United States District Court, N.D. California
ORDER DENYING MOTION TO DISMISS AND STRIKE Re: Dkt.
WILLIAM H. ORRICK UNITED STATES DISTRICT JUDGE
James Knapp brings this putative class action against
defendant Art.com, Inc. (“Art.com”), accusing it
of violating California’s consumer protection laws by
conducting “perpetual sales” that deceive
consumers into believing that they are receiving significant
bargains on Art.com’s merchandise, when in fact they
are not. Art.com moves to dismiss or strike certain portions
of Knapp’s first amended complaint (“FAC”).
Knapp has not plausibly alleged that Art.com’s
advertising falls within the scope of 15 U.S.C. § 52(a),
and his claim based on that statute is DISMISSED WITH LEAVE
TO AMEND. In all other respects, Art.com’s motion is
is a California corporation headquartered in Emeryville,
California. FAC ¶ 6 (Dkt. No. 6). It owns and operates
several online commerce websites selling posters and other
home décor products, including www.art.com,
www.posters.com, and www.allposters.com.
Id. ¶¶ 1-2.
October 11, 2015, Knapp was browsing www.art.com in
search of a piece of framed artwork. Id. ¶ 61.
He saw an item he liked but was “not immediately
prepared to purchase [it], ” until he saw that there
was a 40% off sale ending at midnight that day. Id.
“Enticed by the idea of saving 40% off his purchase,
” Knapp decided to purchase the item. Id. In
placing his order, he entered an optional coupon code, which
triggered the 40 percent discount off the non-sale price of
$172.99. Id. at fig. 16.
next day, shortly after midnight, the sale at
www.art.com “automatically renewed, ”
although this time at a discount of 45 percent instead of 40
percent. Id. ¶ 62. Knapp states that he
“was induced to purchase the product at ‘40%
off’ because he believed that the sale was ending that
day, ” and that he “would not have purchased the
product if it were not for the ‘40% off sale’
advertised on the www.art.com website.”
Id. He also states that “[h]ad [he] waited
until just after midnight - when the sale that induced him to
make the purchase ended - he could have gotten ‘45%
off’ the product he purchased.” Id.
accuses Art.com of conducting “perpetual sales”
on www.art.com, as well as www.posters.com
and www.allposters.com (collectively, the
“accused websites”). Id. ¶ 31. He
alleges that the sales (1) are “automatically
generate[d]” such that they run back-to-back with
“zero lag time between the end of one sales and the
beginning of another, ” (2) consistently offer
discounts ranging from 30 to 50 percent; and (3) are
“prominently advertise[d]” on each of the accused
websites with language such as “40% OFF EVERYTHING*
ENDS TODAY” or “45% OFF ALL ORDERS* - TODAY
ONLY.” Id. ¶¶ 38, 48-49. He also
notes that in connection with each sale, the accused websites
provide a six-character coupon code which consumers
“enter at the time of checkout in order to take
advantage of the purported sale.” Id. ¶
34. Knapp contends that Art.com’s sales are
“designed to falsely induce consumers to purchase their
products under the mistaken belief that they are getting a
significant bargain, ” and that the sales
“deceive consumers into believing they are being
offered a discount from Art.com’s regular prices when,
in fact, they are not.” Id. ¶¶ 31,
filed his original complaint on February 16, 2016 and his FAC
on March 23, 2016. Dkt. Nos. 1, 6. He asserts four causes of
action against Art.com: (1) violation of California’s
False Advertising Law (“FAL”), Cal. Bus. &
Prof. Code § 17500 et seq.; (2) violation of
the unfair and unlawful prongs of California’s Unfair
Competition Law (“UCL”), Cal. Bus. & Prof.
Code § 17200 et seq.; (3) violation of
California’s Consumer Legal Remedies Act
(“CLRA”), Cal. Civ. Code § 1750 et
seq.; and (4) unjust enrichment and common law
restitution. FAC ¶¶ 77-112. He seeks to represent a
class defined as
All natural persons located within the United States who
purchased any product online from Art.com through the
e-commerce websites, www.art.com,
www.posters.com, and/or www.allposters.com,
at any time beginning four (4) years prior to the filing of
this action on February 16, 2016, and ending at the time this
action settles or proceeds to final judgment.
Id. ¶ 65.
filed its motion to dismiss and strike on May 2, 2016. Dkt.
No. 19 (“Mot.”). Art.com does not seek to dismiss
or strike Knapp’s FAC in its entirety. Art.com’s
arguments are limited to (1) the first cause of action for
violation of the FAL, and (2) certain aspects of the second
cause of action for violation of the UCL. See, e.g.,
Mot. at 1-4. I heard argument from the parties on June 8,
2016. Dkt. No. 29.
RULE 12(b)(6): MOTION TO DISMISS FOR FAILURE ...