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Hansen v. Scram of California, Inc.

United States District Court, C.D. California

April 28, 2017

HANSEN ET AL.
v.
SCRAM OF CALIFORNIA, INC. ET AL.

          Present: The Honorable CHRISTINA A. SNYDER

          CIVIL MINUTES - GENERAL

         Proceedings: (IN CHAMBERS) - DEFENDANTS' MOTION TO DISMISS (Dkt. 10, filed March 31, 2017)

         The Court finds this motion appropriate for decision without oral argument. See Fed. R. Civ. P. 78; CD. Cal. L.R. 7-15. Accordingly, the hearing date of May 1, 2017 is vacated, and the matter is hereby taken under submission.

         L INTRODUCTION

         On February 23, 2017, plaintiffs Roseanne Hansen and Jennifer Oh filed this class action against defendants Scram of California, Inc. ("Scram") and Alcohol Monitoring Systems ("AMS"). Dkt. 1 ("Compl."). Plaintiffs assert four claims: (1) violation of California's Unfair Competition Law, Cal. Bus. & Prof. Code §§ 17200 et seq. ("UCL"); (2) violation of California's False Advertising Law, Cal. Bus. & Prof. Code §§ 17500 et seq. ("FAL"); (3) violation of California's Consumers Legal Remedies Act, Cal. Civ. Code §§ 1750 et seq. ("CLRA"); and (4) fraud, deceit, and/or misrepresentation. The gravamen of plaintiffs' claims is that defendants mispresent the capabilities of the transdermal alcohol monitoring devices that AMS manufactures and Scram distributes.

         On March 31, 2017, Scram filed the instant motion to dismiss. Dkt. 10 ("MTD"). On April 6, 2017, AMS filed a notice of its joinder in Scram's motion. Dkt. 13. On April 14, 2017, plaintiffs filed their opposition.[1] Dkt. 15. On April 17, 2017, defendants filed a reply. Dkt. 17.

         Having carefully considered the parties' arguments, the Court finds and concludes as follows.

         II. BACKGROUND

         Plaintiffs allege the following facts.

         AMS is a nationwide provider of alcohol monitoring devices and services to state and federal law enforcement agencies, courts, as well as other private entities such as rehabilitation centers. Compl. ¶ 6. Scram is a local distributer and provider of AMS's devices and services in California. Id. ¶ 7.

         AMS's alcohol monitoring device (the "Device") is a transdermal monitoring device that was designed to detect and record any instances when a wearer consumes alcohol by detecting alcohol vapors caused by ingested alcohol diffusing through the skin. Id. ¶ 13. The Device is worn on the user's ankle. Id. Because transdermal alcohol monitoring measures the amount of alcohol evaporating through the wearers' skin, the Device is inherently susceptible to detecting "false-positive" alcohol readings as a result of "environmental alcohol, " i.e., alcohol vapors encountered on an everyday basis from products including cologne, aftershave, hand sanitizer, household cleaners, and gasoline. Id. ¶¶ 20-21. Individuals who purchase defendants' alcohol monitoring services are not made aware of the risk of false-positive results, and defendants misrepresent this risk. Id. ¶¶25.

         Defendants provide alcohol monitoring services to individuals as part of court mandated rehabilitation programs, as a condition of probation or bond, or other purposes related to the criminal justice system. Id. ¶ 14. In such cases, individuals subject to alcohol monitoring enter into private contracts with defendants, which charge such individuals monthly fees. Id.¶ 15. Ordinarily, users wear the Device at all times and remove it only once per day to connect the Device to an internet-enabled docking station to upload the monitoring data. Id. ¶ 17. The monitoring data is set to AMS, which applies an algorithm to approximate the blood alcohol content of the wearer based on the amount of alcohol vapor detected at the skin's surface. Id. ¶¶ 19, 37. AMS analyzes this date to determine whether an "alcohol consumption event" occurred. Id. ¶ 36. If AMS concludes that the alcohol vapor readings were caused by an "alcohol consumption event, " defendants inform the relevant law enforcement agency or court exercising jurisdiction over the wearer that the individual had consumed alcohol. Id. ¶ 38. However, defendants do not inform the wearer of the Device that an "alcohol consumption event" has occurred. Id. ¶ 39. Furthermore, the Device does not notify wearers in real-time when it detects alcohol vapors. Id. ¶ 40. As a result, when defendants report an "alcohol consumption event" to a law enforcement agency or court, customers who use the device as a condition of their bond or probation are unable to obtain time-sensitive evidence-e.g., a blood or breath alcohol test-to challenge to any resulting revocation of their bond or probation. Id. ¶¶ 41-43.

         Defendants advertise the Device as a cost-effective and accurate alternative for law enforcement agencies and courts to track the alcohol usage of at-risk individuals, including those charged with driving under the influence or other crimes relating to alcohol consumption. Id. ¶ 16. Defendants also advertise to the public and the governmental agencies with which they seek to work that the Device can determine the difference between alcohol vapors arising from ingested alcohol and alcohol vapors arising from environmental alcohol. Id.¶ 24. Defendants claim they can distinguish between alcohol vapor readings caused by "alcohol consumption events" and readings caused by environmental alcohols because the rate of alcohol dissipation is purportedly different for environmental alcohol vapors as compared with ingested alcohol vapors. Id. ¶35.

         Plaintiffs recount two instances involving third parties in which courts rejected results from the Device as biologically impossible and scientifically unreliable. Id. ¶¶ 27-30. Plaintiffs cite a study that concluded that the "methodology used by AMS cannot separate ethanol from other contaminating alcohols and therefore is not a reliable method." Id¶31. Ingested alcohol is comprised of ethanol. Id. Plaintiffs also contend that they experienced false-positive results using the Device. For example, plaintiff Hansen was arrested and charged with driving under the influence of alcohol. Id. ¶¶ 44-47. During the course of her criminal case, Hansen voluntarily entered herself into a residential alcohol treatment center. Id. ¶ 47. It appears that Hansen wore the Device while she was at the treatment facility. Id. ¶¶ 48-49. On February 7, 2016, Hansen tested negative when she took a breathalyzer test administered by her treatment center. Id. ¶ 50. On February 8, 2016, AMS sent a report to Scram indicating that Hansen had consumed alcohol for a day-long period. Id. ¶ 49. Defendants then generated a report stating that Hansen consumed alcohol. Id. Defendants were not aware that Hansen resided in a rehabilitation center. Id. Scram submitted this report to Hansen's attorney and to court. Id. ¶ 51. When Hansen's attorney notified Hansen of this report, Hansen provided the report to her treatment facility, where she again tested negative for alcohol consumption. Id. Hansen subsequently visited a licensed medical lab where her urine sample was tested for drugs and alcohol; Hansen tested negative. Id. ΒΆ 52. Plaintiffs contend that defendants falsely represented to the court, Hansen's attorney, and Hansen that she had consumed alcohol for hours at a time, even though Hansen "scientifically ...


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