Williams v. Affinity Ins. Servs.

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ISABEL WILLIAMS, Plaintiff, v. AFFINITY INSURANCE SERVICES, INC., et al., Defendants.

No. 23-cv-06347-JST

United States District Court, N.D. California

June 24, 2024

ORDER DENYING MOTION TO DISMISS, MOTION TO STRIKE AND MOTION TO STAY RE: ECF NOS. 27, 39, 40

JON S TIGAR UNITED STATES DISTRICT JUDGE

Before the Court are Defendants' motion to dismiss, ECF No. 27; Defendants' motion to strike, ECF No. 39; and Defendants' motion to stay discovery, ECF No. 40. The Court will deny the motions.

I. BACKGROUND

As part of her purchase of two cruise tickets from non-party Carnival Cruise Lines, Plaintiff purchased Defendants' “Vacation Protection” plan. ECF No. 1 ¶ (Complaint).^[1] As presented at check-out, this plan consisted of “Travel Insurance” underwritten by Nationwide Mutual Insurance and two “non-insurance” components: “Trip Cancellation,” and “24/7 Worldwide Travel Assistance.” Id. ¶ 32. Some additional information about the plan was posted elsewhere on the Carnival website, including brief explanations of the three categories of protection. Id. ¶ 33. Defendants' offer was the only insurance option presented. Id. ¶ 51.

Plaintiff alleges that most, if not all, of these offerings in the Vacation Protection plan are not “assistance and other non-insurance services” but actually constitute insurance. Id. ¶¶ 6, 52.

Because insurance premiums must be approved by the California Department of Insurance (CDI), Plaintiff contends that charging additional fees for supposed non-insurance assistance services in the Vacation Protection bundle amounts to an unauthorized premium or an unlawful agent's fee. Id. ¶ 4. To the extent that any of the services in the bundle do not qualify as insurance, Plaintiff contends that automatically bundling a fee for such “non-insurance” services without the option to purchase standalone insurance constitutes an unfair business practice. Id. ¶ 7.

Plaintiff brings two causes of action in this putative class action. First, Plaintiff alleges that Defendants violated Business and Professions Code § 17200, et seq. (“UCL”) (Count One) due to their unlawful, unfair, and fraudulent trade practices. Second, Plaintiff alleges that Defendants violated the False Advertising, Business and Professions Code § 17500, et seq. (“FAL”)) (Count Two).

II. JURISDICTION

This Court has subject matter jurisdiction over this action pursuant to the Class Action Fairness Act, 28 U.S.C. Section 1332(d)(2)(A).

III. LEGAL STANDARD

A. Rule 12(b)(1)

A motion to dismiss under Rule 12(b)(1) tests the subject matter jurisdiction of the Court. See Fed R. Civ. P. 12(b)(1). If a plaintiff lacks Article III standing to bring a suit, the federal court lacks subject matter jurisdiction and the suit must be dismissed under Rule 12(b)(1). Cetacean Cmty. v. Bush, 386 F.3d 1169, 1174 (9th Cir. 2004). “A Rule 12(b)(1) jurisdictional attack may be facial or factual. In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction. By contrast, in a factual attack, the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004) (citation omitted). In resolving a facial attack, the court assumes that the allegations are true and draws all reasonable inferences in the plaintiff's favor. Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004) (citations omitted). A court addressing a facial attack must confine its inquiry to the allegations in the complaint. See Savage v. Glendale Union High Sch., Dist. No. 205, Maricopa Cty., 343 F.3d 1036, 1051 (9th Cir. 2003). Under Rule 12(b)(1), the moving party may submit affidavits or any other evidence properly before the court, and the court may consider these materials. Association of American Medical Colleges v. U.S., 217 F.3d 770, 778 (9th Cir. 2000) (internal citation removed); see also Madanat v. First Data Corp., 2011 WL 208062 at *1 (N.D. Cal. Jan. 21, 2011).

B. Rule 12(b)(3)

Under Federal Rule of Civil Procedure 12(b)(3), a party may file a motion to dismiss on the basis of improper venue. Royal Hawaiian Orchards, L.P. v. Olson, 2015 WL 3948821, at *1 (C.D. Cal. June 26, 2015) (citing Fed.R.Civ.P. 12(b)(3)). “Once venue is challenged, the plaintiff bears the burden of showing that venue is proper.” Underberg v. Emp 'rs Mut. Cas. Co., 2016 WL 1466506, at *3 (D. Mont. Apr. 14, 2016) (citing Piedmont Label Co. v. Sun Garden Packing Co., 598 F.2d 491, 496 (9th Cir. 1979)). In considering a Rule 12(b)(3) motion to dismiss, the court need not accept the pleadings as true and may consider facts outside the pleadings. Doe 1 v. AOL LLC, 552 F.3d 1077, 1081 (9th Cir. 2009). “If the court finds that the case has been filed ‘in the wrong division or district,' it must ‘dismiss, or if it be in the interest of justice, transfer such case to any district or division in which it could have been brought.'” Allstar Mktg. Grp., LLC v. Your Store Online, LLC, 666 F.Supp.2d 1109, 1126 (C.D. Cal. 2009) (quoting 28 U.S.C. § 1406(a)). “Even if the court determines that venue is proper, it may still transfer for the convenience of parties and witnesses, in the interest of justice.” Del Toro v. Atlas Logistics, 2013 WL 796593, at *2 (E.D. Cal. Mar. 4, 2013). “In either case, the decision to transfer rests in the discretion of the court.” Id. (citing 28 U.S.C. 1404(b); King v. Russell, 963 F.2d 1301, 1304 (9th Cir. 1992) (holding that the trial court did not abuse its discretion under 28 U.S.C. § 1406(a) when it chose to dismiss, and not transfer, the action because of improper venue)).

C. Rule 12(b)(6)

Federal Rule of Civil Procedure 8(a) requires that a complaint contain “a short and plain statement of the claim showing that the pleader is entitled to relief.” Fed.R.Civ.P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6). “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff need only plead “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). A claim is facially plausible when a plaintiff pleads “factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). In reviewing the plausibility of a complaint, courts “accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, courts do not “accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)).

Rule 9(b) imposes a heightened pleading standard where fraud is an essential element of a claim. See Fed.R.Civ.P. 9(b) (“In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake.”); see also Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1107 (9th Cir. 2003). A plaintiff must identify “the who, what, when, where, and how” of the alleged conduct, so as to provide defendants with sufficient information to defend against the charge. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997). However, “[m]alice, intent, knowledge, and other conditions of a person's mind may be alleged generally.” Fed.R.Civ.P. Rule 9(b).

Even if the court determines that a 12(b)(6) motion should be granted, the “court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.” Lopez v. Smith, 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (quotation omitted).

D. Rule 12(f)

Under Rule 12(f) of the Federal Rules of Civil Procedure, the Court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.”

The function of a motion to strike pursuant to Rule 12(f) is “to avoid the expenditure of time and money that must arise from litigating spurious issues by dispensing with those issues prior to trial.” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973 (9th Cir. 2010) (citation omitted). “Generally, motions to strike are disfavored because pleadings are of limited importance in federal practice and such motions are usually used as a delaying tactic.” Carranza v. Terminix Int'l Co. Ltd. P'ship, 529 F.Supp.3d 1139, 1142 (S.D. Cal. 2021) (citation omitted). “Thus, courts will generally grant a motion to strike only when the moving party has proved that the matter to be stricken could have no possible bearing on the subject matter of the litigation.” Id. (citation omitted).

IV. REQUESTS FOR JUDICIAL NOTICE

Before turning to the parties' substantive arguments, the Court addresses the parties' requests for judicial notice. ECF No. 27-1 (“Defendants' RJN”); ECF No. 51-1 (“Plaintiffs' RJN”). The Court may generally consider matters properly subject to judicial notice. See Tellabs, Inc. v. Makor Issues & Rights, Ltd., 551 U.S. 308, 322 (2007). In support of its motion, Defendants request, among other items, that the Court take judicial notice of the Carnival Vacation Protection plan California disclosures (D...