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Bautista v. Valero Marketing and Supply Co.

United States District Court, N.D. California

July 21, 2016



          RICHARD SEEBORG United States District Judge.


         Like many gas stations, defendant Valero Marketing and Supply Co. uses “split pricing” to communicate the cost of its gas. Split pricing is the practice of charging customers who pay with cash one price, and those who pay with credit cards a higher price. The Valero-brand gas station in Daly City, California, where plaintiff Faith Bautista bought gas did not advertise which price applied to debit-card purchases. Bautista contends these street signs are misleading because consumers do not know whether they will pay the credit or cash price when using a debit card. To remedy this alleged wrong, Bautista advances four claims for relief on behalf of a class of people against Valero for violations of (1) the Consumers Legal Remedies Act (the “CLRA”), Cal. Civ. Code § 1770(a); (2) the False Advertising Law (the “FAL”), Cal. Bus. & Prof. Code § 17500, et seq.; (3) the Unfair Competition Law (the “UCL”), Cal. Bus. & Prof. Code § 17200, et seq.; and (4) for an accounting. Valero moves to dismiss the first amended complaint (“FAC”).

         Bautista has stated cognizable legal actions under the CLRA, FAL, and UCL. She has not, however, included sufficient facts to establish that Valero personally participated in the use of the offending advertising practices or exercised unbridled control over business practices at the Daly City station. Because this deficiency could be cured, if relevant facts exist, by averring Valero’s control over the unfair conduct at issue, leave to amend will be granted. Bautista has abandoned the accounting claim, and thus it will be dismissed with prejudice.

         II. BACKGROUND[1]

         Bautista is a cost-conscious consumer who checks gas prices regularly. One day, she needed to refuel, checked the prices advertised at various gas stations nearby, and chose a Valero-branded gas station in Daly City because the prices advertised were the lowest. The Daly City station advertised two prices for gas-one for customers who pay with a credit card and one for those who pay with cash. The sign did not provide any information about whether customers using debit cards would have to pay the cash price or the credit price. Bautista believed the cash price would apply if she used her debit card. She swiped her debit card at the point-of-sale device, entered her zip code, and began fueling. As the machine dispensed gas, the display did not specifically indicate whether the credit or cash price was being applied, only the price per gallon. Bautista requested a receipt and was dismayed to read that Valero charged the higher credit price and not the lower cash price on her debit card.


         A complaint must contain . . . “a short and plain statement of the claim showing that the pleader is entitled to relief” Fed.R.Civ.P. 8(a)(2). “[D]etailed factual allegations” are not required, but “a complaint must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (internal quotation marks omitted).

         Federal Rule of Civil Procedure 12(b)(6) provides a mechanism to test the legal sufficiency of the averments in the complaint. Dismissal is appropriate when the complaint “fail[s] to state a claim upon which relief can be granted.” Fed.R.Civ.P. 12(b)(6). When evaluating a complaint, the court must accept all its material factual averments as true and construe them in the light most favorable to the non-moving party. Iqbal, 556 U.S. at 678. “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.” Id. This standard requires “more than a sheer possibility that the defendant has acted unlawfully.” Id. “Where a complaint pleads facts that are merely consistent with a defendant’s liability, it stops short of the line between possibility and plausibility of entitlement to relief.” Id. (internal quotation marks omitted). When plaintiffs have failed to state a claim upon which relief can be granted, leave to amend should be granted unless “the complaint could not be saved by any amendment.” Gompper v. VISX, Inc., 298 F.3d 893, 898 (9th Cir. 2002) (internal quotation marks omitted).


         The CLRA proscribes “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Cal. Civ. Code § 1770(a). Conduct “likely to mislead a reasonable consumer” violates the CLRA. Colgan v. Leatherman Tool Grp., Inc., 135 Cal.App.4th 663, 680 (2006) (internal quotation marks omitted). A plaintiff asserting a CLRA claim must provide facts establishing actual reliance and economic harm. Hodsdon v. Mars, Inc., 15-CV-04450-RS, 2016 WL 627383, at *3 (N.D. Cal. Feb. 17, 2016).

         The FAL prohibits “mak[ing] or disseminat[ing] . . . . any statement . . . which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading, ” in connection with the sale of goods. Cal. Bus. & Prof. Code § 17500. The FAL also requires showing the plaintiff suffered an injury due to her own actual and reasonable reliance on the purported misleading statements. Rosado v. eBay Inc., 53 F.Supp.3d 1256, 1266 (N.D. Cal. 2014) (citing In re Tobacco II Cases, 46 Cal.4th 298, 326 (2009)).

         California’s UCL outlaws all unlawful, unfair, or fraudulent business acts or practices. Cal. Bus. & Prof. Code § 17200 et seq. “Each prong of the UCL is a separate and distinct theory of liability . . . .” Lozano v. AT&T Wireless Servs., Inc., 504 F.3d 718, 731 (9th Cir. 2007). Under the unlawful prong, a plaintiff must allege that the defendant violated another law. Accordingly, a violation of the FAL or CLRA is a violation of the UCL. Under the unfair prong, a plaintiff must allege facts to establish “the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers” or tether the UCL “to some specific constitutional, statutory, or regulatory provisions.” Hodsdon, 2016 WL 627383, at *7 (internal quotation marks omitted).

         Under the reasonable consumer standard of the CLRA, FAL, and UCL, a plaintiff must show a business practice is likely to deceive the reasonable consumer. Williams v. Gerber Prods. Co., 552F.3d 934, 937 (9th Cir. 2008). In other words, ‚Äúthese laws prohibit not only advertising which is false, but also advertising which, although true, is either actually misleading or which has a capacity, likelihood ...

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