worked for the
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defendants as physical therapists—allege that the defendants committed a series of labor law
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violations, including requiring them to perform pre- and post-shift work without pay, rounding
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down the hours they worked, failing to provide meal and rest breaks, failing to reimburse them for
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business expenses, and other actions. See Second Amended Complaint (“SAC”) [Dkt. No. 31] ¶¶
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14–26. I previously granted two motions to dismiss with leave to amend. In the first order, I
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explained that the original complaint was “conclusory and pleads only recitations or paraphrasing
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of the statutory requirements devoid of meaningful factual allegations.” Dkt. No. 21 at 1. In the
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second order, I denied the motion to dismiss one of the two challenged claims. Dkt. No. 30 at 3–
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5. But I dismissed the plaintiffs’ eighth cause of action, which alleged a violation of the UCL. Id.
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at 5–6. I explained that the plaintiffs were required to, but did not, plead that they lacked adequate
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remedies at law and that they had not shown they possessed standing to pursue injunctive relief.
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Id. The plaintiffs filed the SAC on September 27, 2021, and the defendants now move to dismiss
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only the UCL claim.
LEGAL STANDARD
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Under Federal Rule of Civil Procedure 12(b)(6), a district court must dismiss a complaint
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if it fails to state a claim upon which relief can be granted. To survive a Rule 12(b)(6) motion to
dismiss, the plaintiff must allege “enough facts to state a claim to relief that is plausible on its
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United States District Court
Northern District of California
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face.” See Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible
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when the plaintiff pleads facts that “allow the court to draw the reasonable inference that the
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defendant is liable for the misconduct alleged.” See Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009)
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(citation omitted). There must be “more than a sheer possibility that a defendant has acted
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unlawfully.” Id. While courts do not require “heightened fact pleading of specifics,” a plaintiff
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must allege facts sufficient to “raise a right to relief above the speculative level.” See Twombly,
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550 U.S. at 555, 570.
In deciding whether the plaintiff has stated a claim upon which relief can be granted, the
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Court accepts the plaintiff’s allegations as true and draws all reasonable inferences in favor of the
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plaintiff. See Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). However, the court
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is not required to accept as true “allegations that are merely conclusory, unwarranted deductions of
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fact, or unreasonable inferences.” See In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir.
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2008).
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If the court dismisses the complaint, it “should grant leave to amend even if no request to
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amend the pleading was made, unless it determines that the pleading could not possibly be cured
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by the allegation of other facts.” See Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000). In
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making this determination, the court should consider factors such as “the presence or absence of
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undue delay, bad faith, dilatory motive, repeated failure to cure deficiencies by previous
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amendments, undue prejudice to the opposing party and futility of the proposed amendment.” See
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Moore v. Kayport Package Express, 885 F.2d 531, 538 (9th Cir. 1989).
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DISCUSSION
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The defendants argue that, because the plaintiffs’ UCL claim seeks only equitable
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remedies, the plaintiffs must plead that they lack adequate remedies at law under Sonner.
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According to the defendants, the plaintiffs must not only plead that they lack remedies, they must
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plead facts demonstrating that to be true. The plaintiffs respond that making this determination
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would be premature at this early stage. They claim that it is sufficient to plead, as they do, that
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they seek equitable remedies to the extent their remedies at law are ultimately inadequate. And
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United States District Court
Northern District of California
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the defendants reply that this type of conditional pleading is insufficient.
In Sonner, the Ninth Circuit held that “a federal court must apply traditional equitable
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principles before awarding restitution under the UCL.” 971 F.3d at 841. State law may not, the
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court explained, expand or contract the bounds of federal equitable powers. See id. at 841–44.
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One “basic doctrine of equity jurisprudence [is] that courts of equity should not act when the
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moving party has an adequate remedy at law.” Morales v. Trans World Airlines, Inc., 504 U.S.
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374, 381 (1992) (internal quotation marks, alteration, and citations omitted). Accordingly, Sonner
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held that a federal plaintiff must “establish that she lacks an adequate remedy at law before
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securing equitable restitution for past harm under the UCL.” Sonner, 971 F.3d at 844.
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The court went on to apply that principle to the facts there. In the district court, the
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plaintiff had sought (among other things) damages under California’s Consumers Legal Remedies
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Act (“CLRA”) and equitable restitution under the UCL. Id. at 838. Two months before trial, the
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plaintiff sought and obtained leave to amend the complaint to drop the CLRA claim so that the
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UCL equitable restitution claim could be decided by the judge, rather than the damages claim
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being decided by the jury. Id. The district court then held that the plaintiff could not secure
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equitable restitution because her legal remedy, CLRA damages, was available. Id. Applying
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federal equitable principles, the Ninth Circuit agreed that the plaintiff failed to show that she
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lacked an adequate remedy at law. Id. at 845. It explained that “[i]nitially, the operative
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complaint does not allege that Sonner lacks an adequate legal remedy.” Id. It cited a Supreme
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Court case, O’Shea v. Littleton, 414 U.S. 488 (1974), which it characterized as “holding that a
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complaint seeking equitable relief failed because it did not plead ‘the basic requisites of the
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issuance of equitable relief’ including ‘the inadequacy of remedies at law.’” Id. (quoting O’Shea,
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414 U.S. at 502). It then explained that “[m]ore importantly,” the plaintiff “concede[d] that she
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seeks the same sum in equitable restitution as ‘a full refund of the purchase price’—
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$32,000,000—as she requested in damages to compensate her for the same past harm.” Id.
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Accordingly, she “fail[ed] to explain how the same amount of money for the exact same harm is
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inadequate or incomplete, and nothing in the record supports that conclusion.” Id.
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Sonner’s core holding is that a plaintiff in federal court must “establish that she lacks an
adequate remedy at law before securing equitable restitution for past harm under the UCL and
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United States District Court
Northern District of California
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CLRA.” Id. (emphasis added). But most district courts applying Sonner have also “understood it
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to require that a plaintiff must, at a minimum, plead that she lacks adequate remedies at law if she
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seeks equitable relief.” Guthrie v. Transamerica Life Ins. Co., ___ F. Supp. 3d ___, 2021 WL
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4314909, at *4 (N.D. Cal. Sept. 23, 2021) (Orrick, J.) (collecting citations). I have too. See id.;
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Brown v. Madison Reed, No. 21-CV-01233-WHO, 2021 WL 3861457, at *12 (N.D. Cal. Aug. 30,
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2021); Anderson v. Apple Inc., 500 F. Supp. 3d 993, 1009 (N.D. Cal. 2020) (Orrick, J.). That is
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why I dismissed this claim previously. The plaintiffs failed to plead that they lacked adequate
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remedies at law, yet they sought equitable restitution under the UCL. Dkt. No. 30 at 5–6.
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Now, the plaintiffs rely on several allegations to meet this pleading requirement. They
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plead that, as an alternative if they are unable to obtain legal remedies, they request restitution
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“because an adequate remedy at law does not exist for the violations alleged herein.” SAC ¶ 111;
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see also id. at 32 (prayer for relief). They plead that one common question to the class is whether
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class members “in the alternative, are entitled to equitable relief pursuant to [the UCL] as
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Plaintiffs requests [sic] restitution of wage wrongfully withheld because an adequate remedy of
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law does not exist for the alleged violations herein.” Id. ¶ 42n (emphasis added). And they plead
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that they “request[] restitution of wages wrongfully withheld in instances where an adequate
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remedy at law does not exist for the violations alleged herein.” Id. ¶¶ 110, 116 (emphasis added).
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The defendants make two arguments for dismissal: (1) that the plaintiffs must plead facts
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illustrating why they lack adequate remedies at law and (2) that the plaintiffs cannot meet
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Sonner’s rule with this form of conditional pleading. While I do not address the defendants’ first
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argument, I agree with them on the second. I do not necessarily read Sonner to impose as onerous
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a requirement as some other courts have—for example, requiring a plaintiff to allege “specific
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facts—e.g., that she would receive less compensation via damages than restitution—showing that
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[their remedies at law] are necessarily inadequate or incomplete.” See, e.g., Nacarino v. Chobani,
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LLC, No. 20-CV-07437-EMC, 2021 WL 3487117, at *12 (N.D. Cal. Aug. 9, 2021) (internal
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quotation marks and citations omitted) (emphasis added). But the fundamental thing that Sonner,
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by its own terms, requires at the pleadings stage is that the complaint “allege that [the plaintiff]
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lacks an adequate legal remedy.” Sonner, 971 F.3d at 844. The plaintiffs do not do so. All of
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United States District Court
Northern District of California
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their allegations are, instead, conditional: They allege only that they seek equitable relief to the
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extent legal remedies are inadequate or if legal remedies are inadequate. But that is not an
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allegation that they actually lack adequate remedies at law. The Hon. Jacqueline Scott Corley
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recently addressed this issue and explained that such conditional pleading does not satisfy
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Sonner’s rule. See In re California Gasoline Spot Mkt. Antitrust Litig., No. 20-CV-03131-JSC,
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2021 WL 1176645, at *7 (N.D. Cal. Mar. 29, 2021).
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The plaintiffs respond that “[t]he main difference between the present case and Sonner is
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that while Sonner was decided on the pleadings, it was also decided at the eve of trial when
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discovery had already completed.” Dkt. No.43 at 4 (emphasis omitted). That is true; as I have
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previously observed, “[t]he facts of Sonner—where the plaintiff on the eve of trial sought to
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secure a bench trial under the UCL by foregoing CLRA damages claims that had to be tried to a
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jury—are inapposite considering the allegations and the posture of” a complaint this early in the
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case. In re JUUL Labs, Inc., Mktg., Sales Pracs., & Prod. Liab. Litig., 497 F. Supp. 3d 552, 638
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(N.D. Cal. 2020) (Orrick, J.) (emphasis added). And because Sonner was decided at a later
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posture, I agree with the plaintiffs that, if a plaintiff pleads that she lacks an adequate legal
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remedy, Sonner will rarely (if ever) require more this early in the case. But, despite these
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differences in posture between Sonner and a case like this, I and other judges have explained that
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one aspect of Sonner’s reasoning is purely about pleading requirements and does not turn on its
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more developed posture. See, e.g., Sharma v. Volkswagen AG, 524 F. Supp. 3d 891, 906 (N.D.
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Cal. 2021) (Tigar, J.); IntegrityMessageBoards.com v. Facebook, Inc., No. 18-CV-05286-PJH,
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2020 WL 6544411, at *4 (N.D. Cal. Nov. 6, 2020). That is the only requirement I apply in this
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Order. Relatedly, the plaintiffs argue that it is too early to determine whether the plaintiffs’ legal
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remedies will ultimately be adequate, so it makes sense to defer this determination. Dkt. No. 43 at
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5. That argument has significant force, but the plaintiffs’ objection is to Sonner itself, which I am
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bound by.
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If, later in the case, the plaintiffs conclude that they do lack adequate remedies at law, they
should move for leave to amend to re-plead the UCL claim. For the reasons explained above, it
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would not be surprising for a more developed record to reveal the inadequacy of legal remedies
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United States District Court
Northern District of California
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that is less apparent today. I would be inclined to grant leave to amend if the plaintiffs can make
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this allegation, but because this is the third attempt at amendment the plaintiffs must seek leave the
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next time. Cf. Phan v. Sargento Foods, Inc., No. 20-CV-09251-EMC, 2021 WL 2224260, at *6
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(N.D. Cal. June 2, 2021) (“[T]he Court . . . dismisses the claim for relief [under Sonner] but
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without prejudice so that Plaintiff may bring the claim back in should Plaintiff find facts, during
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discovery, showing that the legal remedy would not be adequate.”).
CONCLUSION
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The motion to dismiss the eighth cause of action is GRANTED without prejudice to the
plaintiffs’ ability to seek leave to re-plead it later.
IT IS SO ORDERED.
Dated: January 7, 2022
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William H. Orrick
United States District Judge
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