United States District Court, S.D. California
MONICA RAEL, on behalf of herself and all others similarly situated, Plaintiff,
DOONEY & BOURKE, INC., a Connecticut corporation, and DOES1-50, inclusive, Defendant.
ORDER GRANTING DEFENDANT’S MOTION TO DISMISS
WITH LEAVE TO AMEND
JEFFREY T. MILLER, United States District Judge.
order addresses Defendant Dooney & Bourke, Inc.’s
(“D&B”) motion to dismiss Plaintiff’s
first amended class action complaint, filed on June 10, 2016.
(Doc. No. 17). Plaintiff opposed the motion on July 5, 2016.
(Doc. No. 23). Defendant replied on July 11, 2016. (Doc. No.
26). The court held oral argument on July 18, 2016. For the
reasons set forth below, the court grants Defendant’s
motion to dismiss with leave to amend.
case concerns allegations that Defendant D&B is engaged
in false discount pricing by offering outlet store
merchandise at purported discounts from fabricated
“original” prices. Plaintiff Monica Rael
(“Rael”), on behalf of herself and others
similarly situated, asserts causes of action for (1)
violations of California’s Unfair Competition Laws
(“UCL”), California Business & Professions
Code § 17200 et seq.; (2) violation of
California’s False Advertising Laws
(“FAL”), California Business & Professions
Code § 17500, et seq.; (3) violation of California
Consumer Legal Remedies Act (“CLRA”), California
Civil Code § 1750, et seq.; (4) violation of the
consumer protection laws on behalf of classes of states with
similar laws; and (5) negligent misrepresentation.
alleges as follows: during the class period,  Defendant
continually misled consumers by advertising bags and fashion
accessories at discounted, “savings” prices.
(Doc. No. 9, ¶ 2). Defendant would compare the
“sale” prices to false “original” or
“market” prices, which were misrepresented as the
“original” or “market” retail prices
from which the “savings” were discounted.
(Id.). The advertised discounts were nothing more
than mere phantom markdowns because the represented market
prices were artificially inflated and were never the original
prices for bags and fashion accessories sold at
Defendant’s retail factory outlet stores.
conveys its deceptive pricing scheme to consumers through
promotional materials, in-store displays, and print
advertisements. (Id. ¶ 6). Defendant states on
its sales receipt, provided to customers only after they have
engaged in a purchase, the following: “All items sold
in this store are over-runs, discounted, or irregular. As a
result, the prices are reduced.” (Id. ¶
3). The “market” or “original” prices
were never offered for sale in the outlet stores, for outlet
quality products, and were not the prevailing marketing
retail prices at the outlet stores within the three months
immediately preceding the publication of the advertised
former prices, as required by California law. (Id.
¶ 4). Defendant did not inform Plaintiff or members of
the proposed class that the products sold at its outlet
stores were of lesser quality or value than merchandise
Defendant sells through other channels and retailers. (
Id. ¶ 5).
around December 2, 2015, Plaintiff saw a handbag at a D&B
factory store, which was advertised at “40% off.”
(Id. ¶ 16). Believing she was receiving a
significant value by purchasing the handbag for $136.80 that
was originally priced at approximately $228.00, she decided
to buy it. The “original” or “market”
price of the handbag and the corresponding price
“discounts” were false and misleading, as the
prevailing retail price for the handbag in D&B retail
outlet stores during the three months immediately prior to
Plaintiff’s purchase was not $228.00. (Id.
¶ 17). Plaintiff would not have purchased the handbag
without the misrepresentations made by Defendant.
(Id. ¶ 18).
alleges that this court has jurisdiction pursuant to the
Class Action Fairness Act, 28 U.S.C. § 1332(d)(2), as
she is a California resident, D&B is a Connecticut
corporation headquartered in Connecticut, and the amount in
controversy exceeds $5, 000, 000. (Id. ¶¶
10, 13–14). Plaintiff seeks damages, restitution and
disgorgement of all profits, unjust enrichment, declaratory
and injunctive relief, an order requiring Defendant to engage
in a corrective advertising campaign, and attorneys’
fees and costs. (Id. ¶ 82).
motion to dismiss for failure to state a claim under Federal
Rule of Civil Procedure 12(b)(6) challenges the legal
sufficiency of the pleadings. To overcome such a motion, the
complaint must contain “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.” Ashcroft v. Iqbal, 556 U.S. 662, 678
(2009). Facts merely consistent with a defendant’s
liability are insufficient to survive a motion to dismiss
because they establish only that the allegations are possible
rather than plausible. See id. at 678–79. The
court should grant relief under Rule 12(b)(6) if the
complaint lacks either a cognizable legal theory or facts
sufficient to support a cognizable legal theory. See
Balistreri v. Pacifica Police Dep’t, 901 F.2d 696,
699 (9th Cir. 1990).
heightened pleading standard of Rule 9(b) applies to
Plaintiffs’ claims. See Kearns v. Ford Motor
Co., 567 F.3d 1120, 1125 (9th Cir. 2009) (“Rule
9(b)'s particularity requirement applies to these
state-law causes of action [i.e., CLRA and UCL
claims].”). Rule 9(b) requires a plaintiff alleging
fraud to “state with particularity the circumstances
constituting fraud.” Fed.R.Civ.P. 9(b); see Nursing
Home Pension Fund, Local 144 v. Oracle Corp., 380 F.3d
1226, 1230 (9th Cir. 2004). “It is not enough . . . to
simply claim that [an advertisement] is false-[the plaintiff]
must allege facts showing why it is false.”
Davidson v. Kimberly- Clark Corp., 76 F.Supp.3d 964,
974 (N.D. Cal. 2014) (emphasis in original).
ruling on a motion to dismiss, the court must take all
allegations as true and construe them in the light most
favorable to the plaintiff. See Metlzer Inv. GMBH v.
Corinthian Colls., Inc., 540 F.3d 1049, 1061 (9th Cir.
2008). “Review is limited to the complaint, materials
incorporated into the complaint by reference, and matters of
which the court may take judicial notice.” Id.
Rule of Civil Procedure 15 provides that courts should freely
grant leave to amend when justice requires it. Accordingly,
when a court dismisses a complaint for failure to state a
claim, “leave to amend should be granted unless the
court determines that the allegation of other facts
consistent with the challenged pleading could not possibly
cure the deficiency.” DeSoto v. Yellow Freight
Sys., Inc., 957 F.2d 655, 658 ...