UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA

Transcription

1 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 LAW OFFICES OF RONALD A. MARRON RONALD A. MARRON (SBN 0) ron@consumersadvocates.com SKYE RESENDES (SBN ) skye@consumersadvocates.com WILLIAM B. RICHARDS, JR. (SBN ) bill@consumersadvocates.com MICHAEL T. HOUCHIN (SBN 0) mike@consumersadvocates.com Arroyo Drive San Diego, California 0 Telephone: () -00 Facsimile: () - LAW OFFICE OF DAVID ELLIOT DAVID ELLIOT (SBN 0) elliot.david@hotmail.com 0 rd Avenue San Diego, CA 0 Telephone: () - Counsel for Plaintiff and the Proposed Class UNITED STATES DISTRICT COURT FOR THE CENTRAL DISTRICT OF CALIFORNIA TED SHIMONO, on behalf of himself, all others similarly situated, and the general public, Plaintiff, HARBOR FREIGHT TOOLS USA, INC., v. Defendant. Case No.: :-cv-00-cas-mrw PLAINTIFF S OPPOSITION TO DEFENDANT S MOTION TO DISMISS OR IN THE ALTERNATIVE STRIKE

2 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 TABLE OF CONTENTS SUMMARY OF ARGUMENT... ARGUMENT.... Current Ninth Circuit authority establishes that Plaintiff alleged economic injury and thus has standing under Article III and Cal. Civ. Code Defendant cites out-of-jurisdiction cases decided under other states laws..... Plaintiff Shimono s claims are pled with the requisite of particularity Even without Ninth Circuit authority in Hinojos, Mr. Shimono alleged that the merchandise he and Class Members purchased was worth less than the fake sale prices at which they were sold, and therefore pled a valid alternate measure of economic damages meriting restitution..... Shimono is not required to propose or prove a specific measure of restitution damages in his Complaint..... Mr. Shimono and the Class are also entitled to compensatory damages because Shimono adequately alleged economic injury..... Mr. Shimono has standing to seek injunctive relief under California law, both because he alleges an intent to shop Defendant s stores in the future and because Defendant s conduct is capable of repetition yet evading review..... Because Mr. Shimono s allegations of fact are pertinent and potentially material to his claims and to those of unnamed proposed Class Members, his allegations should not be stricken under Rule (f).... CONCLUSION... i

3 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 Cases TABLE OF AUTHORITIES Ambassador Hotel v. Wei-Chuan Inv. F.d 0 (th Cir. )... Ashcroft v. Iqbal U.S. (00)... Branca v. Nordstrom, Inc. -cv-00-mma (JMA), 0 U.S. Dist. LEXIS (S.D. Cal. Oct., 0)... Bruno v. Quten Research Inst., LLC 0 F.R.D. (C.D. Cal. 0).... Camasta v. Jos. A. Bank Clothiers, Inc. F.d (th Cir. 0)... Chester v. TJX Cos. 0 U.S. Dist. LEXIS 0 (C.D. Cal. Aug., 0)...passim Chowning v. Kohl s Dept Stores 0 U.S. Dist. LEXIS (C.D. Cal. Mar., 0)...passim Cliffdale Assocs., Inc. 0 F.T.C. 0 ()... Discovery Pier Land Holdings, LLC v. Visioneering Envision. Design.build., Inc. No CV00DDPAJWX, 0 WL (C.D. Cal. Feb., 0)... Doe v. AOL LLC F. Supp. d 0 (N.D. Cal. 00)... Dorsey v. Rockhard Labs., LLC No. CV -0 DDP RZX, 0 U.S. Dist. LEXIS (C.D. Cal. Sept., 0)... Fantasy, Inc. v. Fogerty F.d (th Cir. )... 0 Fogerty v. Fantasy, Inc. 0 U.S. ()... 0 Galope v. Deutsche Bank Nat l Tr. Co. F. App x (th Cir. 0)... ii

4 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 Granfield v. NVIDIA Corp. 0 U.S. Dist. LEXIS (N.D. Cal. 0)... Hinojos v. Kohl s Corp. F.d 0 (th Cir. 0)...passim Hinojos v. Kohl s Corp. 00 U.S. Dist. LEXIS 000 (C.D. Cal. Dec., 00)... Hodgers Durgin v. De La Vina F.d 0 (th Cir. )... Horosny v. Burlington Coat Factory of CA, LLC -cv-000-sjo (MRWx), 0 U.S. Dist. LEXIS (C.D. Cal. Oct., 0)...,, In re -Hour Energy Mktg. & Sales Practices Litig. 0 U.S. Dist. LEXIS (C.D. Cal. Sept., 0)... In re Tobacco II Cases Cal. th (00)..., Jacobo v. Ross Stores, Inc. 0 U.S. Dist Lexis * (C.D. Cal. June, 0)...,, Jacobo v. Ross Stores, Inc. No. CV--0-MWF-AGR, 0 U.S. Dist. LEXIS (C.D. Cal. Feb., 0)..., Johns v. Bayer No. 0CV DMS (JMA), 00 WL (S.D. Cal. Feb., 00)... Johnson v. Wal-Mart Stores, Inc. F. App x (th Cir. 0)... Kim v. Carter s Inc. F.d (th Cir. 00)..., Kwikset Corp. v. Super. Ct. Cal. th 0 (0)...passim Lujan v. Defs. of Wildlife 0 U.S. ()... Meyer v. Sprint Spectrum L.P. Cal. th (00)... iii

5 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 Mulder v. Kohl s Dep t Stores, Inc. No. --FDS, 0 U.S. Dist. LEXIS (D. Mass. Feb., 0)..., Nat. Res. Def. Council, Inc. v. Evans F.d 0 (th Cir. 00)..., Nunez v. Best Buy Co. F.R.D. (D. Minn. 0)..., Polo v. Innoventions Int l, LLC No. -, 0 U.S. App. LEXIS 0 (th Cir. Aug., 0)... Reid v. Johnson & Johnson 0 F.d (th Cir. 0)... Ries v. Arizona Beverages USA LLC F.R.D. (N.D. Cal. 0)... Russell v. Kohl s Dep t Stores, Inc. No. ED CV - RGK (SPx), 0 U.S. Dist. LEXIS (C.D. Cal. Oct., 0)...,, San Diego Cnty. Gun Rights Comm. v. Reno F.d (th Cir. )... Spann v. J.C. Penney Corp. 0 F.R.D. 0 (C.D. Cal. 0)... Sperling v. Stein Mart, Inc. :-cv-0-bro-kkx, 0 U.S. Dist. LEXIS 0 (C.D. Cal. March, 0)... Spokeo, Inc. v. Robins S. Ct. 0 (0)... Thomas-Byass v. Michael Kors Stores, (Cal.), Inc. No. EDCV - JGB (KKx), 0 U.S. Dist. LEXIS 0 (C.D. Cal. Sept., 0)... 0, Tomek v. Apple Inc. F. App x (th Cir. 0)... U.S. ex rel. Ackley v. Int l Bus. Machines Corp. 0 F. Supp. d (D. Md. 000)..., 0 Vess v. Ciba-Geigy Corp. USA F.d 0 (th Cir. 00)... 0 iv

6 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 Warner v. Tinder Inc. 0 F. Supp. d 0 (C.D. Cal. 0)..., Whittlestone, Inc. v. Handi-Craft Co. F.d 0 (th Cir. 00)..., 0,, Statutes C.F.R.... C.F.R..... C.F.R..(c)... Cal Civ. Code (a)... Cal. Bus. & Prof. Code 0... Cal. Bus. & Prof. Code 00, et seq...., Cal. Bus. & Prof. Code 00, et seq.... Cal. Civ. Code Cal. Civ. Code 00..., Cal. Civ. Code 0...,, Cal. Civ. Code 0... Cal. Civ. Code 0(a)()... Cal. Civ. Code 0(a)... Cal. Civ. Code 0(a)()... Cal. Civ. Code 0(e)..., Other Authorities C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure 0 (d ed. 00)... Rules Fed. R. Civ. P....,,, Fed. R. Civ. P. (b)..., Fed. R. Civ. P. (b)()... Fed. R. Civ. P. (b)()... Fed. R. Civ. P. (f)...passim Fed. R. Civ. P.... v

7 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #:0 0 0 Fed. R. Civ. P...., Fed. R. Civ. P. (b)...,, 0 vi

8 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 SUMMARY OF ARGUMENT Defendant Harbor Freight moves to dismiss Plaintiff Ted Shimono s Class Action Complaint ( Compl. ), or in the alternative to strike portions thereof. Because Defendant omits controlling legal authority from both the Ninth Circuit Court of Appeals and the California Supreme Court, Defendant s legal arguments do not accurately reflect jurisdiction law. As a consequence, the rulings Defendant urges this Court to make are contrary to current published Ninth Circuit authority. See Hinojos v. Kohl s Corp., F.d 0 (th Cir. 0), citing Kwikset Corp. v. Super. Ct., Cal. th 0 (0). The Ninth Circuit held in Hinojos that where [the plaintiff] alleges that the advertised discounts conveyed false information about the goods he purchased.... [and] that he would not have purchased the goods in question absent this misrepresentation[,] that is sufficient to establish economic injury and standing. Hinojos, F.d at 0-0 (internal punctuation omitted.) Mr. Shimono alleges that Defendant s advertised comparison prices conveyed false information (Compl. -), and that he would not have purchased the goods in question but for that misrepresentation (Compl., ). Defendant concedes that Shimono made both these allegations (MTD :-), but nevertheless argues repeatedly that because Shimono did not also allege he paid more for the merchandise than it was worth, he lacks standing to bring his claims. Id., e.g., at,, 0,,. Because Defendant fails to account for the binding Ninth Circuit authority rejecting Defendant s argument against standing, Hinojos, Defendant s Motion on these grounds collapse at the starting gate. The rest of Defendant s legal arguments for dismissal are similarly deficient. See e.g., Jacobo v. Ross Stores, Inc., 0 U.S. Dist Lexis *, *- (C.D. Cal. June, 0) ( Jacobo II ) (superseding Defendant s cited Jacobo I. ) Defendant s alternative motion, arguing that much of Mr. Shimono s Complaint should be stricken under FRCP (f), falls similarly short of the mark because Defendant fails to establish that any allegations in the Complaint meet the

9 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 stringent requirements of Rule (f) to merit exclusion under that rule. Mr. Shimono s allegations regarding the advertising, comparison prices, price history, asserted and actual quality, and value of products purchased by unnamed Class Members are not only pertinent and material, they are necessary for Mr. Shimono to protect those Class Members legal rights. See, e.g., Chester v. TJX Cos., 0 U.S. Dist. LEXIS 0, at * (C.D. Cal. Aug., 0). Defendant s alternative Motion to Strike should, like its Motion to Dismiss, simply be denied. ARGUMENT. Current Ninth Circuit authority establishes that Plaintiff alleged economic injury and thus has standing under Article III and Cal. Civ. Code 00. Defendant contends that Mr. Shimono alleged no economic injury and therefore lacks standing because, Defendant claims, even though Shimono purchased goods advertised with false comparison sale prices and relied on the false advertising, he did not allege that the items were worth any less than what he paid for them. MTD at (emphasis in the original omitted). Defendant s argument against standing is flatly contradicted by the Ninth Circuit s 0 decision in Hinojos v. Kohl s. In Hinojos, the Ninth Circuit held that a litigant making allegations legally indistinguishable from Mr. Shimono s adequately alleged economic injury-in-fact and therefore had Article III and UCL, FAL, and CLRA standing. Hinojos. The plaintiff in Hinojos alleged in his complaint that the merchandiser s advertised comparison prices were false and misleading, but did not allege that the items he bought were not worth the prices he paid for them. Id. at *0. The district court in Hinojos dismissed the plaintiff s UCL and FAL claims for lack of standing, ruling that the plaintiff s purchase of merchandise based on false sale price advertising did not allege economic injury because the plaintiff did not allege that he had paid more for the merchandise than the items were worth. Hinojos v. Kohl s Corp., 00 U.S. Dist. LEXIS 000 (C.D. Cal., Dec., 00). The Ninth Circuit reversed, holding that [the plaintiff] alleges that the advertised

10 Case :-cv-00-cas-mrw Document Filed 0/0/ Page 0 of Page ID #: 0 0 discounts conveyed false information about the goods he purchased.... He also alleges that he would not have purchased the goods in question absent this misrepresentation. That is sufficient [to demonstrate economic injury and standing] under Kwikset. Hinojos v. Kohl s, F.d at 0-0. In Kwikset, the California Supreme Court held that in order to establish standing to bring a UCL or FAL claim, a consumer need only allege that () he or she purchased a product from the defendant that was falsely advertised, and () the purchase would not have been made but for the misrepresentation. Kwikset, Cal. th at 0 ( Moreover, to interpret standing as dependent on eligibility for restitution would narrow section 0 [of the UCL] in a way unsupported by its text. ). Because both the California Supreme Court and the Ninth Circuit specify that the consumer s injury arising from a purchase induced by false sale price advertising is an actual economic injury, these are not the purely statutory violations described in Spokeo, Inc. v. Robins, S. Ct. 0, (0). MTD,,,. The U.S. Supreme Court s holding in Spokeo is limited to alleged technical violations of a statute that are not accompanied by any actual injury to the plaintiff. Id. Following Hinojos, Mr. Shimono alleged not a technical statutory violation under California law but an actual economic injury. Hinojos. Mr. Shimono therefore adequately alleged Article III injury-in-fact under Hinojos and Kwikset and has standing to bring his individual and class claims in this Court. See Hinojos.. Defendant cites out-of-jurisdiction cases decided under other states laws. Because Defendant omitted the Ninth Circuit and California authority rejecting Defendant s failure to discuss either the Kwikset or Hinojos cases at any point in its Motion is surprising, given that Kwikset has been cited times by courts in this Circuit and Hinojos no fewer than times, including in five separate opinions or dispositions by the Ninth Circuit Court of Appeals itself. See, e.g., Polo v. Innoventions Int l, LLC, No. -, 0 U.S. App. LEXIS 0, at * (th Cir. Aug., 0) (plaintiff alleging that false advertising induced his purchase has economic injury and Article III standing); Tomek v. Apple Inc., F. App x, (th Cir. 0) (same, unpublished); Galope v. Deutsche Bank Nat l Tr. Co., F. App x, (th Cir. 0) (same, unpublished); Reid v. Johnson & Johnson, 0 F.d (th Cir. 0)(same); Johnson v. Wal-Mart Stores, Inc., F. App x (th Cir. 0)(unpublished) [Lexis Shepard s citation search, September, 0].

11 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 its arguments regarding standing, it is unsurprising that the cases Defendant cites in support of its position do not accurately reflect jurisdiction law. Defendant cites to two Seventh Circuit holdings, both interpreting the Illinois Consumer Fraud Act (see Kim v. Carter s Inc., F.d (th Cir. 00) Camasta v. Jos. A. Bank Clothiers, Inc., F.d (th Cir. 0)), and to a Massachusetts district court case decided under Massachusetts law (see Mulder v. Kohl s Dep t Stores, Inc., Civil Action No. --FDS, 0 U.S. Dist. LEXIS (D. Mass. Feb., 0)). MTD at, 0. Out-of-jurisdiction cases decided under other states consumer laws do not overrule Ninth Circuit authority in a case brought under California law. This Court, in fact, previously cited to both Kwikset and Hinojos in the case that Defendant relies on, quotes from, and cites to five times in its brief. See Chowning v. Kohl s Dept Stores, 0 U.S. Dist. LEXIS, at *- (C.D. Cal. Mar., 0), citing Hinojos at 0; Kwikset at 0. MTD at,. This Court held in Chowning that under the UCL and FAL, Plaintiff may establish standing by proving either that she would not have purchased the product absent Defendant s false advertising or that she paid more than she would otherwise have paid as a result of the false advertising. Chowning, 0 U.S. Dist. LEXIS at *- (emphasis added). Defendant s Motion cites only the second test for standing articulated by this Court, omitting the Court s first test entirely. MTD,. In addition to omitting Hinojos and Kwikset, Defendant also inaccurately described the rule for standing set forth by this Court in Chowning. Id.; see also, Spann v. J.C. Penney Corp., 0 F.R.D. 0, (C.D. Cal. 0) ( the Ninth Circuit has held that victims of alleged false price comparison schemes have been injured even if there is no difference in value between the product as labeled and the product as it actually is[.] ) (internal quotation marks omitted). Other courts in the Central District hold the same. The defendant in Russell v. Kohl s, just as Harbor Freight does here, similarly posit[ed] that Plaintiffs request for restitution fails because they have not alleged a discrepancy between the amount they paid and the value of the merchandise they received.... Therefore, Defendant

12 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 contends, Plaintiffs have failed to plead sufficient facts to support a claim for relief under the exclusive measure of restitution. The Court disagrees. Russell v. Kohl s Dep t Stores, Inc., No. ED CV - RGK (SPx), 0 U.S. Dist. LEXIS, at *- (C.D. Cal. Oct., 0). These Central District holdings accurately reflect California law. The California Court of Appeal in In re Tobacco II Cases definitively rejected the argument that cost minus value constitutes the exclusive measure of restitution under the UCL and FAL. Russell, 0 U.S. Dist. LEXIS at *, citing In re Tobacco II Cases, Cal. th (00). The Russell court further noted that The Ninth Circuit, much like the California Court of Appeal, has refused to accept cost minus value as the exclusive measure of restitution under the UCL and FAL. Id. Even if Defendant s arguments regarding restitution damages and standing were legally tenable, which they are not, Defendant s argument for dismissal of Shimono s Complaint on that basis would still fail. As the Court in Defendant s cited Chowning v. Kohl s case holds, even if no restitution measure of damages were viable under the facts of that case, [the] CLRA allows for restitutionary and injunctive relief, as well as compensatory and punitive damages and attorney fees. 0 U.S. Dist. LEXIS at *, citing Doe v. AOL LLC, F. Supp. d 0, 0 (N.D. Cal. 00); Cal. Civ. Code 0(a)()-(), (e). These remedies and damages are available to plaintiff and the class at a minimum thereby with respect to Defendant s strike-through, regular price, or Only former price comparisons, as the Ninth Circuit also held in Hinojos that the CLRA provides a second, overlapping prohibition on advertising nonexistent sales. Specifically, it forbids making false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions. Hinojos v. Kohl s, F.d at 0, citing Cal. Civ. Code 0(a)() (internal quotation marks omitted). Shimono thus has standing to bring these claims under the CLRA as well. Id.. Plaintiff Shimono s claims are pled with the requisite of particularity. Defendant next argues that Plaintiff has failed to plead his claims with

13 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 particularity sufficient to meet the heightened pleading standard of Rule. Fed. R. Civ. P. (b); MTD at. Defendant argues that Mr. Shimono did not allege sufficient details of his pre-suit investigation, though the Complaint includes tables showing historical comparison and actual sale price data for several Harbor Freight products, web archive screen shots of Defendant s catalog, comparisons to several other competing retailers prices for allegedly comparable merchandise, and the current sale and comparison prices for approximately 000 items of Harbor Freight merchandise. Compl. -, -, -; Ex.; see MTD. This level and quantity of detail meets Rule s standards for investigation and for particularity in a false advertising case. Jacobo II. Defendant s citation to Jacobo v. Ross Stores, Inc., does not advance its argument. Jacobo v. Ross Stores, Inc., No. CV--0-MWF-AGR, 0 WL 0, 0 U.S. Dist. LEXIS (C.D. Cal. Feb., 0) (Jacobo I). The plaintiff in Jacobo I had conducted no investigation and pleaded no facts in support of its claims that would allow the Court to conclude the advertising was either false or misleading. Id. at *. The Jacobo I court therefore dismissed the complaint with leave to amend to allow the plaintiff to add minimal factual allegations in support of its claims. Id. at * ( This allegation should not be made on information and belief but should be based on specific facts, such as the exact prices of identical goods offered for sale by other merchants. ). When the plaintiff in Jacobo I amended his complaint to allege minimal facts, the Court in Jacobo II generally denied the defendant s subsequent motion to dismiss. Jacobo v. Ross Stores, Inc., 0 U.S. Dist Lexis *, *- (June, 0) (Jacobo II). The minimal price comparison facts alleged in Jacobo II were sufficient, the Court held, to meet the requirements of Rule and Rule. Id. at *. Here, Plaintiff Shimono provides far more detail, including several examples of retail comparison prices with current and historical prices from Harbor Freight s inventory and comparison prices charged by other retailers demonstrating that Harbor Freight s strike-through, regular price, Only, and comp at price comparison

14 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 advertising is both false and misleading. Compl. -. These are the same types of allegations, though in far greater quantity and detail, that the Jacobo II court found adequately alleged violations of California s FAL and UCL, excepting only Sections 0(a)(), (), and () of the CLRA, and satisfied Rule (b). Jacobo II at * (generally denying motion to dismiss FAL and UCL claims). As significantly, though, for Defendant s argument here, is that in Jacobo I, the case Defendant cites to, the Court discussed both Kwikset and Hinojos in rejecting the same argument that Defendant makes here that the plaintiff s complaint does not sufficiently allege that Plaintiffs received something worth less than what they paid and finding that the plaintiff had standing despite the absence of such allegation. Jacobo I at * (... the Ninth Circuit has recognized that [the consumer is] economically harmed when the seller inflates the perceived value of its products. ) (citing Hinojos) (emphasis in the original omitted). Both Jacobo I and Jacobo II rejected the standing argument Defendant s Motion attempts repeatedly. Defendant further argues that Plaintiff Shimono failed to plead the price he actually paid for any of the items he purchased... MTD. This too is simply not correct. Shimono alleged:. Plaintiff purchased in or around June 0 a solar security light. The product advertising displayed a strike-through price of Only $., suggesting that Harbor Freight s usual price for this unit was $. and that the unit was being offered at a discount from that former price. This advertisement represented that the unit was at that time being offered at a substantial discount from the former price, showing the current price as: Sale: $.. The Jacobo II court granted defendant s motion to dismiss only with respect to the plaintiff s claims under Cal. Civ. Code 0 which alleged that the defendant s Compare At prices were former price comparisons or retail price reductions. Jacobo v. Ross, 0 U.S. Dist Lexis at * (Jacobo II). The Jacobo II court found that that particular CLRA code section was not applicable to price comparisons in the manner that plaintiff alleged, but denied defendant s motion to dismiss regarding those same price comparisons which were alleged to be misleading and therefore violated the FAL and UCL. Id. at *-.

15 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 Compl.. Mr. Shimono alleged the product he purchased, the year and month of the purchase, and the comparison price and Sale price at which Defendant advertised and sold the product. Id. The clear inference which this Court is required to make, Fed. R. Civ. P. (b), is that Shimono purchased the item at the displayed price of $.. But even if Mr. Shimono had not alleged or implied any actual sale price, his allegations would still be sufficient to demonstrate injury and standing, as he alleged that he purchased the product and did so in reliance on false price advertising. Compl., 0; Hinojos. Defendant s reliance on Nunez is misplaced. Nunez v. Best Buy Co., F.R.D. (D. Minn. 0). In Nunez, the plaintiff did not conduct any of his own pre-suit investigation, but instead relied exclusively on a public report published by a non-profit consumer organization, Consumers Checkbook. Id. at. The Nunez Court found much not to like about Mr. Nunez s complaint. Id., passim. The investigatory study Nunez relied on, which Defendant cites in its parenthetical, was not the plaintiff s; the study, in fact did not conclude that Best Buy engaged in deceptive pricing practices, and Nunez himself alleged no comparison price facts regarding his single purchased item, neither its actual sale price history nor the prices charged by competing retailers, only alleging on information and belief that Best Buy did not previously sell the microwave for $., the advertised comparison price. Id. Nunez also did not allege even an approximate range of dates during which he allegedly purchased the item. Id. The Minnesota District Court rightfully dismissed, finding that Nunez had not alleged fraud with particularity. Id. at -0. In contrast, Mr. Shimono alleges facts from his own pre-suit investigation, not on information and belief, regarding numerous items Harbor Freight sells, citing his sources and showing the current sale price and comparison price and historical actual sale prices and comparison prices of these items, demonstrating that Harbor Freight never sold any of this merchandise at its advertised comparison prices (Compl. -, -, -), and retail prices charged by competing retailers similarly

16 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 demonstrating the falsity of Harbor Freight s comp at pricing. Id. Interestingly, regarding the three-month retail market comparison interval referenced in 0, see below, the court in Nunez noted that Best Buy, not the plaintiff, had to determine the price at which it sold [the merchandise] during the three months preceding the purchase. Nunez, at. Defendant s particularity argument here is in effect a second run at the standing argument rejected by the Ninth Circuit s holding in Hinojos. As shown above, Mr. Shimono alleged in sufficient detail Defendant s false advertising, his reliance on that advertising, and his purchases of falsely advertised merchandise. This is all that is required under Hinojos to state his prima facie claims and demonstrate standing under the UCL, FAL, and CLRA. Hinojos. It is not entirely clear to the Court what Defendants believe Plaintiffs must do to adequately establish their standing to sue, at this stage of the litigation.... if Defendants believe Plaintiffs must plead [more] specific factual details to establish standing, their argument is foreclosed by the Supreme Court s explanation that [a]t the pleading stage, general factual allegations of injury resulting from the defendant s conduct may suffice, for on a motion to dismiss we presum[e] that general allegations embrace those specific facts that are necessary to support the claim. In re -Hour Energy Mktg. & Sales Practices Litig., 0 U.S. Dist. LEXIS, at *- (C.D. Cal. Sep., 0) (denying motion to dismiss in a false advertising case, where defendants argued that the named plaintiffs general averments of injury did not meet Rule s particularity standards), citing Lujan v. Defs. of Wildlife, 0 U.S., () (quoting Lujan v. Nat l Wildlife Federation, U.S., (0)). Under Rule (b) as applied to false advertising cases in the Ninth Circuit, Shimono has therefore adequately alleged with sufficient particularity that he purchased falsely-advertised merchandise and did so in reliance on the false advertising. See, id.; see also, Hinojos. Contrary to Defendant s assertions, Mr. Shimono did not merely allege Harbor Freight s pricing practices in general ; he gave specific examples of

17 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #:0 0 0 false pricing for specific products, as well as averring plausibly based on his own investigation that most if not all of Defendant s products were advertised unlawfully during the proposed class period. Compl. -, -0. That is more than sufficient under Rule and Ninth Circuit authority. Hinojos. Plaintiffs are not required to list the selling price, Compare At price, and what the reference price should have been in order to survive a Motion to Dismiss. Chester v. TJX Cos., No. :-cv-0-odw (DTB), 0 U.S. Dist. LEXIS 0, at * (C.D. Cal. Aug., 0). The focus is on whether enough facts support a reasonable consumer s reaction to an allegedly deceptive advertisement not whether enough facts can definitively prove fraud at the pleading stage. Id.... where a litigant, as here, pleads that [a] Compare At price tag would deceive a reasonable consumer, then Rule (b) is satisfied. Chester v. TJX at *0-. Defendant makes much of the fact that for three plastic tarps, Mr. Shimono alleges that the three purchases occurred between January and June of 0. MTD. Defendant s observation that the three tarps dates of purchase are not more precisely alleged is not dispositive of Plaintiff Shimono s UCL claims. Under Rule (b), the plaintiff s allegations of fraud or mistake must be specific enough to give defendants notice of the particular misconduct... so that they can defend against the charge and not just deny that they have done anything wrong. Vess v. Ciba-Geigy Corp. USA, F.d 0, 0 (th Cir. 00). This heightened pleading standard requires the plaintiff to allege fraud or mistake by detailing the who, what, when, where, and how of the misconduct alleged. Id. at 0-0. That is what Mr. Shimono did. He alleged the who (Harbor Freight Tools USA, Inc.), the what (the advertising of false comparison prices and sale prices, including false former-sale prices and comp at reference prices, and his and the proposed Class s purchases of merchandise in reliance thereon), the when (the four years prior to the filing of the Complaint for class purchases; January, 0 through March 0 for Mr. Shimono s purchases and June 0 for the solar security lights 0

18 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 specifically), the where (Harbor Freight retail stores nationwide for the proposed Class; the Murrieta location for Mr. Shimono specifically) and the how (the deliberate use of false price comparison advertisements to unlawfully induce buyers to purchase Harbor Freight products). See, e.g., Compl. -, ; and passim. California s UCL has a specific false pricing statute, 0, that in particular prohibits the display of a comparison price that is not a prevailing market price in the three months prior to the advertisement. Cal. Civ. Code 0. This statutory formula is not, however, the only possible measure of either a false or a misleading comparison price, both of which are prohibited by California law. California law also prohibits, for example, false mark-down pricing, which is pricing that falsely suggests to the consumer that a price indicated on a retail price tag is a reduction from the merchandiser s own previous selling price for that item; false comparisons to noncomparable merchandise; and any omission of fact that makes the comparison misleading. See e.g. Cal. Bus. & Prof. Code 00, et seq.; Cal. Bus. & Prof. Code 00, et seq.; Chester, 0 U.S. Dist. LEXIS 0, at *0. As Defendant concedes, most of Mr. Shimono s individual purchases were made during the period when Defendant used strike-through comparison price advertising (MTD ), which implies to the consumer that the displayed comparison price was a price at which this store previously sold this merchandise, and that the sale price therefore represents an actual mark-down from the establishment s former price. See FTC Pricing Guide, cited in Horosny v. Burlington Coat Factory, 0 U.S. Dist. LEXIS, at *, infra. Because Shimono alleges, and supports his allegation with historical price data, that Defendant never sold these items at the advertised strike through price, these comparison prices conveyed false information and were therefore per se misleading irrespective of 0. Cal. Civ. Code 00. The FTC also prohibits fake comparison sales prices and specifies that any displayed comparison price must be for merchandise of like grade and quality that is obtainable in the area. CFR.(c). Because Shimono alleged, citing voluminous

19 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 customer comments, that consumers report Harbor Freight s merchandise is not of like grade and quality to the merchandise Harbor Freight advertises as comparable, see, e.g., Compl. -, Shimono also alleges that Harbor Freight s comparison prices are misleading and violate Federal regulations and that therefore, under the UCL s borrowing provision, also violate the UCL thereby. Cal. Bus. & Prof. Code 00, et seq.. Even without Ninth Circuit authority in Hinojos, Mr. Shimono alleged that the merchandise he and Class Members purchased was worth less than the fake sale prices at which they were sold, and therefore pled a valid alternate measure of economic damages meriting restitution. Defendant also asserts counter-factually that Mr. Shimono did not allege that the goods he and the putative class members purchased were worth any less than the price [they] paid for them. MTD at (emphasis in the original). Not only is this irrelevant to the plaintiff s UCL, FAL, and CLRA standing under Hinojos, but it is also incorrect. Shimono alleged that all of the goods that Defendant advertised are of poorer quality than Defendant represents and are not worth the fake sale prices at which they are advertised. See e.g., Compl. ( These deceptive [advertising] tactics induced consumers to purchase poor-quality merchandise at inflated prices. ); Compl. 0 ( But a comparable hose reel, of equivalent or superior quality... [sold by Harbor Freight for $. comp at $.00] is available from Home Depot for $.. ) Shimono does not merely allege, as Defendant argues, that he received less of a bargain than the falsely advertised former prices or comp at prices led him to believe (MTD at ); he alleges that consumers overpaid because the goods were not worth their fake sale prices and illustrated those allegations with specific examples. Compl. -,, -, -. Those allegations demonstrate benefit of the bargain and costminus-value economic injury and damages as well, even though such damages are not necessary under Hinojos to show standing. See, e.g., Chowning, citing Hinojos.

20 Case :-cv-00-cas-mrw Document Filed 0/0/ Page 0 of Page ID #: 0 0. Shimono is not required to propose or prove a specific measure of restitution damages in his Complaint. Defendant repeatedly argues that Shimono lacks standing because he did not allege the difference between the price [plaintiffs] paid for [the product] and the actual value received and that he has therefore not demonstrated any measure of restitution damages. MTD at, e.g., :0-, :, :-, :, 0:-; :-, :-, :-, -. Defendant confuses a measure of damages, which Mr. Shimono will be required to prove at trial or on summary judgment, with standing. At this stage in the litigation, Mr. Shimono is not required to propose, much less prove, any specific measure of damages. Hinojos, F.d at 0-0. Because the issue here is only the threshold matter of standing, not whether and how much to award in restitution, a specific measure of the amount of [the alleged] loss is not required. Id. (internal citations omitted). Because Defendant misstates the issue here, Defendant s cited cases do not advance its argument. Defendant cites extensively to Chowning v. Kohl s, which in fact accurately incorporates the standing test set forth by the California Supreme Court in Kwikset and the Ninth Circuit in Hinojos. Chowning, 0 U.S. Dist. LEXIS. But the Court in Chowning was ruling on summary judgment, after the plaintiff in that case had already proposed several different models for restitutionary damages, all of which the Court had rejected as inapplicable. Id. Shimono has not yet proposed a damages model. Defendant will have the opportunity to challenge any such model at the appropriate time, but at this procedural stage, on a motion to dismiss, Defendant has no basis to challenge measures of restitutionary damages that have not yet been proposed. There are innumerable measures of restitution Hinojos. Mr. Shimono is entitled to propose one or more of these as a damage model or models, which may include the opportunity costs and transaction costs that result when a consumer is misled by deceptive marketing practices irrespective of the sale price. See Hinojos; see

21 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 also Meyer v. Sprint Spectrum L.P., Cal. th (Cal. 00). Defendant s conclusion that Mr. Shimono lacks standing because his complaint does not prove Defendant s preferred restitution damages model, using Defendant s assumptions and incorporating Defendant s recommended inferences, is procedurally misplaced on a motion to dismiss. Id. Further, even if restitution damages were to be disallowed for Shimono s CLRA claims, a plaintiff may still seek other forms of monetary relief such as punitive damages and attorney fees. Chowning v. Kohl s, 0 U.S. Dist. LEXIS, at *-, citing Cal. Civ. Code 0(a)(), (e). Contrary to Defendant s argument, this Court in Chowning actually held that, in arguing for dismissal based on an asserted lack of standing for want of restitution damages, Defendant conveniently ignores this statutory language [regarding alternate measures of damages available] and focuses only on actual damages and restitution. The Court rejects this argument. Id.. Mr. Shimono and the Class are also entitled to compensatory damages because Shimono adequately alleged economic injury. Defendant attempts its same argument against standing again in a different guise, here asserting that Plaintiff is not entitled to compensatory damages because he has not plausibly alleged economic injury. MTD at. Defendant maintains this variation on its standing argument only by again omitting the governing authority from the Ninth Circuit and California Supreme Court. See Hinojos; Kwikset. Instead, Defendant cites again to its cases from the Seventh Circuit and the District of Massachusetts interpreting Illinois and Massachusetts law respectively, see Kim; Mulder; and to the factually inapposite Warner v. Tinder Inc. in this Court. 0 F. Supp. d 0, 0 (C.D. Cal. 0). In Tinder, unlike the instant case, the plaintiff never alleged that he had lost any money or property or suffered any economic injury, only that the defendant had added charges for certain features of its dating service after he joined. Id. at 0. The Tinder court found that the plaintiff had no reasonable expectation that premium features of a

22 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 dating service would always be free, and therefore rightly dismissed for lack of injury and standing. Id. Mr. Shimono, however, alleges that he did suffer economic injury when he surrendered money to purchase Defendant s falsely advertised products. Compl., -, -, ; see generally Hinojos. Defendant s argument for dismissal fails here for the same reason that it failed previously: the holding that Defendant urges on this Court is contrary to binding Ninth Circuit authority that Defendant failed to identify. See, Hinojos. Defendant also cites in passing to a California real estate transfer statute that describes damages recoverable after a fraudulent real estate purchase or sale, Cal Civ. Code (a), and a Ninth Circuit opinion ruling on a common-law fiduciary fraud cause of action not California consumer law that predated Hinojos by fourteen years. MTD at 0, citing Ambassador Hotel v. Wei-Chuan Inv., F.d 0, 0 (th Cir. ). The measure of damages in an unrelated statute and the holding in a real estate fiduciary fraud case do not overrule the California Supreme Court s current interpretation of California consumer law or the Ninth Circuit s explicit guidance in Hinojos establishing the federal rule of standing in California false advertising cases.. Mr. Shimono has standing to seek injunctive relief under California law, both because he alleges an intent to shop Defendant s stores in the future and because Defendant s conduct is capable of repetition yet evading review. Defendant also argues that Mr. Shimono and the Class he seeks to represent should be denied injunctive relief as well, because Mr. Shimono now knows that Defendant s advertising is illegal and, according to Defendant, he therefore cannot be injured again by it in the future. MTD at. This argument has been soundly rejected by the Central District and Ninth Circuit courts as inconsistent with the express purpose of California law. See e.g., Russell v Kohl s. Defendant s argument here also requires the Court to disregard Plaintiff s factual allegation that he intends to shop at Harbor Freight in the future (Compl. ), and instead construe this contested material fact in

23 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 favor of Defendant, the moving party, which is prohibited under Rule. Fed. R. Civ. P. (b). An injunction is the primary form of relief available to protect consumers from unfair business practices. Russell v. Kohl s, 0 U.S. Dist. LEXIS at *-0; citing In re Tobacco II Cases, Cal. th, (Cal. 00). To hold that a plaintiff lacks standing to seek an injunction because he is now aware of the alleged misconduct would conflict with the very purpose of this relief to stop such practices in their tracks. Id.; see also Ries v. Arizona Beverages USA LLC, F.R.D., (N.D. Cal. 0) (accepting defendant s argument would mean that injunctive relief would never be available in false advertising cases, a wholly unrealistic result. ). To establish Article III standing for injunctive relief, plaintiffs must show a significant possibility of future harm; it is insufficient to allege only past injury. San Diego Cnty. Gun Rights Comm. v. Reno, F.d, (th Cir. ). In the context of a class action, [u]nless the named plaintiffs are themselves entitled to seek injunctive relief, they may not represent a class seeking that relief. Hodgers Durgin v. De La Vina, F.d 0, 0 (th Cir. ). Courts in this jurisdiction have analyzed Defendant s same argument in legally and factually similar cases and rejected it as inconsistent with California law and public policy. It is inconceivable to think prospective relief in the false advertising context is bound by the rules of fool me once, shame on you; fool me twice shame on me. The Court... refuses to find that, once a plaintiff has alleged that she was deceived, she likely will not voluntarily be deceived again and thus no court can enjoin deceptive practices without ignoring Article III s standing requirements. Instead, the Court looks to the reasoning of our sister courts, which have held that California s consumer laws are designed to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. Chester v. TJX Cos., No. :-cv- 0-ODW (DTB), 0 U.S. Dist. LEXIS 0, at *- (C.D. Cal. Aug., 0) (denying motion to dismiss injunctive relief claims in a false advertising case),

24 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 citing Kwikset, Cal. th at 0. Such a result, the Chester court held, would eviscerate the intent of the California legislature in creating consumer protection statutes because it would effectively bar any consumer who [could avoid] the offending product [in the future] from seeking injunctive relief. Id. This Court in Chester, collecting cases, noted that conflicts still exist within the jurisdiction. See, e.g. Branca v. Nordstrom, Inc., -cv-00-mma (JMA), 0 U.S. Dist. LEXIS (S.D. Cal. Oct., 0); Sperling v. Stein Mart, Inc., :-cv-0-bro-kkx, 0 U.S. Dist. LEXIS 0 (C.D. Cal. March, 0); Horosny v. Burlington Coat Factory of CA, LLC, -cv-000-sjo (MRWx), 0 U.S. Dist. LEXIS (C.D. Cal. Oct., 0). The Chester Court, however, analyzed these cases and concluded that the better rule allowed prospective injunctive relief in false advertising cases. Chester. In any event, because Shimono alleges that he and the other class members would like to and intend to shop at Harbor Freight in the foreseeable future, his claim for prospective injunctive relief is not mooted by his present knowledge. Defendant may easily conform its advertising practices to California law temporarily and then revert to false price comparison advertising again later, once the heat is off. Defendant s purported standing argument against claims for injunctive relief here is therefore analogous to the U.S. Supreme Court cases where defendants raised similar mootness arguments against injunctive relief. See e.g., Nat. Res. Def. Council, Inc. v. Evans, F.d 0 (th Cir. 00). In those cases, defendants argued that prospective injunctive relief was not warranted because the plaintiffs could no longer allege that they would be injured in the future, as the injurious conduct had already ceased. Id. In the instant case, Defendant contends that prospective injunctive relief is not warranted because the plaintiff, now aware of the threat, can no longer be harmed by the injurious conduct. MTD at. Contrary to Defendant s argument, the U.S. Supreme Court allows such claims for prospective injunctive relief, finding that those claims are not moot even where the offending conduct had already ceased and where the alleged unlawful behavior

25 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 therefore did not pose any current or imminent potential future threat of injury. The Supreme Court found prospective injunctive relief was warranted because the alleged unlawful conduct in these cases was capable of repetition yet avoiding review. See e.g., Nat. Res. Def. Council, Inc., F.d 0. The same is true here. Id. Because Mr. Shimono and the class allege both a desire and an intent to shop at Harbor Freight in the future, and because Defendant can turn its false advertising off and on at will, without injunctive relief Defendant s unlawful advertising is capable of repetition yet avoiding review. The claims for injunctive relief are therefore not moot; Mr. Shimono and the class members have standing to seek injunctive relief. Cf., e.g., Id. Even if Shimono s personal claims were to be considered moot, which they are not, see below, they would fall within the Supreme Court s exception to mootness. Id. Defendant s argument against injunctive relief also attempts to shift the burden of avoiding unlawful false advertising from advertisers to the public, in violation of California public policy. Cal. Civ. Code 00, et seq. California law places that responsibility on the advertiser. Id. It is not Mr. Shimono s or California consumers responsibility to maintain a list of false advertisers and remember to avoid those stores, or to verify that all of a store s goods are advertised lawfully before purchasing those goods. Under California law it is the advertiser s responsibility to advertise product prices truthfully. See e.g., 0. Defendant cannot shift that burden to the consumer by continuing its false advertising after having injured consumers, creating injury thereby, and avoid injunctive relief. Chester, at *-. Finally, Defendant s argument that Mr. Shimono lacks standing for injunctive relief because Shimono will always remember that Harbor Freight advertises its goods falsely and therefore never shop there again is a factual argument disputing Mr. Shimono s allegations in his Complaint. Compl.. Defendant s argument is misplaced on a motion to dismiss under FRCP, as it requires the Court to construe a contested issue of material fact in favor of Defendant, the moving party, which Rule

26 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #: 0 0 specifically forbids. Fed. R. Civ. P.. Defendant in effect concedes this point, asserting only that Mr. Shimono is unlikely to shop at Harbor Freight in the future, MTD, not that he physically could not or will not under any circumstances do so. A defendant may not, on a motion to dismiss under Rule, guess the plaintiff s future behavior and argue for dismissal based on defendant s predictions. Fed. R. Civ. P.. The Court does not accept as true a defendant s proposed factual inferences, but rather must construe any such disputed issues of material fact in favor of the non-moving party. Id.. Because Mr. Shimono s allegations of fact are pertinent and potentially material to his claims and to those of unnamed proposed Class Members, his allegations should not be stricken under Rule (f). Defendant argues in the alternative that the Court should strike much of Mr. Shimono s Complaint under Rule (f). Fed. R. Civ. P. (f); MTD at -. Defendant s contention is not supported by Federal practice or by the Rule itself. Motions to strike are disfavored because striking a portion of a pleading is a drastic remedy... and ordinarily will be denied unless the matter under challenge has no possible relation to the controversy and may prejudice the other party. U.S. ex rel. Ackley v. Int l Bus. Machines Corp., 0 F. Supp. d, 0 (D. Md. 000) (internal quotation marks omitted). Defendant fails to establish that any allegations in the complaint qualify for this extraordinary remedy under the stringent requirements of Rule (f) so as to merit exclusion from the pleadings. Id., and see, e.g., Whittlestone, Inc. v. Handi-Craft Co., F.d 0, (th Cir. 00) ( Rule (f) is neither an authorized nor a proper way to procure the dismissal of all or a part of a complaint. ), citing C Charles Alan Wright & Arthur R. Miller, Federal Practice & Procedure 0 (d ed. 00). Rule (f) permits the Court to strike from pleadings an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter. Id. Whittlestone, which Defendant cites, held that allowing litigants to use [Rule (f)] as a means to dismiss

27 Case :-cv-00-cas-mrw Document Filed 0/0/ Page of Page ID #:0 0 0 some or all of a pleading (as [the defendant] would have us do here), [would create] redundancies within the Federal Rules of Civil Procedure, because a Rule (b)() motion (or a motion for summary judgment at a later stage in the proceedings) already serves such a purpose. Id. at *-0. A motion to strike is appropriate where no evidence in support of the allegation would be admissible, or those issues could have no possible bearing on the issues in the litigation. U.S. ex rel. Ackley; and see Whittlestone, F.d at - (reversing the district court s grant of a motion to strike). Immaterial matter is that which has no essential or important relationship to the claim for relief or the defenses being pleaded. Fantasy, Inc. v. Fogerty, F.d, (th Cir. ) (quotation omitted), rev d on other grounds, Fogerty v. Fantasy, Inc., 0 U.S. (). Impertinent matter consists of statements that do not pertain, and are not necessary, to the issues in question. Id., cited in Thomas-Byass v. Michael Kors Stores, (Cal.), Inc., No. EDCV - JGB (KKx), 0 U.S. Dist. LEXIS 0, at *- (C.D. Cal. Sep., 0). Defendant s Motion to Strike fails these basic criteria. The allegations that Defendant nominates to be stricken under Rule (f) pertain to Defendant s alleged false advertising practices, to which Mr. Shimono and the Class Members were exposed (Compl. -), allegations showing Harbor Freight s actual current sale prices, pricing history, and competitors actual sale prices for Harbor Freight merchandise, and allegations regarding the quality and relative value of Harbor Freight products that that one or more unnamed class members purchased or likely purchased. See e.g., Compl. -, 0. At this early stage of the litigation, prior to both class and merits discovery, Defendant has no basis to challenge these factual allegations as either immaterial or impertinent. Defendant challenges allegations pertaining to items not purchased by Plaintiff, MTD, but these are alleged likely to have been purchased by unnamed Class Members, and pricing representations not observed or relied upon by Plaintiff (MTD ), but which are similarly alleged and anticipated to pertain to the claims of 0