The opinion of the court was delivered by: Hon. Dana M. Sabraw United States District Judge
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS' MOTION TO DISMISS THE FIRST AMENDED COMPLAINT [Docket No. 42]
This case comes before the Court on Defendants' motion to dismiss the First Amended Complaint ("FAC"). Plaintiff filed an opposition to the motion, and Defendants filed a reply. On April 21, 2010, the Court requested supplemental briefing from the parties on the effect of North County Communications Corp. v. California Catalog & Technology, 594 F.3d 1149 (9th Cir. 2010), on Plaintiff's fourth claim for relief for violation of the Federal Communications Act ("FCA"). Plaintiff submitted her supplemental brief on April 29, 2010, and Defendants submitted their supplemental brief on April 30, 2010. After thoroughly considering the parties briefs, evidence and the relevant legal authority, the Court grants in part and denies in part Defendants' motion.
On July 23, 2008, Plaintiff purchased a cellular phone from a Verizon Wireless store in Sherman Oaks, California. (FAC at ¶ 34.) In conjunction with this purchase, Plaintiff entered into a two-year wireless service agreement with Verizon. (Id.) The full retail price of the phone was $279.99, but Plaintiff paid a sale price of $99.99. (Id. at ¶¶ 34-36.) Plaintiff alleges that at the time of purchase, a Verizon salesperson told her that Verizon was required by law to charge her sales tax on the full retail price of the phone as opposed to the sale price. (Id. at ¶ 35.) As so calculated, the sales tax amounted to $23.10. (Id.) Plaintiff alleges she asked a sales manager why Verizon calculated sales tax on the full retail price of the phone as opposed to the sale price. (Id. at ¶ 36.) The manager responded that "Verizon was required by California state law to charge consumers the bundled sales tax." (Id.) Plaintiff alleges that in deciding to purchase the phone from Verizon, she relied on the statements of the Verizon employees that California law required her to pay the sales tax. (Id. at ¶ 44.) Plaintiff also alleges she relied on these representations in deciding to purchase another phone from Verizon in January 2009. (Id. at ¶¶ 45-46.)
Plaintiff alleges these representations are repeated in the Customer Information Overview ("CIO") she received from Verizon. (Id. at ¶38.) She relies specifically on the section of the CIO labeled "Taxes, Governmental Surcharges And Fees," which states, "Your bill will include sales, excise and other taxes and governmental surcharges and fees that we are required by law to bill to customers." (FAC, Ex. 3.)
On May 11, 2009, Plaintiff filed the present case against Verizon Wireless Telecom, Inc. ("Verizon") in Los Angeles Superior Court. The original complaint alleged claims for violations of California's Consumer Legal Remedies Act ("CLRA") and Business and Professions Code § 17200 ("UCL"). On July 2, 2009, Verizon removed the case to the United States District Court for the Central District of California. Verizon filed its Answer to the complaint on August 21, 2009. A few days later, the case was transferred to this Court.
On November 30, 2009, pursuant to the parties' stipulation, Plaintiff filed a First Amended Complaint ("FAC") against Verizon and Cellco Partnership dba Verizon Wireless (collectively, "Defendants"). The FAC realleges the claims under the CLRA and UCL, and adds claims for violation of Business and Professions Code § 17500 ("FAL"), the FCA and fraud. In response to the FAC, Defendants filed the present motion.
Defendants raise several arguments in support of their motion to dismiss. First, they argue the allegations in the FAC are contradicted by the documents attached thereto. Second, they dispute whether the CIO applies to the purchase of products. Third, Defendants contend Plaintiff has failed to allege reliance. Fourth, Defendants argue Plaintiff has failed to state a valid claim under the FCA. Fifth, Defendants assert that a safe harbor protects them from Plaintiff's statutory claims. Sixth, Defendants maintain there is no private cause of action for seeking tax refunds from retailers. Seventh, Defendants assert the California Constitution bars Plaintiff's request for an injunction. Finally, Defendants contend Plaintiff's request for restitution is barred because Defendants did not benefit.
In two recent opinions, the Supreme Court established a more stringent standard of review for 12(b)(6) motions. See Ashcroft v. Iqbal, ___ U.S. ___, 129 S.Ct. 1937 (2009); Bell Atlantic Corp. v. Twombly, 550 U.S. 544 (2007). To survive a motion to dismiss under this new standard, "a complaint must contain sufficient factual matter, accepted as true, to 'state a claim to relief that is plausible on its face.'" Iqbal, 129 S.Ct. at 1949 (citing Twombly, 550 U.S. at 570). "A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Id. (citing Twombly, 550 U.S. at 556).
"Determining whether a complaint states a plausible claim for relief will ... be a context-specific task that requires the reviewing court to draw on its judicial experience and common sense." Id. at 1950 (citing Iqbal v. Hasty, 490 F.3d 143, 157-58 (2d Cir. 2007)). In Iqbal, the Court began this task "by identifying the allegations in the complaint that are not entitled to the assumption of truth." Id. at 1951. It then considered "the factual allegations in respondent's complaint to determine if they plausibly suggest an entitlement to relief." Id. at 1951.
B. Allegations in FAC v. Documents Attached Thereto
Before turning to whether the factual allegations in the FAC plausibly suggest an entitlement to relief, the Court addresses Defendants' argument that Plaintiff's claims fail because the documents attached to the FAC contradict Plaintiff's factual allegations. Specifically, Defendants contend Plaintiff's February 18, 2009 letter to Verizon contradicts Plaintiff's allegation that a salesperson in the Sherman Oaks store misrepresented that Verizon was required by law to charge Plaintiff sales tax on the ...