2018-00236714-CU-BT

Jacob Stout vs. Macy’s West Stores, Inc.

Nature of Proceeding: Hearing on Demurrer to Plaintiff’s First Amended Complaint

Filed By: Parsons, Brian Michael

Defendant Macy’s West Stores, Inc.’s (Macy’s) demurrer to the first amended complaint (FAC) is SUSTAINED with leave to amend.

Overview

The plaintiff in this case is Jacob Stout (Stout). Stout alleges that Macy’s misled him into believing that shorts he wished to purchase were on sale, when they were not. Stout alleges that Macy’s placed two clothing racks next to one another and displayed a “40% off” sign on one of the racks such that a reasonable consumer would have believed the merchandise on both racks was on sale. Instead, when he purchased shorts on the rack furthest from the on-sale sign, he learned that he would have to pay the full price, which he paid. He alleges that other shoppers were similarly misled.

With respect to his resulting damages, Stout alleges that he was “embarrassed and based on need for expedience and avoiding further inconvenience to take any further steps and left the store having paid full price[.]” (FAC, ¶ 13.) He also alleges “economic harm and consequential damages, inconvenience, attorney’s fees and costs…wasted time” and “emotional distress.” (Id., ¶¶ 20-21.) The FAC against Macy’s contains causes of action for negligence, negligence per se, fraud, false advertising [B&P Code § 17500 et seq.], violation of the Consumer Legal Remedies Act (CLRA) [CC § 1750 et seq.] and unfair competition [B&P Code § 17200 et seq.]. Macy’s demurs on grounds the allegations fail to state any valid cause of action. Stout opposes.

The demurrer is sustained in its entirety because Stout has not alleged any resulting injury. Proximately caused damages are elements of negligence and fraud. Similarly, actions under B&P Code §§ 17200 and 17500 require a loss of money or property as a result of unfair competition or false advertising. (See B&P Code § 17204; Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 228.) CLRA likewise predicates standing upon “’damage [suffered] as a result of the … practice declared to be unlawful.’” ( Hansen v. Newegg.com Americas, Inc. (2018) 25 Cal.App.5th 714, 724.) Stout alleges that he understood he would be required to pay and did pay full price for the shorts. Because the allegations do not establish that Stout was required to purchase the shorts, his allegations do not establish the resulting injury needed to support his cause of action.

In reaching its conclusion, the court has considered Veera v. Banana Republic, LLC (2016) 6 Cal.App.5th 907, and the factual similarities between that case and this one. In both cases one or more plaintiffs waited in line at a retail store thinking he/they would receive a discount on merchandise only to learn that the item selected was not discounted. Although the Veera plaintiffs were informed pre-purchase that they would be required to pay full price, the Court of Appeal held that resulting injury under the B&P Code as well as the CLRA presented a triable issue. The court reasoned that the plaintiffs were entitled to know the true prices of the items they selected, (Veera, p. 918), and it noted that the plaintiffs were embarrassed when they learned they would be required to pay full price. (Id., pp. 920.) Under these circumstances, the court held that the deceptive advertising “swept [the plaintiffs] up in the momentum of the events,” (id., p. 921), and contributed to the ultimate purchases at full price.

In Veera, though, the plaintiffs were lured into stores by signs suggesting that all merchandise was on sale. (Veera, pp. 911-912.) Stout alleges that he was already shopping at Macy’s when he noticed the shorts he eventually purchased. (FAC, ¶ 10.) He nonetheless asks this court to read Veera broadly, such that it applies even when the allegedly deceptive advertising plays no role in getting the plaintiff into the store in the first place. The court is not persuaded that Veera extends to such circumstances. Nor has Stout demonstrated that Veera, which involved standing under specific statutes, may be applied to common law torts such as negligence or fraud.

In short, Veera does not apply to the allegations in the FAC, and the demurrer is sustained. The court does not address the parties’ additional arguments in support of or in opposition to the demurrer.

Because this is Macy’s first objection to the allegations, the court grants Stout leave to amend.

Stout may file and serve a second amended complaint (SAC) no later than 10/29/18; Response(s) due within 30 days thereafter, 35 days if the SAC is served by mail.

Although not required by any statute or rule of court, Stout is requested to attach a copy of the instant minute order to the SAC to facilitate the filing of the pleading.

If any defendant intends to demur to the SAC or move to strike, it shall determine if any other defendant who has appeared in this action also intends to demur or move to strike. If so, all such defendants shall coordinate a single hearing date for the demurrers and motions to strike. Additionally, a copy of the SAC shall be included with the moving papers.

The minute order is effective immediately. No formal order pursuant to CRC 3.1312 is required.

The notice of motion does not provide notice of the court’s tentative ruling system, as required by Local Rule 1.06(D). Counsel for moving party is directed to contact counsel for opposing party forthwith and advise counsel of Local Rule 1.06 and the court’s tentative ruling procedure. If counsel for moving party is unable to contact counsel for opposing party prior to hearing, counsel for moving party shall be available at the hearing, in person or by telephone, in the event opposing party appears without following the procedures set forth in Local Rule 1.06(B).