The opinion of the court was delivered by: Hon. Roger T. Benitez United States District Judge
ORDER GRANTING DEFENDANT NORDSTROM, INC.'S MOTION TO DISMISS PLAINTIFF'S FIRST AMENDED COMPLAINT [Doc. No. 16]
Before the Court is Defendant Nordstrom, Inc.'s ("Nordstrom") Motion to Dismiss Plaintiff Anvar Alfi's First Amended Class Action Complaint and to Strike the Class Allegations. (Doc. No. 16.) Plaintiff alleges three causes of action on behalf of himself and a class of Nordstrom customers: (1) declaratory relief; (2) unjust enrichment, and (3) breach of contract. (FAC ¶ 9.) Defendant moves to dismiss the declaratory relief cause of action for lack of subject matter jurisdiction and the unjust enrichment and breach of contract causes of action for failure to state a claim pursuant to Rule 12(b)(6). In the alternative, Defendant moves to strike the class allegations. Pursuant to Local Rule 7.1(d)(1), this motion is appropriate for decision without oral argument. For the reasons discussed below, the Court GRANTS Defendant's motion to dismiss for lack of subject matter jurisdiction.
On June 9, 2009, Plaintiff filed his initial Complaint. (Doc. 1.) In the Complaint, Plaintiff, on behalf of himself and an alleged nationwide class of Nordstrom customers, asserted two causes of action: (1) declaratory judgment; and (2) unjust enrichment. Plaintiff claimed that Defendant issued "Nordstrom Notes" ("Notes") to customers throughout the United States. (Compl. ¶ 3.) The Notes are earned by spending certain amounts of money at Nordstrom and may be redeemed at any Nordstrom store. (Id.) Plaintiff alleged that the Notes should be deemed "gift certificates" under California law and throughout the remaining states. (Id. at ¶¶ 3, 4, 6.) More specifically, Plaintiff alleged that Notes issued between October 1, 2005 and March 14, 2008, contained an expiration date in eight-point font, in violation of California Civil Code § 1749.5. (Compl. ¶¶ 5-7.) On July 15, 2009, Defendant filed a motion to dismiss and strike the original complaint arguing, inter alia, that this Court lacked subject matter jurisdiction over Plaintiff's claims. (Doc. No. 7.) On March 11, 2010, the Court granted Defendant's motion to dismiss finding that Plaintiff failed to establish subject matter jurisdiction based on diversity of citizenship or federal question. (Order Granting Mot. to Dismiss at 3:9-10, 5:13-15.)
On March 16, 2010, Plaintiff filed his First Amended Complaint ("FAC"). (Doc. No. 13.) Plaintiff's FAC attacks Nordstrom's loyalty rewards program referred to as the Nordstrom Fashion Rewards Program ("Rewards Program"). (FAC ¶ 3.) The Rewards Program rewards customers who shop at Nordstrom using a Nordstrom credit card with a Note. (Id.) The Notes have a dollar value on their face. (Id. at Ex. A.) Plaintiff alleges that he and other Nordstrom customers incurred specific financial expenses in order to "earn" Notes. (FAC ¶ 4.) Plaintiff alleges many states require expiration dates on gift certificates to be in a minimum of 10-point font so as to adequately put consumers on notice of the expiration date. (FAC ¶ 5.) Plaintiff further alleges that Notes issued with expiration dates in less than 10-point font are unreasonable and an unfair burden upon Nordstrom customers in violation of its agreements with Nordstrom customers. (FAC ¶ 7.) Plaintiff alleges that because he opted out of a prior settlement of "a California class action alleging the same essential violations," he is in a unique position in comparison with all the remaining purported class members. (FAC ¶ 8.)
Plaintiff claims that there are common questions of law and fact concerning whether an expiration date in eight-point font is "clear and conspicuous," whether Nordstrom was unjustly enriched, and whether it breached its contract with customers. (FAC ¶ 13.) Plaintiff alleges the class of persons to be benefitted by the class action are Nordstrom customers who received and were unable to use their Notes with expiration dates in less than 10-point font with the exception of those California customers who participated in the Ulloa settlement. (FAC ¶ 14.) Plaintiff alleges that because of the potential number of prospective class members adversely affected by Notes with inconspicuous expiration dates, a class action would be the appropriate approach to ensure a fair and efficient adjudication of this matter. (FAC ¶ 15.)
Plaintiff's first claim for declaratory relief seeks an order from the Court declaring "that all expiration dates which appeared on Notes in less than 10-point font failed to adequately apprise the Nordstrom customer of the expiration date in a clear and conspicuous manner." (FAC ¶ 23.) Plaintiff's second claim for relief for unjust enrichment alleges that Nordstrom's prior practices unjustly enriched Nordstrom by the value of the Nordstrom's unused Notes. (FAC ¶ 25.) Plaintiff's third claim for relief for breach of contract alleges that failure to provide notice of Notes expiration dates in a clear and conspicuous manner constitutes a breach of contract with each potential class member resulting in damages in excess of $5,000,000 to the class. (FAC ¶ 31.)
Nordstrom's moves to dismiss: (1) Plaintiff's first claim for declaratory relief due to lack of subject matter jurisdiction; (2) Plaintiff's second claim for "unjust enrichment" because it fails to state a claim upon which relief may be granted; and (3) Plaintiff's third claim because he has failed to state facts sufficient to allege the basic elements of breach of contract. (Mtn. to Dismiss FAC at 1.) Having considered the parties' submissions and applicable law, the Court finds Plaintiff lacks standing under Article III of the United States Constitution because he has not suffered an "injury in fact." Lujan v. Defenders of Wildlife, 504 U.S. 555, 560-561 (1992) (citations omitted). Thus, Defendant's motion to dismiss the FAC is GRANTED without prejudice. /// ///
A) Constitutional Standing
The standing inquiry serves to determine whether "a party has a sufficient stake in an otherwise justiciable controversy to obtain judicial resolution of that controversy," Sierra Club v. Morton, 405 U.S. 727, 731 (1972), and to ensure that legal questions will be resolved "in a concrete factual context conducive to a realistic appreciation of the consequences of judicial action." Valley Forge Christian Coll. v. Am. United for Separation of Church and State, Inc., 454 U.S. 464, 472 (1982). To ascertain whether the "case or controversy" requirement under Article III (U.S. Const. art. III, § 2, P1) is satisfied, courts consider three factors:
(1) whether the plaintiff has suffered an "injury in fact" -- an invasion of a legally protected interest which is (a) concrete and particularized, and (b) "actual or ...