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Friedman v. Guthy-Renker LLC

United States District Court, C.D. California

February 27, 2015

AMY FRIEDMAN, JUDI MILLER, and KRYSTAL HENRY-McARTHUR, on behalf of themselves and all others similarly situated, Plaintiffs,
v.
GUTHY-RENKER LLC, Defendant.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION TO DISMISS [36]

OTIS D. WRIGHT, II, District Judge.

I. INTRODUCTION

On November 3, 2014, Plaintiffs Amy Friedman, Judi Miller, and Krystal Henry-McArthur filed their First Amended Complaint against Defendant Guthy-Renker LLC ("Guthy-Renker"). (ECF No. 43 ["FAC"].) In their seven-count putative class action complaint, Plaintiffs allege that Guthy-Renker's "WEN Cleansing Conditioner" line of haircare products caused their hair to fall out. Pending before the Court is Guthy-Renker's Motion to Dismiss. (ECF No. 36.) For the reasons discussed below, Guthy-Renker's Motion to Dismiss is GRANTED IN PART and DENIED IN PART.[1]

II. FACTUAL BACKGROUND

Guthy-Renker is a "direct marketing" corporation with a principal place of business in Santa Monica, California. (FAC ¶¶ 18, 21.) It sells a variety of beauty-related products, to include a line of haircare products called "WEN by Chaz Dean." At issue in this case is the "WEN Cleansing Conditioner" (hereinafter "WEN"). ( Id. ¶ 21.) According to Guthy-Renker's website, WEN "is a revolutionary new concept in hair care" and "takes the place of... shampoo, conditioner, deep conditioner, detangler and leave-in conditioner." ( Id. ¶ 22.) WEN is sold online and over the phone. ( Id. ¶ 21.)

Each of the three plaintiffs-Ms. Miller, Ms. Friedman, and Ms. Henry-McArthur-allege that WEN caused their hair to fall out. ( Id. ¶¶ 33-38.) Ms. Miller purchased WEN over the phone, while Ms. Friedman and Ms. Henry-McArthur purchased the product through Guthy-Renker's website. ( Id. )

Plaintiffs allege that WEN causes significant hair loss as the result of a design and/or manufacturing defect. ( Id. ¶ 2.) Plaintiffs' First Amended Complaint raises seven causes of action: (1) two theories of breach of warranty-implied warranty under Cal. Com. Code § 2314, and express warranty under the Magnuson-Moss Warranty Act ("MMWA"), 15 U.S.C. § 2301; (2) California's Unfair Competition Law, Cal. Civ. Code § 17200; (3) California's False Advertising Law, Cal. Civ. Code § 17500; (4) common law assumpsit; (5) failure to warn negligence; (6) failure to test negligence; and (7) strict products liability. ( Id. ¶¶ 52-108.) Plaintiffs propose a class defined as: "All persons or entities in the United States who purchased WEN Cleansing Conditioner from August 1, 2009 to present." ( Id. ¶ 42.)

III. LEGAL STANDARD

Pursuant to Rule 12(b)(6), a defendant may move to dismiss an action for failure to allege "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). "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. The plausibility standard is not akin to a probability requirement, ' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) motion, the Court "accept[s] factual allegations in the complaint as true and construe[s] the pleading in the light most favorable to the non-moving party." Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008).

The Court is not required to "assume the truth of legal conclusions merely because they are cast in the form of factual allegations." Fayer v. Vaughn, 649 F.3d 1061, 1064 (9th Cir. 2011) (internal quotation marks and citations omitted). Mere "conclusory allegations of law and unwarranted inferences are insufficient to defeat a motion to dismiss." Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) (internal quotation marks and citations omitted). "If a complaint is accompanied by attached documents, the court is not limited by the allegations contained in the complaint. These documents are part of the complaint and may be considered in determining whether the plaintiff can prove any set of facts in support of the claim." Durning v. First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987) (internal citations omitted). The Court may consider contracts incorporated in a complaint without converting a motion to dismiss into a summary judgment hearing. United States v. Ritchie, 342 F.3d 903, 907-08 (9th Cir. 2003).

IV. DISCUSSION

Guthy-Renker makes three arguments in its Motion to Dismiss. (ECF No. 36 ["MTD"].) First, it argues that the Court must dismiss Ms. Friedman and Ms. Henry-McArthur's claims because both ladies agreed to binding arbitration when they purchased WEN online. ( Id. at 6-11.) Second, Guthy-Renker argues that Plaintiffs cannot state a claim under the MMWA because there was no express written warranty. ( Id. at 11-13.) Third, Guthy-Renker argues that Plaintiffs cannot state a claim for assumpsit because a valid contract exists. ( Id. at 13-15.) Plaintiffs filed an Opposition Brief on January 16, 2015 (ECF No. 38 ["Opp. Br."]), and Guthy-Renker a Reply on February 6, 2015 (ECF No. 39 ["Reply"]).

A. First Argument: Binding Arbitration Clause

According to Guthy-Renker, when a customer purchases WEN online the customer must affirmatively assent to the company's "Terms and Conditions" prior to completing the purchase. (MTD at 4.) Customers assent to the Terms and Conditions by "clicking an interactive checkbox" on the final checkout screen. ( Id. ) Guthy-Renker argues that its Terms and Conditions waive class action lawsuits and require arbitration for all disputes arising between the customer and Guthy-Renker. ( Id. ) Guthy-Renker argues that both Ms. Friedman and Ms. Henry-McArthur clicked the interactive checkbox when completing their online purchases, and therefore both women are bound by the arbitration agreement in the Terms and Conditions. ( Id. ) Guthy-Renker makes no claim that Ms. Miller's over-the-phone purchase subjects her to the same arbitration agreement.

Ms. Friedman and Ms. Henry-McArthur do not dispute that they clicked the interactive box, nor do they dispute that the Terms and Conditions contains a class action waiver and an arbitration clause. Instead, they argue that they did not knowingly assent to the Terms and Conditions because the design of Guthy-Renker's website does not give the customer proper inquiry notice of those terms. (Opp. Br. at 4.) Because they were not given notice and did not assent to the Terms and Conditions, Ms. Friedman and Ms. Henry-McArthur argue that they are not required to submit to arbitration. ( Id. ) Thus ...


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