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Sateriale v. R.J. Reynolds Tobacco Co.

December 7, 2010

AMANDA SATERIALE, JEFFREY FEINAMN, PAMELA BURNS, PATRICK GRIFFTHS, JACKIE WARREN, HEATHER POLESE, DAN POLESE, FRED JAVAHERI, RICHARD HOLTER, AND DONALD WILSON, ON BEHALF OF THEMSELVES AND ALL OTHERS SIMILARLY SITUATED, PLAINTIFFS,
v.
R.J. REYNOLDS TOBACCO CO. DEFENDANT.



The opinion of the court was delivered by: Christina A. Snyder United States District Judge

I. INTRODUCTION & BACKGROUND

ORDER GRANTING DEFENDANT'S MOTION TO DISMISS PLAINTIFFS' THIRD AMENDED COMPLAINT PURSUANT TO FED. R. CIV. P. 12(b)(6)

On November 16, 2009, plaintiffs Amanda Sateriale, Jeffrey Feinman, Pamela Burns, Patrick Griffiths, Jackie Warren, and Donald Wilson, individually and on behalf of all persons similarly situated, filed suit against defendant R.J. Reynolds Tobacco Company ("RJR").

On May 24, 2010, plaintiffs filed their corrected second amended complaint ("SAC"), alleging claims for: (1) breach of contract; (2) promissory estoppel; (3) unfair competition under Cal. Bus. & Prof. Code §§ 17200 et seq.; and (4) deceptive practices pursuant to the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750 et seq. In an order issued July 12, 2010 (the "Order"), the Court dismissed plaintiffs' SAC in its entirety, with leave to amend. See Order at 12.

On August 11, 2010, plaintiffs filed their third amended complaint ("TAC"), alleging claims for: (1) breach of contract; (2) promissory estoppel; (3) unfair competition under Cal. Bus. & Prof. Code §§ 17200 et seq.; and (4) deceptive practices pursuant to the Consumer Legal Remedies Act ("CLRA"), Cal. Civ. Code §§ 1750 et seq.*fn1

Plaintiffs allege that beginning in 1991, RJR conducted the "Camel Cash" program, under which it sold Camel cigarettes along with certificates redeemable for merchandise described in catalogs circulated by RJR. TAC ¶ 2. Plaintiffs allege that they are smokers 21 and older who either purchased Camel cigarettes and the Camel Cash certificates packaged with those cigarettes, or purchased Camel Cash through secondary market transactions. TAC ¶ 11. Plaintiffs allege that they registered for the Camel Cash program by filling out an enrollment form and submitting the form to RJR. TAC ¶ 4. Plaintiffs allege that RJR accepted and processed their enrollment forms and provided each plaintiff with an enrollment number and one or more catalogs containing merchandise. TAC ¶ 4. Plaintiffs allege that the catalogs listed the merchandise available, the number of Camel Cash certificates needed to receive the merchandise, and the procedures to be followed to receive the merchandise. TAC ¶ 4. Plaintiffs allege that on October 1, 2006, RJR announced that it would be discontinuing the Camel Cash program. TAC ¶¶ 5, 32. The announcement stated:

As a loyal Camel smoker we wanted to tell you our Camel Cash program is expiring. C-Notes will no longer be included on packs, which means whatever Camel Cash you have is among the last of its kind. Now, this isn't happening overnight-there'll be plenty of time to redeem your C-Notes before the program ends. In fact, you'll have from OCTOBER '06 through MARCH '07 to go to camelsmokes.com and redeem your C-Notes. Supplies will be limited, so it won't hurt to get there before the rush.

TAC ¶ 33; TAC, Ex. A. Plaintiffs further allege that beginning in October 2006, before the announced March 2007 termination date specified in RJR's announcement, RJR stopped printing and issuing catalogs, and stated to plaintiffs that it did not have merchandise available for redemption. TAC ¶ 34. Plaintiffs allege that RJR terminated its Camel Cash program on March 31, 2007. TAC ¶¶ 5, 45.

On September 20, 2010, RJR filed the instant motion to dismiss plaintiffs' TAC. On October 25, plaintiffs filed an opposition. On November 15, 2010, RJR filed a reply. After carefully considering the arguments set forth by both parties, the Court finds and concludes as follows.

II. LEGAL STANDARD

A Rule 12(b)(6) motion tests the legal sufficiency of the claims asserted in a complaint. "While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiff's obligation to provide the 'grounds' of his 'entitlement to relief' requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Bell Atlantic Corp. v. Twombly, 127 S. Ct. 1955, 1964-65 (2007). "[F]actual allegations must be enough to raise a right to relief above the speculative level." Id. at 1965.

In considering a motion pursuant to Fed. R. Civ. P. 12(b)(6), a court must accept as true all material allegations in the complaint, as well as all reasonable inferences to be drawn from them. Pareto v. F.D.I.C., 139 F.3d 696, 699 (9th Cir. 1998). The complaint must be read in the light most favorable to the nonmoving party. Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001); Parks Sch. of Bus., Inc. v. Symington, 51 F.3d 1480, 1484 (9th Cir. 1995). However, a court need not accept as true unreasonable inferences or conclusory legal allegations cast in the form of factual allegations. Sprewell, 266 F.3d at 988; W. Mining Council v. Watt, 643 F.2d 618, 624 (9th Cir. 1981).

Dismissal pursuant to Rule 12(b)(6) is proper only where there is either a "lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable legal theory." Balistreri v. Pac. Police Dept., 901 F.2d 696, 699 (9th Cir. 1990).

Furthermore, unless a court converts a Rule 12(b)(6) motion into a motion for summary judgment, a court cannot consider material outside of the complaint (e.g., facts presented in briefs, affidavits, or discovery materials). In re American Cont'l Corp./Lincoln Sav. & Loan Sec. Litig., 102 F.3d 1524, 1537 (9th Cir. 1996), rev'd on other grounds sub nom Lexecon, Inc. v. Milberg Weiss Bershad Hynes & Lerach, 523 U.S. 26 (1998). A court may, however, consider exhibits submitted with or alleged in the complaint and matters that may be judicially noticed pursuant to Federal Rule of Evidence 201. In re Silicon Graphics Inc. Sec. Litig., 183 F.3d 970, 986 (9th Cir. 1999); Lee v. City of Los Angeles, 250 F.3d 668, 689 (9th Cir. 2001).

For all of these reasons, it is only under extraordinary circumstances that dismissal is proper under Rule 12(b)(6). United States v. City of Redwood City, 640 F.2d 963, 966 (9th Cir. 1981).

Leave to amend may be denied when "the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency." Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th ...


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