Crowder v. The Shade Store, LLC

Filing 109

ORDER DENYING Motion to Dismiss the Third Amended Complaint. Re: Dkt. Nos. 99 , 104 , 105 . Defendant is ordered to file an answer to the third amended complaint by 3/24/2025 by Judge Nathanael M. Cousins. (lmh, COURT STAFF) (Filed on 3/10/2025)

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA

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SHARON CROWDER, et al.,
Plaintiffs,

United States District Court
Northern District of California

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v.

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THE SHADE STORE, LLC,
Defendant.

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Case No. 23-cv-02331-NC
ORDER DENYING MOTION TO
DISMISS THE THIRD AMENDED
COMPLAINT
Re: Dkt. Nos. 99, 104, 105

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Plaintiffs Sharon Crowder, Joel Lumian, Robert Smith, Amanda Goldwasser, and

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Mark Elkins bring a putative class action alleging Defendant The Shade Store deceptively

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advertises its products as discounted through false strikethrough pricing and purported

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time-limited sales. Defendant moves to dismiss Plaintiffs’ claims for violations of

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California’s False Advertising Law (FAL), California’s Consumer Legal Remedies Act

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(CLRA), and California’s Unfair Competition Law (UCL), and for quasi-contract/unjust

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enrichment from the third amended complaint for lack of equitable jurisdiction and failure

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to state a claim. The Court DENIES Defendant’s motion to dismiss.

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I.

BACKGROUND

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The Court provides only a brief summary of the facts alleged, which are recounted

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more fully in previous orders. See ECF 46, 69, 89. Defendant makes, sells, and markets

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window covering products and accessories, including blinds, shades, and drapes. ECF 94

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(TAC) ¶¶ 7, 27. Plaintiffs allege the advertisements and price quotes available through all

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of Defendant’s direct-to-consumer sales channels are deceptive in two ways. TAC ¶¶ 28–

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29. First, Defendant advertises sales for 15-20% off all products that are purportedly time-

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limited but actually continuous. TAC ¶¶ 30–34. Second, Defendant lists fake prices and

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fake discounts for its products by showing a purported regular price (reference or

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strikethrough price), e.g., $350, and a discounted price, e.g. $298. TAC ¶¶ 35, 39.

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However, Plaintiffs allege the reference prices are not the products’ prevailing prices

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because the products are always advertised at a discount. TAC ¶¶ 37, 39.
Plaintiffs bring this action on behalf of a putative nationwide and California class of

United States District Court
Northern District of California

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consumers who “purchased one or more The Shade Store Products advertised at a

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discount.” TAC ¶ 83. The Court granted in part and denied in part Defendant’s motions to

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dismiss the initial, first, and second amended complaints. ECF 46, 69, 89. Plaintiffs filed

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a third amended complaint, adding Elkins as a named plaintiff. TAC. Defendant filed a

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motion to dismiss the third amended complaint. ECF 99 (Mot.). Plaintiffs opposed, ECF

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104 (Opp’n), and Defendant replied, ECF 105 (Reply). All parties have consented to

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magistrate judge jurisdiction under 28 U.S.C. § 636(c). ECF 7, 17, 53, 71, 95.

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II.

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LEGAL STANDARD
A motion to dismiss for failure to state a claim under Rule 12(b)(6) tests the legal

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sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). “To

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survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as

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

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662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). When

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reviewing a 12(b)(6) motion, a court “must accept as true all factual allegations in the

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complaint and draw all reasonable inferences in favor of the non-moving party.” Retail

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Prop. Trust v. United Bd. of Carpenters & Joiners of Am., 768 F.3d 938, 945 (9th Cir.

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2014). A court, however, need not accept as true “allegations that are merely conclusory,

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unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs.

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Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). A claim is facially plausible when it “allows

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the court to draw the reasonable inference that the defendant is liable for the misconduct
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alleged.” Id. If a court grants a motion to dismiss, leave to amend should be granted

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unless the pleading could not possibly be cured by the allegation of other facts. Lopez v.

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Smith, 203 F.3d 1122, 1127 (9th Cir. 2000).

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III.

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Defendant moves to dismiss Plaintiffs’ FAL, CLRA, UCL, and quasi-

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contract/unjust enrichment claims for equitable relief, arguing the Court lacks equitable

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jurisdiction because Plaintiffs fail to sufficiently allege they lack adequate legal remedies

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for past or future harms. Mot. 5–11. Defendant also argues Plaintiffs fail to sufficiently

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allege a claim for quasi-contract/unjust enrichment. Mot. 11–12. The Court denies

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Defendant’s motion as to each argument.

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United States District Court
Northern District of California

DISCUSSION

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A.

The Court has Equitable Jurisdiction over Plaintiffs’ FAL, CLRA, UCL,
and Quasi-Contract/Unjust Enrichment Claims (First, Second, Third, and
Seventh Claims)

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A court must have equitable jurisdiction to hear the merits of an equitable claim.

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Forrett v. Gourmet Nut, Inc., 634 F. Supp. 3d 761, 768 (N.D. Cal. 2022) (citing Guzman v.

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Polaris Indus. Inc., 49 F.4th 1308, 1314 (9th Cir. 2022)). To establish equitable

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jurisdiction and recover equitable relief, a plaintiff must plead and show a lack of adequate

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remedies at law. Sonner v. Premier Nutrition Corp., 971 F.3d 834, 844 (9th Cir. 2020);

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Guthrie v. Transamerica Life Ins. Co., 561 F. Supp. 3d 869, 875 (N.D. Cal. 2021).

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Defendant previously argued that Plaintiffs failed to sufficiently allege they lack an

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adequate legal remedy—namely, damages—for past harms such that their equitable claims

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must be dismissed. ECF 75 at 9–11. The Court found Plaintiffs did not allege which of

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their claims sought equitable relief, nor what type of equitable relief, so it could not assess

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whether it retained equitable jurisdiction. ECF 89 at 10. The Court dismissed Plaintiffs’

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claims for equitable relief with leave to amend. ECF 89 at 10. Following amendment,

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Plaintiffs now “seek all available equitable relief, including injunctive relief,

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disgorgement, and restitution in the form of a full refund and/or measured by the price

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premium charged” for their FAL, CLRA, UCL, and quasi-contract/unjust enrichment

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claims. TAC ¶¶ 101, 117–22, 140, 174. Plaintiffs’ CLRA claim also seeks “all monetary
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relief available,” including various types of monetary damages. TAC ¶¶ 118–22.

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Defendant renews their argument that Plaintiffs fail to sufficiently allege they lack an

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adequate legal remedy, this time as to both past and future harm. The Court disagrees and

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finds that, at the pleading stage, Plaintiffs plausibly allege they lack an adequate legal

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remedy to establish equitable jurisdiction over their claims for restitution for past harm and

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injunctive relief for future harm.

United States District Court
Northern District of California

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Restitution for Past Harm

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Plaintiffs “seek equitable remedies in the alternative because they have no adequate

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remedy at law.” TAC ¶ 78. Plaintiffs allege legal damages are inadequate to redress their

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past harms because they are not as “certain,” “equally prompt or otherwise efficient” as

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restitution. TAC ¶¶ 79–81. They also allege the “elements of Plaintiffs’ equitable claims

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are different and do not require the same showings as Plaintiffs’ legal claims,” including

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because “Plaintiffs must show that the Products they purchased have essentially no market

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value” to obtain a full refund as damages, which they do not have to show to obtain a full

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refund as restitution. TAC ¶¶ 79–80. Defendants argue Plaintiffs’ allegations that

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restitution is more certain, prompt, and efficient are insufficient to establish equitable

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jurisdiction, and that “Plaintiffs’ equitable and legal claims seek ‘the same amount of

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money for the exact same harm.’” Mot. 6–7.

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As the parties’ briefs indicate, courts within the Ninth Circuit are divided as to the

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allegations required to establish inadequate remedies at law for past harm at the pleading

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stage. Compare Norman v. Gerber Prods. Co., No. 21-cv-09940-JSW, 2023 WL 2633220,

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at *2 (N.D. Cal. Mar. 24, 2023) (requiring plaintiff to demonstrate “an inherent limitation

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of the legal remedy that renders it inadequate”), with Shuman v. SquareTrade Inc., No. 20-

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cv-02725-JCS, 2021 WL 5113182, at *10–11 (N.D. Cal. Nov. 3, 2021) (rejecting a claim

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for restitution that the plaintiffs alleged was more certain, prompt, and efficient where it

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was not based on a different legal theory and facts than their claim at law), with Johnson v.

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Trumpet Behav. Health, LLC, No. 3:21-cv-03221-WHO, 2022 WL 74163, at *3 (N.D. Cal.

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Jan. 7, 2022) (finding a plaintiff usually only needs to allege they lack an adequate remedy
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United States District Court
Northern District of California

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at the pleading stage) and “require far less at the pleading stage.” Here, the Court finds, as

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other courts have, that Plaintiffs’ allegations that damages are inadequate because

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restitution is more certain, prompt, and efficient are sufficient at the pleading stage. See

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Valiente v. Simpson Imports, Ltd., 717 F. Supp. 3d 888, 907 (N.D. Cal. 2024); Murphy v.

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Olly Pub. Benefit Corp., 651 F. Supp. 3d 1111, 1129 (N.D. Cal. 2023); Elgindy v. AGA

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Serv. Co., No. 20-cv-06304-JST, 2021 WL 1176535, at *15 (N.D. Cal. Mar. 28, 2021).

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This is particularly so considering multiple judges within this district have begun to

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reverse course from their previous decisions requiring stricter allegations at the pleading

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stage to establish equitable jurisdiction over claims for past harms. See Ablaza v. Sanofi-

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Aventis U.S. LLC, 21-cv-01942-JST, 2022 WL 19517298, at *3 (N.D. Cal. July 12, 2022)

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(“More recently, however, after a review of cases from other district courts in the Ninth

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Circuit, the Court has determined [a] more nuanced approach is appropriate.); French v.

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Banana Republic LLC, No. 24-cv-05216-VC, 2024 WL 4682312, at *2 (N.D. Cal. Nov. 4,

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2024) (“On further consideration,” allegations are sufficient “so long as the plaintiff can

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articulate a basis for why there may (depending on how the litigation develops) not be an

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adequate remedy at law.”). “Indeed, Sonner’s requirement makes the most sense at

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summary judgment, after a record has been developed.” French, 2024 WL 4682312, at *2.

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The Court therefore denies Defendant’s motion to dismiss Plaintiffs’ equitable

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claims for restitution for past harms and does not address their remaining arguments as to

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whether restitution allows for a full refund. See Mot. 7; Reply 3–4.

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2.

Injunctive Relief for Future Harm

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Within the Ninth Circuit, courts have varied in their analysis of equitable

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jurisdiction over injunctive relief for future harm. See Brooks v. Thomson Reuters Corp.,

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No. 21-cv-01418-EMC, 2021 WL 3621837, at *10–11 (N.D. Cal. Aug. 16, 2021)

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(discussing split among courts in the circuit); Kryzhanovskiy v. Amazon.com Servs., Inc.,

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No. 21-cv-01292-DAD-BAM, 2022 WL 2345677, at *4–5 (E.D. Cal. June 29, 2022)

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(same). Specifically, some courts have applied the inadequate-remedy-at-law requirement

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to claims for injunctive relief and dismissed such claims, some courts have concluded the
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United States District Court
Northern District of California

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requirement never applies to claims for injunctive relief for future harms, and still others

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have concluded that the requirement applies to injunctive relief, but whether it bars

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equitable jurisdiction or not depends on the purpose of the injunction and the adequacy of

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the legal remedies available in the given case. Compare In re MacBook Keyboard Litig.,

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No. 18-cv-02813-EJD, 2020 WL 6047253, at *3–4 (N.D. Cal. Oct. 13, 2020) (dismissing

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claim for injunctive relief where plaintiffs did “not explain” why consumers experiencing a

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continuing harm “could not sufficiently be ‘made whole’ by monetary damages”), with

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Linton v. Axcess Fin. Servs., Inc., No. 23-cv-01832-CRB, 2023 WL 4297568, at *3 (N.D.

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Cal. June 30, 2023) (finding equitable jurisdiction after “the Court decline[d] to extend

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Sonner’s inadequate-remedy-at-law requirement to [plaintiff’s] injunctive relief claim”),

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with Zeiger v. WellPet LLC, 526 F. Supp. 3d 652, 687 (N.D. Cal. 2021) (applying the

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inadequate-remedy-at-law requirement to an injunctive relief claim and concluding “at

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least on the facts of a case like this, California’s consumer protection laws permit courts to

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issue injunctions that serve different purposes and remedy different harms than

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retrospective monetary damage”).

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Here, Defendant argues the inadequate-remedy-at-law requirement applies to claims

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for injunctive relief and precludes equitable jurisdiction over Plaintiffs’ claims for

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injunctive relief because “Plaintiffs have not alleged facts to explain why future harm from

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TSS’s alleged ongoing conduct ‘cannot be remedied through money damages.’” Mot. 10–

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future harms, including as applied to their allegations here because they seek an injunction

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“to remedy the prospective, future harms caused by Defendant’s continuing violations of

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California’s consumer protection laws.” Opp’n 3–4.

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Without deciding whether a claim for injunctive relief is always sufficient to

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establish equitable jurisdiction, the Court finds Plaintiffs plausibly allege they lack an

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adequate legal remedy for the continuing and future harms they seek to address with an

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injunction. Plaintiffs allege an ongoing or imminent threat of future harm because they

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“would purchase or consider purchasing Products from Defendant again in the future if
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United States District Court
Northern District of California

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they could feel sure that Defendant’s . . . discounts were truthful.” TAC ¶ 82. And they

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allege legal damages are inadequate to remedy this harm because, without an injunction,

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Plaintiffs “are unable to rely on Defendant’s advertising in the future, and so cannot

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purchase Products they would like to purchase.” TAC ¶ 82. The Court follows the

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reasoning of its peers in finding these allegations sufficient to establish equitable

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jurisdiction over Plaintiffs’ claims for injunctive relief.

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In IntegrityMessageBoards.com v. Facebook, Inc., the court found monetary

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damages inadequate to address future harms because the “plaintiff had no factual basis to

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quantify its actual damages for future harm.” No. 18-cv-05286-PJH, 2020 WL 6544411,

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at *7 (N.D. Cal. Nov. 6, 2020). That reasoning is equally applicable here; “At minimum,

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such calculation depends on how many [products] [Plaintiffs] would purchase but-for the

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challenged conduct and how much defendant would charge for such purchases. Plainly,

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both factors are unknown.” See id. Moreover, the court in Zeiger, a case involving

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deceptive labelling on pet food, found that while “[d]amages would compensate Zeiger for

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his past purchases[,] [a]n injunction would ensure that he (and other consumers) can rely

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on [the defendant’s] representations in the future.” 526 F. Supp. 3d at 687. The same is

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true here. Plaintiffs allege that an injunction would remedy a different harm than damages

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for past purchases—namely, the harm that they “cannot rely on Defendant’s advertising in

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the future, and so cannot purchase products they otherwise would like to purchase.” See

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TAC ¶ 82; Opp’n at 4.

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Multiple courts in other cases involving false advertising have found allegations

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akin to Plaintiffs’ sufficient to establish equitable jurisdiction over claims for injunctive

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relief. See, e.g., Phillips v. Brooklyn Bedding LLC, No. 23-cv-03781-RFL, 2024 WL

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2830663, at *2 (N.D. Cal. Mar. 28, 2024) (finding the plaintiff “sufficiently pled that

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retrospective monetary damages would be an inadequate remedy for his future harm”

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where he alleged he could not rely on the defendant’s advertising and buy products he

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would like to purchase absent an injunction); Nacarino v. Chobani, LLC, No. 20-cv-

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07437-EMC, 2021 WL 3487117, at *12 (N.D. Cal. Aug. 9, 2021) (finding retrospective
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damages inadequate to remedy future harm where plaintiff sought to enjoin the defendant

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“from continuing to conduct business through unlawful acts and practices and to

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commence a corrective advertising campaign”); Roper v. BigHeart Pet Brands, Inc., 510

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F. Supp. 3d 903, 917–18 (E.D. Cal. 2020) (finding “‘an ongoing, prospective nature to

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[plaintiff’s allegations]’ given her contention that she and other future purchasers will

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continue to be misled”); Ary v. Target Corp., No. 22-cv-02625-HSG, 2023 WL 2622142,

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at *5 (N.D. Cal. Mar. 23, 2023) (finding sufficient the plaintiff’s allegations “that she

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wants to purchase the Lidocaine Patches but cannot make informed decisions about

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whether to purchase them as long as Defendant continues its current labeling practices”).

United States District Court
Northern District of California

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In sum, the Court finds Plaintiffs sufficiently allege they lack an adequate legal

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remedy for the continuing or future harm they seek to address with an injunction. This is

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especially so at this stage of the case where Plaintiffs do not yet need to “provide evidence

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demonstrating that Defendant’s failure to change its practices . . . could produce harm for

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which legal relief is inadequate.” See Huynh v. Quora, Inc., 508 F. Supp. 3d 633, 663

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(N.D. Cal. 2020); see also Roper, 510 F. Supp. 3d at 918 (“Although monetary damages

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may ultimately fully address plaintiff’s harm . . . the court has not certified any class . . . .

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Given that, the scope of any class, the identities of its members, and their respective []

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purchasing practices also remain unknown.”).

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The Court therefore denies Defendant’s motion to dismiss Plaintiffs’ claims for

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injunctive relief for lack of equitable jurisdiction. The Court need not address Defendant’s

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remaining arguments that Plaintiffs cannot seek injunctive relief as part of a quasi-

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contract/unjust enrichment claim. See Mot. 9–10; Reply 9–10.

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B.

Plaintiffs Adequately Allege a Claim for Quasi-Contract/Unjust
Enrichment (Seventh Claim)

In the Court’s previous order on Defendant’s motion to dismiss the first amended

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complaint, the Court dismissed Plaintiffs’ quasi-contract/unjust enrichment claim because,

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among other reasons, Plaintiffs did “not explain how the ‘use of price discounts resulted in

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payment of a price premium’ to Defendant.” ECF 69 at 17 (quoting Vizcarra v. Michael’s
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United States District Court
Northern District of California

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Stores, Inc., No. 23-cv-0468-PCP, 2024 WL 64747, at *9 (N.D. Cal. Jan. 5, 2024)). This

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pleading deficiency is fatal to a quasi-contract claim because “[w]rongful conduct does not

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provide a basis for restitution unless there is a benefit unjustly retained by the defendant at

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the plaintiff’s expense.” Vizcarra, 2024 WL 64747, at *9 (citation omitted). Defendant

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argues that Plaintiffs’ third amended complaint is subject to the same error and its quasi-

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contract/unjust enrichment claim must be dismissed. Mot. 11–12. The Court disagrees.

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Plaintiffs allege Defendant’s false advertising, pricing, and sales induce customers

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“to make purchases they otherwise would not have” and “artificially increase consumer

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demand for Defendant’s Products.” TAC ¶ 55. These forces allegedly put “upward

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pressure on the prices that Defendant can charge for its Products” such that “Defendant

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can charge a price premium” and receives a “direct and unjust benefit” at Plaintiffs’

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expense. TAC ¶¶ 55, 173 (emphasis added).

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Defendant takes issue with Plaintiffs’ use of the word “can” in these allegations,

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arguing the allegations are conclusory and speculative because Plaintiffs do not allege

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Defendant “did increase its prices based on the challenged conduct.” Mot. 12 (emphasis in

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original); see Reply 14. Although admittedly imprecise language, Plaintiffs’ use of the

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word “can” is not, in the Court’s view, fatal to their claim, as Defendant argues. Rather,

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the Court reads Plaintiffs’ complaint to allege that Defendant’s unlawful tactics are what

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allows them to charge false and inflated prices, which Plaintiffs allege they do. See TAC

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¶¶ 29–30, 35, 39. Plaintiffs further allege that consumers are more likely to make a

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purchase when given a discount, particularly if it is time-limited, and that “Plaintiffs and

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the class paid more for the Products they bought than they otherwise would have” as a

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result of Defendant’s practices. TAC ¶¶ 53–55.

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Taken as a whole, the Court finds Plaintiffs adequately allege Defendant’s “price

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discounts resulted in payment of a price premium” by Plaintiffs. See Vizcarra, 2024 WL

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64747, at *9; TAC ¶¶ 172–73. The Court declines to assess the accuracy of Plaintiffs’

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“microeconomic theory,” as urged by Defendant, as doing so would require factual

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determinations inappropriate at the pleading stage. See Reply 13–14; Mot. 12.
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IV.

CONCLUSION
The Court DENIES Defendant’s motion to dismiss Plaintiffs’ FAL, CLRA, UCL,

and quasi-contract/unjust enrichment claims in the third amended complaint.
Defendant is ordered to file an answer to the third amended complaint by March 24,

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2025. See Fed. R. Civ. P. 12. Plaintiffs must seek leave of the Court should they wish to

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further amend their complaint.

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IT IS SO ORDERED.

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Dated: March 10, 2025

_____________________________________
NATHANAEL M. COUSINS
United States Magistrate Judge

United States District Court
Northern District of California

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