Gilberto v. Walgreen Co.

Filing 36

ORDER: The Court ADOPTS in part Magistrate Judge Acosta's Findings and Recommendation 30 . Defendant's Motion to Dismiss 13 is GRANTED in part and DENIED in part. Plaintiff shall file an amended complaint within 30 days of this Order. IT IS SO ORDERED. DATED: April 15, 2020 by United States District Judge Marco A. Hernandez. (pjg)

Case 3:18-cv-01003-AC

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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF OREGON

HEATHER GILBERTO, individually and
on behalf of other customers,
Plaintiff,

No. 3:18-cv-01003-AC

ORDER

v.
WALGREEN CO.,
Defendant.

HERNÁNDEZ, District Judge:
Magistrate Judge Acosta issued a Findings and Recommendation [30] on November 20,
2019, in which he recommends that this Court grant Defendant’s Motion to Dismiss [13] and
give Plaintiff leave to amend. The matter is now before the Court pursuant to 28 U.S.C.
§ 636(b)(1)(B) and Federal Rule of Civil Procedure 72(b).
Plaintiff and Defendant both filed timely objections to the Magistrate Judge’s Findings &
Recommendation. Pl. Obj., ECF 33; Def. Obj., ECF 32. When any party objects to any portion of
the Magistrate Judge's Findings & Recommendation, the district court must make a de novo

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determination of that portion of the Magistrate Judge's report. 28 U.S.C. § 636(b)(1); Dawson v.
Marshall, 561 F.3d 930, 932 (9th Cir. 2009); United States v. Reyna-Tapia, 328 F.3d 1114, 1121
(9th Cir. 2003) (en banc).
Together, Plaintiff and Defendant object to each of the Magistrate Judge’s findings. The
Magistrate Judge found that Plaintiff had not alleged actionable violations of Oregon’s Unlawful
Trade Practices Act (UTPA) under Or. Rev. Stat. § (“O.R.S.”) 646.608(1)(b), (e), (i), (t), and (j).
F&R at 18–30. He concluded, however, that Plaintiff sufficiently pleaded a violation of ORS
646.608(1)(s). Id. at 26–27. The Magistrate Judge also found that Plaintiff has failed to allege
that she and the putative class members suffered an ascertainable loss and that Defendant acted
knowingly or recklessly as required to maintain a class action under the UTPA. Id. at 30–37.
The Court adopts these findings in part. The Court agrees with the Magistrate Judge that
Plaintiff: (1) failed to allege violations of ORS 646.608(1)(b), (t), and (j); (2) sufficiently stated a
claim for a violation of ORS 646.608(1)(s); and (3) failed to allege that she and the putative class
members suffered an ascertainable loss. The Court, however, declines to adopt the Magistrate
Judge’s findings that Plaintiff has failed to adequately allege claims for violations of ORS
646.608(1)(e) and (i) and knowing or reckless conduct by Defendant.
Plaintiff has adequately stated claims for violations of ORS 646.608(1)(e) and (i).
Subsection (e) makes it unlawful to “represent[] that real estate, goods or services have
sponsorship, approval, characteristics, ingredients, uses, benefits, quantities or qualities that the
real estate, goods or services do not have[.]” O.R.S. 646.608(1)(e). The Court cannot conclude at
this stage in the proceedings that, as a matter of law, redeemability of the drink boxes is not a
“characteristic” or “quality” of the good under Oregon law. Even assuming that, as the
Magistrate Judge concluded, the statute “is concerned with misrepresentations as to the inherent

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characteristics or qualities of a good,” see F&R 22 (citing Caldwell v. Pop’s Homes, Inc., 54 Or.
App. 104 (1981) and Feitler v. Animation Celection, Inc., 170 Or. App. 702 (2000)), whether the
redeemability of the packaging is a distinguishing attribute of a good, increases the value of a
good, or might induce a reasonable consumer to purchase one good over another is a question
more appropriate for summary judgment.
Subsection (i) makes it unlawful to “[a]dvertise[] real estate, goods or services with intent
not to provide the real estate, goods or services as advertised[.]” O.R.S. 646.608(1)(i). In this
case, Plaintiff alleges that Defendant “advertis[ed] on the price tags on its shelves that the
exempt beverage containers would be redeemable in the amount of the 10-cent bottle deposit
charge” even though it did not intend that the containers would be redeemable. Am. Compl. ¶ 17.
The Court agrees with the Magistrate Judge that such a representation constitutes advertising as
to a good. See F&R at 24. But it disagrees that Plaintiff has not adequately alleged intent.
Although Plaintiff does not allege that she sought to return the containers and Defendant denied
the redemption, she does allege that she complained to Defendant about the 10-cent charge and
that Defendant refused to refund the money:
When Ms. Gilberto learned that the boxes she purchased from Walgreens were not
eligible for a 10-cent deposit refund under Oregon law, she complained to
Walgreens management and to corporate, but Walgreens refused to give her a cash
refund of the 10-cent overcharges it assessed against her for its exempt beverages.
Corporate said they would call Ms. Gilberto back but never did.
Am Compl. ¶ 10. From this, it is plausible that Defendant did not intend to provide the goods as
advertised. Accordingly, the Court declines to adopt the Magistrate Judge’s findings that Plaintiff
cannot bring claims under O.R.S. 646.606(1)(e) and (i).
The Court also finds that Plaintiff has plausibly alleged that Defendant was reckless as
required to maintain a class action under Oregon’s UTPA. See O.R.S. 646.638(8)(a) (requiring

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Plaintiff to establish that Defendant’s unlawful act was reckless or knowing). Again, in the
Amended Complaint, Plaintiff alleges that she complained to corporate management and
corporate counsel after learning that the drink boxes were not redeemable, and Defendant refused
to give her a refund for the overcharges. Am. Compl. ¶ 10. Plaintiff also alleges that even after
she complained, Defendant “recklessly continued to violate Oregon’s [UTPA] by charging 10cent deposits on exempt beverages[.]” Am. Compl. ¶ 21. Viewing these facts in the light most
favorable to Plaintiff, the Court can reasonably infer that Defendant acted recklessly: Plaintiff
complained about the 10-cent deposit to Defendant, Defendant was put on notice of its potential
UTPA violation, and Defendant continued to apply the 10-cent deposit to exempt beverage
containers. Accordingly, the Court declines to adopt the Magistrate Judge’s finding that Plaintiff
has not adequately alleged recklessness.
The Court has carefully considered the remainder of Plaintiff’s and Defendant’s
objections, has reviewed the pertinent portions of the record de novo, and finds no other error in
the Magistrate Judge’s Findings & Recommendation.
CONCLUSION
The Court ADOPTS in part Magistrate Judge Acosta’s Findings and Recommendation
[30]. Defendant’s Motion to Dismiss [13] is GRANTED in part and DENIED in part. Plaintiff
shall file an amended complaint within 30 days of this Order.
IT IS SO ORDERED.
DATED: ________________________.
April 15, 2020

_______________________________________
MARCO A. HERNÁNDEZ
United States District Judge

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