MARTINEZ v. TD BANK USA, N.A.
OPINION. Signed by Chief Judge Jerome B. Simandle on 12/20/2016. (tf, )
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
individually and on behalf of
all others similarly situated,
HONORABLE JEROME B. SIMANDLE
TD BANK USA, N.A., a National
Bank, and TARGET CORPORATION,
a Minnesota corporation
Stefan Louis Coleman, Esq.
1072 Madison Ave., Suite 1
Lakewood, NJ 08701
Attorney for Plaintiff
Jarrod D. Shaw, Esq.
MCGUIRE WOODS LLP
625 Liberty Avenue, 23rd Floor
Pittsburgh, PA 1522
Attorney for Defendants
SIMANDLE, Chief Judge:
Plaintiff Charlene Martinez brings this putative class
action against Defendants TD Bank USA, N.A. (“TD Bank”) and
Target Corporation (“Target”), alleging violations of the
Telephone Consumer Protection Act (“TCPA”), 47 U.S.C. § 227; the
Rosenthal Fair Debt Collection Practices Act (“RFDCPA”), Cal.
Civ. Code §§ 1788-1788.33; and California’s Unfair Competition
Law (“UCL”), Cal. Bus. & Prof. Code §§ 17200, et seq., arising
from telephone calls placed in connection with Defendants’
efforts to collect a consumer debt from Plaintiff’s credit card.
[First Amended Complaint (“FAC”), Docket Entry 25.] Before the
Court is Defendants’ motion to dismiss the claims under the
RFDCPA and the UCL, Counts II and III of the First Amended
Complaint. [Docket Entry 39.] Plaintiff has filed a Response
[Docket Entry 42] and Defendants have filed a Reply [Docket
Defendants argue that Plaintiff’s claim under the RFDCPA
cannot be sustained for two reasons. First, Defendants assert
that Plaintiff has not alleged sufficient facts to properly
plead that Defendants are “debt collectors” under the RFDCPA.
Second, Defendants argue that the conduct Plaintiff describes in
the FAC does not make out a claim for harassment under the
RFDCPA as a matter of law. Defendants also argue that
Plaintiff’s UCL claims fail because Plaintiff lacks standing and
cannot recover under the UCL, inasmuch as Plaintiff has not
“lost money or property,” and does not have the right to
Count I of the FAC alleging
a violation of the Telephone Consumer Protection Act (“TCPA”),
47 U.S.C. § 227, pertaining to calling cellular telephone
numbers without prior consent using a random or sequential
number generator, is not a subject of Defendants’ dismissal
equitable remedies (i.e., injunction and/or restitution). For
the reasons that follow, the Court will deny Defendants’ motion
in part and grant it in part because Plaintiff has adequately
alleged grounds plausibly supporting her RFDCPA claim, but
cannot recover under the UCL.
TD Bank is a large national bank chain that, inter alia,
“owns and underwrites a portfolio of credit card accounts.” [FAC
¶ 1.] Target is a corporation headquartered in Minnesota and
doing business in New Jersey and nationwide. [Id. at ¶ 8.]
Plaintiff Charlene Martinez, a California resident, opened
a Target credit card account in 2007. She obtained her current
cellular telephone number in 2011. In 2012, when she moved to a
new home, she went online to Target’s website in order to change
the address associated with her Target credit card. The website
required Plaintiff to input a telephone number in order to
update her address information. The website claimed that when
consumers put their phone number in the required field, they
were consenting to receive autodialed and prerecorded calls or
text messages at that phone number. There was no opportunity or
ability, however, to decline such consent and still update one’s
For purposes of the pending motion, the Court accepts as true
the version of events set forth in the FAC, documents explicitly
relied upon in the FAC, and matters of public record. See
Schmidt v. Skolas, 770 F.3d 241, 249 (3d Cir. 2014).
address information as Plaintiff sought to do. Plaintiff
allegedly entered her phone number in order to update her
address, but only for that purpose. [Id. at ¶¶ 6; 25-30.]
TD Bank purchased the consumer credit card portfolio of
Target in 2013 and assumed the assets and liabilities of those
credit card accounts. Target remained responsible for servicing
those accounts, subject to TD Bank’s monitoring and control.
[Id. at ¶ 14.] To that effect, TD Bank provided a Collections
Manager to assist Target with operational oversight of the
collections-related aspects of the program. [Id. at ¶ 16.] TD
Bank caused collection calls to be placed for its credit card
accounts, both on its own and through its agents. [Id. at ¶ 17.]
From late 2014 through April 2015, TD Bank and/or Target
(acting as TD Bank’s servicing agent) called Plaintiff’s cell
phone over 100 times, and as often as three times per day. [Id.
at ¶ 32.] On April 10, 2015, Plaintiff faxed cease-and-desist
letters to “TD Bank USA/Target Credit” and ordered them to
“cease and desist all communications.” [Id. at ¶ 33.] Despite
this, Plaintiff received two phone calls from TD Bank and/or
Target on April 14, 2015 “for purposes related to her
outstanding debt.” [Id. at ¶ 34.] During the first call,
Plaintiff answered the phone, but only experienced a long delay
before the call disconnected. During the second call, Plaintiff
answered the phone and heard a “prerecorded or artificial” voice
asking her to hold for a representative; once she was connected
to a representative, she told him that he was calling her cell
phone, that she did not consent to receive such calls, and that
he should stop calling. On April 15, 2015, TD Bank and/or Target
called Plaintiff’s cell phone again. [Id. at ¶¶ 34-36.]
further calls are alleged after April 15, 2015.
Plaintiff alleges that, “[a]s a result of Defendants’
conduct, [she] lost money or property in the form of consumed
battery life; increased electrical usage; and diminished use,
enjoyment, and utility of her cellular telephone and cellular
telephone plan[,]” and that she and the California Subclass of
potential plaintiffs suffered harms including “monies paid to
receive the unsolicited telephone calls on their cellular
phones” and “appropriati[on of their] cellular minutes” as well
as the above [Id. at ¶¶ 38; 59; 65.] She also alleges that
Defendants “not only invaded the personal privacy of Plaintiff
and members of the putative Class and Subclass, but also
intentionally and repeatedly violated the TCPA and the
[RFDCPA].” [Id. at ¶ 24.]
Plaintiff alleges the following in her second cause of
54. Plaintiff and the members of the California
Subclass are natural persons obligated or allegedly
obligated to pay debts incurred for personal, family,
and/or household purposes, and as such are “persons”
owing “consumer debts” within the meaning of Cal. Civ.
Code §§ 1788.2(d)-(g).
55. Defendants, in the ordinary course of business,
regularly engage in acts or practices in connection
with the collection of consumer debts, and as such are
“debt collectors” within the meaning of Cal. Civ. Code
[Id. at ¶¶ 54-55.]
STANDARD OF REVIEW
Pursuant to Rule 8(a)(2), Fed. R. Civ. P., a complaint need
only contain “a short and plain statement of the claim showing
that the pleader is entitled to relief.” Specific facts are not
required, and “the statement need only ‘give the defendant fair
notice of what the . . . claim is and the grounds upon which it
rests.’” Erickson v. Pardus, 551 U.S. 89, 93 (2007) (citations
While a complaint is not required to contain detailed
factual allegations, the plaintiff must provide the “grounds” of
his “entitle[ment] to relief”, which requires more than mere
labels and conclusions. Bell Atlantic Corp. v. Twombly, 550 U.S.
544, 555 (2007).
A motion to dismiss under Rule 12(b)(6), Fed. R. Civ. P.,
may be granted only if, accepting all well-pleaded allegations
in the complaint as true and viewing them in the light most
favorable to the plaintiff, a court concludes that the plaintiff
failed to set forth fair notice of what the claim is and the
grounds upon which it rests. Id.
A complaint will survive a
motion to dismiss if it contains sufficient factual matter to
“state a claim to relief that is plausible on its face.”
Ashcroft v. Iqbal, 556 U.S. 662, 663 (2009).
Although a court
must accept as true all factual allegations in a complaint, that
tenet is “inapplicable to legal conclusions,” and “[a] pleading
that offers labels and conclusions or a formulaic recitation of
the elements of a cause of action will not do.” Id. at 678.
A. California RFDCPA
1. Harassing or Improper Conduct
Defendants argue that Plaintiff has failed to allege
“specific facts showing harassment or improper debt collection
activity.” [Docket Entry 39-1 at 12.] The Court disagrees.
The RFDCPA prohibits harassing conduct related to debt
collection, including “causing a telephone to ring repeatedly or
continuously to annoy the person called” and “communicating with
such frequency as to be unreasonable and to constitute
harassment under the circumstances.” Cal. Civ. Code
§§ 1788.11(d) & (e). It also prohibits parties from “engaging in
conduct, the natural consequence of which is to harass or abuse
a person in connection with the collection of a debt.” Cal. Civ.
Code § 1788.17 (referencing 15 U.S.C. § 1692d).
While Plaintiff’s allegations may not describe conduct
arising to the utmost heights of harassment or abuse (cf. Neu v.
Genpact Services, LLC, No. 11-cv-2246, 2013 WL 1773822, at *3-*5
(S.D. Cal. Apr. 25, 2013) (defendant called plaintiff 150 times
over fifty-one days); Stirling v. Genpact Services, LLC, No.
2:11-cv-06369, 2012 WL 952310, at *4-*5 (C.D. Cal. Mar. 19.
2012) (649 calls over four-month period); Krapf v. Nationwide
Credit Inc., No. SACV 09-00711, 2010 WL 2025323, at *2 (C.D.
Cal. May 21, 2010) (over 180 calls in one month)), the Court
finds that she has adequately stated a claim that Defendants
violated the RFDCPA.
Defendants cite Arikat v. JP Morgan Chase & Co., 430 F.
Supp. 2d 1013, 1027 (N.D. Cal. 2006) for the proposition that a
plaintiff may fail to state a claim for a violation of the
RFDCPA even when he or she claims that defendants have made
“endless annoying and minatory phone calls,” “endless letters
and minatory notices,” calls at 4:00 AM and “ceaseless” calls at
night, and calls outside their household. However, the Court
reads Arikat differently as to that point; the plaintiffs in
that case sued no fewer than thirteen defendants, including
several different stores and financial services providers. The
court in Arikat stated that the allegations in the complaint
were “too vague to give rise to any inference that a specific
defendant has violated the [RFDCPA]” (emphasis added). The court
cited Gauvin v. Tromatore, 682 F. Supp. 1067, 1071 (N.D. Cal.
1988), for a similar situation where the plaintiff did not
specify “how each private defendant allegedly” committed the
wrongful conduct (emphasis added).
In contrast, other courts have held that minimal
allegations regarding harassing phone calls may be sufficient to
state a claim under the RFDCPA. See Alborzian v. JPMorgan Chase
Bank, N.A., 235 Cal. App. 4th 29, 38 (Cal. Ct. App. 2d Dist.
2015) (“The making of frequent calls itself can constitute
actionable harassment under the Rosenthal Act”); O’Donovan v.
CashCall, Inc., No. 08-cv-03174, 2009 WL 1833990, at *6 (N.D.
Cal. June 24, 2009) (plaintiff adequately pled claim with
allegations that defendant called multiple times each day,
aggressively demanded payment, made misrepresentations, yelled
at and threatened plaintiffs, and contacted third parties in an
effort to collect plaintiffs’ debts); Renteria v. Nationwide
Credit, Inc., No. 09-cv-1195, 2009 WL 2754988, at *2 (S.D. Cal.
Aug. 27, 2009) (plaintiff adequately pled claim where he
described the RFDCPA-violative conduct but not the contents or
of each communication, the number of calls, or the identity of
In general, other courts have found complaints adequately
pled where general patterns of harassing phone calls were
described in the complaint. See Green v. Creditor Iustus
Remedium, LLP, No. 1:13-cv-01414, 2013 WL 6000967, at *1, *3
(E.D. Cal. Nov. 12, 2013) (calls made on a near-daily basis for
approximately two months; plaintiff asked defendant to stop
calling her at work but defendant continued to do so); Akalwadi
v. Risk Mgmt. Alternatives, Inc., 336 F. Supp. 2d 492, 506
(D.Md. 2004) (periods where calls made on a daily basis and
three telephone calls made within five hours on same day);
Haysbert v. Navient Solutions, Inc., No. CV 15-4144, 2016 WL
890297, at *13 (C.D. Cal. Mar. 8, 2016) (ninety-nine calls over
one-and-a-half-year period, including periods with two to five
calls per day).
Here, Plaintiff alleges that she received over 100 calls
over an undetermined period of time comprising somewhere between
four and nine months (including rates of calling as high as
three calls per day) and that Defendants continued to call her
after she faxed them a cease-and-desist letter. [FAC ¶¶ 32-36.]
The Court finds that these facts, although spare, adequately
plead Plaintiff’s claim under the RFDCPA.
2. Debt Collector
The Court finds, in addition, that Plaintiff has adequately
pled facts in support of her contention that Defendants are
“debt collectors” within the meaning of the RFDCPA. For that
reason, the Court will deny Defendants’ Motion to Dismiss Count
II of the FAC.
The RFDCPA applies only to “debt collectors.” The RFDCPA
defines a “debt collector” as “any person, who, in the ordinary
course of business, regularly, on behalf of himself or herself
or others, engages in debt collection.” Cal. Civ. Code
Plaintiff argues that the RFDCPA defines “debt collection”
as “any act or practice in connection with the collection of
consumer debts” [emphasis in Plaintiff’s Response]. Cal. Civ.
Code § 1788.2(b). Plaintiff argues that she has “alleged
Defendants, which are credit card servicers, are debt collectors
placing debt collection calls from their call center regarding
lines of credit they are servicing.” [Docket Entry 42 at 13,
citing FAC ¶¶ 2, 15-16, 19-20, 34-36.] The Court finds that the
FAC does minimally make out such factual allegations.
The FAC primarily discusses Defendants’ activities
servicing credit card accounts. In Paragraph 2, the FAC alleges
that Defendants have “called” cell phone numbers “it associates
with [credit card] accounts.” It is not a fair reading of this
allegation to infer that such calls are for the purpose of or in
connection with the collection of consumer debts. Paragraph 15
describes Defendants’ call centers and performance of Cardholder
Service Functions and does not allege facts in support of
Defendants’ status as “debt collectors. Paragraph 16 alleges,
Its definition of “debt collector” is broader than that of its
federal counterpart, the FDCPA, in that it includes original
creditors. Selby v. Bank of America, Inc., No. 09-2079, 2010 WL
4347629, at *6 (S.D. Cal. Oct. 27, 2010).
however, that TD Bank required Target to allow a TD Bank
“‘Collections Manager’ to assist with ‘exercis[ing] day-to-day
operational oversight of the collections-related aspects” of TD
Bank’s holding of Target’s credit card account portfolio.
Paragraph 17 alleges that TD Bank has authority over “Target’s
collection calling practices,” that it knowingly accepts the
benefits of “Target’s collection calls,” and that Target acts as
TD Bank’s agent “when placing collection calls.” Paragraph 18
alleges that TD Bank, on its own and through its agents, “causes
collection calls to be placed for all such credit card
accounts.” Finally, Paragraph 34 alleges that Plaintiff received
a call from TD Bank and/or Target on April 14, 2015 “related to
her outstanding debt.”
While these factual allegations do not directly state with
clarity and particularity that Defendants “regularly” and “in
the ordinary course of business” engage in practices relating to
debt collection, the Court is satisfied that Plaintiff rests her
allegations that Defendants are “debt collectors” within the
meaning of the RFDCPA [FAC ¶55] upon plausible facts. See First
North American Nat. Bank v. Superior Court, No. B176618, 2005 WL
67123 at *5 (Cal. Ct. App. 2d Dist. Jan. 13, 2005) (bank issuing
credit card is a debt collector under RFDCPA); McNichols v.
Moore Law Group, No. 11-cv-1458, 2012 WL 667760, at *3 (S.D.
Cal. Feb. 28, 2012) (Discover Bank deemed “debt collector” under
both FDCPA and RFDCPA when plaintiff alleged in complaint that
Discover Bank “regularly collects or attempts to collect . . .
debts . . . owed or due another”); Oei v. N. Star Capital
Acquisitions, LLC, 486 F. Supp. 2d 1089, 1097 (C.D. Cal. 2006)
(defendant deemed “debt collector” where plaintiff alleged
defendant was corporation “doing business of collecting debts,”
“engaged in the collection of debts from consumers,” and
“regularly attempt[ing] to collect consumer debt”); Haas v. HSBC
Card Services, Inc., No. 12-cv-570, 2012 WL 12882144, at *4
(S.D. Cal. Sept. 25, 2012) (servicer of delinquent credit card
account deemed “debt collector” under RFDCPA where plaintiff
alleged defendant was “engaged in the business of collecting
consumer debts and regularly collects consumer debts”); Huy
Thanh Vo v. Nelson & Kennard, 931 F. Supp. 2d 1080, 1090 (E.D.
Cal. 2013) (bank deemed “debt collector” under RFDCPA where
complaint alleged that bank “is a debt collector as that term is
defined by Cal. Civ. Code 1788.2(c)”).
The factual allegations in the FAC are admittedly thin, but
they are not absent and must be accepted as true for the
purposes of Defendants’ Motion. Cf. Noel v. Bank of America, No.
12-cv-4019, 2012 WL 5464608, at *4, *5-*6 (N.D. Cal. Nov. 8,
2012) (plaintiff’s “statement that BOA is a debt collector is a
legal conclusion, not a factual allegation entitled to the
presumption of truth”); Munekiyo v. Capital One Bank, N.A., No.
11-cv-3143, 2011 WL 6057830, at *5 (C.D. Cal. Dec. 5, 2011)
(plaintiff’s “conclusory labeling of the defendant as a ‘debt
collector,’ without further substantiation, fails to state a
claim under the RFDCPA”) (internal citations omitted); Sanchez
v. U.S. Bancorp, No. 09-cv-00718, 2009 WL 3157486, at *5-*6
(S.D. Cal. Sept. 5, 2009) (“complaint’s sparse facts do not
support” “conclusory” allegation that defendants were “debt
collectors” under FDCPA or RFDCPA where “complaint is completely
devoid of any facts regarding [defendant’s] business practices,
as a debt collector or otherwise”).
The procedures of pretrial
discovery, and not Rule 12(b)(6) motion practice, will explore
whether actual evidence exists to prove Plaintiff’s allegations
under the California RFDCPA.
Accordingly, Defendants’ Motion to Dismiss Count II of the
FAC is denied.
B. California Unfair Competition Law (“UCL”)
Defendants argue that Plaintiff’s UCL claim must be
dismissed because she lacks standing to recover under the UCL.
The Court agrees.
A plaintiff has standing under the UCL only when that
plaintiff “has suffered injury in fact and has lost money or
property as a result of the unfair competition.” Cal. Bus. &
Prof. Code § 17204. See also Drew v. Lexington Consumer
Advocacy, LLC, No. 16-cv-00200-LB, 2016 WL 1559717, at *8 (N.D.
Cal. Apr. 18, 2016) (plaintiff who received unwanted text
messages but was not charged for them lacked standing under
UCL). The plaintiff must also demonstrate an entitlement to one
or more forms of the equitable relief the UCL provides:
injunction and/or restitution. Cal. Bus. & Prof. Code §§ 17203 &
1. Lost money or property
Defendants argue that Plaintiff has not adequately alleged
that she has lost money or property as a result of Defendants’
alleged conduct. The Court disagrees and will assume for
purposes of this opinion that Plaintiff has pled a plausible
basis for lost money or property.
A plaintiff must lose money or property to have standing to
recover under the UCL. Cal. Bus. & Prof. Code § 17204. See also
Sapan v. Authority Tax Services, LLC, No. 13-cv-2782, 2014 WL
12493282, at *4 (S.D. Cal. July 15, 2014) (no standing under UCL
found where there were “no allegations in the complaint that
[unwanted phone calls] caused [p]laintiff any financial harm,
such as an increased phone bill, loss of business or other
financial expenditures associated with repeated phone calls” and
it was “unclear how the repeated phone calls caused [p]laintiff
to lose time, which in turn caused [p]laintiff to become
financially harmed or deprived of property”). “Lost time is
insufficient to recover damages under a UCL claim.” Id. (citing
Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 321 (2011). A
plaintiff may show an economic injury if she adequately alleges
that “a present or future property interest [was] diminished[.]”
Id. at 323.
Here, Plaintiff alleged that she “lost money or property in
the form of consumed battery life; increased electrical usage;
and diminished use, enjoyment, and utility of her cellular
telephone and cellular telephone plan.” FAC ¶ 38. The Court
finds that while such allegations are exceedingly minimal and
the Court remains unconvinced that Plaintiff will be able to
maintain the allegations when the Court is no longer obliged to
take Plaintiff’s allegations as fact and infer all facts in her
favor, the allegations contained in the FAC sufficiently plead a
loss of money or property under the UCL. In Mey v. Got Warranty,
Inc., No. 5:15-cv-101, 2016 WL 3645195, at *3, *5-*6 (N.D.W.Va.
June 30, 2016), the court found that “unwanted phone calls cause
concrete harm[,]” whether plaintiffs have prepaid cell phones or
limited minute plans or not, insofar as all unwanted calls
“deplete a cell phone’s battery, and the cost of electricity to
recharge the phone” is a “small” but “tangible harm” with
potentially “consequential” “cumulative effect[s].” The court in
Mey also found applicable to a TCPA claim regarding unwanted
phone calls the “ancient common law claim of trespass to
chattels.” Id. at *5-*6, citing Czech v. Wall St. on Demand, 674
F. Supp. 2d 1102, 1122 (D. Minn. 2009) and Palm Beach Golf Ctr.Boca, Inc. v. John G. Sarris, D.D.S., P.A., 781 F.3d 1245, 125051 (11th Cir. 2015).
As alleged in the FAC, Plaintiff suffered a diminution in
the economic value of her cell phone due to the need to recharge
her phone as a result of depleted battery life from fielding
Defendants’ phone calls.4 It is also reasonable to infer that a
cellular phone or phone number that receives over 100 unwanted
phone calls over a period of several months would cost less on
the open market than one that does not receive such calls. While
the issue is close and Plaintiff indeed may not succeed on the
merits as the case progresses, her allegations in the FAC are
sufficient. They adequately and particularly allege an economic
injury (albeit not a great one), and not one that is merely
speculative or conclusory. Cf. Pietzak v. Microsoft Corp., No.
CV 15-5527-R, 2015 WL 7888408, at *2 (C.D. Cal. Nov. 17, 2015)
Wear and tear on a cellular phone has been held to be a
diminution in value resulting in economic loss. Tyacke v. First
Tenn. Bank, N.A., No. EDCR 16-228-JCB (SPx) (C.D. Cal. Apr. 28,
2016) (ECF No. 35 at 4) (finding standing under UCL for
diminution of value of cell phone where plaintiff received up to
three calls per day beginning approximately eight months before
complaint was filed), citing Yunker v. Pandora Media, Inc., No.
11-cv-03113, 2014 WL 988833, at *3 (N.D. Cal. Mar. 10, 2014)
(diminution in performance of electronic device constitutes
“injury in fact” under Article III). But see Olmos v. Bank of
America, N.A., No. 15-cv-2786, 2016 WL 3092194, at *4 (S.D. Cal.
Jun. 1, 2016) (declining to follow Tyacke where diminution of
value of cell phone was de minimis when plaintiff only received
two unwanted text messages).
(plaintiff alleged “embarrassment and emotional harm” and
“financial loss”; allegations deemed conclusory and insufficient
to allege injury in fact); Opperman v. Path, Inc., 87 F. Supp.
3d 1018, 1055-56 (N.D. Cal. 2014) (Article III standing found,
but alleged injury of “diminished mobile device resources, such
as storage, battery life, and bandwidth” held de minimis and
inadequate to allege injury in fact; contrasted with valid
alleged injury that “battery resources were depleted as in [In
re] iPhone [Application Litigation, 844 F. Supp. 2d (N.D. Cal.
2012)]”). As the court in Opperman wrote, the “essence of the
standing inquiry is to determine whether the plaintiff has
‘alleged such a personal stake in the outcome of the controversy
as to assure that concrete adverseness which sharpens the
presentation of issues upon which the court so largely
depends.’” 87 F. Supp. 3d at 1057 (citing Baker v. Carr, 369
U.S. (1962)). The Court is satisfied that, at this early stage
of the proceedings, Plaintiff has alleged such a personal stake
in terms of a monetizable loss.
2. Equitable relief
Defendants next argue that Plaintiff cannot seek one of the
equitable remedies of restitution and/or injunction, as these
are the sole remedies provided for in the UCL. The Court agrees.
A plaintiff alleging a violation of the UCL may seek an
injunction against the offending party or restitution of “any
money or property, real or personal, which may have been
acquired by means of such unfair competition.” Cal. Bus. & Prof.
Code § 17203. Under the UCL, “[p]revailing plaintiffs are
generally limited to injunctive relief and restitution.
Plaintiffs may not receive damages . . . or attorney fees.” CelTech Communications, Inc. v. Los Angeles Cellular Telephone Co.,
20 Cal. 4th 163, 179 (1999) (internal citations omitted).
Defendants argue that Plaintiff has not alleged facts
tending to show that she may recover restitution; the Court
An order for restitution under the UCL is “one ‘compelling
a UCL defendant to return money obtained through an unfair
business practice to those persons in interest from whom the
property was taken[.]’” Korea Supply Co. v. Lockheed Martin
Corp., 29 Cal. 4th 1134, 1144 (2003) (citing Kraus v. Trinity
Mgmt. Servs., Inc., 23 Cal. 4th 116, 126-27 (2000)). Courts have
held that dimunition-of-value cannot be a remedy under the UCL
“because such a recovery would constitute damages rather than
restitution.” Smit v. Charles Schwab & Co., Inc., No. 10-2971,
2011 WL 846697, at *9 (N.D. Cal. Mar. 8, 2011); see also
Feitelberg v. Credit Suisse First Boston LLC, 134 Cal. App. 4th
997, 1013 (Cal. Ct. App. 6th Dist. 2005).
Here, Plaintiff alleges only that Defendants were
responsible for her economic losses, and not that they received
any money or property from her. Accordingly, she does not have a
claim for restitution under the UCL.
Defendants argue that Plaintiff similarly lacks standing to
seek an injunction under the UCL. The Court agrees.
There is no motion for preliminary injunction pending, and
in addressing this Rule 12(b)(6) dismissal motion, the Court is
obliged to credit the facts and reasonable inferences in the FAC
in favor of the Plaintiff.
Generally, injunctive relief is
available where there is a “clear showing on immediate
irreparable injury.” Hohe v. Casey, 868 F.2d 69, 72 (3d Cir.
1989)(emphasis added); Continental Grp., Inc. v. Amoco Chem.
Corp., 614 F.2d 351, 359 (3d Cir. 1980)(threat of imminent
action required). Under federal law,5 “[a] district court cannot
issue an injunction unless ‘there exists some cognizable danger
of recurrent violation’ . . . [and a] determination that such
The Court applies federal law in this situation because “the
issuance of a preliminary injunction is in the court’s
discretion according to both federal and [California] law,”
Kaiser Trading Co. v. Associated Metals & Minerals Corp., 321 F.
Supp. 923, 931 n.14 (N.D. Cal. 1970). See also Irving Trust Co.
v. Braswell, 596 F. Supp. 1441, 1444 (S.D.N.Y. 1944) (holding
that a federal court sitting in diversity may issue an
injunction pursuant to Fed. R. Civ. P. 65 regardless of whether
substantive state law authorizes such an injunction).
danger exists must ‘be based on appropriate findings supported
by the record.’” U.S. v. Laerdal Mfg. Corp., 73 F.3d 852, 854
(9th Cir. 1995) (citing Federal Election Comm’n v. Furgatch 869
F.2d 1256, 1263 (9th Cir. 1989) & Fed. R. Civ. P. 65(d)); see
also Melendres v. Arpaio, 695 F.3d 990, 997 (9th Cir. 2012) (“To
have standing to assert a claim for prospective injunctive
relief, a plaintiff must demonstrate that he is realistically
threatened by a repetition of the violation”) (internal
When making this determination, the
district court may consider such factors as
the degree of scienter involved; the isolated or
recurrent nature of the infraction; the defendant’s
recognition of the wrongful nature of his conduct; the
extent to which the defendant’s professional and
personal characteristics might enable or tempt him to
commit future violations; and the sincerity of any
assurances against future violations.
Furgatch, 869 F.2d at 1263 n.5 (internal citations omitted).
When a plaintiff seeks a final or permanent injunction, he or
must show that (1) the Court’s exercise of equity
jurisdiction is proper, (2) the plaintiff succeeded on
the merits, and (3) the balance of equities tips in
favor of injunctive relief. The first factor contains
three sub-parts that require the plaintiff to show (1)
plaintiff has no adequate legal remedy; (2) the
threatened injury is real, not imagined; and (3) no
equitable defenses exist. However, where [the
legislature] provided for injunctive relief in a
statute . . . , courts often enjoin defendants without
weighing the traditional equitable considerations
posed by injunctive relief.
Comcast Cable Communications v. Bowers, No. 06-1664, 2007 WL
1557510, at *5-*6 (D.N.J. May 25, 2007) (internal citations
Some cases suggest that a strict accounting of all the
traditional equitable factors may not be necessary where the
statute at issue specifically provides for injunctive relief.
See Antoninetti v. Chipotle Mexican Grill, Inc., 643 F.3d 1165,
1175 (9th Cir. 2010) (“Considering . . . the statutory
violations we have found and the fact that an injunction is the
only relief available to a private party under the
[Disabilities] Act, it would be an abuse of discretion for the
district court now to deny injunctive relief. . . . ‘[T]he
standard requirements for equitable relief need not be satisfied
when an injunction is sought to prevent the violation of a
federal statute which specifically provides for injunctive
relief’” (citing Silver Sage Partners, Ltd. V. City of Desert
Hot Springs, 251 F.3d 814, 827 (9th Cir. 2001) (internal
citations omitted))); see also Meyer v. Portfolio Recovery
Associates, LLC, 707 F.3d 1036, 1044 (9th Cir. 2012) (plaintiff
demonstrated irreparable harm where he “argued before the
district court that he . . . [would] suffer irreparable harm
from [defendant’s] continuing violations of the TCPA, which
violate the class members’ right to privacy”).
Defendants cite Clark v. Prudential Ins. Co. of America,
which states that a plaintiff “cannot pursue her action in
federal court unless she can demonstrate a real or immediate
threat of irreparable injury. . . . A plaintiff whose cause of
action under § 17204 is perfectly viable in state court under
state law may nonetheless be foreclosed from litigating the same
cause of action in federal court, if he cannot demonstrate the
requisite continuing threat of injury to establish Article III
standing.” 736 F. Supp. 2d 902, 925 (D.N.J. 2010) (internal
citations omitted). They also cite Mladenov v. Wegmans Food
Markets, Inc., 124 F. Supp. 3d 360, 379 (D.N.J. 2015), where the
court found that the plaintiffs lacked standing to seek an
injunction because the complaint did not allege “any threat of
immediate harm” where the plaintiffs stated their intention “to
continue to purchase [d]efendants’ [allegedly misrepresented]
brea[d] and bakery products.” In Clark, the plaintiff “no longer
face[d] a threat of continued harm with regard to Prudential’s
disclosures about the CHIP policy” because “she cancelled her
CHIP policy in September 2005.” Id. at 924.
The Court finds these cases helpful but not squarely onpoint in the instant case. In both Clark and Mladenov, the
plaintiffs were not at risk of continuing harm because they had
the sole power to expose themselves—or not—to the offending
practice, whether that was improper disclosures in Clark (where
the plaintiff could buy or not buy a policy) or misrepresented
bread in Mladenov (where the plaintiff could buy or not buy
bread from Wegmans). Such is not the case here; Plaintiff does
not control whether Defendants contact her again.
Nevertheless, the Court finds, under the grounds pled in
the FAC, that Plaintiff cannot make out an adequate case for an
injunction in this matter. Plaintiff herself has not alleged
sufficient facts demonstrating “a real or immediate threat of
irreparable injury.” Clark, 736 F. Supp. 2d at 925. Per her
allegations, Plaintiff has not been contacted by Defendants
since April 15, 2015, over twenty months ago; the last such
contact occurred within five days of her request to cease and
desist from contacting her. [FAC ¶¶ 34-36.] In a different case,
a plaintiff’s request for an injunction was granted when his
“declaration attests that he continues to receive telephone
calls from individuals stating that they are calling in response
to his request for an insurance quote, despite his efforts to
stop receiving such calls.” Heidorn v. BDD Marketing & Mgmt.
Co., LLC, No. C-13-00229-JCS, 2013 WL 6571629, at *18 (N.D. Cal.
Aug. 19, 2013). Here, Plaintiff only alleges that she received
calls after faxing a cease-and-desist letter; she does not
allege that Defendants continue to contact her in violation of
her statutory rights as the plaintiff in Heidorn did. On these
facts, the Court finds that Plaintiff lacks standing to seek an
injunction under the UCL because Plaintiff does not plead a
plausible risk of immediate and irreparable harm in the absence
of an injunction.
If circumstances change whereby Plaintiff can
set forth a plausible basis for injunctive relief, Plaintiff
may, of course, seek to revive her UCL cause of action by motion
Accordingly, the Court grants Defendants’ Motion to Dismiss
Count III of the FAC for lack of standing, without prejudice.
For the foregoing reasons, the Court will deny Defendants'
motion to dismiss Count II of Plaintiff’s First Amended
Complaint and will grant Defendants’ motion to dismiss Count III
of Plaintiff’s First Amended Complaint without prejudice. If
Plaintiff elects to file a Second Amended Complaint, she must
seek leave to do so within 30 days of the entry of the Order
accompanying this opinion. The accompanying Order will be
December 20, 2016
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
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