Clerkin et al v. Mylife.com Inc. et al

Filing 82

ORDER GRANTING DEFENDANT OAK INVESTMENT PARTNERS 69 MOTION TO DISMISS AND DENYING DEFENDANTS JOINT 70 MOTION TO DISMISS AND 73 MOTION TO STRIKE. Responses due by 3/15/2012. Replies due by 5/17/2012. Replies due by 5/24/2012. Signed by Judge Claudia Wilken on 8/29/2011. (ndr, COURT STAFF) (Filed on 8/29/2011)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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Plaintiffs,

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v.
MYLIFE.COM, INC. and OAK INVESTMENT
PARTNERS,

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Defendants.
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United States District Court
For the Northern District of California

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ORDER GRANTING
DEFENDANT OAK
INVESTMENT
PARTNERS’ MOTION
TO DISMISS AND
DENYING
DEFENDANTS’ JOINT
MOTION TO DISMISS
AND MOTION TO
STRIKE
(Docket Nos. 69,
70 and 73)

CYNTHIA MCCRARY, individually and on
behalf of all others similarly
situated,
Plaintiff,

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No. C 11-00527 CW

JOHN CLERKIN and VERONICA MENDEZ,
individually and on behalf of all
others similarly situated,

v.
MYLIFE.COM, INC.,

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Defendant.

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CODY BROCK, individually and on
behalf of all others similarly
situated,

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Plaintiff,

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v.
MYLIFE.COM, INC.,
Defendant.
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In these consolidated cases, Defendants MyLife.com, Inc.; and

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Oak Investment Partners have filed three motions: a Rule 12(b)(6)

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Motion to Dismiss by Oak Investment Partners; a Rule 12(b)(6)

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Motion to Dismiss by MyLife.com and Oak Investment Partners;1 and a

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Rule 12(f) Motion to Strike by MyLife.com and Oak Investment

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Partners.

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McCrary and Cody Brock oppose the motions.

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decided on the papers.

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the parties, the Court GRANTS Oak Investment Partners’ motion to

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dismiss and DENIES Defendants’ joint motion to dismiss and motion

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to strike.

Plaintiffs John Clerkin, Veronica Mendez, Cynthia

Having considered the papers submitted by

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United States District Court
For the Northern District of California

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The motions will be

BACKGROUND
Because the parties are familiar with the allegations of this
case, only a limited recitation is provided below.
MyLife.com, Inc., operates mylife.com, an Internet website.

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MyLife presents those who sign up for its service with “a list of

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fake names of people supposedly ‘searching for you.’”

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Class Compl. (CACC) ¶ 1.

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are false, Plaintiffs point to a testimonial posted on the Internet

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by an individual who registered on the website as “sfsf sdgfsdgs.”

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Id. at 4:4.

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people were looking for “sfsf sdgfsdgs.”

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another individual’s Internet testimonial stating that,

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irrespective of the zip code entered, the website indicated that

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“Grovia Paxton” was residing in that zip code area and was looking

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for the individual.

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Consol. Am.

To show that the website-generated lists

The website reported to that individual that seven
Id.

Plaintiffs cite

Id. at 4:13-18.

Clerkin and Mendez received emails from MyLife stating that

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Although the motion’s caption states that the motion is
brought by MyLife, the notice of motion indicates that it is
asserted by MyLife and Oak Investment Partners.
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people were searching for them.

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and Mendez’s decisions to subscribe to MyLife’s service.

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Clerkin signed up for the service, MyLife represented that he would

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be charged $12.95 for one month; however, he was charged $155.40.

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When Mendez signed up for a trial subscription, MyLife represented

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she would be charged $5.00; however, she was charged $60.00.

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the time they subscribed, the website represented membership prices

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in bold and relatively large print.

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and small print, below the prices, the website stated, “One payment

These emails influenced Clerkin’s
When

Walker Decl., Ex. 2.2

At

In grey

United States District Court
For the Northern District of California

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for full membership term.”

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page,” the website indicated the amounts for the single payment to

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be charged for each membership term and that “[a]ll charges are

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non-refundable.”

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using the service, Clerkin and Mendez discovered that no one they

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knew was looking for them.

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Id., Ex. 2.

On a separate “payment

Id.; Defs.’ Jt. Mot. to Dismiss 18:1.

After

McCrary and Brock saw advertisements “stating that someone

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could be looking for [them] on MyLife.com.”

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advertisement McCrary saw indicated she could find out by

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subscribing to the service, while the advertisement Brock saw said

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“he could find out whom for free.”

CACC ¶¶ 9-10.

Id. ¶ 10.

The

Both McCrary and

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Under the “incorporation by reference” doctrine, courts may
“take into account documents ‘whose contents are alleged in a
complaint and whose authenticity no party questions, but which are
not physically attached to the [plaintiff's] pleading.’” Knievel
v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005) (quoting In re Silicon
Graphics Secs. Litig., 183 F.3d 970, 986 (9th Cir. 1999)). This
doctrine extends “to internet pages as it does to printed
material.” Knievel, 393 F.3d at 1076. Plaintiffs do not dispute
that the contents of the MyLife website are at issue in their
complaint. Nor do they challenge the authenticity of Exhibit 2 of
the Walker Declaration.

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Brock discovered that “no one was looking for [them].”

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10.

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Id. ¶¶ 9-

Oak Investment Partners, a venture capital firm, provided $25

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million to MyLife.

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¶ 12.

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It “conspired with MyLife and others.”

CACC

Plaintiffs bring the following claims against Defendants:
(1) common count for money had and received; (2) violation of

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California’s Consumer Legal Remedies Act (CLRA), Cal. Civ. Code

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§§ 1750, et seq.; (3) violation of the fraud prong of California’s

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United States District Court
For the Northern District of California

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Unfair Competition Law (UCL), Cal. Bus. & Prof. Code §§ 17200, et

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seq.; (4) violation of the UCL’s unlawful prong; (5) violation of

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the UCL’s unfairness prong; and (6) unjust enrichment and common

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law restitution.

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Plaintiffs’ CACC is based largely on Clerkin and Mendez’s

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amended complaint, which the Court dismissed in part.

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things, Clerkin and Mendez’s claims against Oak Investment Partners

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were dismissed because their allegations did not support liability

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against it.

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Among other

LEGAL STANDARD
A complaint must contain a “short and plain statement of the

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claim showing that the pleader is entitled to relief.”

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Civ. P. 8(a).

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claim is appropriate only when the complaint does not give the

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defendant fair notice of a legally cognizable claim and the grounds

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on which it rests.

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(2007).

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state a claim, the court will take all material allegations as true

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Fed. R.

Dismissal under Rule 12(b)(6) for failure to state a

Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555

In considering whether the complaint is sufficient to

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and construe them in the light most favorable to the plaintiff.

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Indus., Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986).

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However, this principle is inapplicable to legal conclusions;

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“threadbare recitals of the elements of a cause of action,

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supported by mere conclusory statements,” are not taken as true.

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Ashcroft v. Iqbal, 129 S. Ct. 1937, 1949-50 (2009) (citing Twombly,

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550 U.S. at 555).

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United States District Court
For the Northern District of California

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NL

DISCUSSION
I.

Oak Investment Partners’ Motion to Dismiss
Oak Investment Partners asserts that Plaintiffs have not plead

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facts supporting liability against it for MyLife’s alleged

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misconduct.

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Investment Partners provided funds to and conspired with MyLife is

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sufficient to state their claims against it.

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Plaintiffs respond that their allegation that Oak

Plaintiffs identify no allegation that distinguishes the CACC

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from Clerkin and Mendez’s previously-dismissed complaint.

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Plaintiffs allege only that Oak Investment Partners provided $25

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million to MyLife.

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conspiratorial or aider-and-abettor liability against Oak

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Investment Partners.

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Investment Partners shared a common plan with MyLife, which is

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necessary to support liability as a co-conspirator.

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Corp. v. Litton Saudia Arabia Ltd., 7 Cal. 4th 503, 510-11 (1994).

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Nor does it imply Oak Investment Partners was aware of MyLife’s

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alleged fraudulent scheme or that it breached a duty to Plaintiffs,

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as required to impose aider-and-abettor liability.

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Superior Court, 27 Cal. App. 4th 832, 846 (1994).

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Even if true, this is not sufficient to support

This allegation does not suggest that Oak

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Applied Equip.

Saunders v.

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Accordingly, Plaintiffs’ claims against Oak Investment

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Partners are dismissed.

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Mendez’s amended complaint, Plaintiffs were on notice as to what

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was required to state a claim against Oak Investment Partners.

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Thus, this dismissal is without leave to amend.

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II.

Based on the dismissal of Clerkin and

Defendants’ Joint Motion to Dismiss

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A.

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Defendants argue that certifying this case as a class action

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United States District Court
For the Northern District of California

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Class Allegations

is not appropriate and, pursuant to Rule 12(b)(6), challenge
Plaintiffs’ class allegations.
Defendants fail to identify any authority permitting the use

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of a motion to dismiss for failure to state a claim to contest the

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suitability of class certification.

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v. Handi-Craft Co., 618 F.3d 970 (9th Cir. 2010), which does not

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support their position.

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12(f) did not authorize a district court to strike a punitive

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damages claim on the basis that it was barred as a matter of law.

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Id. at 974-75.

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enumerated in Rule 12(f),3 and the court opined that the

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defendant’s motion “was really an attempt to have certain portions

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of Whittlestone’s complaint dismissed or to obtain summary judgment

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against Whittlestone as to those portions of the suit -- actions

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better suited for a Rule 12(b)(6) motion or a Rule 56 motion, not a

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Rule 12(f) motion.”

They cite Whittlestone, Inc.

There, the Ninth Circuit held that Rule

The claim exhibited none of the characteristics

Id. at 974.

The court reasoned that

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Rule 12(f) provides that a court “may strike from a pleading
an insufficient defense or any redundant, immaterial, impertinent,
or scandalous matter.”

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permitting the use of Rule 12(f) to eliminate claims would create

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“redundancies within the Federal Rules of Civil Procedure, because

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a Rule 12(b)(6) motion (or a motion for summary judgment at a later

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stage in the proceedings) already serves such a purpose.”

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different standards of review applied to decisions under Rule

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12(b)(6), which are reviewed de novo, and Rule 12(f) motions, which

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are reviewed for an abuse of discretion, also supported the court’s

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conclusion.

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Id.

Id.

Indeed, Whittlestone counsels against employing Rule 12(b)(6)

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United States District Court
For the Northern District of California

The

to challenge an action’s fitness for class treatment.

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12(b)(6) permits a party to assert a defense that the opposing

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party has failed “to state a claim upon which relief can be

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granted.”

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relief.

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331 (1980).

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to address impertinent allegations and class certification.4

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the use of Rule 12(b)(6) to address the same would create

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redundancies in the Federal Rules.

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applied to orders granting motions to dismiss differs from that

First, Rule

A class action is a procedural device, not a claim for

See Deposit Guaranty Nat’l Bank v. Roper, 445 U.S. 326,
Second, other Federal Rules of Civil Procedure exist
Thus,

Finally, the standard of review

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Some defendants have brought motions under Rule 12(f) to
strike class allegations from complaints. See, e.g., Cholakyan v.
Mercedes-Benz USA, LLC, ___ F. Supp. 2d ___, 2011 WL 2682975, at
*21 (C.D. Cal.). While courts entertain such motions, it is rare
that class allegations are stricken at the pleading stage. Id.
(listing cases). Another alternative is a motion pursuant to Rule
23. See, e.g., Vinole v. Countrywide Home Loans, Inc., 571 F.3d
935, 939-941 (9th Cir. 2009); Kamm v. California, 509 F.2d 205, 206
n.2 (9th Cir. 1975).
Even if Defendants had brought a Rule 12(f) or Rule 23 motion,
it would fail. They have not shown that Plaintiffs’ allegations
are “redundant, immaterial, impertinent, or scandalous.” Fed. R.
Civ. P 12(f). Nor have they shown, at this early stage in the
litigation, that class treatment is improper as a matter of law.

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governing orders granting or denying class certification.

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Ninth Circuit reviews de novo orders dismissing claims pursuant to

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Rule 12(b)(6).

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of class certification, however, are reviewed for abuse of

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discretion.

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Cir. 2011).

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Whittlestone, 618 F.3d at 974.

The

Grants and denials

Marlo v. United Parcel Serv., 639 F.3d 942, 946 (9th

Rule 12(b)(6) is not the appropriate procedural vehicle to
challenge class allegations.

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12(b)(6) motion concerning Plaintiffs’ class allegations is denied.

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United States District Court
For the Northern District of California

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The Court has scheduled a date to hear Plaintiffs’ motion for class

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certification.

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against class certification in its opposition to that motion.

Accordingly, Defendants’ Rule

Defendant MyLife should present its arguments

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B.

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Defendants argue that McCrary’s and Brock’s CLRA claims fail

CLRA Claims

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because they do not allege “that they received any solicitation

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from MyLife.”

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argument appears to be that, because McCrary and Brock allegedly

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saw an advertisement and did not receive an email, it is

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irreconcilably inconsistent with other allegations in the

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complaint.

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violated the CLRA by “disseminating false soliciations representing

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that ‘someone’ is looking for the recipient.”

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Plaintiffs did not allege that this was the sole manner in which

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MyLife violated the CLRA.

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allegations and this general allegation are not inconsistent, and

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their CLRA claims need not be dismissed.

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Defs.’ Mot. to Dismiss at 15:3.

Defendants’

Defendants point to a general allegation that MyLife

CACC ¶ 33.

However,

Thus, McCrary’s and Brock’s specific

Defendants also argue that Clerkin’s and Mendez’s CLRA claims
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based on MyLife’s billing practices must be dismissed because a

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reasonable consumer would not have found MyLife’s representations

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on its website deceptive.

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be misled by the placement and display of the effective rates of

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the memberships in relation to the amounts MyLife actually charges

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in advance.

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Plaintiffs respond that consumers could

While the monthly rates are displayed in bold and relatively

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large print, it is not evident that a subscriber will be charged

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immediately for the full amount for an entire membership term.

As

United States District Court
For the Northern District of California

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noted above, the website states, “One payment for full membership

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term.”

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multiple meanings.

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mean that payments will not change over a membership term; in other

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words, a twelve-month membership will be charged invariably at

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$14.95 every month.

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payment of $179.40 for a 12 month plan,” which they argue suggests

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that customers will be charged a single amount.

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language is presented in grey and small print on a “payment page,”

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which is apparently separate from the “subscription page,” on which

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membership terms and prices are displayed.

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Dismiss at 17:28-18:2.

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This language can be viewed as ambiguous and susceptible of
A consumer could understand this language to

Defendants point to language stating, “One

However, this

Defs.’ Jt. Mot. to

Based on the present record, the Court declines to hold, as a

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matter of law, that MyLife’s presentation of its subscription

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prices is not deceptive.

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that whether a business practice is deceptive will usually be a

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question of fact not appropriate for decision on demurrer.”

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Williams v. Gerber Prods. Co., 552 F.3d 934, 938 (9th Cir. 2008)

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“California courts . . . have recognized

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(citing Linear Tech. Corp. v. Applied Materials, Inc., 152 Cal.

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App. 4th 115, 134-35 (2007)).

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a departure from this general rule.

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Defendants’ arguments do not warrant

In sum, Defendants’ motion to dismiss Plaintiffs’ CLRA claims
is denied.

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C.

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Defendants argue that Plaintiffs’ UCL claims must be dismissed

UCL Claims

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because they have not alleged unlawful, unfair or fraudulent

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conduct.

However, Plaintiffs have stated claims under the CLRA,

United States District Court
For the Northern District of California

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which Defendants acknowledge can support Plaintiffs’ claims under

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all three prongs of the UCL.

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Accordingly, Defendants’ motion to dismiss Plaintiffs’ UCL
claims is denied.
D.

Common Count for Money Had and Received and Claims for
Unjust Enrichment and Common Law Restitution

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Defendants assert that Plaintiffs’ common count and claims for
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unjust enrichment and common law restitution must be dismissed
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because Plaintiffs fail to state UCL and CLRA claims.

However, as

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already explained, Plaintiffs’ UCL and CLRA claims are stated
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sufficiently.
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Accordingly, Defendants’ motion to dismiss Plaintiffs’ common
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count and claims for unjust enrichment and common law restitution
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is denied.
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III. Defendants’ Motion to Strike
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Defendants move to strike paragraph four of the CACC, which
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lists alleged complaints by non-parties about MyLife’s website.
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They contend that these complaints are immaterial and impertinent.
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Matter is immaterial if it has no essential or important

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relationship to a claim for relief or defense.

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F.3d at 974.

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issues in question.

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Whittlestone, 618

Impertinent matter is that which does not pertain to
Id.

It is true that these third party complaints cannot be

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submitted to a jury for the truth of the matters they assert.

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Fed. R. Evid. 802.

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nor impertinent.

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Plaintiffs’ claims that MyLife misled consumers.

However, the complaints are neither immaterial

They are not immaterial because they relate to
They are

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United States District Court
For the Northern District of California

See

pertinent to whether MyLife engaged in misconduct because they

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place Plaintiffs’ individual circumstances in context.

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Accordingly, paragraph four of the CACC will not be stricken.

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CONCLUSION

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For the foregoing reasons, the Court GRANTS Oak Investment

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Partners’ motion to dismiss (Docket No. 69) and DENIES Defendants’

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joint motion to dismiss and motion to strike (Docket Nos. 70 and

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73).

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dismissed without leave to amend.

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complaint within fourteen days of the date of this Order.

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Civ. P. 12(a)(4)(A).

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Plaintiffs’ claims against Oak Investment Partners are
MyLife shall answer Plaintiffs’
Fed. R.

Plaintiffs’ motion for class certification is due January 12,

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2012.

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motion and its cross-motion for summary judgment, contained in a

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single brief, are due March 15, 2012.

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of class certification and their opposition to MyLife’s summary

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judgment motion, contained in a single brief, are due May 17, 2012.

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MyLife’s reply in support of its motion for summary judgment is due

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MyLife’s opposition to Plaintiffs’ class certification

Plaintiffs’ reply in support

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May 24, 2012.

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certification and MyLife’s motion for summary judgment is scheduled

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for June 14, 2012 at 2:00 p.m.

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The hearing on Plaintiffs’ motion for class

IT IS SO ORDERED.

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Dated: 8/29/2011
CLAUDIA WILKEN
United States District Judge

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United States District Court
For the Northern District of California

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