United States District Court, D. Oregon, Portland Division
MONIKA TAYLOR, individually and on behalf of all others similarly situated,
NIKE, INC., Defendant.
OPINION AND ORDER
Michael W. Mosman Chief United States District Judge
matter comes before the Court on Nike's Motion to Dismiss
 Ms. Taylor's Complaint . For the reasons set
forth below, I GRANT Nike's Motion and DISMISS Ms.
Taylor's Complaint with leave to amend.
Taylor asserts the following factual allegations in her
Complaint. In the summer of 2015, Ms. Taylor visited a Nike
Outlet Store in Orange, California. There, she observed
several items marked with tags that contained two prices: a
“Sugg. Retail Price” and a lower “Our
Price.” She also observed other items without such
tags, leading her to believe that the items with tags were
discounted. Enticed by the prospect of “receiving a
bargain, ” Ms. Taylor purchased several items from the
she was deceived, Ms. Taylor brought this suit against Nike.
In general, Ms. Taylor claims that Nike's use of the dual
price tags is misleading to reasonable consumers. She asserts
four causes of action arising under California law: the False
Advertising Law (“FAL”); the Consumers' Legal
Remedies Act, (“CLRA”); the Unfair Competition
Law, (“UCL”); and unjust enrichment. Nike moves
to dismiss these claims, arguing that Ms. Taylor lacks
standing to bring suit and that the Complaint fails to
satisfy the heightened pleading requirements for fraud. I
held oral argument on November 10, 2016.
Whether Ms. Taylor Has Standing Under Article III
survive a motion to dismiss under Federal Rule of Civil
Procedure 12(b)(1) for lack of standing, a plaintiff must
have “(1) suffered an injury in fact, (2) that is
fairly traceable to the challenged conduct of the defendant,
and (3) that is likely to be redressed by a favorable
judicial decision.” Spokeo, Inc. v. Robins,
136 S.Ct. 1540, 1547 (2016) as revised (May 24,
2016). Plaintiff bears the burden of proof and must
“‘clearly . . . allege facts demonstrating'
each element.” Id. (quoting Warth v.
Seldin, 422 U.S. 490, 518 (1975)). An injury in fact is
one that is (a) concrete and particularized and (b) actual or
imminent. Lujan v. Defs. of Wildlife, 504 U.S. 555,
560 (1992). In other words, the injury “must affect the
plaintiff in a personal and individual way, ” and
“must actually exist.” Spokeo, 136 S.Ct.
at 1548. “Even named plaintiffs who represent a class
must allege and show that they personally have been
injured.” Id. at 1547 n.6 (quoting Simon
v. E. Ky. Welfare Rights Org., 426 U.S. 26, 40 n.20
(1976)) (internal quotation marks omitted).
argues that Ms. Taylor lacks standing to bring these state
law claims because she has failed to meet Article III's
injury in fact requirement. Nike also argues that Ms. Taylor
has failed to plead facts sufficient to show she has standing
to seek injunctive relief.
Injury in Fact
person has standing under the UCL, FAL, or CLRA when that
person has suffered an economic injury as a result of unfair
competition. Hinojos v. Kohl's Corp., 718 F.3d
1098, 1103-04, 1108 (9th Cir. 2013) as amended on denial
of reh'g and reh'g en banc (July 8, 2013). An
“economic injury” is a loss or deprivation of
money or property which requires no more injury than
“the corresponding requirement under Article III of the
U.S. Constitution.” Reid v. Johnson &
Johnson, 780 F.3d 952, 958 (9th Cir. 2015). Plaintiffs
meet the economic injury in fact requirement when “they
show that, by relying on a misrepresentation on a product
label, they ‘paid more for a product than they
otherwise would have paid, or bought it when they otherwise
would not have done so.'” Id. (quoting
Hinojos, 718 F.3d at 1104 n.3).
Taylor has sufficiently pled that she suffered an injury in
fact. In her Complaint, she alleges that she observed
merchandise with the dual price tags and understood the tags
to mean she was “receiving a bargain.” She also
asserts that she was “induced” to purchase the
items on the prospect of the bargain and would not have
purchased them, or paid the prices she did, had she
“known she was not truly receiving a bargain.”
These allegations are sufficient to meet the economic injury
requirement under the UCL, FAL, or CLRA, which corresponds to
the injury in fact requirement under Article III.
argues that Ms. Taylor's failure to plead sufficient
facts regarding the falsity of Nike's statements
undercuts her ability to establish standing under the UCL,
FAL, or CLRA. But, the facts necessary to establish standing
are not the same as those required to plead a claim with
particularity. See Vassigh v. Bai Brands LLC, No.
14-CV-05127-HSG, 2015 WL 4238886, at *3 (N.D. Cal. July 13,
2015) (finding that challenges to standing and a
complaint's sufficiency under Rule 8(a) or 9(b) involve
different questions); Branca v. Nordstrom, Inc., No.
14CV2062-MMAJMA, 2015 WL 1841231, at *4, *6 (S.D. Cal. Mar.
20, 2015) (finding that the plaintiff had made sufficient
allegations for purposes of standing even though those same
allegations failed to meet the heightened pleading
requirement under Rule 9(b)). Thus, even if Ms. Taylor's
claims are insufficient under the heightened pleading
standard of Rule 9(b), they are sufficient to provide Ms.
Taylor with standing under Article III.
Standing to Seek Injunctive Relief
of whether Ms. Taylor has made sufficient allegations to show
she suffered an injury in fact, she still has to demonstrate
that she has standing to seek injunctive relief. Nike argues
that even if Ms. Taylor plans to shop at Nike Outlets in the
near future, her knowledge of the purported false pricing
scheme precludes her from seeking injunctive relief because
she can no longer be induced by a bargain she knows does not
addition to the three general requirements for Article III
standing, a plaintiff seeking injunctive relief must also
show that she is “realistically threatened by
repetition of the violation.” Gest v.
Bradbury, 443 F.3d 1177, 1181 (9th Cir. 2006) (quoting
Armstrong v. Davis, 275 F.3d 849, 860-61 (9th Cir.
2001)). “Past exposure to illegal conduct does not in
itself show a present case or controversy regarding
injunctive relief . . . if unaccompanied by any continuing,
present adverse effects.” Lujan, 504 U.S. at
564 (quoting City of L.A. v. Lyons, 461 U.S. 95, 102
courts in the Ninth Circuit are split on the issue of whether
plaintiffs in Ms. Taylor's position have standing to seek
injunctive relief. Spann v. J.C. Penney Corp., No.
SA CV 12-0215 FMO (RNBx), 2015 WL 1526559, at *11 (C.D. Cal.
Mar. 23, 2015). In some cases, district courts have denied
standing because consumers who become aware of a
defendant's false advertising cannot establish that they
are likely to be “fooled again” by the
misrepresentations. See, e.g., Romero v. Flowers
Bakeries, LLC, No. 14-CV-05189-BLF, 2015 WL 2125004,
at*7 (N.D. Cal. May 6, 2015); Castagnola v.
Hewlett-Packard Co., No. C 11-05772 JSW, 2012 WL
2159385, at *6 (N.D. Cal. June 13, 2012). In other cases,
district courts have found standing, reasoning that holding
otherwise would “eviscerate the intent of the
California legislature in creating consumer protection
statutes.” Koehler v. Litehouse, Inc., No. CV
12-04055 SI, 2012 WL 6217635, at *6 (N.D. Cal. Dec. 13,
2012); Spann, 2015 WL 1526559, at *11; Henderson
v. Gruma Corp., No. CV 10-04173 AHM (AJWX), 2011 WL
1362188, at *7-8 (C.D. Cal. Apr. 11, 2011). Although I
recognize the policy concerns of denying standing in cases
like these, I agree with the former line of cases and
conclude that Ms. Taylor does not have standing to seek
in federal court is a question of federal law, not state
law.” Hollingsworth v. Perry, 133 S.Ct. 2653,
2667 (2013). Under federal law, it is “the imminent
prospect of future injury, ” not the “presence or
absence of a past injury, ” that “determines
Article III standing to seek injunctive relief.”
Ervine v. Desert View Reg'l Med. Ctr. Holdings,
LLC, 753 F.3d 862, 868 (9th Cir. 2014) (citations
omitted) (internal quotation marks omitted); see also
Lujan, 504 U.S. at 564 (“Past exposure to illegal
conduct does not in itself show a present case or controversy
regarding injunctive relief . . . if unaccompanied by any
continuing, present adverse effects.” (citation
omitted) (internal quotation marks omitted)).
Ms. Taylor's economic injury is rooted in Nike's
alleged deception; without such deception, she would not have
purchased the merchandise or paid as much as she did. By
virtue of her past injury, however, Ms. Taylor is now aware
of any false pricing scheme in which Nike might be engaged.
Therefore, she cannot demonstrate “the imminent
prospect of future jury” because she can no longer be
fact that California's consumer protection
explicitly provide for injunctive relief does not change this
conclusion. See Cal. Bus. & Prof. Code §
17203 (West 2017); Cal. Civ. Code § 1780 (West 2017);
Spann, 2015 WL 1526559, at *9 (“An injunction
is the primary form of relief available . . . to protect
consumers from unfair business practices[.]” (citation
omitted) (internal quotation marks omitted)). Regardless of
whether the California legislature intended injunctive relief
to be available in these cases, Article III “limits the
jurisdiction of federal courts to ‘cases and
controversies.'” Lee v. Am. Nat. Ins. Co.,
260 F.3d 997, 1001 (9th Cir. 2001); see also 3 Henry
P. Johnston, Correspondence and Public Papers of John
Jay 486-89 (1891); 10 Jared Sparks, The Writings of
George Washington 542-45 (1836) (detailing how Justices,
by letter to President Washington, declined to answer
questions posed to the Supreme Court by Secretary of State
Thomas Jefferson as not involving cases or controversies).
Thus, “a plaintiff whose cause of action is perfectly
viable in state court under state law may nonetheless be
foreclosed from litigating the same cause of action in
federal court, if he cannot demonstrate the requisite
injury.” Lee, 260 F.3d at 1001-02.
I recognize that in this instance, the federal standing
requirements create a situation in which a consumer who has
demonstrated economic injury under California's consumer
protection laws lacks Article III standing to pursue
injunctive relief in federal court. But a body of law almost
as old as the Republic requires this result. Ms. Taylor has