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Patrick Berry, On Behalf of Himself and v. Webloyalty.Com

April 11, 2011

PATRICK BERRY, ON BEHALF OF HIMSELF AND ALL OTHERS SIMILARLY SITUATED,
PLAINTIFF,
v.
WEBLOYALTY.COM, INC., A DELAWARE CORPORATION; MOVIETICKETS.COM, INC., A DELAWARE CORPORATION; DOES 1 THROUGH 50 INCLUSIVE, DEFENDANTS.



The opinion of the court was delivered by: Marilyn L. Huff, District Judge United States District Court

ORDER GRANTING DEFENDANTS' MOTION TO DISMISS

On January 18, 2011, Plaintiff filed his first amended complaint ("FAC") in this matter. (Doc. No. 46.) On February 17, 2011, Defendants Webloyalty.com, Inc. ("Webloyalty") and MovieTickets.com, Inc. ("MovieTickets.com") filed their motion to dismiss the first amended complaint. (Doc. Nos. 48, 49.) Along with the motion to dismiss, Defendants also filed a request for judicial notice. (Doc. No. 50.) On March 21, 2011, Plaintiff Patrick Berry ("Berry") filed his opposition to the motion, opposition to Defendants' request for judicial notice, and his own request for judicial notice. (Doc. No. 53.) On April 4, 2011, Defendants filed their reply to the motion to dismiss, their reply to their request for judicial notice, and their opposition to Plaintiff's request for judicial notice. (Doc. Nos. 57, 58.) On April 11, 2011, the Court held a hearing on this matter. James Patterson and Alisa Ann Martin appeared on behalf of Plaintiff Berry. James Prendergast and John Regan appeared on behalf of Defendant Webloyalty. Carrie Anderson, Bruce Colbath, and Jaime Kaplan appeared on behalf of Defendant MovieTickets.com. After due consideration, the Court GRANTS Defendants' motion to dismiss for all claims.

BACKGROUND

Plaintiff challenges the adequacy of enrollment into a membership program on the internet. (FAC ¶ 1.) On May 26, 2009, Plaintiff Berry purchased tickets from MovieTickets.com using his debit card. (FAC ¶ 48.) Berry alleges he saw an advertisement on the website to save $10.00 on his next purchase. (Id.) Berry clicked on the coupon and provided his email. (Id.) Plaintiff did not spend substantial time to read the text or other information provided in the pop-up window before he provided his email address and clicked the green button. (Id.) Berry started getting monthly charges of $12.00 per month as a member of this club. (Id. ¶ 53.) Berry alleges that the enrollment process was deceptive and misleading and he would not have entered into the program had to known the terms and conditions of the club. (Id. ¶¶ 50, 52.)

The Court previously issued an order granting in part and denying in part Defendant's first motion to dismiss the complaint. (Doc. No. 41.) In its order, the Court allowed Plaintiff 30 days to file an amended complaint also granted the parties limited discovery with respect to the issue of the enrollment page screenshots. (Id.) The parties conducted limited depositions of Plaintiff Berry, taken on January 11, 2011, and of Defendant witness Richard Winiarski, taken on January 7, 2011. (Doc. No. 49-2, Declaration of Daniel Esrick ("Esrick Decl."), Exs. 6-7.) Plaintiff filed his first amended complaint on January 18, 2011, and Defendants filed their motion to dismiss the amended complaint on February 17, 2011. (Doc. Nos. 46, 48, 49.)

DISCUSSION

I. Motion to Dismiss Pursuant to Fed. R. Civ. P. 12(b)(6)

A. Legal Standard

A motion to dismiss a complaint under Federal Rule of Civil Procedure 12(b)(6) tests the legal sufficiency of the claims asserted in the complaint. Navarro v. Black, 250 F.3d 729, 732 (9th Cir. 2001). Federal Rule of Civil Procedure 8(a)(2) requires that a pleading stating a claim for relief contain "a short and plain statement of the claim showing that the pleader is entitled to relief." The function of this pleading requirement is to "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests." Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007). "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." Id. A complaint does not "suffice if it tenders 'naked assertion[s]' devoid of 'further factual enhancement.'" Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949 (2009) (quoting Twombly, 550 U.S. at 557). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly, 550 U.S. at 555 (citing 5 C. Wright & A. Miller, Federal Practice and Procedure § 1216, pp. 235--36 (3d ed. 2004)). "All allegations of material fact are taken as true and construed in the light most favorable to plaintiff. However, conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss for failure to state a claim." Epstein v. Wash. Energy Co., 83 F.3d 1136, 1140 (9th Cir. 1996); see also Twombly, 550 U.S. at 555. The Ninth Circuit has "repeatedly held that a district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000).

B. Enrollment Page Disclosures

After his online purchase at MovieTickets.com, Plaintiff Berry alleges that he clicked on a coupon offer presented to him. (FAC ¶ 48.) After clicking on the offer, Berry was presented with an enrollment page where he entered his email address and clicked on a green button. (Id.)

The enrollment page has a "Shopper Discounts and Rewards" logo at the top and does not display the MovieTickets.com logo anywhere. (See Esrick Decl. Ex. 1 Ex. A.)

The enrollment page contains several disclosures that detail the terms and conditions of accepting the coupon offer:

(1)

Thank You . . .

Sign up to claim your rewards!

Click YES below to get your $20.00 Cash Back Award if you sign up for all Cash Back Rewards of Shopper Discounts & Rewards, the premier online savings service FREE for the next 30 days and only $12 per month thereafter billed to the credit card or deducted from the debit card you used at MovieTickets.com today.

(2)

Member Care Guarantee

- Email reminder before first monthly charge

- Cancel anytime hassle-free, online or by phone

(3)

So claim all your Shopper Discounts & Rewards Benefits . . . plus get your $20.00 Cash Back Award! You'll get your $20.00 Cash Back Award and instructions on the next page so you can access the site and start saving today! Plus we'll send your Membership kit email to you at your email address. Try all the benefits free for the next 30 days FREE and see how much you save! There's no obligation to continue. If you are completely satisfied, do nothing and you'll enjoy ongoing savings for only $12 a month and of course you have our Guarantee as described in the Offer and Billing Details! There is no limit in the amount of money you can save!

(4)

30 DAYS FREE plus only $12 a month thereafter

(5)

Offer and Billing Details:

Sign up for our Shopper Discounts & Rewards FREE for the next 30 days, with our compliments, and enjoy ongoing savings for only $12 a month thereafter. Get your $20.00 Cash Back Award on your next MovieTickets.com purchase, Cash Back Rewards at over 500 leading Web sites plus all the valuable benefits . . .

(6)

Enter your email address and click YES below to sign up for Shopper Discounts & Rewards By entering my email address as my electronic signature and clicking YES, I have read and agree to the Office and Billing Details and authorize MovieTickets.com to securely transfer my name, address and credit or debit card information to Shopper Discounts & Rewards for billing and benefit processing.

(7)

It's a Special Reward! If you 100% satisfied during your trial, do nothing. All your Shopper Discounts & Rewards discounts and protection will continue for just $12 a month billed by Shopper Discounts & Rewards to the credit card or deducted from the debit card you used at MovieTickets.com today. For you convenience Shopper Discounts & Rewards will use the contact and credit or debit card information you provided to MovieTickets.com today for billing and benefit processing. (Id.)

After scrolling to the bottom of the page, there are two spaces to the left to enter an email address twice and click on a large "YES" button to accept the offer. (Id.) Below the "YES" button is a link that says "No thanks, not right now." (Id.)

C. Fraud-Based Claims

I. 9(b) Pleading Standards

Rule 9(b) requires that a person alleging fraud or mistake must "state with particularity the circumstances constituting fraud or mistake." Fed. R. Civ. P. 9(b). Rule 9(b) requires "the identification of the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations." Odom v. Microsoft Corp., 486 F.3d 541, 553 (9th Cir. 2007) (quoting Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.3d 1393, 1400 (9th Cir. 1986)). In general, the complaint must state "the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation." Id. "[A]

plaintiff must set forth more than neutral facts necessary to identify the transaction. . . . In other words, the plaintiff must set forth an explanation as to why the statement or omission complained of was false or misleading." In re Glenfeld Sec. Litig., 42 F.3d 1541, 1548 (9th Cir. 1994). Consistent with its previous order on Defendants' motion to dismiss, the Court applies this standard to the following causes of action that are grounded in fraud: (1) negligent misrepresentation, (2) fraudulent misrepresentation, (3) false ...


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