2014-00169700-CU-BT

Joseph Cortez vs. McClatchy Newspapers, Inc.

Nature of Proceeding: Motion for Summary Judgment and/or Adjudication

Filed By: Herrington, Robert J.

*** If oral argument is requested, the parties must at the time oral argument is requested notify the clerk and opposing counsel of the specific issues or causes of action that will be addressed at the hearing. Counsel are also reminded that pursuant to local rules, only limited oral argument is permitted on law and motion matters. ***

Defendant McClatchy Newspapers, Inc.’s motion for summary judgment or summary adjudication is ruled upon as follows.

Judge Krueger discloses that he has been a continuous subscriber to the Sacramento Bee since approximately 1995. He also served as an intern reporter in McClatchy Newspapers’ Washington, D.C. bureau while in college. Judge Krueger does not believe that there is any basis for him to be disqualified from hearing this case.

The notice of motion does not provide notice of the Court’s tentative ruling system as required by Local Rule 1.06(D) and CRC Rule 3.1308. Counsel for moving party is ordered to notify the opposing party immediately of the tentative ruling system and to be available at the hearing, in person or by telephone, in the event the opposing party appears without following the procedures set forth in Local Rule 1.06(B).

Plaintiffs’ operative complaint is the second amended complaint (“SAC”) which includes causes of action for (1) violation of the automatic renewal law (“ARL”); (2) violation of the unfair competition law (“UCL”); and (3) violation of the Consumer Legal Remedies Act (“CLRA”).

This case arises from Defendant’s billing practices related to its sale of Sacramento Bee subscriptions. Plaintiffs identify four allegedly unlawful practices: (1) Defendant solicits consumers through promotions materials that seek newspaper subscriptions for a specified subscription period without adequately disclosing its automatic renewal policy, and often increases the subscription price upon renewal (SAC ¶ 2); (2) Defendant continues to deliver newspapers after the subscription period expires and then charges the subscriber for the extended period (id. ¶ 3); (3) Defendant deceives customers regarding its alleged practice of “backdating” renewal periods (id. ¶ 4); and

(4) Defendant fails to disclose that subscription periods are adjusted based on nine “special edition” newspapers delivered throughout the year with an extra $1 charge, whereby Defendant shortens the subscription period to recoup the extra charge (id. ¶ 5.).

Plaintiffs subsequently moved to file a proposed third amended complaint while the instant motion was pending. The motion was denied without prejudice.

Legal Standard

In evaluating a motion for summary judgment or summary adjudication, the Court engages in a three-step process. First, the Court identifies the issues as framed by the pleadings. The pleadings define the scope of the issues on a motion for summary judgment. (FPI Dev. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) The Court cannot consider an unpleaded issue in ruling on a motion for summary judgment. ( Roth v. Rhodes (1994) 25 Cal.App.4th 530, 541.)

Next, the Court must determine whether the moving party has met its burden. A defendant moving for summary judgment or summary adjudication bears the burden of persuasion that one or more elements of the challenged causes of action cannot be established or that there is a complete defense to the causes of action. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850, quoting Code Civ. Proc. § 437c(p)

(2).) A defendant is not required to conclusively negate one or more elements of the plaintiff’s causes of action. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 780-781.) Rather, to meet its burden, the defendant is only required to show that the plaintiff cannot prove an element of the causes of action, i.e., that the plaintiff does not possess and cannot reasonably obtain evidence necessary to show this element. ( Aguilar, 25 Cal.4th at 853-855.)

Once the moving party has met its burden, the burden shifts to the opposing party to show that a material factual issue exists as to the causes of action alleged or a defense to them. (Code Civ. Proc. § 437c(p); see generally Bush v. Parents without Partners (1993) 17 Cal.App.4th 322, 326-327.)

In ruling on the motion, the Court must consider the evidence and inferences reasonably drawn from the evidence in the light most favorable to the opposing party. ( Aguilar, 25 Cal.4th at 843.) Summary judgment or summary adjudication is properly granted only if the moving party’s evidence establishes that there is no issue of material fact to be tried. (Lipson v. Superior Court (1982) 31 Cal.3d 362, 374.)

Deficiencies of the Pleadings

In their opposition papers, Plaintiffs do not use standard pleading formatting. Rather

than the traditional 28 numbered lines per page, the opposition contains 33 lines per page. While the moving papers followed the standard 28 lines per page, Defendant’s reply papers have 34 lines per page. The parties apparently utilized this practice as a means to circumvent the statutory page limits. California Rule of Court 3.113(d) provides that summary judgment motions may not exceed 20 pages and a reply brief may not exceed 10 pages. A party who believes additional pages are necessary may file an ex parte application seeking permission file a longer memorandum. (Cal. R. Ct. 3.113(e).) A memorandum that exceeds the established page limitation will be considered in the same manner as a late-filed paper (Cal. R. Ct. 3.113(g)), meaning the court has discretion to disregard the filing entirely. Here, neither party sought a page extension from the Court. Nonetheless, the court has considered the motion and opposition on their merits.

Moving counsel sometimes failed to comply with California Rule of Court 3.1350(d)(3), requiring that the separate statement in support include a citation to the supporting evidence by exhibit, title, page, and line numbers.

Moving counsel failed to comply with California Rule of Court 3.1350(b) and (h), which require that the specific issues presented for summary adjudication be set forth in the notice of motion and then be repeated verbatim in the separate statement. Here, the notice of motion provides: “Plaintiffs claim to have been misled about the length, delivery, and pricing for their subscriptions to the Sacramento Bee, a newspaper owned by McClatchy, asserting claims under California’s Unfair Competition Law (‘UCL’), Automatic Renewal Law (‘ARL’), and Consumer Legal Remedies Act (‘CLRA’). But Plaintiffs’ claims of deception and injury fail as a matter of law for several reasons, including (i) the ‘backdating,’ ‘continuing delivery,’ and ‘premium edition’ policies, which Plaintiffs challenge as deceptive, were disclosed in flyers, invoices, notices, emails, and other written materials provided to the Plaintiffs; these policies and practices also were not material to the Plaintiffs’ renewal decisions, inasmuch as Plaintiffs continued to renew and pay for subscriptions with knowledge of these policies; (ii) Plaintiff Asbury has no injury and no standing to sue, because he received a refund of disputed payments before he filed suit; (iii) there is no private right of action to sue under the ARL, and moreover, the ARL does not even to the renewal payments made by Plaintiffs Felts, Durfee, and Cortez, because no recurring charges were assessed to their credit or debit cards or any payment account and (iv) the voluntary payment doctrine bars any recovery.” Defendant’s separate statement includes six issues rather than these four, as outlined below.

Additionally, Defendant’s separate statement includes 66 facts in support of summary judgment, then another separate statement in support of summary adjudication with the following “issues”: (1) Plaintiffs’ premium edition claims fail, with 21 related facts;

(2) Plaintiffs’ continuing delivery practice claims fail, with 28 related facts, which are not consecutively numbered following issue 1; (3) backdating claims of Cortez, Felts, and Durfee fail, with 7 related facts; (4) Asbury’s claims fail because he suffered no harm, with 3 related facts; (5) ARL does not apply to renewal payments made by Cortez, Durfee, or Felts, with 3 related facts; (6) additional undisputed facts relevant to the voluntary payments doctrine defense, with 3 related facts. Therefore, Defendant’s “separate statement” related to summary judgment includes 66 facts, while the cumulative facts listed in the “separate statement” with “issues” for summary adjudication add up to 65 facts.

Since Defendant appears to use the consecutive numbering from its separate

statement portion related to the motion for summary judgment, the Court will follow the same practice.

In opposition, Plaintiffs include 82 additional material facts. However, Plaintiffs do not specify which facts address which issues.

Analysis

Issues 1-3

Defendant’s first issue for summary adjudication is “Plaintiffs’ premium edition claims fail.” The second issue for summary adjudication is “Plaintiffs’ continuing delivery practice claims fail.” The third issue for summary adjudication is “Backdating claims of Cortez, Felts, and Durfee fail.”

Code of Civil Procedure section 437c(f)(1) states: “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one of more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Emphasis added.)

Defendant’s separate statement and briefing fails to address how any of these individual issues would “completely dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” Defendant’s motion states that “[d] istinct theories of liability or allegedly wrongful facts, even if not separately pled in the complaint, can be the subject of a motion for summary adjudication.” (Mot. at 14.) In support, Defendant cites to Lilienthal & Fowler v. Superior Court (1993) 12 Cal.App.4th 1848, 1853. Defendant misconstrues Lilienthal, which the Court finds inapplicable here.

In Lilienthal, the plaintiffs sought to recover damages from their attorneys in connection with two separate and distinct legal proceedings. (Id. at 1854.) The Court of Appeal noted that the plaintiffs’ claims were based on two separate and distinct obligations, each of which created a separate and distinct claim. (Id.) The first obligation related to legal services on “the Murillo matter,” while the second obligation related to legal services on “the Barton matter.” (Id.) There was “no dispute that the two matters have no relation to each other and involve legal services performed at different times, with different and distinct obligations, and distinct and separate alleged damages.” (Id.) After considering the Legislature’s intent in amending Code of Civil Procedure section 437c(f) in 1990, the Lilienthal court held that “a party may present a motion for summary adjudication challenging a separate and distinct wrongful act even though combined with other acts alleged in the same cause of action.” (Id. at 1854-1855.) For purposes of summary adjudication, a cause of action consists of the invasion of a primary right, regardless of the number of theories of recovery. (Skrbina v. Fleming Cos. (1996) 45 Cal.App.4th 1353, 1364.)

The presentation before the Court is distinguishable. None of the issues individually

would dispose of an entire case of action, affirmative defense, claim for damages, or issue of duty, as required by section 437c(f)(1). (See also Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 251.)

Defendant’s issues addressing practices of Defendant may have been sufficient to avoid this concern had the different issues been directed at one cause of action each, but each issue appears to be directed at all three causes of action without regard for the different elements of each cause of action.

This is especially problematic because motions of summary judgment or adjudication are not used in CLRA actions. Civil Code section 1781(c)(3) states that a court at the class certification stage may determine whether the action “is without merit or there is no defense to the action. [¶] A motion based upon Section 437c of the Code of

Civil Procedure [providing grounds and procedure for motion for summary judgment or adjudication] shall not be granted in any action commenced as a class action pursuant to subdivision (a).” (Emphasis added.) This provision allows for a defendant to move for a determination that the action is without merit. (Olsen v. Breeze, Inc. (1996) 48 Cal.App.4th 608, 612 (holding that a no-merit determination is the means of resolving CLRA actions before trial).) However, summary adjudication of Plaintiff’s cause of action under the CLRA is precluded as a matter of law.

The Court is not tasked with performing the analysis for Defendant.

Therefore, summary adjudication of issues 1 through 3 is DENIED.

Issue 4

Defendant’s fourth issue for summary adjudication is “Asbury’s claims fail because he suffered no harm.”

Defendant contends that “[b]efore Asbury filed suit, the Sacramento Bee tendered a refund of all amounts ever paid by Asbury since September 2010, and waived any account balance.” (UMF 57.) In opposition, Plaintiffs claim that Asbury has standing despite Defendant’s attempt to “pick off” his claims, particularly when Asbury is seeking class certification and Defendant has not mooted the claims of the entire class. On reply, Defendant argues that the majority viewpoint is that “a pre-litigation refund does not run afoul of the rule against ‘pick-offs.’” (Reply at 12, fn. 11; see also Reply at 12, fn. 13.)

First, the Court discusses the law applicable to CLRA claims. The CLRA letter sent on behalf of Plaintiffs, including Plaintiff Asbury, clearly provided notice of a class grievance, not individual. The letter begins: “In compliance with the requirements of the California Consumers Legal Remedies Act (Civil Code §§ 1750, et seq.) we write on behalf of our clients, Joseph Cortex, Brad Asbury, Margaret Felts, and Belen Durfee (‘Claimants’) and on behalf of all others similarly situated.” [6/11/2015 CLRA Letter (Plaintiffs’ Exh. 16), emphasis added.] Defendant does not allege that it met all the requirements of Civil Code section 1782(c). Therefore, Plaintiff Asbury is still able to act as a representative with regard to the CLRA claim.

Defendant’s motion on this issue again combines all causes of action, and briefs all three causes of action as if the same standard applies. In Polo v. Innoventions International, LLC (9th Cir. 2016) 833 F.3d 1193, summary judgment was granted to

the defendant on the basis that the plaintiff lacked Article III standing. “With respect to [the plaintiff’s] CLRA claim, the district court found that [the defendant] had undisputedly refunded [the plaintiff] her entire purchase price, including tax and shipping. As a result, the district court held that [the plaintiff] lacked Article III standing for all of her claims, granted summary judgment in favor of [the defendant], and dismissed the case.” (Id. at 1195.) The plaintiff appealed only with regard to her CLRA claim. The Ninth Circuit held that the case must be remanded to state court because full compensation of the plaintiff’s claims did not eliminate the plaintiff’s ability to act as a class representative of a CLRA claim. The Court found: “Under California law, however, that sort of ‘picking off’ of class plaintiffs is ineffective: ‘[O]nce a person has been the victim of a proscribed practiced under the CLRA and makes a demand on behalf of a class, remedying the plaintiff’s individual complaint does not disqualify her as a class representative.’ [Meyer v. Sprint Spectrum, L.P. (2009) 45 Cal.4th 634,642.] Instead, to defeat a class action based on practices proscribed under the CLRA, the defendant ‘must adequately notify the members of the class and provide an opportunity for an appropriate remedy for the defective goods or services.’ [Id., citing Civ. Code § 1782(c).].” (Polo, 833 F.3d at 1198-1199.)

Defendant contends that the holding of Kagan v. Gibraltar Savings & Loan Ass’n (1984) 35 Cal.3d 582 was limited in Wallace v. GEICO General Insurance Co. (2010) 183 Cal.App.4th 1390. The Court finds this to be overly simplistic. Kagan involved the CLRA and states: “Accordingly, we hold that an individual consumer may bring a class action under section 1781, subdivision (a), if pursuant to section 1782, subdivision (a), he or she has put the prospective defendant on notice that the alleged violations of section 1770 affect a class of consumers, and the prospective defendant has failed to correct or seek to correct such violations as to all similarly situated consumers pursuant to the conditions set forth in section 1782, subdivision (c).” (Kagan, 35 Cal.3d at 595.)

Wallace does not mention Kagan at all and discusses the UCL and not the CLRA. Further, Wallace does not specifically limit its holding to post-filing settlements but discusses the facts at issue in that case. (See Wallace, 183 Cal.App.4th at 1403 (“Under these circumstances, we find the pickoff cases to be fully applicable. Because GEICO was not required to reimburse Wallace under the terms of the consent order, it voluntarily offered to settle with her after she filed a class action lawsuit. The pickoff cases establish that in such a situation, Wallace does not automatically lose standing to act as a representative plaintiff. It was thus error for the trial court to grant GEICO’s motion to strike class allegations on the ground that the lawsuit lacked a representative plaintiff.”).) Further, as discussed below, Plaintiff Asbury rejected Defendant’s settlement offer.

The Court acknowledges Kagan has been limited by Meyer v. Sprint Spectrum (2009) 45 Cal.4th 634, where the California Supreme Court stated: “We decline to extend Kagan to situations in which an allegedly unlawful practice under the CLRA has not resulted in some kind of tangible increased cost or burden to the consumer.” (Id. at 643.) However, Meyer does not foreclose Plaintiff Asbury’s suit here: “Nor, as the damages threshold was interpreted in Kagan and in the present case, would a corporation initially intent on engaging in an unlawful practice against a consumer, such as enforcing an unconscionable term, be able to avoid an injunction by remedying that consumer’s individual grievance, thereby ‘picking off’ troublesome plaintiffs. First, as discussed above, a consumer who has had to expend transaction costs in order to avoid the unconscionable term has suffered ‘damage’ within the

meaning of section 1780(a) and therefore has standing to sue. Second, section 1782, subdivision (d) makes clear that remedying an individual consumer grievance, while precluding CLRA individual damage lawsuits under certain circumstances, does not prevent consumers from suing to enjoin unlawful practices on the public’s behalf. Third, as discussed above and in Kagan, if the action is filed as a class action lawsuit, section 1782, subdivision (c) makes clear that individual settlement will not undermine a plaintiff’s status as a legitimate class representative.” (Meyer, 45 Cal.4th at 645-646.)

The Court also finds that Defendant has not negated Plaintiff Asbury’s standing on the other claims as well. “A prospective defendant is not allowed to avert a class action by ‘picking off’ prospective plaintiffs one-by-one. Thus, precertification payment of the named plaintiff’s claim does not automatically disqualify the named plaintiff as a class action representative.” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (Rutter Group 2018) ¶ 14:14, p. 14-43, citing Ticconi v. Blue Shield of Calif. Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 547548; Larner v. Los Angeles Doctors Hosp. Assocs., LP (2008) 168 Cal.App.4th 1291, 1299; see also Wallace v. GEICO Gen. Ins. Co. (2010) 183 Cal.App.4th 1390, 1403.).)

To the extent that Defendant contends that the “pick-off” cases are not applicable here because the settlement offer was made before Plaintiff Asbury was named as a representative, the Court is not convinced that the analysis is so simple.

Defendant cites to federal cases in support of its argument, wherein the cases were dismissed for lack of Article III standing. (See Reply at 12, fn. 11, citing Berry v. Webloyalty.com, Inc. (9th Cir. 2013) 517 F. App’x 581, 581 (“Berry has alleged no injury in fact sufficient to support Article III standing. The record reveals Berry was fully compensated by Webloyalty.com for the $36.00 charged against his debit card. The $1.00 charge appearing in his account history is clearly marked as a debit card authorization rather than an actual charge. Berry has not shown that he incurred any other injury as a result of defendants’ actions.”); Stanford v. Home Depot USA, Inc. (9th Cir. 2009) 358 F. App’x 816, 819 (“On summary judgment, there was no genuine factual dispute that the alleged excess permit charge was refunded on the day after the purchase and that a permit was issued a few months after the installation and prior to plaintiff filing his lawsuit.”); Luman v. Theismann (9th Cir. 2016) 647 F. App’x 804, 806-807 (“The district court held that Plaintiffs’ individual claims for monetary relief were rendered moot when NAC refunded Plaintiffs’ money to their credit cards.”).) Additionally, the Polo decision also stated that it was “questionable” whether the plaintiff’s claim was moot simply on the basis that it had been paid in full, citing Chen v. Allstate Ins. Co. (2016) 819 F.3d 1141-1143, but stated the plaintiff “expressly waived any argument to the contrary on appeal.”

Plaintiff Asbury did not accept Defendant’s refund and therefore his “injury” and claims are arguably still live. (See Wallace, 183 Cal.App.4th at 1401 (“We see no indication in the history of Proposition 64 . . . that the voters amended section 17204 with the intent of allowing defendants in class actions brought under section 17200 et seq. to defeat class status by forcing an involuntary settlement.”).) Defendant’s UMF no. 57 states: “Before Asbury filed suit, the Sacramento Bee tendered a refund of all amounts ever paid by Asbury since September 2010, and waived any account balance.” In support, Defendant cites to Defendant’s Exhibit 12, which is correspondence from The Sacramento Bee dated July 8, 2015 and sent in response to Plaintiffs’ Exhibit 16 CLRA notice letter. The letter states with regard to Plaintiff Asbury: “To avoid any dispute with Mr. Asbury, we are enclosing a check for $313.92, which is a refund for all

payments made by Mr. Asbury since September 9, 2010. In addition, we have zeroed out Mr. Asbury’s account, waived any and all amounts that should be shown as due on Mr. Asbury’s account, including the $11.24 balance, and confirmed that ARM Solutions has ceased any and all collection activity relating to Mr. Asbury. Mr. Asbury’s account is closed and he owes nothing.” Mr. Asbury rejected the settlement offer. (See Plaintiffs’ Exhibit 19 (Asbury Decl.), ¶ 17 (“I rejected this payment because of my duty as a putative class representative. The Sacramento Bee’s offer would have only benefited me, and altogether failed to provide any compensation to the putative class.”); Plaintiffs’ Exhibit 5 (Asbury Depo. Tr.), 161:22-162:16 (Plaintiff Asbury did not deposit the refund check because “I represent the entire class and this only benefits me, and it doesn’t benefit the entire class.”).)

In Campbell-Ewald Co. v. Gomez (2016) 136 S.Ct. 663, the United States Supreme Court held that “an unaccepted offer of judgment cannot moot a case” on the basis of contract principles. (Id. at 670.) The Court quoted and adopted Justice Kagan’s prior dissent in Genesis HealthCare Corp. v. Symczyk (2013) 569 U.S. 66, which stated: “‘When a plaintiff rejects such an offer-however good the terms-her interest in the lawsuit remains just what it was before. And so too does the court’s ability to grant her relief. An unaccepted settlement offer-likely any unaccepted contract offer-is a legal nullity, with no operative effect. As every first-year law student learns, the recipient’s rejection of an offer ‘leaves the matter as if no offer had ever been made.’” (Id. at 81.) Subsequently, in a case where the defendant deposited the full amount of the named plaintiff’s individual claims into an escrow account in an attempt to eliminate the plaintiff’s claims, the Ninth Circuit denied dismissal of the case, stating it was “inappropriate” for a court to enter judgment on the individual claims over the plaintiff’s objection “before the plaintiff has had a fair opportunity to move for class certification.” (Chen v. Allstate Ins. Co. (9th Cir. 2016) 819 F.3d 1136, 1146-1148.)

This distinction was recognized in Stromberg v. Ocwen Loan Servicing, LLC (N.D. Cal. 2017) 2017 U.S. Dist. LEXIS 96738, at *21-25. Following its analysis of Campbell-Ewald and Chen, the court found that the plaintiff’s “individual claims are not moot because she rejected the Defendants’ tender and therefore has not actually received complete relief for her claims. Even if her individual claims were moot, Chen makes clear that this Court cannot dismiss her claims until she has had a fair opportunity to move for class certification.” (Id. at *25.) Defendant attempts to argue-without citation to any authority-that this is the minority viewpoint. To the extent Defendant relies on the prior ruling on Defendant’s demurrer and motion to strike heard on February 19, 2015 by Judge Brown, that ruling specifically stated that the fact that Plaintiff Cortez had not cashed Defendant’s refund check was “not before the Court” because the assertion was not alleged in the complaint and was not an admission or other matter of which the Court could take judicial notice. (Defendant’s Exhibit 24 (2/19/2015 Demurrer and Motion to Strike ruling, at p. 2).)

While not controlling on this Court, the Seventh Circuit Court of Appeals has decided this issue in Laurens v. Volvo Cars of North America, LLC (7th Cir. 2017) 868 F.3d

622. There, “the defendant in the case . . . assert[ed] that an unaccepted offer of relief before a putative plaintiff files a lawsuit deprives that plaintiff of standing.” (Id. at 623.) The Court stated: “We see no reason why the timing of the offer has such a powerful effect. Black-letter contract law states that offers to not bind recipients until they are accepted. [Citing ALI Restatement (Second) of Contracts § 17 (1981).] Hence while the legal effect of every variation on the strategic-mooting theme has not yet been explored, we are satisfied that an unaccepted pre-litigation offer does not deprive a

plaintiff of her day in court.” (Id.; see also id. at 626-629.)

On May 11, 2018, the Ninth Circuit issued the following order in Hamilton v. Gen. Mills, Inc. (9th Cir. May 11, 2018) 2018 U.S. App.LEXIS 12432, requiring supplemental briefing from both parties, discussing whether “[i]n light of the Seventh Circuit’s recent decision” in Laurens, “a pre-litigation offer nullifies a plaintiff’s Article III standing to sue or affects a plaintiff’s burden to establish an ‘ascertainable loss’ under” the law at issue in that case. (The appeal was later dismissed with prejudice pursuant to a stipulation filed by the parties.) Laurens has also been cited by a trial court in the Ninth Circuit on March 30, 2018, when the District Court of Hawaii found that the plaintiff in that case had standing, stating: “It is also relevant that Wieck is nominally the lead plaintiff in a putative class action, and courts have been skeptical of ‘defense effort[s] to pretermit a proposed class action by picking off the named plaintiff’s claim.’ [Laurens, 868 F.3d at 632 (concluding that an unaccepted offer of a full refund before a putative plaintiff files a lawsuit does not deprive that plaintiff of standing, and reviewing other similar circumstances).].)” (Wieck v. CIT GRp., Inc. (D. Haw. Mar. 30, 2018) 2018 U.S. Dist. LEXIS 55257, at *28-29, fn. 5.)

Plaintiff Asbury rejected Defendant’s attempt to preemptively moot his claim and deprive him of standing and his non-CLRA claims are also arguably thereby still live. While mindful of the distinction between standing and mootness as a basis to challenging Plaintiff Asbury, the Court finds that a challenge to his ability to represent the class is more properly raised in opposition to motion for class certification. (See Wallace, 183 Cal.App.4th at 1399, emphasis in original (“Instead of a reflexive dismissal of the representative plaintiff on the basis that he or she lacks standing as the trial court did here-the proper procedure in a pickoff situation is for the trial court to consider whether ‘the named plaintiffs will continue fairly to represent the class’ in light of the individual relief offered by the defendant. [Citation.] As a practical matter, in most cases, that evaluation may be performed in the context of a ruling on a motion for class certification, where the trial court inquires into the existence of, among other things, ‘(1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class. [Citations.].”).)

Summary adjudication is DENIED as to Defendant’s Issue 4.

Issue 5

Defendant’s fifth issue for summary adjudication is “ARL does not apply to renewal payments made by Cortez, Durfee, or Felts.”

Defendants contend that Plaintiffs’ claims fail because (1) there is no private right of action for violations of the ARL, and (2) the ARL does not apply at all to Plaintiffs because the Bee did not make any automatic, unauthorized charges to Plaintiffs’ cards or payment accounts, and the ARL can only be violated if there are recurring charges to a consumer’s card or payment account.

The pleadings define the scope of the issues on a motion for summary judgment or summary adjudication. (FPI Dev., Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.) Because a motion for summary judgment or summary adjudication is limited to the issues raised by the pleadings (see Lewis v. Chevron (2004) 119 Cal.App.4th 690, 694), all evidence submitted in support of or in opposition to the motion must be

addressed to the claims and defenses raised in the pleadings. An issue that is “within the general area of issues framed by the pleadings” is properly before the Court on a summary judgment or summary adjudication motion. (Lennar Northeast Partners v.

Buice (1996) 49 Cal.App.4th 1576, 1582-1583.)

Plaintiffs concede that the ARL does not allow for a stand-alone cause of action. (See Johnson v. Pluralsight, LLC (9th Cir. 2018) 2018 U.S.App.LEXIS 7969, at *4; Ingalls v. Spotify USA, Inc. (N.D. Cal. 2017) 2017 U.S.Dist. LEXIS 110817, at *6.) Plaintiffs claim that, despite the language in the current operative complaint, they are pursuing ARL violations under the “unlawful” prong of the UCL and will again move to amend their complaint after the instant motion is decided. Therefore, Plaintiffs’ stand-alone cause of action under the ARL fails as a matter of law.

Defendant’s additional challenge to Plaintiffs’ claim is “within the general area of issues framed by the pleadings” and has been briefed by both parties. Plaintiffs’ SAC provides in its second cause of action for violation of the UCL: “Defendant’s practice of automatically renewing consumers’ subscriptions and/or continuing to deliver papers without the required disclosures or consent of the consumer is an illegal business practice in that it violates the ARL . . . .” (SAC ¶ 65.) Therefore, the Court will also decide whether the ARL applies in this circumstance to form the basis of an unlawful business practice under the UCL.

Defendant claims that the claims of Plaintiffs Cortex, Durfee, and Felts fail because they were not charged a recurring payment on a debit or credit card or payment account. [UMF Nos. 60-62.] Plaintiffs do not dispute this, but argue it is immaterial because “payment by debit or credit card is not a requirement of the ARL.” [Plaintiffs’ Response to UMF Nos. 60-62.]

The first section of the automatic renewal law provides: “It is the intent of the Legislature to end the practice of ongoing charging of consumer credit or debit cards or third party payment accounts without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service.” (Bus. & Prof. Code § 17600.) In turn, section 17602(a) provides that it “shall be unlawful for any business that makes an automatic renewal or continuous service offer to a consumer” to do 3 acts: (1) fail to present the automatic renewal offer terms or continuous service offer terms in a prescribed manner; (2) charge the consumer’s credit or debit card or third party account for an automatic renewal or continuous service without first obtaining affirmative consent; or (3) fail to provide an acknowledgment that includes the automatic renewal or continuous offer service terms, cancellation policy, and information regarding how to cancel, with additional requirements if the offer includes a free trial. Section 17601(b)(3) defines that “‘[a]utomatic renewal offer terms’ means the following clear and conspicuous disclosures” and includes “[t]he recurring charges that will be charged to the consumer’s credit or debit card or payment account with a third party as part of the automatic renewal plan or arrangement, and that the amount of the charge may change, if that is the case, and the amount to which the charge will change, if known.” (Bus. & Prof. Code § 17602(b)(3), emphasis added.) Plaintiffs attempt to argue that this subsection must only be disclosed “when applicable,” but cites no authority. (See Oppo. at 23.) “Continuous service offer terms” is not defined.

Plaintiffs’ additional arguments are similarly not convincing. A third party payment account is a service like PayPal or an Apple account, and not “similar or identical” to a check that has to be sent in by the individual billed. Plaintiffs cite to no legal authority

overcoming the clear statement of legislative intent, and no cases in which the ARL has been applied when consumers have not been charged to a credit or debit card or third party payment account. (See Equilon Enterprises v. Consumer Cause, Inc. (2002) 29 Cal.4th 53, 61 (“Where, as here, legislative intent is expressed in unambiguous terms, we must treat the statutory language as conclusive; ‘no resort to extrinsic aids is necessary or proper.’ [People v. Otto (1992) 2 Cal.4th 1088, 1088].”).) Here, the Legislature’s concern and intent was clear, simple, and plainly set forward in section 17600 and is found throughout the statutory scheme.

While the Court recognizes that Plaintiffs are not without argument for finding a basis for the application of the ARL here, it appears the relief that Plaintiffs seek lies with the Legislature.

Summary adjudication of Issue 5 is GRANTED. The ARL does not allow for a private right of action and does not apply here, where the Plaintiffs were not charged to a credit or debit card or consumer account with a third party.

Issue 6

Defendant’s sixth issue for summary adjudication is “additional undisputed facts relevant to the voluntary payments doctrine defense.”

Defendant fails to explain whether the voluntary payments doctrine acts as a defense to all of Plaintiffs’ causes of action. For the reasons discussed above related to Issues 1-3, Defendant’s failure to direct this issue to specific causes of action precludes the Court from granting summary judgment or adjudication. This is especially true here, where such motions are precluded as a matter of law with regard to causes of action under the CLRA. Summary adjudication as to Issue 6 is DENIED.

Defendant’s request for judicial notice is granted. Plaintiffs’ request for judicial notice is granted.

Due to the Court’s ruling, the Court need not rule on objections to evidence. (Code Civ. Proc. § 437c(q).)

This minute order is effective immediately. Defendant is directed to prepare a formal order complying with C.C.P. §437c(g) and C.R.C. Rule 3.1312.