Gillespie v. Travelscape LLC et al

Filing 74

ORDER granting Defendants' 65 Motion to Dismiss by Judge Ricardo S Martinez.(TM)

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UNITED STATES DISTRICT COURT
WESTERN DISTRICT OF WASHINGTON
AT SEATTLE

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EILEEN GILLESPIE, individually and on
behalf of all others similarly situated,
Plaintiff,

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v.
TRAVELSCAPE LLC; EXPEDIA INC.;
and EAN.COM LP,

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Defendants.

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) CASE NO. C13-0622 RSM
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) ORDER GRANTING DEFENDANTS’
) MOTION TO DISMISS
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I.

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INTRODUCTION

This matter comes before the Court on Defendants’ Motion to Dismiss under Rule
12(h)(3). (Dkt. #65). Defendants argue that Plaintiff’s complaint should be dismissed for

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lack of standing both individually and on behalf of any class, primarily because she was
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reimbursed for her alleged damages by her former employer. Id. Alternatively, Defendants

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argue that Plaintiff cannot prove injury as an essential element of her claims, and therefore

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this matter must be dismissed. Id. Plaintiff opposes the motion, arguing that the collateral

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source rule precludes Defendants from introducing evidence of the reimbursement. (Dkt.

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#69). Plaintiff further argues that there are questions of fact with respect to her damages
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ORDER
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which also preclude summary judgment in favor of Defendants. Id. For the reasons set forth
below, the Court disagrees with Plaintiff, and GRANTS Defendants’ motion.

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II.

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BACKGROUND

This case arises out of Defendant Travelscape LLC’s alleged unfair business practices,

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which Plaintiff asserts result in room rate overcharges and the imposition of unfair and
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deceptive tax recovery charges on hotel room consumers. Dkt. #21 at ¶ ¶ 7-8. Plaintiff alleges

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that Defendants’ practices have violated Washington’s Consumer Protection Act (“CPA”). Id.

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at ¶ ¶ 45-69 and 81-85. Plaintiff also alleges that Defendants’ actions have resulted in a

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violation of the Washington Seller of Travel Act (“WSOT”) and unjust enrichment. Id. at ¶ ¶

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70-80 and 86-89. She purports to bring all claims as an individual and on behalf of others
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similarly situated. Id. at ¶ ¶ 32-44. Her Amended Complaint seeks to certify a nationwide

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class consisting of all persons and entities in the United States who were charged a bundled Tax

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Recovery Charge and Service Fee when reserving and paying for a hotel room through

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Travelscape LLC. Id. at ¶ 32. Plaintiff seeks money damages and injunctive relief. Id. at ¶ ¶
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B-E.
Defendants deny all of the claims and now seek to dismiss this suit for lack of subject
matter jurisdiction. (Dkt. #65).

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III.

DISCUSSION

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A. Standard of Review
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Federal courts are courts of limited jurisdiction. Gunn v. Minton, __ U.S. __, 133 S. Ct.

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1059, 1064 (2013) (citation omitted). As such, this Court is to presume “that a cause lies

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outside this limited jurisdiction, and the burden of establishing the contrary rests upon the party

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asserting jurisdiction.” Kokkonen v. Guardian Life Ins. Co. of Am., 511 U.S. 375, 377, 114 S.

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Ct. 1673 (1994) (citations omitted); see also Robinson v. United States, 586 F.3d 683, 685 (9th
ORDER
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Cir. 2009); Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). When

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analyzing a motion to dismiss brought pursuant to Rule 12(h)(3), as in the instant case, courts

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apply the same standards for a motion brought under Rule 12(b)(1). Wood v. City of San

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Diego, 678 F.3d 1075, 1082 (9th Cir. 2012).

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A Rule 12(b)(1) motion to dismiss for lack of subject matter jurisdiction may be either
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“facial” or “factual.” See Safe Air for Everyone, 373 F.3d at 1039. A facial attack on subject

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matter jurisdiction is based on the assertion that the allegations contained in the complaint are

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insufficient to invoke federal jurisdiction. Id. “A jurisdictional challenge is factual where ‘the

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challenger disputes the truth of the allegations that, by themselves, would otherwise invoke

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federal jurisdiction.’” Pride v. Correa, 719 F.3d 1130, 1133 n.6 (9th Cir. 2013) (quoting Safe
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Air for Everyone, 373 F.3d at 1039)). When a defendant factually challenges the plaintiff’s

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assertion of jurisdiction, a court does not presume the truthfulness of the plaintiff’s allegations

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and may consider evidence extrinsic to the complaint. See Terenkian v. Republic of Iraq, 694

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F.3d 1122, 1131 (9th Cir. 2012); Robinson, 586 F.3d at 685; Safe Air for Everyone, 373 F.3d at
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1039. “Once the moving party has converted the motion to dismiss into a factual motion by

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presenting affidavits or other evidence properly brought before the court, the party opposing the

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motion must furnish affidavits or other evidence necessary to satisfy its burden of establishing

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subject matter jurisdiction.” Savage v. Glendale Union High Sch., 343 F.3d 1036, 1040 fn. 2

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(9th Cir. 2003).
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Defendants make a factual challenge in the instant motion. As further discussed below,

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the Court has considered all of the evidence presented in order to determine whether Plaintiff

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has met her burden of establishing the existence of a case or controversy.

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ORDER
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B. Article III Standing

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To establish Article III standing, a plaintiff must show (1) a concrete injury that is

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actual or imminent and not hypothetical; (2) fairly traceable to the defendant’s allegedly

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wrongful conduct; (3) that is likely to be redressed by a favorable decision. Lujan v. Defenders

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of Wildlife, 504 U.S. 555, 560-61, 112 S. Ct. 2130 (1992). To have standing to seek injunctive
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relief, a plaintiff must also show “a sufficient likelihood that he will again be wronged in a

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similar way.” City of Los Angeles v. Lyons, 461 U.S. 95, 111, 103 S. Ct. 1660 (1983). “A

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plaintiff must demonstrate standing for each claim” and “for each form of relief sought.”

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DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352, 126 S. Ct. 1854 (2006).

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Defendants challenge Plaintiff’s standing in part by relying on evidence from Plaintiff’s
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former employer indicating that Plaintiff was reimbursed for the money she paid to Defendants.

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Dkts. #66 and #67, and exhibits thereto. Plaintiff argues that this evidence should be stricken

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from the record based on Washington’s “collateral source rule.” Dkt. # 69 at 5-19. Defendants

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respond that the collateral source rule does not apply to this motion because the rule does not
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apply to determine Article III standing. Dkt. #73 at 4-5. The Court first turns to Plaintiff’s

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argument that the collateral source rule precludes the Court’s consideration of the evidence

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presented by Defendants, as the resolution to whether the collateral source rule applies will

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inform the Court’s decision on the substantive arguments.

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Under Washington’s “collateral source rule,” no party can introduce evidence that a
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plaintiff was compensated by some independent source such as worker’s compensation, an

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insurance payout, or welfare benefits. See Mazon v. Krafchick, 158 Wn.2d 440, 452, 144 P.3d

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1168 (2006).

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The collateral source rule ensures that the fact finder will not reduce the

plaintiff's award because the plaintiff has received compensation from a third party. Id.; Diaz v.

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State, 175 Wn.2d 457, 465, 285 P.3d 873, 878 (2012).
ORDER
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In this case, the Court agrees with Defendants, and finds that the collateral source rule

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is inapplicable where a plaintiff cannot plead that he or she has suffered the damages sought.

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At least two other federal district courts addressing this question have determined the same.

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See Bechara v. Bayer Corp., 2010 U.S. Dist. LEXIS 145646, *195 (S.D. Fla. Mar. 16, 2010);

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see also Qst Envtl. V. Nat’l Union Fire Ins. Co., 2002 U.S. Dist. LEXIS 9937, *5 fn. 2 (D.N.H.
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2002) (“The collateral source rule, relied on by ESE to avoid the standing issue, applies only to

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preserve an award of damages and does not affect a party’s standing to litigate a claim.”

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(citation omitted)).

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Having determined that the collateral source rule does not apply at this juncture of the

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case, the Court now turns to Defendants’ substantive allegations.

Defendants have

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demonstrated that Plaintiff Gillespie submitted her hotel room expenses to her employer the

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day after returning from her August 20-21, 2012, hotel stay, and was reimbursed for the costs

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on August 31, 2012 – prior to the filing of this lawsuit on January 23, 2013. Dkt. #1 and Dkt.

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#67, Exs. A and B. Plaintiff does not dispute these facts. Instead, she argues that even if she
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was ultimately reimbursed by her employer, she was still injured because she temporarily lost

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the use of her credit (in the amount she paid for her hotel room) while waiting for

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reimbursement. Dkt. #69 at 19-23. However, Plaintiff provides no evidence that during the ten

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days she was without use of that credit, she was damaged in any way. Moreover, she alleges

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no continuing harm from the single transaction in which she engaged with Travelscape, LLC.
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As a result, the Court concludes that Plaintiff has failed to satisfy her burden of establishing the

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existence of an actual injury at the time this action was brought. See Noonan LLC v. Sempris,

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LLC, 2013 U.S. Dist. LEXIS 146378, *6-7 (W.D. Wash. Oct. 9, 2013) (citing Stanford v. Home

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Depot USA, Inc., 358 Fed. App’x 816, 818-19 (9th Cir. 2009).

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ORDER
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As for Plaintiff’s claims for injunctive and declaratory relief, Plaintiff again has not

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established that she has suffered a concrete injury or that there is a strong likelihood that she is

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likely to be wronged in the same manner again. See Lyons, 461 U.S. at 111. In fact, while

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Plaintiff states that she intends to continue to use internet travel sites to book hotels in the

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foreseeable future, including Defendants’ sites, Plaintiff has now received full notice regarding
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the terms and conditions of Travelscape’s bundled tax and service fees, and will not likely

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suffer the harm she has alleged in her Amended Complaint. See Noonan, supra, at *7-8

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(citations omitted). Because Plaintiff does not have an ongoing relationship with Defendants

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and there is no realistic threat of future harm in the absence of injunctive relief, Plaintiff lacks

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standing to pursue prospective relief. Id.
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Having determined that Plaintiff has no cognizable claim for relief, the Court also finds

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that she cannot represent a class of others who may have a claim against Defendants based on

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its bundling practices. Lierboe v. State Farm Mut. Auto. Ins. Co., 350 F.3d 1018, 1022 (9th Cir.

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2003).
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IV.

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CONCLUSION

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Having reviewed the relevant pleadings, the declarations and exhibits attached thereto,

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and the remainder of the record, the Court hereby ORDERS that Defendants’ Motion to

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Dismiss (Dkt. #65) is GRANTED. Plaintiff’s claims are dismissed in their entirety and this

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matter is now CLOSED.
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DATED this 26 day of August 2014.

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RICARDO S. MARTINEZ
UNITED STATES DISTRICT JUDGE

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ORDER
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