Vallarta v. United Airlines, Inc., Case No. 19-cv-05895-HSG

• Decision Date: 26 October 2020
• Docket Number: Case No. 19-cv-05895-HSG
• Parties: Diana VALLARTA, et al., Plaintiffs, v. UNITED AIRLINES, INC., Defendant.
• Court: U.S. District Court — Northern District of California

497 F.Supp.3d 790

Diana VALLARTA, et al., Plaintiffs,

v.UNITED AIRLINES, INC., Defendant.

Case No. 19-cv-05895-HSG

United States District Court, N.D. California.

Signed October 26, 2020

Kevin S. Landau, Pro Hac Vice, Taus, Cebulash, Landau, LLP., New York, NY, Rosanne L. Mah, Rosemary M. Rivas, Levi & Korsinsky, LLP, San Francisco, CA, Marc Lawrence Godino, Glancy Prongay & Murray LLP, Los Angeles, CA, for Plaintiffs.

Azar Asas Alexander, Pro Hac Vice, Rachel Frances Sifuentes, Sondra Ann Hemeryck, Pro Hac Vice, Riley Safer Holmes and Cancila LLP, Chicago, IL, for Defendant.

AMENDED ORDER GRANTING MOTION TO DISMISS

Re: Dkt. No. 19

HAYWOOD S. GILLIAM, JR., United States District Judge

Pending before the Court is Defendant United Airlines’ motion to dismiss. Dkt. No. 19. The Court held a hearing on February 12, 2020.¹ See Dkt. No. 48. On October 26, 2020, the Court granted Defendant's motion to reconsider this Court's prior order granting the motion to dismiss in part. See Dkt. Nos. 62, 63. For the reasons detailed below, the Court RECONSIDERS it prior order and GRANTS the motion to dismiss in its entirety.

I. BACKGROUND

Plaintiffs Diana Vallarta and Lisa Salmons filed this putative class action on September 20, 2019. See Dkt. No. 1 ("Compl."). Plaintiff Vallarta is a resident of San Jose and a citizen of California, and Plaintiff Salmons is a resident of Stamford, Connecticut. See id. at ¶¶ 3, 4. Plaintiffs allege that Defendant offers optional, third-party travel insurance to its customers for purchase during the online ticketing process. See id. at ¶¶ 1, 14–15. After a customer selects her flight, but before she can complete the purchase, Defendant's website requires the customer to decide whether to purchase travel insurance. Id. at ¶¶ 19–20, 22–27, 29–35. During this selection process, Defendant's website "encourages" and "urg[es] consumers to purchase travel insurance" by, for example, including "a quote from Frommer's noting that ‘[i]t's wise to always consider a travel protection plan to cover your trip costs from the unexpected’; the ‘Top 4 reasons you need travel insurance’; and an ‘Important Fact’ noting the high out-of-pocket costs associated with medical emergency transportation." See id. at ¶¶ 1, 14, 24, 29–31, 34.

Prior to October 2017, the website noted that the travel insurance policy would be underwritten by the Allianz group. See id. at ¶¶ 24, 26. For customers who then purchased the travel insurance, the receipt indicated that the specific amount charged "would be ‘[b]illed separately by Allianz Global Assistance.’ " Id. at ¶ 28. After October 2017, the website indicated that "[c]overage is offered by Travel Guard Group, Inc." See id. at ¶¶ 34–35. If purchased, the receipt similarly stated that the specific amount charged will be " ‘[b]illed separately by Travel Guard Group, Inc.’ " Id. at ¶ 35–36.

However, Plaintiffs allege that Defendant has an undisclosed financial interest in the sale of this travel insurance. See id. at ¶¶ 1, 37. If a customer purchases third-party travel insurance through Defendant's website, the insurer either pays part of the purchase price back to Defendant or allows Defendant to retain some portion of the purchase price "in exchange for helping broker the insurance sale." See id. at ¶ 14. Plaintiffs refer to this interchangeably as a "commission," "brokerage fee," or "kickback." See, e.g. , id. at ¶¶ 13–15, 39. Yet according to the complaint, at no point during the purchase process or in the insurance policy itself does Defendant disclose that it receives money as part of the travel insurance transaction. See id. at ¶¶ 38–39. To the contrary, Plaintiffs allege that Defendant's website "repeatedly indicat[es] that Allianz or the Travel Guard Group will be the sole recipient of Plaintiff's travel-insurance payments." See id. at ¶ 40. Plaintiffs contend that had they known, they "would not have purchased the travel insurance and/or would have paid less for travel insurance." Id. at ¶¶ 41–42, 47.

Based on these allegations, Plaintiffs bring claims for (1) violations of California's Unfair Competition Law ("UCL"), Cal. Bus. & Prof. Code §§ 17200, et seq. ; (2) violations of Connecticut's Unfair Trade Practices Act ("CUTPA"), Conn. Gen. State. Ann. § 42-110b; (3) unjust enrichment; (4) conversion; and (5) fraudulent concealment. See id. at ¶¶ 66–107. Plaintiffs also seek to represent a nationwide class of "[a]ll persons who purchased a travel insurance policy on United's website in the United States within the applicable limitations period"; a California subclass of "[a]ll persons who purchased a travel insurance policy on United's website in the State of California within the applicable limitations period"; and a Connecticut subclass of "[a]ll persons who purchased a travel insurance policy on United's website in the State of Connecticut within the applicable limitations period." See id. at ¶¶ 53–55.

Defendant moves to dismiss Plaintiff Salmons’ claims for lack of personal jurisdiction under Federal Rule of Civil Procedure 12(b)(2) ; to strike the nationwide class and Connecticut subclass allegations; and to dismiss all remaining causes of action under Federal Rule of Civil Procedure 12(b)(6).

II. LEGAL STANDARD

A. Rule 12(b)(2)

When a defendant moves to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of demonstrating that the court has jurisdiction over the defendant." Pebble Beach Co. v. Caddy , 453 F.3d 1151, 1154 (9th Cir. 2006). Where, as here, the motion is based on written materials rather than an evidentiary hearing, Plaintiffs need only make a "prima facie showing of jurisdictional facts." Bauman v. DaimlerChrysler , 579 F.3d 1088, 1094 (9th Cir. 2009), vacated on other grounds , 603 F.3d 1141 (9th Cir. 2010) (quotations omitted). "Any greater burden such as proof by a preponderance of the evidence would permit a defendant to obtain a dismissal simply by controverting the facts established by a plaintiff through his own affidavits and supporting materials." Data Disc, Inc. v. Sys. Tech. Assocs., Inc. , 557 F.2d 1280, 1285 (9th Cir. 1977). A prima facie showing "must be based on affirmative proof beyond the pleadings, such as affidavits, testimony or other competent evidence of specific facts." Excel Plas, Inc. v. Sigmax Co., Ltd. , No. 07-CV-578-IEG, 2007 WL 2853932 (S.D. Cal. Sept. 27, 2007) (citing 4 Charles A. Wright & Arthur R. Miller, Federal Practice and Procedure § 1067.6 (3rd ed. 2002) ). "Although the plaintiff cannot simply rest on the bare allegations of its complaint, uncontroverted allegations in the complaint must be taken as true." Schwarzenegger v. Fred Martin Motor Co. , 374 F.3d 797, 800 (9th Cir. 2004) (quotations omitted).

B. Rule 12(b)(6)

Federal Rule of Civil Procedure 8(a) requires that a complaint contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Fed. R. Civ. P. 8(a)(2). A defendant may move to dismiss a complaint for failing to state a claim upon which relief can be granted under Rule 12(b)(6). "Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory." Mendiondo v. Centinela Hosp. Med. Ctr. , 521 F.3d 1097, 1104 (9th Cir. 2008). To survive a Rule 12(b)(6) motion, a plaintiff need only plead "enough facts to state a claim to relief that is plausible on its face." Bell Atl. Corp. v. Twombly , 550 U.S. 544, 570, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007). A claim is facially plausible when a plaintiff pleads "factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged." Ashcroft v. Iqbal , 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009).

Rule 9(b) imposes a heightened pleading standard where fraud is an essential element of a claim. See Fed. R. Civ. P. 9(b) ("In alleging fraud or mistake, a party must state with particularity the circumstances constituting fraud or mistake."); see also Vess v. Ciba–Geigy Corp. USA , 317 F.3d 1097, 1107 (9th Cir. 2003). A plaintiff must identify "the who, what, when, where, and how" of the alleged conduct, so as to provide defendants with sufficient information to defend against the charge. Cooper v. Pickett , 137 F.3d 616, 627 (9th Cir. 1997).

In reviewing the plausibility of a complaint, courts "accept factual allegations in the complaint as true and construe the pleadings in the light most favorable to the nonmoving party." Manzarek v. St. Paul Fire & Marine Ins. Co. , 519 F.3d 1025, 1031 (9th Cir. 2008). Nevertheless, courts do not "accept as true allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig. , 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. Golden State Warriors , 266 F.3d 979, 988 (9th Cir. 2001) ). Yet even if the court concludes that a 12(b)(6) motion should be granted, the "court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts." Lopez v. Smith , 203 F.3d 1122, 1127 (9th Cir. 2000) (en banc) (quotation omitted).

III. ANALYSIS

A. Personal Jurisdiction over Plaintiff Salmons’ Claims

As a threshold matter, Defendant contends that the Court lacks personal jurisdiction over nonresident Plaintiff Salmons’ claims. In response, Plaintiffs proffer three alternative bases under which the Court has jurisdiction: (1) general jurisdiction based on "exceptional circumstances"; (2) specific jurisdiction based on Defendant's website directed to California customers; and (3) supplemental jurisdiction because the Connecticut claims "arise[ ] out of a common nucleus of operative facts" with the California claims properly before the Court. See Dkt. No. 29 at 15–18.

i. General Jurisdiction

A court may exercise general jurisdiction only when the defendant's ...