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Rudd v. Borders

November 24, 2009

AMANDA RUDD, PLAINTIFF,
v.
BORDERS, INC., DEFENDANT.



The opinion of the court was delivered by: Honorable Barry Ted Moskowitz United States District Judge

ORDER GRANTING MOTION TO DISMISS

Defendant Borders, Inc. moves to dismiss Plaintiff Amanda Rudd's ("Rudd") Complaint for a lack or subject matter jurisdiction under Federal Rule of Civil Procedure 12(b)(1) or for a failure to state a claim under Rule 12(b)(6). For the reasons explained below, the Court GRANTS Defendant's Motion to Dismiss without prejudice.

I. BACKGROUND

On March 19, 2009, Plaintiff filed a Complaint against Borders in California Superior Court. Plaintiff's Complaint alleges that she received a Borders gift card as a gift within four years preceding the date she filed her Complaint. (Compl. ¶ 5.) Plaintiff claims that her gift card provided that it was "not returnable or redeemable for cash." (Compl. ¶ 4.) Plaintiff asserts that she desired to redeem her gift card for cash. (Compl. ¶ 5.) Plaintiff allegedly still wishes to redeem her gift card for cash. (Id.)

Plaintiff filed her Complaint as a class action on behalf of herself and others who received a Borders gift card not redeemable for cash. (Compl. ¶ 7.) Plaintiff's Complaint brings two causes of action. First, she argues that Defendant violated the California Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq. (the "UCL"), by engaging in unfair, deceptive, or unlawful conduct. (Compl. ¶ 16.) Specifically, Plaintiff claims that Defendant unlawfully violated California Civil Code § 1749.5. (Compl. ¶ 17.) Second, Rudd contends that Borders has been unjustly enriched by its allegedly unfair and unlawful practice of refusing cash redemptions on unused card balances, the result of which is that the funds revert to Borders. (Compl. ¶ 23.)

On April 21, 2009, Borders removed this case to federal court and filed the instant Motion to Dismiss.

II. STANDARD OF REVIEW

Defendant argues that the Court must dismiss Plaintiff's Complaint under Rule 12(b)(6) for failure to state a claim.

A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) should be granted only where a plaintiff's complaint lacks a "cognizable legal theory" or sufficient facts to support a cognizable legal theory. Balistreri v. Pacifica Police Dept., 901 F.2d 696, 699 (9th Cir. 1988). When reviewing a motion to dismiss, the allegations of material fact in the plaintiff's complaint are taken as true and construed in the light most favorable to the plaintiff. See Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). Although detailed factual allegations are not required, factual allegations "must be enough to raise a right to relief above the speculative level." Bell Atlantic v. Twombly, 550 U.S. 544, 127 S.Ct. 1955, 1965 (2007). "A plaintiff's obligation to prove the 'grounds' of his 'entitle[ment] to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Id.

III. DISCUSSION

A. First Cause of Action: Violation of California's Unfair Competition Law

Plaintiff brings her first cause of action pursuant to California's Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq (the "UCL"). In order to state a claim under California's UCL, a Plaintiff must allege that Defendant engaged in an "unlawful, unfair or fraudulent business act or practice" or "unfair, deceptive, untrue, or misleading advertising." Cal. Bus. & Prof. Code § 17200. "Virtually any law- federal, state or local - can serve as a predicate for an action" under Section 17200. Smith v. State Farm Mutual Automobile Ins. Co., 93 Cal. App. 4th 700, 718 (2001). Thus, Section 17200 permits the "borrowing" of violations under other state and federal laws and treats these violations as independently actionable unlawful practices. Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). If a plaintiff cannot state a claim under the predicate law, however, her Section 17200 claim also fails. See Ingels v. Westwood One Broadcasting Services, Inc., 129 Cal. App. 4th 1050, 1060 (2005) ("A defendant cannot be liable under § 17200 for committing 'unlawful business practices' without having violated another law.") (quotations omitted); Rubio v. Capital One Bank (USA), N.A., 572 F. Supp. 2d 1157, 1168 (C.D. Cal. 2008) (dismissing plaintiff's UCL claim because her predicate claim also failed).

The Court agrees with Defendant that Plaintiff has not sufficiently pled a claim for relief. Borders properly argues that Plaintiff's UCL cause of action hinges on Defendant's violation of Cal. Civ. Code § 1749.5(b)(1). Plaintiff claims that Section 1749.5(b)(1) requires retailers to permit customers to redeem their gift certificates or gift cards for cash.*fn1 Thus, Plaintiff argues, Defendant's refusal to redeem her Borders gift card for cash unlawfully denied her money to which she has a cognizable claim and invaded her legal rights under state law. ...


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