Amy Friedman v. Guthy-Renker LLC, No. 2:2014cv06009 - Document 41 (C.D. Cal. 2015)
Court Description: ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS MOTION TO DISMISS 36 by Judge Otis D. Wright, II. (lc). Modified on 2/27/2015 (lc).
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Amy Friedman v. Guthy-Renker LLC Doc. 41 O 1 2 3 4 5 6 United States District Court Central District of California 7 8 9 Case No. 2:14-cv-06009-ODW(AGRx) 10 AMY FRIEDMAN, JUDI MILLER, and 11 KRYSTAL HENRY-MCARTHUR, on 12 behalf of themselves and all others ORDER GRANTING IN PART AND 13 similarly situated, DENYING IN PART DEFENDANT’S v. 15 16 MOTION TO DISMISS [36] Plaintiffs, 14 GUTHY-RENKER LLC, Defendant. 17 I. 18 INTRODUCTION 19 On November 3, 2014, Plaintiffs Amy Friedman, Judi Miller, and Krystal 20 Henry-McArthur filed their First Amended Complaint against Defendant Guthy- 21 Renker LLC (“Guthy-Renker”). 22 putative class action complaint, Plaintiffs allege that Guthy-Renker’s “WEN 23 Cleansing Conditioner” line of haircare products caused their hair to fall out. Pending 24 before the Court is Guthy-Renker’s Motion to Dismiss. (ECF No. 36.) For the 25 reasons discussed below, Guthy-Renker’s Motion to Dismiss is GRANTED IN 26 PART and DENIED IN PART.1 (ECF No. 43 [“FAC”].) In their seven-count 27 28 1 After carefully considering the papers filed in support of and in opposition to the Motion, the Court deems the matter appropriate for decision without oral argument. Fed. R. Civ. P. 78; L.R. 7-15. Dockets.Justia.com II. 1 FACTUAL BACKGROUND 2 Guthy-Renker is a “direct marketing” corporation with a principal place of 3 business in Santa Monica, California. (FAC ¶¶ 18, 21.) It sells a variety of beauty- 4 related products, to include a line of haircare products called “WEN by Chaz Dean.” 5 At issue in this case is the “WEN Cleansing Conditioner” (hereinafter “WEN”). (Id. 6 ¶ 21.) According to Guthy-Renker’s website, WEN “is a revolutionary new concept 7 in hair care” and “takes the place of . . . shampoo, conditioner, deep conditioner, 8 detangler and leave-in conditioner.” (Id. ¶ 22.) WEN is sold online and over the 9 phone. (Id. ¶ 21.) 10 Each of the three plaintiffs—Ms. Miller, Ms. Friedman, and Ms. Henry- 11 McArthur—allege that WEN caused their hair to fall out. (Id. ¶¶ 33–38.) Ms. Miller 12 purchased WEN over the phone, while Ms. Friedman and Ms. Henry-McArthur 13 purchased the product through Guthy-Renker’s website. (Id.) 14 Plaintiffs allege that WEN causes significant hair loss as the result of a design 15 and/or manufacturing defect. (Id. ¶ 2.) Plaintiffs’ First Amended Complaint raises 16 seven causes of action: (1) two theories of breach of warranty—implied warranty 17 under Cal. Com. Code § 2314, and express warranty under the Magnuson-Moss 18 Warranty Act (“MMWA”), 15 U.S.C. § 2301; (2) California’s Unfair Competition 19 Law, Cal. Civ. Code § 17200; (3) California’s False Advertising Law, Cal. Civ. Code 20 § 17500; (4) common law assumpsit; (5) failure to warn negligence; (6) failure to test 21 negligence; and (7) strict products liability. (Id. ¶¶ 52–108.) Plaintiffs propose a class 22 defined as: 23 Cleansing Conditioner from August 1, 2009 to present.” (Id. ¶ 42.) 24 “All persons or entities in the United States who purchased WEN III. LEGAL STANDARD 25 Pursuant to Rule 12(b)(6), a defendant may move to dismiss an action for 26 failure to allege “enough facts to state a claim to relief that is plausible on its face.” 27 Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). “A claim has facial plausibility 28 when the plaintiff pleads factual content that allows the court to draw the reasonable 2 1 inference that the defendant is liable for the misconduct alleged. The plausibility 2 standard is not akin to a ‘probability requirement,’ but it asks for more than a sheer 3 possibility that a defendant has acted unlawfully.” Ashcroft v. Iqbal, 556 U.S. 662, 4 678 (2009) (internal citations omitted). For purposes of ruling on a Rule 12(b)(6) 5 motion, the Court “accept[s] factual allegations in the complaint as true and 6 construe[s] the pleading in the light most favorable to the non-moving party.” 7 Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). 8 The Court is not required to “assume the truth of legal conclusions merely 9 because they are cast in the form of factual allegations.” Fayer v. Vaughn, 649 F.3d 10 1061, 1064 (9th Cir. 2011) (internal quotation marks and citations omitted). Mere 11 “conclusory allegations of law and unwarranted inferences are insufficient to defeat a 12 motion to dismiss.” Adams v. Johnson, 355 F.3d 1179, 1183 (9th Cir. 2004) (internal 13 quotation marks and citations omitted). “If a complaint is accompanied by attached 14 documents, the court is not limited by the allegations contained in the complaint. 15 These documents are part of the complaint and may be considered in determining 16 whether the plaintiff can prove any set of facts in support of the claim.” Durning v. 17 First Boston Corp., 815 F.2d 1265, 1267 (9th Cir. 1987) (internal citations omitted). 18 The Court may consider contracts incorporated in a complaint without converting a 19 motion to dismiss into a summary judgment hearing. United States v. Ritchie, 342 20 F.3d 903, 907–08 (9th Cir. 2003). 21 IV. DISCUSSION 22 Guthy-Renker makes three arguments in its Motion to Dismiss. (ECF No. 36 23 [“MTD”].) First, it argues that the Court must dismiss Ms. Friedman and Ms. Henry- 24 McArthur’s claims because both ladies agreed to binding arbitration when they 25 purchased WEN online. (Id. at 6–11.) Second, Guthy-Renker argues that Plaintiffs 26 cannot state a claim under the MMWA because there was no express written warranty. 27 (Id. at 11–13.) Third, Guthy-Renker argues that Plaintiffs cannot state a claim for 28 assumpsit because a valid contract exists. 3 (Id. at 13–15.) Plaintiffs filed an 1 Opposition Brief on January 16, 2015 (ECF No. 38 [“Opp. Br.”]), and Guthy-Renker 2 a Reply on February 6, 2015 (ECF No. 39 [“Reply”]). 3 A. First Argument: Binding Arbitration Clause 4 According to Guthy-Renker, when a customer purchases WEN online the 5 customer must affirmatively assent to the company’s “Terms and Conditions” prior to 6 completing the purchase. (MTD at 4.) Customers assent to the Terms and Conditions 7 by “clicking an interactive checkbox” on the final checkout screen. (Id.) Guthy- 8 Renker argues that its Terms and Conditions waive class action lawsuits and require 9 arbitration for all disputes arising between the customer and Guthy-Renker. (Id.) 10 Guthy-Renker argues that both Ms. Friedman and Ms. Henry-McArthur clicked the 11 interactive checkbox when completing their online purchases, and therefore both 12 women are bound by the arbitration agreement in the Terms and Conditions. (Id.) 13 Guthy-Renker makes no claim that Ms. Miller’s over-the-phone purchase subjects her 14 to the same arbitration agreement. 15 Ms. Friedman and Ms. Henry-McArthur do not dispute that they clicked the 16 interactive box, nor do they dispute that the Terms and Conditions contains a class 17 action waiver and an arbitration clause. 18 knowingly assent to the Terms and Conditions because the design of Guthy-Renker’s 19 website does not give the customer proper inquiry notice of those terms. (Opp. Br. at 20 4.) 21 Conditions, Ms. Friedman and Ms. Henry-McArthur argue that they are not required 22 to submit to arbitration. (Id.) Thus the only question before the court is whether Ms. 23 Friedman and Ms. Henry-McArthur were on proper inquiry notice of the Guthy- 24 Renker’s Terms and Conditions. Instead, they argue that they did not Because they were not given notice and did not assent to the Terms and 25 This question requires the Court to examine the layout of Guthy-Renker’s 26 website, with a particular focus on hyperlink placement, terminology, and clarity. The 27 Court will first discuss the controlling law for online contract inquiry notice and will 28 then explain the layout of Guthy-Renker’s checkout screen. 4 1 1. Law of Online Contracts 2 The Federal Arbitration Act (“FAA”) requires federal courts to stay judicial 3 proceedings and compel arbitration if the claims are covered by a written and 4 enforceable arbitration agreement. 9 U.S.C. § 3. In deciding whether an arbitration 5 agreement exists, courts “apply ordinary state-law principles that govern the formation 6 of contracts.” First Options of Chicago, Inc. v. Kaplan, 514 U.S. 938, 944 (1995). 7 The Ninth Circuit recently opined on the enforceability of online contracts 8 containing arbitration agreements. In Nguyen v. Barnes & Noble Inc., 763 F.3d 1171, 9 1173 (9th Cir. 2014), the question before the court was whether a consumer was 10 bound by an arbitration agreement in a “Terms of Use” hyperlink found at the bottom 11 of every website page. The consumer argued that he was not bound because he 12 neither had notice of nor assented to the website’s Terms of Use. Id. The website 13 argued that the placement of the hyperlink put the consumer on constructive notice of 14 the arbitration clause. Id. at 1174–75. 15 Applying New York law, but acknowledging that “California and New York 16 dictate the same outcome,” the Nguyen court held that the customer did not assent to 17 the arbitration agreement because he did not have proper inquiry notice. Id. at 1175. 18 The court first explained that internet website contracts come in two forms: 19 “‘clickwrap’ (or ‘click-through’) agreements, in which website users are required to 20 click on an ‘I agree’ box after being presented with a list of terms and conditions of 21 use; and ‘browsewrap’ agreements, where a website’s terms and conditions of use are 22 generally posted on the website via a hyperlink at the bottom of the screen.” Id. at 23 1176. The court further explained that courts will enforce a browsewrap agreement if 24 (a) the consumer had actual notice of the agreement or (b) the “browsewrap agreement 25 resembles a clickwrap agreement—that is, where the user is required to affirmatively 26 acknowledge the agreement before proceeding with use of the website.” Id. 27 The court noted that the agreement at issue in Nguyen was a browsewrap 28 agreement that did not require an affirmative acknowledgement from the consumer, 5 1 and there was no evidence that the consumer had actual notice of the agreement. Id. at 2 1177. Thus, “the validity of the browsewrap agreement turns on whether the website 3 puts a reasonably prudent user on inquiry notice of the terms of the contract.” Id. 4 This validity determination “depends on the design and content of the website and the 5 agreement’s webpage.” Id. The Nguyen court explained that “the conspicuousness 6 and placement of the ‘Terms of Use’ hyperlink, other notices given to users of the 7 terms of use, and the website’s general design all contribute to whether a reasonably 8 prudent person would have inquiry notice of a browsewrap agreement.” Id. In 9 analyzing the hyperlink placements on the Barnes & Noble website, the court 10 concluded the following: 11 In light of the lack of controlling authority on point, and in 12 keeping with courts’ traditional reluctance to enforce 13 browsewrap agreements against individual consumers, we 14 therefore hold that where a website makes its terms of use 15 available via a conspicuous hyperlink on every page of the 16 website but otherwise provides no notice to users nor 17 prompts them to take any affirmative action to demonstrate 18 assent, even close proximity of the hyperlink to relevant 19 buttons users must click on—without more—is insufficient 20 to give rise to constructive notice. 21 Id. at 1178–79. 22 2. 23 Since Nguyen instructs that website design dictates the validity of online 24 contracts, the Court will do its best to explain the layout of Guthy-Renker’s website as 25 it appeared when Ms. Friedman and Ms. Henry-McArthur made their purchases. The 26 layout at the time of Ms. Friedman’s purchase is attached as Exhibit A to Guthy- 27 Renker’s Motion. (MTD, Ex. A.) 28 Website Layout for Ms. Friedman’s Purchase The final checkout screen, titled “Your Shopping Cart,” is where Ms. Friedman 6 1 inputted her contact, billing, and payment information. Near the bottom of the page, 2 and in-between the total cost and the “Complete Your Order” button, are two lines of 3 text and an interactive checkbox. The lines of text read: “By checking this box you 4 are electronically signing your order and authorizing us to charge payments against 5 credit card provided above.” Below the lines of text is the interactive checkbox, 6 which is labeled as “Agree to terms” and contains an asterisk indicating that clicking 7 the box is required to complete the purchase. Along the bottom of the same screen is 8 an offset frame that contains numerous other links, to include links to Facebook, 9 Twitter, and the product formulas. The third hyperlink below the heading “Helpful 10 Links” is “Terms & Conditions” which, when clicked, takes the consumer to the 11 arbitration agreement and class action waiver. 12 This layout, as instructed by Nguyen, is clearly not a clickwrap because website 13 visitors are not presented “with a list of terms and conditions” when completing a 14 purchase. 15 agreement because the “website’s terms and conditions of use are generally posted on 16 the website via a hyperlink at the bottom of the screen.” Id. The first issue the Court 17 must decide is whether Guthy-Renker’s design is a “browsewrap that resembles 18 clickwrap.” 19 combination includes the terms and conditions “via a hyperlink at the bottom of the 20 screen” and “affirmative[] acknowledge[ment of] the agreement before proceeding” 21 with the purchase. Id. While a browsewrap alone is insufficient to give a consumer 22 constructive notice, a browsewrap with an affirmative acknowledgement is enough. 23 Id. at 1178–79. Id. at 1176. Instead, Guthy-Renker’s website employs a browsewrap Nguyen teaches that such a design is generally acceptable—this 24 The Court finds that Guthy-Renker’s website design at the time of Ms. 25 Friedman’s purchase is not a “browsewrap that resembles a clickwrap” because the 26 design does not require the customer to affirmatively acknowledge the terms of use. 27 The lines of text appearing directly above the interactive checkbox only reference 28 credit card authorization. By placing the checkbox directly below this text, it appears 7 1 that the checkbox is only an acknowledgement of credit card authorization. In 2 addition to the placement of the checkbox, the preceding text advises the consumer 3 that “[b]y clicking this box” the consumer agrees to the credit card authorization—the 4 text makes no mention of any other terms associated with the checkbox. A reasonably 5 prudent person would believe that checkbox is in reference to the immediately 6 preceding text and not some other set of unmentioned terms. 7 Since Guthy-Renker’s website does not resemble a clickwrap, the Court now 8 must decide whether this browsewrap independently satisfies the requirements of 9 Nguyen. This validity turns on whether the “design and content” of the “website puts 10 a reasonably prudent user on inquiry notice of the terms of the contract.” Nguyen, 763 11 F.3d at 1177. In addition to the confusion caused by the proximity of the checkbox to 12 the language regarding credit card authorization, the actual checkbox label is 13 problematic. The checkbox is labeled as “Agree to terms.” By not capitalizing 14 “terms,” a consumer is not put on notice that the checkbox’s “terms” reference the 15 capitalized “Terms & Conditions” at the bottom of the screen. A reasonably prudent 16 person would not believe that the common noun “terms” associated with the checkbox 17 are the same terms found in the proper noun “Terms & Conditions” at the bottom of 18 the page. A reasonable consumer could believe that the “terms” associated with the 19 checkbox are the terms in the immediately preceding text regarding the credit card 20 authorization. 21 The Court also notes that the “Terms & Conditions” hyperlink is more-or-less 22 buried at the bottom of the screen, placed in-between similarly appearing links for the 23 “Privacy Policy” and “Money Back Guarantee.” Nguyen teaches that a hyperlink at 24 the bottom of the page—“without more—is insufficient to give rise to constructive 25 notice.” Id. at 1178–79. And the “more” in this case is not enough. The combination 26 of the common noun “terms,” the preceding text regarding credit card authorization, 27 and the buried “Terms & Conditions” hyperlink were misleading and failed to put Ms. 28 Friedman on inquiry notice. 8 1 Guthy-Renker’s reliance on Guadagno v. E*Trade Bank, 592 F. Supp. 2d 1263 2 (C.D. Cal. 2008), is misplaced. In Guadagno, “a highlighted, underlined link to the 3 Agreement was directly above the acknowledgement box, along with notice that ‘The 4 following contain important information about your account(s).’” Id. at 1271. The 5 court concluded that a “reasonably prudent offeree would have noticed the link and 6 reviewed the terms before clicking the acknowledgment icon.” Id. The Guadagno 7 court’s emphasis on the design placement cuts against Guthy-Renker because part of 8 the confusion prohibiting assent in this case is the placement of the checkbox in 9 relation to the statement regarding credit card authorization. 10 As a result, Ms. Friedman did not assent to the Terms & Conditions because she 11 did not have inquiry notice, and is therefore not bound by Guthy-Renker’s arbitration 12 agreement. 13 3. Website Layout for Ms. Henry-McArthur’s Purchase 14 Guthy-Renker changed its website at some point between Ms. Friedman’s 15 purchase and Ms. Henry-McArthur’s purchase. The new and improved website fits 16 neatly into the requirements of Nguyen to create a binding agreement between Guthy- 17 Renker and Ms. Henry-McArthur. An image of the website at the time of Ms. Henry- 18 McArthur’s purchase is found in Exhibit B of Guthy-Renker’s Motion. (MTD, Ex. 19 B.) 20 Guthy-Renker made two changes to its website, both of which were principal 21 concerns when Ms. Friedman made her purchase. First, the language directly next to 22 the checkbox states “Agree to Terms and Conditions.” The “Terms and Conditions” 23 language is bold, underlined, and hyperlinked. There is now no question that the 24 checkbox is in reference to the proper noun “Terms and Conditions” that would 25 appear if the user clicked the hyperlink next to the checkbox or the hyperlink at the 26 bottom of the screen. Second, the credit card authorization language is below the 27 checkbox, and the language was modified to read as follows: “By checking this box 28 you are agreeing to the Terms and Conditions, electronically signing your order and 9 1 authorizing us to charge payments against credit card provided.” This language is 2 further notice that the checkbox relates to the Terms and Conditions, eliminating any 3 confusion that the checkbox only serves as notice of credit card authorization. 4 Both design choices that prohibited the Court from finding that Ms. Friedman 5 assented to her arbitration agreement were changed by the time Ms. Henry-McArthur 6 made her purchase. A reasonably prudent consumer was on notice that clicking the 7 checkbox is assent to Guthy-Renker’s Terms & Conditions, and therefore Ms. Henry- 8 McArthur was on inquiry notice when she made her purchase. Ms. Henry-McArthur 9 argues that Guthy-Renker should use a clickwrap agreement, requiring consumers to 10 actually view the terms to which they are agreeing. (Opp. Br. at 10.) The Court 11 rejects this suggestion because the Ninth Circuit in Nguyen expressly ratified the use 12 of browsewrap agreements when such agreements “do more” than a mere hyperlink at 13 the bottom of the screen. 14 encountered before she purchased WEN is perfectly acceptable. The browsewrap agreement Ms. Henry-McArthur 15 Ms. Henry-McArthur is therefore bound by the arbitration clause and class 16 action waiver found in the Terms and Conditions. All of Ms. Henry-McArthur’s 17 claims are dismissed under Rule 12(b)(6). See Sparling v. Hoffman Const. Co., 864 18 F.2d 635, 638 (9th Cir. 1988) (finding that district courts have discretion to stay or 19 dismiss claims when all claims are bound by FAA). 20 B. Second Argument: MMWA Express Warranty Cause of Action 21 Guthy-Renker also argues that Count I of the First Amended Complaint—a 22 claim for breach of warranty under the MMWA—should be dismissed because no 23 written warranty exists. (MTD at 11.) 24 The federal MMWA creates a civil cause of action for consumers to enforce the 25 terms of implied or express warranties. See 15 U.S.C. § 2310(d). Under the MMWA, 26 a “written warranty” means a “written affirmation of fact or written promise made in 27 connection with the sale of a consumer product by a supplier to a buyer which relates 28 to the nature of the material . . . and affirms or promises that such material . . . is 10 1 defect free or will meet a specified level of performance over a specified period of 2 time.” 15 U.S.C. § 2301(6)(A) (emphasis added). “A product description does not 3 constitute a warranty under the MMWA.” Anderson v. Jamba Juice Co., 888 F. Supp. 4 2d 1000, 1004 (N.D. Cal. 2012). 5 In referencing the First Amended Complaint, Guthy-Renker argues that 6 “Plaintiffs have merely pointed to Guthy-Renker’s advertisements related to WEN 7 hair care products, which are clearly no ‘written warranties’ under the MMWA.” 8 (MTD at 12.) It further argues that such advertisements “do not contain a ‘promise’ 9 that the product will perform at a specified level for a specified period of time or an 10 express guarantee that the product will be defect free,” and the advertisements are 11 “merely descriptions of the product.” 12 identify numerous representations from Guthy-Renker’s website that they argue create 13 a written warranty. (Opp. Br. at 13.) The website states that “WEN isn’t like an 14 ordinary shampoo so that you want to use more of it, not less. You can never use too 15 much! The more you use, the better the results.” (Id.) Guthy-Renker’s website also 16 states that WEN is “gentle enough to use every day.” (Id.) Plaintiffs argue that these 17 written statements affirm or promise that WEN is defect-free, which is allegedly not 18 true. (Id.) (Id.) In their Opposition Brief, Plaintiffs 19 Plaintiffs are correct—the statements on Guthy-Renker’s website are more than 20 simple product descriptions. This is a products liability case in which Plaintiffs allege 21 that WEN was defectively designed or manufactured. On its website, Guthy-Renker 22 advertised that WEN was safe for unlimited daily use. These statements do not 23 describe WEN but warrant the effectiveness and safety of the product. 24 Renker’s written statements imply that its product is defect-free, and thus fall under 25 the purview of the MMWA. Guthy- 26 Guthy-Renker’s published statements regarding the effectiveness and safety of 27 its allegedly defective product are distinguishable from the host of false advertising 28 cases involving product labeling. Guthy-Renker’s statements are not misbranded 11 1 labels or mischaracterized product descriptions. See Burton v. Gerber Prods. Co., 961 2 F. Supp. 2d 1062, 1098 (N.D. Cal. 2013) (“allegedly misbranded labels are not 3 ‘warranties’ and thus do not fall within the coverage of the [MMWA]”); Hairston v. S. 4 Beach Beverage Co., No. 12-1429-JFW, 2012 WL 1893818, at *6 (C.D. Cal. May 18, 5 2012) (“The challenged statements—‘all natural with vitamins’ and the names of 6 various Lifewater flavors—are ‘product 7 Lifewater is defect-free, or guarantees of specific performance levels.”). descriptions’ rather than promises that 8 Guthy-Renker urges the Court to dismiss the MMWA claim on grounds that the 9 online representations do not state a period of time over which the performance is 10 guaranteed. (Reply at 10.) It is true that the Code of Federal Regulations, in reference 11 to the MMWA, state: “A written affirmation of fact or a written promise of a 12 specified level of performance must relate to a specified period of time in order to be 13 considered a ‘written warranty.’ A product information disclosure without a specified 14 time period to which the disclosure relates is therefore not a written warranty.” 16 15 C.F.R. § 700.3(a). However, Guthy-Renker fails to identify a single case rejecting a 16 MMWA claim on grounds that an everyday-use warranty did not encompass a 17 specified period. The Court also notes that the plain language of the MMWA states 18 that a written warranty is one that affirms a product is “defect free or will meet a 19 specified level of performance over a specified period of time.” 20 2301(6)(A) (emphasis added). The “or” conjunction does not require a specified 21 period of time in addition to a defect-free representation. While the relevant federal 22 regulation appears to require a specific time period, the lack of case law and the plain 23 text of the statute convince the Court otherwise. 15 U.S.C. § As a result, the Court rejects Guthy-Renker’s argument that Plaintiffs’ MMWA 24 25 must be dismissed. 26 C. Third Argument: Assumpsit Cause of Action 27 Guthy-Renker’s final argument challenges Plaintiffs’ cause of action for 28 assumpsit on grounds that a valid contract between the parties precludes such claim. 12 1 (MTD at 13.) Count IV of the First Amended Complaint is for common law 2 assumpsit. (FAC ¶¶ 81–86.) According to Plaintiffs, this cause of action is “derived 3 from the common-law writ of assumpsit by implying a contract at law, or a quasi- 4 contract as an alternative to a claim for breach of contract.” (Id. ¶ 82.) While the 5 assumpsit cause of action comes in multiple forms, see 55 Cal. Jur. 3d Restitution 6 § 18, Plaintiffs’ clearly chose the quasi-contract route. 7 Guthy-Renker is correct—a plaintiff cannot bring a claim for assumpsit when a 8 valid contract exists between the parties. This principle is well-established in the 9 Ninth Circuit. See Gerlinger v. Amazon.com, Inc., 311 F. Supp. 2d 838, 856 (N.D. 10 Cal. 2004) (“unjust enrichment is an action in quasi-contract[, which] cannot lie where 11 a valid express contract covering the same subject matter exists between the parties”); 12 Tait v. BSH Home Appliances Corp., No. 10-0711-DOC, 2011 WL 1832941, at *6 13 (C.D. Cal. May 12, 2011) (“Although certain situations permit plaintiffs to pursue an 14 unjust enrichment claim as an alternative to a breach of contract claim, this alternative 15 pleading theory is not available where a plaintiff expressly pleads, and relies on, the 16 existence of an express agreement between the parties relating to the same issues.”). 17 Plaintiffs argue that they “have not asserted a breach of contract claim because 18 there is no contract between the parties other than potentially a basic agreement to 19 purchase the product.” (Opp. Br. at 17.) That “basic agreement” is exactly what 20 precludes Plaintiffs’ assumpsit claim. Notwithstanding the issues surrounding assent 21 to the Terms and Conditions on Guthy-Renker’s website, the parties satisfied all of the 22 elements of a contract when WEN was bought and sold online, and that activity serves 23 as the basis for Plaintiffs’ warranty claims. Thus, a cause of action sounding in quasi- 24 contract is misplaced. Pursuant to Rule 12(b)(6), the Court dismisses Count IV for all 25 remaining Plaintiffs. 26 V. CONCLUSION 27 The Court concludes: (1) that Plaintiff Ms. Henry-McArthur is bound by the 28 arbitration agreement from Guthy-Renker’s website and therefore her claims are 13 1 dismissed pursuant to Rule 12(b)(6); and (2) Count IV of the First Amended 2 Complaint fails to state a claim and is dismissed pursuant to Rule 12(b)(6). The Court 3 rejects Guthy-Renker’s claims that Ms. Friedman is bound by the arbitration 4 agreement and that the MMWA claim is inappropriate. 5 Accordingly, Guthy-Renker’s Motion to Dismiss is GRANTED IN PART and 6 DENIED IN PART. (ECF No. 36.) 7 IT IS SO ORDERED. 8 9 February 27, 2015 10 11 12 ____________________________________ OTIS D. WRIGHT, II UNITED STATES DISTRICT JUDGE 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 14
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