Evenchik v. Avis Rent A Car System, LLC, No. 3:2012cv00061 - Document 19 (S.D. Cal. 2012)
Court Description: ORDER Denying Defendant's 12 Motion to Dismiss; and Directing Compliance with Fed. R. Civ. P. Rule 5.1. Signed by Judge Roger T. Benitez on 9/17/2012. (knb)
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Evenchik v. Avis Rent A Car System, LLC Doc. 19 1 2 3 4 5 6 7 8 9 UNITED STATES DISTRICT COURT 10 SOUTHERN DISTRICT OF CALIFORNIA 11 12 LYNN EVENCHIK, on behalf of herself and all others similarly situated, CASE NO. 12-cv-61 BEN (DHB) 13 Plaintiffs, 14 ORDER DENYING DEFENDANT’S MOTION TO DISMISS and DIRECTING COMPLIANCE WITH FED. R. CIV. P. RULE 5.1 vs. 15 16 17 AVIS RENT A CAR SYSTEM, LLC, [Docket No. 12] Defendant. 18 19 20 21 22 Presently before the Court is the motion to dismiss filed by Defendant Avis Rent A Car System, LLC (“AVIS”). For the reasons stated below, the motion is denied. I. BACKGROUND According to the Complaint, Plaintiff rented a car from AVIS in July 2011, in the County 23 of San Diego, California. She was charged $311.36. According to the Complaint, at that time 24 AVIS gave large price discounts to members of two groups: the International Gay and Lesbian 25 Travel Association and the National Gay and Lesbian Chamber of Commerce. Plaintiff is not a 26 member of either group. The Complaint further alleges that AVIS did not give her the gay and 27 lesbian group member price discount. Plaintiff alleges that California’s Unruh Civil Rights Act 28 (California Civil Code § 51 and its related section § 51.5) prohibits a business from discriminating -1- 12cv61 Dockets.Justia.com 1 between its customers on the basis of sexual orientation. According to the Complaint, a business 2 also violates California Business and Professions Code § 17200, which prohibits unfair business 3 practices, when it gives price discounts to some customers, but not all customers, on the basis of 4 sexual orientation. Plaintiff also asserts a class action on behalf of other similarly situated persons 5 who rented cars from AVIS in California and who did not receive the gay and lesbian group 6 member price discount. AVIS does not challenge the class action allegations at this time. AVIS 7 seeks only dismissal of the Complaint on the basis that Plaintiff has failed to state a claim for 8 relief. 9 10 11 II. DISCUSSION A. Request to Take Judicial Notice Defendant requests the Court take judicial notice of six documents in support of their 12 motion to dismiss. The six documents appear to be screen shots of various business web pages. 13 Exhibits A and B are undated AVIS web pages listing various offers. Exhibit C is a Hilton web 14 page dated Feb. 22, 2012. Exhibit D is an United Airlines web page (undated). Exhibit E appears 15 to be an aavacations.com web page (undated). Exhibit F appears to be a 16 myrewardzone.bestbuy.com web page (undated). None of these exhibits are the type of 17 documents for which judicial notice can be taken under Federal Rule of Evidence 201(b). 18 Federal Rule of Evidence 201(b) explains that “[a] judicially noticed fact must be one not 19 subject to reasonable dispute in that it is . . . capable of accurate and ready determination by resort 20 to sources whose accuracy cannot reasonably be questioned.” Judicial notice is proper only when 21 the matter is “beyond reasonable controversy.” Rivera v. Philip Morris, Inc., 395 F.3d 1142, 1151 22 (9th Cir. 2005) (quoting Fed. R. Evid. 201 advisory committee note). Screen shots of web pages, 23 especially because of the ever-changing content, are not typically the type of document containing 24 facts, the accuracy of which is capable of ready determination. See e.g., In re Easysaver Rewards 25 Litig., 737 F. Supp. 2d 1159, 1167-68 (S.D. Cal. 2010) (Anello, J.) (declining to take judicial 26 notice of changing web screen shots); Ferrington v. McAfee, Inc., 2010 U.S. Dist. LEXIS 106600 27 (N.D. Cal. Oct. 5, 2010) (declining to take judicial notice of changing web screen shots provided 28 by defendant); but see Kenneally v. Bank of N.S., 711 F. Supp. 2d 1174, 1183 (S.D. Cal. 2010) -2- 12cv61 1 (Hayes, J.) (taking judicial notice of unchallenged material on website run by U.S. Department of 2 Housing and Urban Development regarding property owner’s registration under the Land Sales 3 Act). The Court declines AVIS’s request to take judicial notice of the web page screen shots 4 under Rule 201. 5 Alternatively, AVIS argues that the screen shots should be considered under the doctrine of 6 incorporation by reference. In resolving a Rule 12(b)(6) motion, a court generally cannot consider 7 material outside the complaint. Branch v. Tunnel, 14 F.3d 449, 453-54 (9th Cir. 1994). However, 8 a court may consider exhibits attached to the complaint. Id. A court may treat such a document as 9 “part of the complaint, and thus may assume that its contents are true for purposes of a motion to 10 dismiss under the Rule 12(b)(6).” United States v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003); see 11 also Castagnola v. Hewlett-Packard Co., 2012 U.S. Dist. LEXIS 82026 (N.D. Cal. June 13, 2012) 12 (considering screen shots of defendant’s web pages which plaintiff incorporated into his 13 complaint). “Even if a document is not attached to a complaint, it may be incorporated by 14 reference into a complaint if the plaintiff refers extensively to the document or the document forms 15 the basis of the plaintiff's claim.” Ritchie, 342 F.3d at 908. “The defendant may offer such a 16 document, and the district court may treat such a document as part of the complaint, and thus may 17 assume that its contents are true for purposes of a motion to dismiss under Rule 12(b)(6).” Id. 18 (doctrine applies when a claim about insurance coverage is based on the contents of a coverage 19 plan or when a claim about stock fraud is based on contents of SEC filings). 20 AVIS asserts that Plaintiff references the AVIS website in her Complaint. The gist of the 21 Complaint is about rental discounts based on a customer’s sexual orientation not offered to 22 Plaintiff at an AVIS airport car rental counter. It is not about rental transactions made through 23 AVIS’s website. Paragraph 10 of the Complaint refers to a “Avis-Prouder” website page, but the 24 exhibit appears to be part of a computer file labeled: mhtml:file://C:\Documents and 25 Settings\david\Destop\Avis - Prouder.mht. See Notice of Lodgment in Support, Exh. B. None of 26 the documents offered by AVIS purport to complete the “Avis - Prouder” document. 27 28 The Complaint also refers generally to AVIS’s website while quoting language about commission rates AVIS pays to its rental car affiliates. None of the documents offered by AVIS -3- 12cv61 1 purport to complete the terms upon which AVIS offers commissions. AVIS cites no other 2 references to AVIS’s website nor references to the websites of Hilton, United Airlines, 3 aavacations.com, or myrewardzone.bestbuy.com. The Court finds that the six exhibits offered by 4 AVIS are not proper documents for applying the incorporation by reference doctrine. Defendant’s 5 request to take judicial notice is denied. 6 B. Defendant’s Motion to Dismiss 7 Defendant moves to dismiss the Complaint under Federal Rule of Civil Procedure 12(b)(6). 8 Dismissal is appropriate under Rule 12(b)(6) if the Complaint fails to state a plausible claim for 9 relief on its face. Bell Atl. Corp. v. Twombly, 550 U.S. 544, 556-57 (2007); see also Ashcroft v. 10 Iqbal, 556 U.S. 662, 678 (2009) (requiring plaintiff to plead factual content that provides “more 11 than a sheer possibility that a defendant has acted unlawfully”). Under this standard, dismissal 12 may be obtained if the Complaint fails to state enough facts to raise a reasonable expectation that 13 discovery will reveal evidence of the matter complained of, or if the Complaint lacks a cognizable 14 legal theory under which relief may be granted. Twombly, 550 U.S. at 556. 15 California law describes the contours of the claim for relief, since this suit is based upon 16 diversity jurisdiction. “The task of a federal court in a diversity action is to approximate state law 17 as closely as possible in order to make sure that the vindication of the state right is without 18 discrimination because of the federal forum.” U. S. Fidelity & Guar. Co. v. Lee Invest., LLC, 641 19 F.3d 1126, 1133-34 (9th Cir. 2011) (citations omitted). “In analyzing state law in a diversity case, 20 we are bound by the decisions of the state’s highest court. . . [and] [i]f the California Supreme 21 Court has not decided the question, we are required to ascertain from all the available data what 22 the state law is and apply it.” Id. (citations omitted). 23 1. Violation of California’s Unruh Civil Rights Act 24 AVIS moves to dismiss the first claim for relief which alleges AVIS violated California’s 25 Unruh Civil Rights Act, California Civil Code §§ 51 et seq.1 A straight forward reading of the Act 26 27 1 28 (a) This section shall be known, and may be cited, as the Unruh Civil Rights Act. (b) All persons within the jurisdiction of this state are free and equal, and no California Civ. Code § 51 states in its entirety: -4- 12cv61 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever. (c) This section shall not be construed to confer any right or privilege on a person that is conditioned or limited by law or that is applicable alike to persons of every sex, color, race, religion, ancestry, national origin, disability, medical condition, marital status, or sexual orientation or to persons regardless of their genetic information. (d) Nothing in this section shall be construed to require any construction, alteration, repair, structural or otherwise, or modification of any sort whatsoever, beyond that construction, alteration, repair, or modification that is otherwise required by other provisions of law, to any new or existing establishment, facility, building, improvement, or any other structure, nor shall anything in this section be construed to augment, restrict, or alter in any way the authority of the State Architect to require construction, alteration, repair, or modifications that the State Architect otherwise possesses pursuant to other laws. (e) For purposes of this section: (1) “Disability” means any mental or physical disability as defined in Sections 12926 and 12926.1 of the Government Code. (2) (A) “Genetic information” means, with respect to any individual, information about any of the following: (i) The individual’s genetic tests. (ii) The genetic tests of family members of the individual. (iii) The manifestation of a disease or disorder in family members of the individual. (B) “Genetic information” includes any request for, or receipt of, genetic services, or participation in clinical research that includes genetic services, by an individual or any family member of the individual. (c) “Genetic information” does not include information about the sex or age of any individual. (3) “Medical condition” has the same meaning as defined in subdivision (h) of Section 12926 of the Government Code. (4) “Religion” includes all aspects of religious belief, observance, and practice. (5) “Sex” includes, but is not limited to, pregnancy, childbirth, or medical conditions related to pregnancy or childbirth. “Sex” also includes, but is not limited to, a person’s gender. “Gender” means sex, and includes a person’s gender identity and gender expression. “Gender expression” means a person’s gender-related appearance and behavior whether or not stereotypically associated with the person’s assigned sex at birth. (6) “Sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation” includes a perception that the person has any particular characteristic or characteristics within the listed categories or that the person is associated with a person who has, or is perceived to have, any particular characteristic or characteristics within the listed categories. (7) “Sexual orientation” has the same meaning as defined in subdivision (r) of Section 12926 of the Government Code. (f) A violation of the right of any individual under the federal Americans with Disabilities Act of 1990 (P.L. 101-336) shall also constitute a violation of this section. California Civil Code §51.5(a) and (b) state: “(a) No business establishment of any kind whatsoever shall discriminate against, boycott or blacklist, or refuse to buy from, contract with, sell to, or trade with any person in this state on account of any characteristic listed or defined in subdivision (b) or (e) of Section 51, or of the person’s partners, members, stockholders, directors, officers, managers, superintendents, agents, employees, business associates, suppliers, or customers, because the person is perceived to have one or more of those characteristics, or because the person is associated with a person who has, or is perceived to have, any of those characteristics. (b) As used in this section, “person” includes any person, firm, association, organization, partnership, business trust, corporation, limited liability company, or company. -5- 12cv61 1 in light of the California Supreme Court decisions interpreting the Act, lead to the conclusion that 2 Plaintiff has stated a plausible claim for relief, i.e., that AVIS violated the prohibitions of the Act 3 regarding discrimination on the basis of sexual orientation. Plaintiff plausibly alleges a concrete 4 business transaction took place. In addition, Plaintiff plausibly alleges that during the transaction 5 AVIS charged her a higher price to rent a car because AVIS did not perceive her to be a lesbian or 6 gay customer or because AVIS did not perceive her to be associated with favored lesbian or gay 7 customer groups. 8 The Unruh Civil Rights Act “prevents discrimination in the form of pricing differentials.” 9 Chabner v. United of Omaha Life Ins. Co., 225 F.3d 1042, 1050 (9th Cir. 2000) (citing Koire v. 10 Metro Car Wash, 40 Cal. 3d 24 (1985)). In Koire, the California Supreme Court observed that 11 “[c]ourts have repeatedly held that the Unruh Act is applicable where unequal treatment is the 12 result of a business practice.” 40 Cal. 3d at 29. The supreme court explained, “The Act’s 13 proscription is broad enough to include within its scope discrimination in the form of sex-based 14 price discounts.” Id. at 30. It held that the Unruh Act was violated by a car wash business 15 offering reduced rates to women, but not men. Id. at 32. In its ruling, the supreme court 16 specifically warned against the offering of price discounts based upon sexual orientation. In 17 regards to the type of discounts Plaintiff alleges AVIS gave to groups based on sexual orientation, 18 the Koire court said: “It would be no less a violation of the Act for an entrepreneur to charge all 19 homosexuals . . . reduced rates in his or her restaurant or hotel in order to encourage one group’s 20 patronage and, thereby, increase profits.” Id. This is similar to the violation of the Act Plaintiff 21 alleges. 22 California Civil Code § 52(a) “creates a private right of action against anyone who ‘denies, 23 aids or incites a denial, or makes any discrimination or distinction contrary to Section 51.’” 24 Stevens v. Optimum Health Inst., 810 F. Supp. 2d 1074, 1085 (S.D. Cal. 2011) (Hayes, J.). The 25 California Supreme Court has made it clear that a customer does not have to make an express 26 demand for equal treatment in order for a business to violate the Act. Angelucci v. Century Supper 27 28 California Government Code §12926(r), which defines “sexual orientation” for purposes of the Unruh Civil Rights Act states: “‘Sexual orientation’ means heterosexuality, homosexuality, and bisexuality.” -6- 12cv61 1 Club, 41 Cal. 4th 160, 164 (2007) (concluding that a valid claim for relief under the Unruh Act 2 does not require “customers who are discriminated against when they present themselves at a 3 business establishment and pay the price of admission [to] also [] demand equal treatment and be 4 refused”). Finally, the Act must be construed liberally to carry out its purpose of creating and 5 preserving a nondiscriminatory environment in California business establishments. Id. at 167 6 (“[T]he [Unruh] Act must be construed liberally in order to carry out its purpose.”). Applying 7 Angelucci to this case, the Court finds that Plaintiff need not allege that she requested and was 8 denied an equally discounted car rental rate in order to state a cognizable claim for relief. Since 9 Plaintiff has alleged a violation of state law and state law provides a private right of action, the 10 Complaint sets forth a plausible claim for relief. Nevertheless, AVIS puts forth scattered 11 arguments, knocks over straw men, falls back on an ad hominem attack,2 and invokes the Free 12 Speech Clause of the United States Constitution, in an effort to pump up its deflated motion to 13 dismiss. None of these asservations are persuasive. Some of the more substantial arguments are 14 addressed here. 15 AVIS asserts throughout its briefs that the purpose of California’s Unruh Civil Rights Act 16 is (to use AVIS’s words): “to prevent unequal treatment for disadvantaged classes of people who 17 have been the subject of invidious discrimination.” Neither the language of the statute nor the case 18 law speak of protecting disadvantaged classes. Instead, the Act seeks to prevent any 19 discrimination among people on the basis of listed characteristics. Thus, because the Act prohibits 20 discrimination on the basis of sex, for example, it prohibits business from charging men more than 21 women for the same services. See Koire, 40 Cal. 3d at 32. In finding that charging men more 22 than women for a car wash, the California Supreme Court did not suggest that men were a 23 “disadvantaged class” or that men had been previously subjected to “invidious discrimination.” 24 Instead, it found that the unequal price treatment was the prohibited discrimination. One court 25 26 27 28 2 Throughout its reply brief, AVIS slings personal attacks at Evenchik. For example, AVIS says Plaintiff “has invoked the Unruh Act as a weapon in her moral crusade against a class of persons she apparently finds objectionable;” and “this lawsuit is a manufactured attempt by an out-of-state Plaintiff to turn the Unruh Act . . . into a weapon to pursue her social agenda.” There is nothing in the Complaint that supports these barbs. Demeaning language and offensive remarks have no place in federal court briefs. -7- 12cv61 1 2 described the Act’s purpose like this: 4 The objective of the Act is to prohibit businesses from engaging in unreasonable, arbitrary or invidious discrimination. Therefore, the Act applies not merely in situations where businesses exclude individuals altogether, but also where treatment is unequal. Unequal treatment includes offering price discounts on an arbitrary basis to certain classes of individuals. 5 Pizarro v. Lamb’s Players Theatre, 135 Cal. App. 4th 1171, 1174 (2006) (citations omitted) 6 (emphasis added). The same point was made by the supreme court in Koebke v. Bernardo Heights 7 Country Club, 36 Cal. 4th 824, 849 (2005) (“But Harris[v. Capital Growth Investors XIV, 52 Cal. 8 3d 1142 (1991)] did not hold that only classes protected under federal equal protection law were 9 worthy of protection under the [Unruh] Act, nor did we require a history of stigmatization in order 3 10 11 to bring a category within the ambit of the [Unruh] Act.”). The approach of the Unruh Act, prohibiting all arbitrary discrimination without regard to 12 “protected classes” is quite different from the approach AVIS argues. AVIS puts much of its 13 argument in terms of protected classes and past stigmatization. For example, AVIS incorrectly 14 asserts, “The purpose of the Unruh Act is to prevent unequal treatment for disadvantaged classes 15 of people who have been the subject of invidious discrimination,” and then argues that the 16 Complaint fails to state a claim because “Plaintiff does not even allege she is a member of a 17 protected class.” This misapprehension runs through AVIS’s briefs. Likewise, AVIS argues 18 “[t]here is no allegation in the Complaint that heterosexuals have been subject to invidious 19 discrimination.” But California law does not require a plaintiff to be a member of any protected 20 class or to have been previously subject to discrimination, in order to bring an action under the 21 Unruh Act. Consequently, this thread of argument is unavailing. 22 Another thread of argument runs through AVIS’s briefs: (a) since Plaintiff might have been 23 able to qualify herself for other rental discounts; and (b) since Plaintiff could have become a 24 member of the International Gay and Lesbian Travel Association or the National Gay and Lesbian 25 Chamber of Commerce and thus qualified for its favored discounts (a subset of the first argument), 26 there was no pricing discrimination. There are at least two problems with this thread. The 27 California Supreme Court made clear in Angelucci, 41 Cal 4th at 164, that as a matter of law, a 28 business customer need not ask for equal treatment or for the benefit of a discriminatory discount -8- 12cv61 1 for a violation of the Unruh Act to occur. In contrast, AVIS argues that Plaintiff could have asked 2 for another discount such as a Hilton Honors member discount or a Best Buy Rewards member 3 discount, or that Plaintiff could have become a member of the International Gay and Lesbian 4 Travel Association or the National Gay and Lesbian Chamber of Commerce, and thus been 5 eligible for a discounted rental rate. This argument disregards the clear holding of Angelucci. 6 The other problem with this thread is that it assumes an evidentiary showing which has yet 7 to be made. There is no evidence at this stage that Plaintiff was offered a Hilton Honors member 8 discount or a Best Buy Rewards member discount. There is no evidence that AVIS offered 9 Plaintiff any discount equal to the rental discount given members of the International Gay and 10 Lesbian Travel Association or the National Gay and Lesbian Chamber of Commerce. There is no 11 evidence that any of the discounts AVIS refers to as being on its “deals” webpage were offered to 12 Plaintiff when she rented her car. And although AVIS repeats it often as fact, there is no evidence 13 that membership in either International Gay and Lesbian Travel Association or the National Gay 14 and Lesbian Chamber of Commerce was open to Plaintiff when she rented her car. Finally, there 15 is no evidence that any of the other discounts would have been as favorable as the alleged 16 discriminatory discounts.3 To the extent that the existence of other discounts are relevant (which 17 Angelucci suggests they are not), they may be considered later at summary judgment or trial. They 18 may not be considered when ruling on a motion to dismiss. 19 To the extent that it is relevant whether Plaintiff could have become a member of either the 20 International Gay and Lesbian Travel Association or the National Gay and Lesbian Chamber of 21 Commerce, there is no evidence of the membership requirements or her eligibility in the record. 22 The salient allegation of the Complaint is that AVIS charged Plaintiff more money for her car 23 rental than it would have charged Plaintiff if Plaintiff had been a member of the favored gay and 24 lesbian groups. This is sufficient to plausibly allege a violation of § 51. 25 Another thread of argument repeated in AVIS’s briefs is the notion that the Complaint 26 alleges disparate impact and disparate impact is not actionable under the Unruh Act. AVIS is 27 3 28 AVIS argues that because Plaintiff requested and received other discounts, the actual rate she paid for her rental car was no higher than the rate she could have obtained using the challenged discounts. Unfortunately, AVIS offers no evidence to prove its statement. -9- 12cv61 1 certainly correct that the Unruh Act does not prohibit cases of disparate impact. See Koebke, 36 2 Cal. 4th at 854 (“We held, therefore, that a plaintiff seeking to establish a case under the Unruh 3 Act must plead and prove intentional discrimination in public accommodations in violation of the 4 terms of the Act. A disparate impact analysis or test does not apply to Unruh Act claims.”) 5 (internal quotations marks omitted). However, Plaintiff alleges disparate treatment based upon a 6 facially discriminatory method of charging rental customers – not a disparate impact. Gay and 7 lesbian renters were given discounts because of their sexual orientation. Plaintiff was not given a 8 discount because she was (or was perceived to be) of a different sexual orientation. Thus, the 9 Complaint alleges AVIS applied an arbitrary generalization focusing on the unlawful customer 10 characteristic of sexual orientation. Some promotional discounts are permissible under the Act. A 11 business could lawfully offer reduced rates to all customers on one day each week. Starkman v. 12 Mann Theatres Corp., 227 Cal. App. 3d 1491, 1498 (1991) (citing Koire, 40 Cal. 3d at 24). Or a 13 business could offer a discount to any patron who presented a coupon. Id. A business could 14 lawfully reduce a price for purchasing commodities in quantity, or for making advance 15 reservations. Id. “The key is that the discounts must be applicable alike to persons of every sex, 16 color, race, etc. . . . instead of being contingent on some arbitrary class-based generalization.” Id. 17 (internal quotations omitted). The type of discount AVIS allegedly offers, one based upon a 18 particular sexual orientation, is facially discriminatory and not permissible under the Unruh Act. 19 AVIS also sets up a straw man and complains that “Plaintiff is effectively asking this Court 20 to decree the rates Avis may charge and dictate the organizations with whom Avis may negotiate 21 marketing agreements.” The Complaint, however, does not ask AVIS to charge any particular 22 rental rates. It only asks that the rates (whatever AVIS decides to charge) be the same for all 23 customers without regard to their perceived sexual orientation. AVIS complains that Plaintiff’s 24 Unruh Act claim will involve the Court in “extended judicial interference into the day-to-day 25 economic decisions” and setting economic policy for AVIS’s business. A § 51 claim, however, 26 will only involve the court to the extent AVIS makes day-to-day decisions or sets its economic 27 policy using intentional price discrimination based on sexual orientation which is prohibited by the 28 Act. No unlawful discrimination; no judicial interference. - 10 - 12cv61 1 AVIS maintains that this action is a manufactured lawsuit brought by a professional 2 plaintiff and bounty-hunting attorneys. To back up its aspersion, it points to nothing more than 3 one 2005 lawsuit initiated by the same attorneys and a different plaintiff pursuing a different legal 4 claim.4 There is nothing to suggest that Plaintiff Evenchik is a professional plaintiff who 5 manufactured this lawsuit. A search of this Court’s own records and a Lexis search fails to 6 unearth any prior lawsuits filed by Lynn Evenchik. Although AVIS may disagree, these are not 7 the tell-tale signs of professional plaintiffs and bounty-hunting attorneys. Moreover, it is of no 8 legal relevance. In Angelucci, the California Supreme Court addressed a complaint that the 9 plaintiffs made repeated visits to a business in order to increase the amount of statutory damages 10 and their attorneys filed numerous similar lawsuits. Although concerned, the supreme court 11 concluded that it was up to the legislature to protect against abusive private legal actions and 12 settlement tactics. Angelucci, 41 Cal. 4th at 179. In other words, being sued by a professional 13 plaintiff with the help of bounty-hunting attorneys is not a valid basis under California law for 14 granting a motion to dismiss. 15 AVIS also argues the Unruh Act claim must be dismissed because AVIS’s discount 16 policies are neither unreasonable, arbitrary or invidious. That case must be made at summary 17 judgment or at trial. “Although California courts have concluded that reasonable restrictions may 18 be put in place so long as the restrictions are rationally related to the services performed . . . , 19 whether the policies in this case are reasonable, not arbitrary or not invidious under the Unruh Act 20 is a question that cannot be addressed in a motion to dismiss.” Angstman v. Carlsbad Seapoint 21 Resort II, L.P., 2011 WL 2009999 (S.D. Cal. May 23, 2011) (Lorenz, J.). 22 Lastly, AVIS argues that if the Unruh Act makes giving discounts to the International Gay 23 and Lesbian Travel Association or the National Gay and Lesbian Chamber of Commerce unlawful, 24 then the Unruh Act runs afoul of AVIS’s federal and state constitutional rights of free expression 25 and free association. Of course, a motion to dismiss for failure to state a claim merely tests the 26 sufficiency of the complaint; it does not decide the merits of the case. The Court is not aware of a 27 28 4 That action, Case No. 05cv1039 DMS, concerned whether a California statue prohibiting airport concession recovery fees could be applied when AVIS rents cars outside California. - 11 - 12cv61 1 case, and AVIS cites none, where a defendant attempted to raise a constitutional challenge to a 2 state law claim in a motion to dismiss. 3 Further, a defendant’s constitutional challenge to California’s Unruh Act raises two 4 additional concerns. The first question is whether AVIS should notify the attorney general of 5 California as required by Federal Rule of Civil Procedure 5.1.5 See also 28 U.S.C. § 2403(b) (“In 6 any action, suit, or proceeding in a court of the United States to which a State or any agency, 7 officer, or employee thereof is not a party, wherein the constitutionality of any statute of that State 8 affecting the public interest is drawn in question, the court shall certify such fact to the attorney 9 general of the State, and shall permit the State to intervene for presentation of evidence, if 10 evidence is otherwise admissible in the case, and for argument on the question of 11 constitutionality.”). The attorney general would then have 60 days to decide whether to intervene 12 to defend the statute. In order to protect the State’s right to intervene and defend its statute, the 13 Court directs counsel for AVIS to file within 14 days of this Order either a notice that it has 14 complied with Rule 5.1, or a notice that AVIS is abandoning its constitutional defense. 15 The second question is whether this Court should abstain from deciding the constitutional 16 question. Under the Pullman abstention doctrine, when a state law is being challenged in federal 17 court as unconstitutional and there are questions of state law which may be dispositive of the case, 18 a federal court should abstain from deciding the case, allowing, instead, the state courts to decide 19 the state issues. Babbitt v. United Farm Workers Nat’l Union, 442 U.S. 289, 306 (1979). The 20 rationale behind the Pullman doctrine is the avoidance of unnecessary resolution of constitutional 21 22 5 23 Notice by a Party. A party that files a . . . written motion . . . drawing into question the constitutionality of a federal or state statute must promptly: (1) file a notice of constitutional question stating the question and identifying the paper that raises it, if: (A) a federal statute is questioned and the parties do not include the United States, one of its agencies, or one of its officers or employees in an official capacity; or (B) a state statute is questioned and the parties do not include the state, one of its agencies, or one of its officers or employees in an official capacity; and (2) serve the notice and paper on the Attorney General of the United States if a federal statute is questioned – or on the state attorney general if a state statute is questioned . . . . 24 25 26 27 Rule 5.1(a) states: 28 - 12 - 12cv61 1 questions by allowing state courts an opportunity to interpret an ambiguous state statute so that it 2 is constitutional. Harris Cnty. Comm’rs Ct. v. Moore, 420 U.S. 77, 84 (1975) (“Among the cases 3 that call most insistently for abstention are those in which the federal constitutional challenge turns 4 on a state statute, the meaning of which is unclear under state law.”). In this lawsuit, neither party 5 has addressed Pullman abstention. Without full briefing on the abstention issue, including briefing 6 on the position of the attorney general (should she decide to intervene), this Court declines to 7 abstain. 8 9 10 AVIS’s other arguments in support of its motion to dismiss the Unruh Civil Rights Act claims are either restatements of the already-discussed arguments or are insubstantial. The motion to dismiss the Unruh Civil Rights Act claim is denied. 11 2. Violation of California’s Business and Professions Code § 17200 12 For her second claim for relief, Plaintiff alleges AVIS violated California Business and 13 Professions Code § 17200, which prohibits unfair business practices. AVIS argues that Plaintiff 14 has failed to plead a viable Unruh Act claim and that to the extent the § 17200 claim derives from 15 the failed claim, the § 17200 claim fails as well. This argument is moot because Plaintiff has 16 sufficiently pled a plausible Unruh Act claim. 17 AVIS alternatively argues that Plaintiff has not sufficiently pled an independent § 17200 18 claim. This argument also fails. To state a claim under § 17200, “a plaintiff must allege that the 19 defendant committed a business act that is either fraudulent, unlawful, or unfair.” Levine v. Blue 20 Shield of Cal., 189 Cal. App. 4th 1117, 1136 (2010). Each prong of § 17200 describes a separate 21 and distinct theory of liability. Kearns v. Ford Motor Co., 567 F.3d 1120, 1127 (9th Cir. 2009). 22 As to the unlawful prong, § 17200 incorporates other laws and treats violations of those laws as 23 unlawful business practices independently actionable under state law. Chabner v. United Omaha 24 Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000). As to the unfair prong, “[a]n unfair business 25 practice is one that either ‘offends an established public policy’ or is ‘immoral, unethical, 26 oppressive, unscrupulous or substantially injurious to consumers.’” McDonald v. Coldwell 27 Banker, 543 F.3d 498, 506 (9th Cir. 2008) (quoting People v. Casa Blanca Convalescent Homes, 28 Inc., 159 Cal. App. 3d 509, 530 (1984)). As to the fraudulent prong, “fraudulent acts are ones - 13 - 12cv61 1 where members of the public are likely to be deceived.” Sybersound Records, Inc. v. UAV Corp., 2 517 F.3d 1137, 1151-52 (9th Cir. 2008). 3 Plaintiff alleges independently of the Unruh Act that the AVIS discount given only to 4 customers of a favored sexual orientation is an unfair business practice. The California Supreme 5 Court has decided that a business practice may violate § 17200 without violating a specific statute. 6 Cel-Tech Com., Inc. v. L. A. Cellular Tel. Co., 20 Cal. 4th 163, 180 (1999) (“The statutory 7 language referring to ‘any unlawful, unfair or fraudulent’ practice makes clear that a practice may 8 be deemed unfair even if not specifically proscribed by some other law.”). However, to 9 circumscribe the potential liability, the California Supreme Court requires a redressable unfair 10 business practice to be in violation of public policy, and “the public policy triggering the violation 11 must be tethered to a constitutional or statutory provision.” Id. at 185. The California public 12 policy against sexual orientation discrimination, as reflected in the Unruh Civil Rights Act, is such 13 a policy. The allegations in the Complaint, of course, may prove to be untrue. That judgment is 14 reserved for later proceedings. At this juncture, however, Plaintiff has stated a plausible claim for 15 relief under California Business and Professions Code § 17200. The Defendant’s motion to 16 dismiss this claim is also denied. 17 III. CONCLUSION 18 AVIS’s motion to dismiss is denied. AVIS is directed to file within 14 days of this Order 19 either a notice that it has complied with Federal Rule of Civil Procedure 5.1, or a notice that it is 20 abandoning its constitutional defense. 21 DATED: September 17, 2012 22 23 Hon. Roger T. Benitez United States District Judge 24 25 26 27 28 - 14 - 12cv61
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