Case Name: Hayley Hodson v. Stanford University, et al.
Case No.: 18CV325565

Currently before the Court are demurrers by defendant Stanford University (“Stanford”) and defendant National Collegiate Athletic Association (“NCAA”) (collectively, “Defendants”) to the third amended complaint (“TAC”) filed by Hayley Hodson (“Plaintiff”) in response to the order sustaining the demurrer to her sixth and seventh causes of action with leave to amend.

According to the allegations in the TAC, Plaintiff played volleyball for Stanford whose volleyball program is governed by the NCAA. Plaintiff sustained a concussion at practice during a dangerous digging drill, was prematurely returned to play without a proper evaluation, and sustained a second concussion and traumatic brain injury during a game roughly three weeks later. Plaintiff alleges Stanford did not follow its own concussion protocol or the NCAA’s protocol and forced her to return to play despite significant, persistent symptoms of a concussion. She additionally alleges Defendants concealed and misrepresented facts about the risks of participating in the volleyball program and their safety protocols. She claims their conduct exacerbated her injuries.
Plaintiff asserts causes of action against Defendants for: (1) negligence; (2) medical negligence; (3) fraud; (4) fraudulent concealment; (5) negligent misrepresentation; (6) violation of Business and Professions Code section 17200; and (7) violation of Business and Professions Code section 17500.

First, NCAA demurs to each cause of action in the TAC on the ground of uncertainty. A demurrer on the ground of uncertainty tests whether a pleading is ambiguous, uncertain, or unintelligible. (Code Civ. Proc., § 430.10, subd. (f).) It “is not intended to reach the failure to incorporate sufficient facts in the pleading, but is directed at the uncertainty existing in the allegations actually made.” (Butler v. Sequeira (1950) 100 Cal.App.2d 143, 145–46.) The Court previously overruled NCAA’s demurrer on this ground to the second amended complaint primarily because it did not provide a supporting explanation to elucidate the allegations to which it was objecting. But while the Court overruled the demurrer, it also encouraged Plaintiff “to be clearer in her third amended complaint as to which allegations directly implicate Stanford, which ones implicate the NCAA, and which ones implicate both of them.” (Order at pp. 2:27–3:2.)

As NCAA now argues, Plaintiff did not attempt to clarify her allegations in the TAC. Throughout the pleading she refers to Defendants collectively in a manner that renders her allegations unclear. For example, there are allegations where Plaintiff seemingly describes Stanford’s conduct—using singular verbs and pronouns—yet simultaneously refers to Defendants collectively in a manner that is both ungrammatical and unclear. (TAC, ¶¶ 22–23.) Even if Plaintiff wishes to hold Defendants jointly liable or rely on a theory of vicarious liability, the underlying conduct upon which her claim is based must necessarily have been performed by some employee on behalf of some particular entity. To the extent Plaintiff believes Defendants are joint employers of some particular actor, she should state as much. And so, in light of the new points articulated by NCAA, to which Plaintiff does not provide an adequate response, the Court finds the pleading is ambiguous and uncertain. NCAA’s demurrer on the ground of uncertainty to each cause of action is, therefore, sustainable.

Second, Defendants demur to the sixth and seventh causes of action for violations of Business and Professions Code sections 17200 (the Unfair Competition Law (“UCL”)) and 17500 (the False Advertising Law (“FAL”)) on the ground of failure to state facts sufficient to constitute a cause of action. (See Code Civ. Proc., § 430.10, subd. (e).)

Section 17200 “prohibits ‘unfair competition,’ which it defines as ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [Section 17500].” (Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 722, quoting Bus. & Prof. Code, § 17200.) “‘The UCL’s purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.’” (Hansen, supra, 25 Cal.App.5th at p. 722, quoting Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) “‘The state’s false advertising law (§ 17500 et seq.) is equally comprehensive within the narrower field of false and misleading advertising.’” (Hansen, supra, 25 Cal.App.5th at p. 722, quoting Kwikset Corp. v. Super. Ct. (2011) 51 Cal.4th 310, 320.) “[A]ny violation of the false advertising law…necessarily violates the UCL.” (Hansen, supra, 25 Cal.App.5th at p. 722 [internal quotation marks and citations omitted].)

Standing is an essential prerequisite for asserting a claim under the UCL and FAL. (Hansen, supra, 25 Cal.App.5th at p. 723, citing Kwikset, supra, 51 Cal.4th at pp. 320–21.) To satisfy the standing requirement under either statute, “a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Kwikset Corp., supra, 51 Cal.4th at p. 322.) For example, a plaintiff suffers an economic injury sufficient to confer standing when he or she pays more in the course of a transaction than he or she would have or when a present or future interest in property is diminished. (Id. at pp. 323–24.) As another example, loss of customers and increased business costs may qualify as an injury in fact. (Law Offices of Mathew Higbee v. Expungement Assistance Services (2013) 214 Cal.App.4th 544, 560.) A plaintiff must prove and plead these facts. (Id. at pp. 547–48.)

Defendants argue Plaintiff still does not allege a loss of money or property sufficient to show she has standing to assert a claim under either statute. For context, Plaintiff previously retracted her allegation that she lost her scholarship as a result of Defendants’ conduct because her scholarship was reinstated. (See SAC, ¶¶ 97–101.) She requested leave to amend the pleading to allege she lost out on a professional volleyball career as a result of Defendants’ conduct. And so, the Court sustained the demurrer to the sixth and seventh causes of action with leave to amend. In the TAC, Plaintiff alleges she incurred medical expenses as a basis for standing under the UCL and FAL. (TAC, ¶¶ 99, 103.) She also alleges she “had the ability to turn professional without the need to be subjected to Defendants, and both of their deceptive business practices.” (TAC, ¶ 99; see also TAC, ¶ 103.) Defendants state these allegations are insufficient.

According to Defendants, medical expenses are not a qualifying loss of money or property for the purpose of standing under the UCL and FAL. All of the parties seem to agree there is no authority directly on point. Both Stanford and NCAA state there is no similar case in which a court recognized medical expenses as a loss of money or property for the purpose of the UCL or FAL; Plaintiff does not identify any case in her opposition. And, neither Stanford nor NCAA cite any authority explicitly rejecting a theory like Plaintiff’s here.

Even so, Defendants argue the medical expenses are not Plaintiff’s direct injury, but rather the damages she incurred as a result of suffering a physical injury. There is some indirect support for this argument in Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623. In Grisham, the California Supreme Court evaluated the timeliness of claims, including a UCL claim, against a tobacco company. (Grisham, supra, 40 Cal.4th at p. 628.) In discussing the primary rights theory for the purpose of evaluating when the claims accrued, the court distinguished between the plaintiff’s physical and economic injuries. (Id. at pp. 639–44.) Plaintiff sought damages under various tort theories for physical injuries including emphysema and periodontitis. (Id. at p. 639.) She also asserted a UCL claim based on an economic injury, namely that she was “compelled by the addiction to devote a steady stream of her income to the purchase of cigarettes.” (Id. at p. 641.) And so, while Grisham does not directly address the issue of standing, the Court is persuaded that NCAA’s characterization of Plaintiff’s medical expenses is apt. In other words, Plaintiff’s medical expenses are one step removed from Defendants’ injury-producing conduct because the expenses are the resulting damages from a physical injury as distinct from an economic injury flowing directly from Defendants’ conduct. (See, e.g., Sarun v. Dignity Health (2014) 232 Cal.App.4th 1159, 1165–69 [standing established by additional medical expenses attributable to overbilling].) Thus, the medical expenses Plaintiff incurred as a result of her physical injury do not qualify as an economic injury that gives rise to standing under the UCL and FAL.

Otherwise, while Plaintiff previously stated she intended to allege she lost the opportunity to play professional volleyball, what she actually alleges is that she “had the ability to turn professional without the need to be subjected to Defendants, and both of their deceptive business practices” (TAC, ¶ 99). As NCAA points out, she does not actually appear to be alleging the loss of her professional career is the loss of money or property upon which her UCL and FAL claims are based. To be sure, she focuses exclusively on medical expenses in her opposition. And, ultimately, like the medical expenses allegedly incurred, the loss of her professional volleyball career is not the direct result of Defendants’ conduct, but rather, another item of damages attributable to her physical injury. Accordingly, Plaintiff does not allege any other economic injury to show she has standing to assert a claim under the UCL and FAL.

For these reasons, Defendants’ demurrers to the sixth and seventh causes of action on the ground of failure to state facts sufficient to constitute a cause of action are also sustainable.
When a court sustains a demurrer, it may deny leave to amend if there is no reasonable possibility the plaintiff can amend the complaint to state a viable claim. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) A “[p]laintiff must show in what manner he [or she] can amend his [or her] complaint and how that amendment will change the legal effect of the pleading.” (Ibid.) Here, although Plaintiff presumably can clarify her allegations, she does not articulate how she can amend the pleading to state viable claims under the UCL and FAL. Accordingly, NCAA’s demurrer on the ground of uncertainty is SUSTAINED with 10 days’ leave to amend as to the first, second, third, fourth, and fifth causes of action. Defendants’ demurrers to the sixth and seventh causes of action are SUSTAINED WITHOUT LEAVE TO AMEND.