Johnson v. Pluralsight, LLC

236 F.Supp.3d 1176

Kyle JOHNSON, individually and on behalf of all others similarly situated, Plaintiff,

v.PLURALSIGHT, LLC; and Does 1–10, inclusive, Defendants.

No. 2:16–cv–01148–MCE–CKD

United States District Court, E.D. California.

Signed February 16, 2017

Filed February 17, 2017

Scott J. Ferrell, Pacific Trial Attorneys, Newport Beach, CA, for Plaintiff.

Arthur Robert Petrie, II, John Anthony McMahon, Hatton Petrie & Stackler APC, Aliso Viejo, CA, for Defendants.

ORDER

MORRISON C. ENGLAND, JR., UNITED STATES DISTRICT JUDGE

Plaintiff Kyle Johnson ("Plaintiff") filed this putative class action against Pluralsight, LLC, and Does 1–10 (collectively "Defendants" or "Pluralsight") alleging two claims for relief: (1) violation of California's Automatic Purchase Renewals Statute ("CAPRS"), codified at California Business and Professions Code §§ 17600 – 17606¹ ; and (2) violation of California's Unfair Competition Law ("UCL"), §§ 17200–17204.²

Presently before the Court is Defendants' Motion to Dismiss ("Motion") each claim pursuant to Federal Rule of Civil Procedure 12(b)(6).³ Defs.' Mot., ECF No. 5. Defendants seek dismissal of the lawsuit on the grounds that CAPRS does not create a private right of action under which Plaintiff can state any cognizable claim. Defendants further contend that Plaintiff lacks standing under the UCL in any event because he does not sufficiently plead an "injury in fact" resulting from Defendants' actions. For the reasons set forth below, the Court agrees, and Defendants' Motion is thus GRANTED.⁴

BACKGROUND

Defendants sell access to online training videos designed to facilitate learning for IT professionals and software developers. Defs.' Mem. at 1, ECF No. 5. Their videos are offered via a monthly or annual fee-based subscription to the website www.pluralsight.com, where subscribers stream the videos. Pl.'s Compl. ¶ 18, ECF No. 1. Defendants offer a 10–day "free trial" period in which a potential purchaser may access up to 1,000 minutes of the online videos without being charged a fee. ECF No. 5–1, Ex. A. Unless cancelled within the 10–day trial period, Defendants convert the free trial into a paid subscription, and automatically renew the subscription at the end of each subscription period (the "Automatic Renewal Program"). ECF No. 5–1, Ex. B.

On December 1, 2010, CAPRS came into effect for businesses offering automatic renewals or continuous service offers to consumers in California. See Cal. Bus. & Prof. Code § 17602. The stated intent of CAPRS is 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." Cal. Bus. & Prof. Code § 17600.

Plaintiff claims he purchased a Pluralsight subscription in California. Pl.'s Compl. ¶ 7. He further alleges that, after subscribing, Defendants emailed him an acknowledgement of the purchase. Id. at ¶ 19. Plaintiff claims, however, that Defendants did not provide the Automatic Renewal Program's offer terms, cancellation policy, or information on how to unsubscribe before additional payments were collected. Id. According to Plaintiff, Defendants' actions violated CAPRS because they failed to provide statutorily required information prior to enrollment into the Automatic Renewal Program. Id. Plaintiff thus reasons that pursuant to CAPRS § 17603, all goods, wares, merchandise, or products sent to Plaintiff and Class Members under an Automatic Renewal Program are unconditional gifts. Id. at ¶ 2. As gifts, Plaintiff asks the Court to conclude that the money Defendants received in the form of subscription payments was unlawfully obtained, and caused both Plaintiff and Class Members injury. Id. at ¶ 39.

Plaintiff filed his Complaint on May 27, 2016 seeking to represent a class of all California consumers who purchased subscriptions for any products from Defendants. Id. at ¶ 1. Defendants filed the instant Motion on June 22, 2016. ECF No. 5.

STANDARD

On a motion to dismiss for failure to state a claim under Rule 12(b)(6), all allegations of material fact must be accepted as true and construed in the light most favorable to the nonmoving party. Cahill v. Liberty Mut. Ins. Co. , 80 F.3d 336, 337–38 (9th Cir. 1996). Rule 8(a)(2) requires only "a short and plain statement of the claim showing that the pleader is entitled to relief" in order to "give the defendant fair notice of what the ... claim is and the grounds upon which it rests." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007) (quoting Conley v. Gibson , 355 U.S. 41, 47, 78 S.Ct. 99, 2 L.Ed.2d 80 (1957) ). A complaint attacked by a Rule 12(b)(6) motion to dismiss does not require detailed factual allegations. However, "a plaintiff's obligation to provide the grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (internal citations and quotations omitted). A court is not required to accept as true a "legal conclusion couched as a factual allegation." Ashcroft v. Iqbal , 556 U.S. 662, 129 S.Ct. 1937, 1950, 173 L.Ed.2d 868 (2009) (quoting Twombly , 550 U.S. at 555, 127 S.Ct. 1955 ). "Factual allegations must be enough to raise a right to relief above the speculative level." Twombly , 550 U.S. at 555, 127 S.Ct. 1955 (citing 5 Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 1216 (3d ed. 2004) (stating that the pleading must contain something more than "a statement of facts that merely creates a suspicion [of] a legally cognizable right of action.")).

Furthermore, "Rule 8(a)(2) ... requires a showing, rather than a blanket assertion, of entitlement to relief." Id. at 556, 127 S.Ct. 1955 n.3 (internal citations and quotations omitted). Thus, "[w]ithout some factual allegation in the complaint, it is hard to see how a claimant could satisfy the requirements of providing not only ‘fair notice’ of the nature of the claim, but also ‘grounds' on which the claim rests." Id. (citing 5 Charles Alan Wright & Arthur R. Miller, supra , at § 1202 ). A pleading must contain "only enough facts to state a claim to relief that is plausible on its face." Id. at 570, 127 S.Ct. 1955. If the "plaintiffs ... have not nudged their claims across the line from conceivable to plausible, their complaint must be dismissed." Id. However, "[a] well-pleaded complaint may proceed even if it strikes a savvy judge that actual proof of those facts is improbable, and ‘that a recovery is very remote and unlikely.’ " Id. at 556, 127 S.Ct. 1955 (quoting Scheuer v. Rhodes , 416 U.S. 232, 236, 94 S.Ct. 1683, 40 L.Ed.2d 90 (1974) ).

A court granting a motion to dismiss a complaint must then decide whether to grant leave to amend. Leave to amend should be "freely given" where there is no "undue delay, bad faith or dilatory motive on the part of the movant, ... undue prejudice to the opposing party by virtue of allowance of the amendment, [or] futility of the amendment...." Foman v. Davis , 371 U.S. 178, 182, 83 S.Ct. 227, 9 L.Ed.2d 222 (1962) ; Eminence Capital, LLC v. Aspeon, Inc. , 316 F.3d 1048, 1052 (9th Cir. 2003) (listing the Foman factors as those to be considered when deciding whether to grant leave to amend). Not all of these factors merit equal weight. Rather, "the consideration of prejudice to the opposing party ... carries the greatest weight." Eminence Capital , 316 F.3d at 1052 (citing DCD Programs, Ltd. v. Leighton , 833 F.2d 183, 185 (9th Cir. 1987) ). Dismissal without leave to amend is proper only if it is clear that "the complaint could not be saved by any amendment." Intri–Plex Techs. v. Crest Group, Inc. , 499 F.3d 1048, 1056 (9th Cir. 2007) (citing In re Daou Sys., Inc. , 411 F.3d 1006, 1013 (9th Cir. 2005) ; Ascon Props., Inc. v. Mobil Oil Co. , 866 F.2d 1149, 1160 (9th Cir. 1989) ("Leave need not be granted where the amendment of the complaint ... constitutes an exercise in futility....")).

ANALYSIS

Defendants' Motion rests on two primary contentions. First, they claim that CAPRS does not authorize claims to be filed under its provisions, and instead is subject to enforcement only by filing suit under existing mechanisms, such as the UCL.⁵ Defs.' Mem. at 2, ECF No. 5. Second, according to Defendants, Plaintiff lacks standing under the UCL, because he failed to plead an actual injury that is attributable to Defendants' alleged wrongdoing. Defs.' Mot. at 3, ECF No. 5.⁶

A. A Private Right Of Action Under CAPRS

A private right of action does not exist under a California statute unless the state Legislature has manifested its intent to create one. Lu v. Hawaiian Gardens Casino, Inc. , 50 Cal.4th 592, 596, 113 Cal.Rptr.3d 498, 236 P.3d 346 (2010). "Such legislative intent, if any, is revealed through the language of the statute and its legislative history." Id. A statute may provide clear, unmistakable language which strongly indicates Legislative intent to create a private right of action. Lu , 50 Cal.4th at 597, 113 Cal.Rptr.3d 498, 236 P.3d 346. "If, however, a statute does not contain such obvious language, resort to its legislative history is next in order." Id. (internal citations omitted).

1. CAPRS' Provisions Do Not Reveal Legislative Intent to Create a Private Cause of Action.

The Court finds no provision in CAPRS explicitly authorizing a private right of action. The sole reference to remedies is contained within § 17604(a), which states that "[n]otwithstanding Section 17534, a violation of this article shall not be a crime. However, all available civil remedies that apply to a violation of this article may be employed." Plaintiff asserts that the words "all available" expressly recognize a private right of action. Pl.'s Opp'n to Defs.' Mot. at 3–5, ECF No. 6. To support this position, Plaintiff cites Jordan Kissel v. Code 42 Software, Inc. et al. , Case No. SACV...