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Soto v. Superior Telecom

June 2, 2010

RICARDO SOTO, PLAINTIFF,
v.
SUPERIOR TELECOM, INC., A CALIFORNIA CORPORATION, INDIVIDUALLY; 7-ELEVEN, INC., A TEXAS CORPORATION, ON BEHALF OF ITSELF AND OTHER SIMILARLY SITUATED; DHAMI CORPORATION, A CALIFORNIA CORPORATION, ON BEHALF OF ITSELF AND OTHERS SIMILARLY SITUATED; AND DOES 1-1000, DEFENDANTS.



The opinion of the court was delivered by: Irma E. Gonzalez, Chief Judge United States District Court

ORDER DENYING MOTION TO DISMISS [Doc. No. 8]

Presently before the Court is Defendants 7-Eleven, Inc. and Dhami Corporation's Motion to Dismiss Plaintiff's First Amended Complaint. The Court finds the motion suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1). Having considered the parties' arguments, and for the reasons set forth below, the Court DENIES the motion to dismiss.

BACKGROUND

I. Factual Background

This matter pertains to the sale of prepaid telephone cards and the disclosure of fees and costs associated with such cards. The facts are drawn from Plaintiff's First Amended Complaint ("FAC").

Defendant Superior Telecom, Inc. ("STI") markets, sells, and services prepaid telephone cards. These cards provide purchasers with a PIN and an 800-number that they can then use to access telecommunication services up to the allotted number of minutes they have bought. STI markets a particular prepaid phone card with the brand name "Bonita Señorita," which it sells to retailers.

Over the past two years, Plaintiff Ricardo Soto ("Plaintiff") purchased Bonita Señorita phone cards from a 7-Eleven, Inc. convenience store operated by Defendant Dhami Corporation ("Dhami"). Dhami operated the store under a franchise agreement with franchisor Defendant 7-Eleven, Inc. ("7-Eleven"). Plaintiff purchased each Bonita Señorita phone card from Dhami's store for $5.00, which purportedly provided him 50 minutes of calling time to La Paz, Bolivia, at the advertised rate of $0.10 per minute. Plaintiff is originally from Bolivia, and frequently uses prepaid phone cards to contact friends and family who live there. When Plaintiff dialed the provided 800-number and entered his PIN, a voice prompt informed him he had 50 minutes of calling time on the card.

However, Plaintiff alleges that he did not receive the full 50 minutes of calling time.*fn1 Plaintiff alleges he was unaware of the rates, charges, and fees associated with the Bonita Señorita phone card, and that had he known about those charges, he would not have purchased the card. According to him, the applicable rates, charges, and fees, among other information, were not displayed on the prepaid card itself, the card's packaging, or at or near the point of sale, as is required under California law.

II. Procedural History

Plaintiff filed suit on December 15, 2009, with a request for class certification in the Superior Court for the County of San Diego. On January 19, 2010, 7-Eleven removed the case to this Court. After Plaintiff filed the FAC, Defendants 7-Eleven and Dhami filed the present motion to dismiss. On March 18, 2010, the hearing on the motion was vacated when the Court issued an Order to Show Cause why this case should not be dismissed for lack of subject matter jurisdiction. [Doc. No. 9]. Defendant filed a response to the Order to Show Cause on April 2, 2010. On April 6, 2010, satisfied with Defendant's response, and noting no objection from Plaintiff, the Court reset the motion to dismiss for a hearing on May 3, 2010. [Doc. No. 11]. Subsequently, the Court found the motion was suitable for disposition without oral argument pursuant to Civil Local Rule 7.1(d)(1).

LEGAL STANDARD

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings. A complaint survives a motion to dismiss if it contains "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly, 550 U.S.544, 570 (2007). The court may dismiss a complaint as a matter of law for: (1) "lack of cognizable legal theory," or (2) "insufficient facts under a cognizable legal claim." SmileCare Dental Group v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). The court only reviews the contents of the complaint, accepting all factual allegations as true, and drawing all reasonable inferences in favor of the nonmoving party. al-Kidd v. Ashcroft, 580 F.3d 949, 956 (9th Cir. 2009) (citation omitted).

Despite the deference, the court need not accept "legal conclusions" as true. Ashcroft v. Iqbal, --- U.S. ---, 129 S.Ct. 1937, 1949-50 (2009). It is also improper for the court to assume "the [plaintiff] can prove facts that [he or she] has not alleged." Assoc. Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, "[w]hen there are well-pleaded factual allegations, a court should assume their ...


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