Blain v. Liberty Mut. Fire Ins. Co., 22-cv-0970-AJB-DEB

CourtUnited States District Courts. 9th Circuit. United States District Court (Southern District of California)
Writing for the CourtHon. Anthony J. Baattaglia United States District Judge
PartiesSARAH BLAIN, individually and on behalf of all others similarly situated, Plaintiff, v. LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant.
Docket Number22-cv-0970-AJB-DEB
Decision Date09 March 2023


SARAH BLAIN, individually and on behalf of all others similarly situated, Plaintiff,


No. 22-cv-0970-AJB-DEB

United States District Court, S.D. California

March 9, 2023


(Doc. No. 15)

Hon. Anthony J. Baattaglia United States District Judge

Presently pending before the Court is Defendant Liberty Mutual Fire Insurance Company's (“Liberty Mutual”) motion to dismiss Plaintiff Sarah Blain's Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Doc. No. 15.) Plaintiff filed an opposition to the motion to dismiss, (Doc. No. 20), to which Liberty Mutual replied, (Doc. No. 21).

Pursuant to Civil Local Rule 7.1.d.1, the Court finds the instant matter suitable for determination on the papers and without oral argument. For the reasons stated herein, the Court GRANTS IN PART AND DENIES IN PART the motion to dismiss Plaintiff's Complaint.



Plaintiff has been, and remains, a Liberty Mutual policy holder at all times relevant to this lawsuit. (Complaint (“Compl.”), Doc. No. 1, ¶ 33.) The time period relevant to this lawsuit is from March 1, 2020, to the present. (Id. ¶ 44.) Beginning in March 2020, California began implementing various mandates, including “stay-at-home” orders, to combat the COVID-19 pandemic. (Id. ¶ 2.) These measures resulted in reduced driving across the state which respectively lowered the number of claims likely to be paid by automobile insurance providers, such as Liberty Mutual. (Id. ¶ 19.) In light of the decreased traffic volume, Plaintiff alleges Liberty Mutual collected excessive premiums, which led to a substantial windfall at the expense of its customers and failed to act in good faith when exercising its discretion to adjust the premiums charged to Liberty Mutual customers. (Id. ¶¶ 23, 29, 36.)

In April 2020, Liberty Mutual announced it would issue a 15% refund to all auto insurance policyholders for two months' worth of premiums. (Id. ¶ 30.) From June 2020 through May 2021, Liberty Mutual continued to refund policyholders at a rate of 5% for that twelve-month period. (Id. ¶ 31.) Plaintiff concedes she received premium refunds in both 2020 and 2021. (Id. ¶ 34.) The issue instead, as Plaintiff alleges, is that the distributed refunds of 15% were inadequate, and that she and other class members should have received “at least a 30% average refund of paid premiums” to offset the unfair windfall enjoyed by Liberty Mutual from mid-March through the end of April 2020 due to the COVID-19 pandemic. (Id. ¶ 4.) Plaintiff further alleges that the subsequent refunds of 5% were similarly inadequate, though does not indicate what an appropriate amount would have been for that timeframe. (Id. ¶ 5.)


Plaintiff contends that under the applicable “CHANGE” provision of the Liberty Guard Auto Policy, Liberty Mutual retained contractual discretion to make downward premium adjustments based on changed circumstances at any point during the coverage term, and that, in the case of Plaintiff and the members of the putative class, Liberty Mutual failed to exercise this discretion in good faith during the COVID-19 pandemic. (Id. ¶¶ 2527, 35-36.)

Plaintiff asserts three claims against Liberty Mutual: (1) breach of contract under the implied covenant of good faith and fair dealing; (2) unjust enrichment; and (3) violation of California's Unfair Competition Law (“UCL”) under its unfairness prong. (See Compl.) Liberty Mutual filed the instant motion to dismiss under Federal Rule of Civil Procedure 12(b)(1), asserting the Court lacks subject matter jurisdiction, and under Federal Rule of Civil Procedure 12(b)(6) asserting that Plaintiff's Complaint fails to state a claim for which relief can be granted. (Doc. No. 15.)


A. Rule 12(b)(1)

A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) tests whether the court has subject matter jurisdiction. While lack of “statutory standing” requires dismissal for failure to state a claim under Rule 12(b)(6), lack of Article III standing requires dismissal for want of subject matter jurisdiction under Rule 12(b)(1). See Nw. Requirements Utilities v. F.E.R.C., 798 F.3d 796, 808 (9th Cir. 2015) (“Unlike Article III standing, however, ‘statutory standing' does not implicate our subject-matter jurisdiction.”) (citing Lexmark Int'l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 128 n.4 (2014)); Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011).

“A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.” Id. The court “resolves a facial attack as it would a motion to dismiss under Rule 12(b)(6): accepting the plaintiff's allegations as true and drawing all reasonable


inferences in the plaintiff's favor, the court determines whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction.” Leite v. Crane Co., 749 F.3d 1117, 1121 (9th Cir. 2014).

“[I]n a factual attack,” on the other hand, “the challenger disputes the truth of the allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for Everyone, 373 F.3d at 1039. In resolving such an attack, unlike with a motion to dismiss under Rule 12(b)(6), a court “may review evidence beyond the complaint without converting the motion to dismiss into a motion for summary judgment.” Id. Moreover, the court “need not presume the truthfulness of the plaintiff's allegations.” Id. Once the defendant has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), the plaintiff bears the burden of establishing the court's jurisdiction. See Chandler v. State Farm Mut. Auto Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010).

B. Rule 12(b)(6)

A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state a claim upon which relief may be granted. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). The court may dismiss a complaint as a matter of law for: “(1) lack of cognizable legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). However, a complaint survives a motion to dismiss if it contains “enough facts to state a claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007).

Notwithstanding this deference, the reviewing court need not accept legal conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is also improper for the court to assume “the [plaintiff] can prove facts that [he or she] has not alleged ....” Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 (1983). On the other hand, “[w]hen there are well-pleaded factual allegations, a court should assume their veracity and then determine whether they plausibly give rise to


an entitlement to relief.” Iqbal, 556 U.S. at 679. The court only reviews the contents of the complaint, accepting all factual allegations as true, and drawing all reasonable inferences in favor of the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). III. REQUESTS FOR JUDICIAL NOTICE

While the scope of review on a motion to dismiss for failure to state a claim is limited to the complaint, a court may consider evidence on which the complaint necessarily relies if: “(1) the complaint refers to the document; (2) the document is central to the plaintiff['s] claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) motion.” Daniels-Hall v. Nat'l Educ. Ass'n, 629 F.3d 992, 998 (9th Cir. 2010) (internal quotation marks and citations omitted). Furthermore, Federal Rule of Evidence 201 permits judicial notice of a fact when it is “not subject to reasonable dispute because it: (1) is generally known within the trial court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Welk v. Beam Suntory Imp. Co., 124 F.Supp.3d 1039, 1041-42 (S.D. Cal. 2015).

Here, only Liberty Mutual requests judicial notice, and these requests are unopposed.

As part of its motion, Liberty Mutual requests the Court to take judicial notice of the following exhibits in support of its Motion to Dismiss:

A. Request for Judicial Notice in Defendant's Support of Motion to Dismiss

First, Exhibit (A), is Bulletin 2020-3, issued by Insurance Commissioner Ricardo Lara (“Lara”) on April 13, 2020. (Doc. No. 15-6 at 2.) Exhibit (B) is Bulletin 2020-4, issued by Lara on May 15, 2020. (Id. at 2.) Exhibit (C) is Bulletin 2020-8, issued by Lara on December 3, 2020. (Id. at 3.) Exhibit (D) is Bulletin 2021-3, issued by Lara on March 11, 2021. (Id. at 3.) Exhibits (A)-(D) are public bulletins available on the California Department of Insurance (“DOI”) webpage regarding premium refunds in response to the COVID-19 pandemic. Judicial notice is appropriate for records and “reports of administrative bodies.” Interstate Nat. Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th Cir. 1954). Therefore, the Court GRANTS Liberty Mutual's request for judicial notice of Exhibits (A)-(D).


Next, Liberty Mutual requests judicial notice of Exhibit (E), a press release issued by the DOI, dated March 11, 2021, regarding the overcharge of auto insurance premiums during the COVID-19 pandemic. (Id. at 3.) The press release has a public nature and is released through an administrative body....

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