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Anderson v. Seaworld Parks and Entertainment, Inc.

United States District Court, N.D. California

August 1, 2016

MARC ANDERSON, et al., Plaintiffs,
v.
SEAWORLD PARKS AND ENTERTAINMENT, INC., Defendant.

ORDER GRANTING, IN PART, AND DENYING, IN PART, MOTION TO DISMISS, WITH LEAVE TO AMEND AND SETTING CASE MANAGEMENT CONFERENCE RE: DOCKET NOS. 43, 69

          JEFFREY S. WHITE United States District Judge.

         Now before the Court for consideration is the motion to dismiss Plaintiffs’ first amended complaint, filed by SeaWorld Parks and Entertainment, Inc. (“SeaWorld”), and the motion for leave to file a second amended class action complaint, filed by Plaintiffs Marc Anderson (“Mr. Anderson”) and Ellexa Conway (“Ms. Conway”) (“Plaintiffs, ” unless otherwise noted). The Court has considered the parties’ papers, relevant legal authority, and the record in this case, and it HEREBY GRANTS, IN PART, AND DENIES IN PART SeaWorld’s motion to dismiss the first amended complaint, and it grants Plaintiffs leave to amend on the terms set forth in this Order.

         BACKGROUND

         A. Procedural History.

         This case is one of four putative class actions that were filed against SeaWorld regarding alleged misrepresentations about its treatment of orcas, i.e. killer whales, at its various theme parks.[1] Plaintiffs originally filed their complaint in the Superior Court of the State of California for the City and County of San Francisco. (Dkt. No. 1-1, Complaint; Dkt. No. 9-1; First Amended Complaint (“FAC”).) SeaWorld then removed the action to this Court and asserted the Court had jurisdiction under the Class Action Fairness Act (“CAFA”), 28 U.S.C. section 1332(d). (Dkt. No. 1, Notice of Removal, ¶ 3.)

         On September 18, 2015, SeaWorld filed its motion to dismiss the FAC. (Dkt. No. 43.)

         On September 24, 2015, Judge Conti denied Plaintiffs’ motion to remand. (Dkt. No. 45.) Plaintiffs filed a motion for leave to appeal that Order to the United States Court of Appeals for the Ninth Circuit (“Ninth Circuit”). (See Dkt. No. 51.)

         On October 14, 2015, Judge Conti permitted Plaintiffs to file a motion for reconsideration of his order denying remand. (Docket No. 53) On January 12, 2016, the undersigned granted, in part, and denied, in part Plaintiffs’ motion for reconsideration of the order denying remand and deferred ruling on SeaWorld’s motion to dismiss pending a ruling from the Ninth Circuit on Plaintiffs’ motion for leave to appeal. (Dkt. No. 65.)[2]

         On April 7, 2016, the Ninth Circuit denied Plaintiffs’ petition for permission to appeal the Order denying remand. (Dkt. 71.) Plaintiffs filed their motion for leave to file a second amended complaint on that same date. (Dkt. No. 69.)

         Because SeaWorld’s motion to dismiss was filed and ripe for decision before Plaintiffs filed their motion for leave to amend, and because the first amended complaint is the operative complaint, the Court shall consider that motion in the first instance. The Court has considered the allegations in Plaintiffs’ proposed second amended complaint to determine whether it would be futile to grant Plaintiffs leave to amend. Accordingly, the Court DENIES, AS MOOT, the motion for leave to amend.

         B. Factual Background.

         Plaintiffs allege that “[a]s part of a marketing campaign to induce ticket purchases, SeaWorld has made, continues to make, and profits off of false and misleading statements concerning the welfare of [its] captive orcas.” (FAC ¶ 1.) In their proposed Second Amended Complaint, Plaintiffs allege that SeaWorld also engaged in this marketing campaign to induce merchandise purchases. (Dkt. No. 77, Redline Proposed Second Amended Complaint (“Redline SAC”), ¶ 1.)

         Plaintiffs allege that SeaWorld represents that: (1) orca’s lifespans in captivity are equivalent to life spans in the wild; (2) collapsed dorsal fins are normal; (3) it does not separate orca calves from mothers; and (4) captivity does not harm orcas. (FAC ¶¶ 22-37; Redline SAC ¶¶ 22-37.) Plaintiffs allege that each of these statements are false or misleading and that they were “exposed” to these representations in a variety of ways. (FAC ¶¶ 19-20, 24, 26-28, 30-37; Redline SAC ¶¶ 17-20, 24, 26-28, 30-37.)

In sum, Plaintiffs allege that
SeaWorld’s advertising misleadingly creates the perception that orcas as a species are generally benefited by SeaWorld’s rehabilitative programs, scientific studies, and educational activities, and that the individual orcas it holds in captivity are as healthy and as stimulated as their wild counterparts. …

(FAC ¶ 6; Redline SAC ¶ 6.)

         According to Plaintiffs, and two proposed plaintiffs, Kelly Nelson (“Ms. Nelson”) and Juliette Morizur (“Ms. Morizur”), they relied on these various representations and purchased tickets or merchandise, or both, from SeaWorld, which they would not have purchased had they known the truth. (FAC ¶¶ 19-20; Redline SAC ¶¶ 17-20.) In the proposed SAC, Plaintiffs also allege that

[a]lthough SeaWorld continues to make these representations, on or around March 17, 2016, SeaWorld announced that it will end all orca breeding programs, and that the orcas SeaWorld currently has in captivity will be the last generation of orcas in SeaWorld’s care. SeaWorld also announced around the same time that it will phase out its theatrical orca whale shows across all of its parks. Plaintiffs’ inability to rely on the accuracy of these statements presents a continuing injury to them.

(Redline SAC ¶ 37.)

         Based on these, and other allegations that Court shall address as necessary, Plaintiffs assert claims for: (1) violations of California’s false advertising law, Business and Professions Code sections 17500, et seq. (the “FAL claim”); (2) violations of California’s unfair competition law, Business and Professions Code sections 17200, et seq. (the “UCL claim”); and (3) violation of California’s Consumer Legal Remedies Act, California Civil Code section 1750, et seq. (the “CLRA claim”).

         ANALYSIS

         SeaWorld argues the Court should dismiss the FAC, because: (1) Plaintiffs lack standing to seek injunctive relief under Article III of the United States Constitution; (2) Plaintiffs fail to comply with the requirements of Rule 9(b); (3) Plaintiffs fail to allege economic injury or reliance and, thus, fail to show they have statutory standing to seek relief; (4) tickets to SeaWorld are neither a good nor a service under the CLRA; and (5) Plaintiffs have not complied with the pre-suit notice requirements under the CLRA.[3]

         A. Applicable Legal Standards.

         1. Federal Rule of Civil Procedure 12(b)(1).

         SeaWorld moves to dismiss for lack of Article III standing, pursuant to Federal Rule of Civil Procedure 12(b)(1). See Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011); White v. Lee, 227 F.3d 1214, 1242 (9th Cir. 2000). A motion to dismiss under Rule 12(b)(1) may be “facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). Where, as here, a defendant makes a facial attack on jurisdiction, a court takes the factual allegations of the complaint as true. Federation of African Am. Contractors v. City of Oakland, 96 F.3d 1204, 1207 (9th Cir. 1996); see also Lujan v. Defenders of Wildlife, 504 U.S. 555, 561 (1992) (“At the pleading stage, general factual allegations of injury resulting from the defendant’s conduct may suffice, for on a motion dismiss, [courts] presume that general allegations embrace those specific facts that are necessary to support the claim.”) (internal citation and quotations omitted). The plaintiff is then entitled to have those facts construed in the light most favorable to him or her. Federation of African Am. Contractors, 96 F.3d at 1207.

         2. Federal Rule of Civil Procedure 12(b)(6).

         SeaWorld also moves to dismiss for failure to state a claim and for lack of statutory standing. A “lack of statutory standing requires dismissal for failure to state a claim, ” and is evaluated under Rule 12(b)(6). Maya, 658 F.3d at 1067 (emphasis omitted). Under Rule 12(b)(6), the Court’s “inquiry is limited to the allegations in the complaint, which are accepted as true and construed in the light most favorable to the plaintiff.” Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008). Even under the liberal pleadings standard of Federal Rule of Civil Procedure 8(a)(2), “a plaintiff’s obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a claim for relief will not do.” Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)). Pursuant to Twombly, a plaintiff must not allege conduct that is conceivable but must allege “enough facts to state a claim to relief that is plausible on its ...


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