[author: Sarah Kagan]
In Davis v. HSBC Bank Nevada, N.A., No. 10-56488, 2012 WL 3804370 (9th Cir. Aug. 31, 2012), the Ninth Circuit affirmed the dismissal of claims for (1) false advertising in violation of the California Business and Professions Code § 17500, et seq. (“FAL”); (2) fraudulent concealment; (3) “unlawful” business practices in violations of California Business and Professions Code § 17200, et seq. (“UCL”); and (4) “unfair” and “fraudulent” business practices in violation of the UCL, at the pleading stage.
The plaintiff's putative class action suit against HSBC Bank Nevada, N.A. and Best Buy Stores, L.P., alleged that defendants defrauded California consumers by offering credit cards without adequately disclosing that cardholders would be subject to an annual fee. The defendants moved to dismiss the action and requested that the court take judicial notice of three annual fee disclosure documents referenced in, but not attached to, the first amended complaint. The district court dismissed all four claims with prejudice on the ground that they failed to state claims entitling the plaintiff to relief because, in part, the advertising was not likely to deceive the reasonable consumer. Plaintiff appealed arguing that: (1) the district court erred when considering the documents provided by defendants in their request for judicial notice; and (2) the district court’s conclusion that none of the four claims plausibly suggested a right to relief was error.
The Ninth Circuit held that the fee disclosure documents were properly incorporated because courts may take into account “documents whose contents are alleged in a complaint and whose authenticity no party questions, but which are not physically attached to the [plaintiff’s] pleading.” Id. at 10375, citing Knievel v. ESPN, 393 F.3d 1068, 1076 (9th Cir. 2005). Because the plaintiff did not challenge the documents' authenticity, and the plaintiff “based his allegations on the contents and appearance of [the documents],” the court may treat the documents as part of the complaint. Id. at 10375 - 77.
The Ninth Circuit affirmed the dismissal of plaintiff’s FAL claim, holding that Best Buy's advertising was not likely to deceive a reasonable consumer. Id. at 10379. Because the advertisement contained a legible disclaimer that “‘[o]ther restrictions may apply,’ no reasonable consumer could have believed that if an annual fee was not mentioned it must not exist.” Id. at 10378. The...
