United States District Court, N.D. California
ORDER GRANTING DEFENDANTS’ MOTION FOR PARTIAL
SUMMARY JUDGMENT DOCKET NO. 393
EDWARD
M. CHEN United States District Judge
I.
INTRODUCTION
Plaintiffs
Circle Click Media, LLC and CTNY Insurance Group filed the
instant putative class action against Defendants Regus
Management Group, LLC, Regus Business Centre LLC, Regus PLC,
and HQ Global Workplaces LLC (collectively, Regus). Docket
No. 65 (Second Amended Complaint) (SAC). Regus is in the
business of leasing fully equipped commercial office space
using an Office Service Agreement (OSA). See SAC at
¶¶ 34-41. The OSA identifies the office location,
lease term, initial payment amount, and monthly payment
amount. Id. at ¶ 23; e.g., Docket No.
346 (Aalaei Dec.), Exh. 1. Plaintiffs allege that the actual
monthly payment amount (as stated in Regus's monthly
invoices) exceed the monthly amount stated on the OSA because
Regus charges mandatory fees that are not adequately
disclosed until after the lease is signed. Based on these
allegations, Plaintiffs brought claims for: (1) violations of
California Business & Professions Code section 17200
(Unfair Competition Law) (UCL); (2) violations of California
Business & Professions Code section 17500 (California
False Advertising Law) (FAL), and (3) unjust enrichment.
Regus
now moves for partial summary judgment as to whether Circle
Click[1] may seek injunctive relief under the UCL,
and whether Circle Click could seek an injunction against
Regus on behalf of anyone other than itself Docket No. 393
(Mot.). Regus's motion for partial summary judgment came
on for hearing before the Court on June 30, 2016. For the
reasons stated below, the Court GRANTS
Regus's motion for summary judgment.
II.
BACKGROUND
In July
2015, Regus moved to dismiss Plaintiffs' claims for lack
of standing under Article III. Docket No. 271. Regus argued
that Plaintiffs lacked standing to seek injunctive relief on
behalf of themselves and the putative classes because there
was no threat of future harm, as both Plaintiffs had shown
that they did not plan to rent office space from Regus in the
future. Id. at 14. Plaintiffs did not dispute this
or otherwise suggest that they intended to rent office space
from Regus, but instead argued that the fact that the
plaintiffs are aware of the false and misleading nature of
the advertisements did not preclude injunctive relief under
Article III. Docket No. 295 at 24. In so arguing, Plaintiffs
relied on Henderson v. Gruma Corp., in which the
district court had rejected an argument that a plaintiff
lacks standing to seek injunctive relief where a plaintiff
was now aware of the misleading label, as to otherwise hold
would be to preclude federal courts from enjoining false
advertising under California consumer protection laws. CV
10-04173 AHM (AJWx), 2011 U.S. Dist. LEXIS 41077, at *19-20
(CD. Cal. Apr. 11, 2011). In denying Regus's motion to
dismiss, Judge Conti agreed with the Henderson
decision's reasoning and found that Plaintiffs met the
requirements for standing and could seek injunctive relief
Docket No. 335 (Conti Ord.) at 14.
Plaintiffs
in turn moved for class certification, seeking certification
of a California class and a New York class. Docket No. 238.
In the same order denying Regus's motion to dismiss,
Judge Conti denied Plaintiffs' motion for class
certification without prejudice, finding problems with
typicality and predominance. Conti Ord. at 21-33.
Plaintiffs
then brought a renewed motion for class certification before
this Court. Docket No. 345. On March 11, 2016, the Court
denied the motion, finding that in addition to a potential
ascertainability problem, Plaintiffs could not show
predominance. Docket No. 374 (Cert. Ord.) at 12, 17. The
Court subsequently denied Plaintiffs' motion for leave to
file a motion for reconsideration of the Court's order
denying class certification. Docket No. 395 (Recons. Ord.) at
5, 7.
III.
DISCUSSION
A.
Standard of Review
The
Court shall grant a motion for summary judgment “if the
movant shows that there is no genuine dispute as to any
material fact and the movant is entitled to judgment as a
matter of law.” Fed. R. Civ. Proc. 56(a). An issue of
fact is genuine only if there is sufficient evidence for a
reasonable jury to find for the nonmoving party. See
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248-49
(1986). “The mere existence of a scintilla of evidence
in support of the [non-moving party]'s position will be
insufficient; there must be evidence on which the jury could
reasonably find for the [non-moving party].”
Id. at 252. At the same time, “all reasonable
inferences must be drawn in favor of the non-movant.”
John v. City of El Monte, 515 F.3d 936, 941 (9th
Cir. 2008).
The
moving party bears the burden of demonstrating the absence of
a genuine issue of material fact. Celotex Corp. v.
Catrett, 477 U.S. 317, 323 (1986). Where the non-moving
party has the ultimate burden of proof, the moving party may
prevail on a motion for summary judgment by pointing to the
non-moving party's failure “to make a showing
sufficient to establish the existence of an element essential
to that party's case.” Id. at 322.
B.
Article III Standing to Seek Injunctive Relief
In
general, Article III standing requires the party invoking
federal jurisdiction to show that it has “suffered some
actual or threatened injury as a result of the putatively
illegal conduct of the defendant, and that the injury fairly
can be traced to the challenged action and is likely to be
redressed by a favorable decision.” Valley Forge
Christian Coll. v. Ams. United for Separation of Church &
State, 454 U.S. 464, 472 (1982) (internal citations and
quotations omitted). Where a plaintiff is seeking injunctive
relief, the plaintiff “must demonstrate that they are
realistically threatened by a repetition of the
violation.” Gest v. Bradbury, 443 F.3d 1177,
1181 (9th Cir. 2006) (internal quotation omitted); see
also Chapman v. Pier 1 Imports (U.S.), Inc., 631 F.3d
939, 946 (9th Cir. 2011) (“to establish standing to
pursue injunctive relief . . . [the] plaintiff must
demonstrate a real and immediate threat of repeated injury in
the future”) (internal quotation omitted).
Here,
Regus argues that Circle Click lacks Article III standing to
seek an injunction under the UCL because Circle Click no
longer has a contractual relationship with Regus. Mot. at 5.
Plaintiffs did not respond substantively to the argument, but
instead contend that because Judge Conti previously decided
the issue in favor of Plaintiffs, Regus is bringing an
improper motion for reconsideration.[2] Docket No. 397 (Opp.) at 3.
At the hearing, Plaintiffs argued that it would be unfair to
decide the standing issue without allowing Plaintiffs to
brief the issue.
The
Court finds that it is appropriate to decide the standing
issue without further briefing. Standing is a matter of
subject matter jurisdiction, which affects the Court's
ability to review Plaintiffs' injunction claims. See
Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d
1115, 1121 (9th Cir. 2010) (“The Article III case or
controversy requirement limits federal courts' subject
matter jurisdiction by requiring, inter alia, that plaintiffs
have standing and that claims be 'ripe' for
adjudication”); see also Breeden v. Kirkpatrick
& Lockhart LLP (In re Bennett Funding Grp., Inc.),
336 F.3d 94, 102 (2d Cir. 2003) (rejecting argument that
“the district court could not dismiss on standing
grounds after denying a Rule 12(b) motion on the same
ground” because “[d]enial of the motion to
dismiss on standing grounds does not preclude later
consideration on summary judgment or indeed at trial as
standing is an aspect of subject matter jurisdiction”).
Standing under Article III can be raised at any time, even
sua sponte because of the jurisdictional nature of
the question. City of Los Angeles v. Cnty. of Kern,
581 F.3d 841, 845 (9th Cir. 2009) (explaining that Article
III standing is a jurisdictional limit that “cannot be
waived by any party, and there is no question that a court
can, and indeed must, resolve any doubts about this
constitutional issue sua sponte”).
Further,
Plaintiffs had ample opportunity to brief the issue, whether
in their opposition papers or their motion to file
supplemental briefing; instead of responding on the merits,
Plaintiffs doubled down on their position that Regus's
motion was an improper motion for reconsideration, and never
addressed the substance of the argument. Plaintiffs made this
decision despite being put on notice that the standing issue
would be raised in the instant motion for summary judgment;
during the March 24, 2016 status conference, the Court
observed that “[t]here may be a standing issue as well,
” which Regus stated it would brief. Docket No. 392
(March 24, 2016 Trans.) at 18:4-6. In short, the ...