Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 1 of 26
`
`
`
`
`
`
`
`UNITED STATES DISTRICT COURT
`
`NORTHERN DISTRICT OF CALIFORNIA
`
`LONA'S LIL EATS, LLC,
`
`Plaintiff,
`
`v.
`
`DOORDASH, INC.,
`
`Case No. 20-cv-06703-TSH
`
`
`ORDER RE: MOTION TO DISMISS
`
`Re: Dkt. No. 29
`
`
`
`
`
`Defendant.
`
`
`
`I.
`
`INTRODUCTION
`
`
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`
`
`In this putative class action, Plaintiff brings claims for purported violations of the Lanham
`
`15
`
`Act, California’s false advertising statute, and California’s unfair competition statute, alleging that
`
`16
`
`Defendant misrepresents to consumers that it provides delivery and pick-up services for non-
`
`17
`
`partner restaurants and then misrepresents the restaurants are closed, do not offer delivery
`
`18
`
`services, or are unavailable for pick-up orders. Pending before the Court is Defendant’s Motion to
`
`19
`
`Dismiss pursuant to Federal Rule of Civil Procedure 12(b)(6). ECF No. 29. Plaintiff filed an
`
`20
`
`Opposition, ECF No. 30, and Defendant filed a Reply, ECF No. 31. The Court finds this matter
`
`21
`
`suitable for disposition without oral argument and VACATES the January 21, 2021 hearing. See
`
`22
`
`Civ. L.R. 7-1(b). Having considered the parties’ positions, relevant legal authority, and the record
`
`23
`
`in this case, the Court DENIES Defendant’s motion for the following reasons.
`
`24
`
`25
`
`26
`
`Plaintiff Lona’s Lil Eats, LLC (“Lona’s”), alleges the following:
`
`II. BACKGROUND
`
`Defendant DoorDash, Inc. is in the business of delivering food for restaurants via its
`
`27
`
`websites and mobile apps. Compl. ¶ 2, ECF No. 26. DoorDash has partnerships with certain
`
`28
`
`restaurants around the country. Id. ¶ 9. Through these partnerships, DoorDash takes online orders
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 2 of 26
`
`
`
`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
`
`from customers using its websites or mobile app, which orders are then relayed to the partner
`
`restaurants. Id. A customer who places an order using DoorDash’s platforms can select to have
`
`the food delivered by DoorDash or can choose to pick it up themselves. Id. If a customer wants
`
`delivery, DoorDash will engage someone from its network of drivers to go to the restaurant, pick
`
`up the order, and deliver it to the customer. Id. ¶ 2. DoorDash then collects payments from the
`
`customer for these orders and also withholds various commissions and fees from partner
`
`restaurants in exchange for its services. Id. ¶ 10.
`
`To the extent that it offers a mechanism to order food online and then have it delivered or
`
`made available for pickup, DoorDash competes directly with restaurants that offer their own
`
`online delivery or pick-up services. Id. ¶ 12. DoorDash, which was recently valued at $16 billion,
`
`has developed significant market power, particularly as a result of the COVID-19 pandemic. Id. ¶
`
`11. With many restaurants unable or unwilling to offer dine-in services, many consumers have
`
`turned to DoorDash to order pickup or delivery in lieu of dining out. Id. DoorDash’s market
`
`power is such that restaurants are put in a difficult situation: they can become partner restaurants
`
`and pay exorbitant fees and commissions to Defendant, or they decline to do so and risk losing out
`
`on sales. Id. ¶ 13.
`
`Worse yet, DoorDash pressures non-partner restaurants by setting up “landing pages” for
`
`them, which in some instances still are available on its website and on its mobile app. Id. ¶ 14.
`
`The landing pages are displayed for the general public to see, and DoorDash’s marketing power is
`
`such that the landing pages are often prioritized on internet search engines and displayed even
`
`before the restaurants’ own websites. Id. These landing pages are complete with DoorDash
`
`branding and usually show a restaurant’s full menu, even if the restaurant has no affiliation with
`
`DoorDash and has not authorized the use of its information. Id. This façade of a connection
`
`signals to consumers that the landing page for the non-partner restaurant is legitimate and can be
`
`relied upon. Id.
`
`On these landing pages, DoorDash publishes false and misleading information about
`
`restaurants that are not its partners, including restaurants being “closed” when they were in fact
`
`open; being “unavailable” as “too far away” for delivery; and being “unavailable” for pick-up
`
`2
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 3 of 26
`
`
`
`orders when the restaurant is in fact accepting pick-up orders. Id. ¶ 15. Each of these false and
`
`misleading statements steers would-be customers of non-partner restaurants’ to DoorDash’s
`
`partner restaurants. Id.
`
`Lona’s is one such non-partner restaurant. In June 2020, as the pandemic’s effects were
`
`crippling small-business restauranteurs, several customers informed Lona’s that it was being
`
`represented as closed online on DoorDash’s landing page for Lona’s. Id. ¶ 17. If a consumer
`
`were to search for “Lona’s Lil Eats delivery,” as a result of DoorDash’s market power and internet
`
`marketing strategies, then one of the first results displayed was a link for Lona’s on a DoorDash
`
`website. Id. ¶ 21. Lona’s had no relationship with DoorDash, so its website mock-up of a Lona’s’
`
`landing page is itself deceptive, let alone falsely representing that Lona’s was closed. Id. ¶ 17.
`
`Clicking through the link for Lona’s would bring a consumer to a page with DoorDash branding
`
`and Lona’s’ complete menu, as if it were possible to place an order through the site:
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶ 21 (the website images are from DoorDash’s website on August 18, 2020, unless otherwise
`
`noted). DoorDash’s site would let the customer go through the process of placing an order,
`
`including the opportunity to customize the order, adding credibility to the idea that Lona’s had
`
`partnered with DoorDash and that placing an order was possible:
`
`
`
`
`
`3
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 4 of 26
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶ 22. The order, however, could not be completed, and no matter what the user’s proximity to
`
`Lona’s—even as close as only 200 feet away—the site would say that ordering from Lona’s was
`
`“unavailable” on account of being “out of the delivery area” and “too far.”
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶¶ 23-24. The problem is not, in fact, that a delivery address is too far away, but that Lona’s
`
`has not agreed to partner with DoorDash and pay its fees. Id. ¶ 25. A consumer can change his or
`
`her address over and over again, but Lona’s will never become available for delivery because it is
`
`not a partner restaurant. Id.
`
`The same is true for DoorDash’s mobile app. Id. ¶ 26. DoorDash’s mobile app
`
`misrepresents that Lona’s is not available for delivery and also not accepting pick-up orders:
`
`
`
`4
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 5 of 26
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶¶ 27-28 (the mobile phones images are from November 11, 2020). And if the consumer clicks
`
`on the information button immediately next to “Unavailable too far away,” then the app displays
`
`options of “Switch to Pickup” or “See other stores”:
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶ 29. Since Lona’s (at 200 feet) is too far away for delivery, DoorDash represents that the
`
`customer could simply “Switch to Pickup.” Id. ¶ 30. Indeed, pick-up is available at Lona’s, but
`
`not through DoorDash. Id. So, when the customer chooses “Switch to Pickup,” DoorDash
`
`5
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 6 of 26
`
`
`
`misrepresents that pick-up is not an option:
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. ¶ 30. Since DoorDash misrepresents that even pick-up at Lona’s is “unavailable,” the
`
`customer returns to the information screen and clicks the next option, “See other stores,” which
`
`routes what would be Lona’s’ customer back to DoorDash’s home page, where DoorDash markets
`
`its partner restaurants. Id. ¶ 31. Thus, DoorDash takes advantage of the existing market demand
`
`for Lona’s and other restaurants to drive traffic to its site, where it redirects customers to partner
`
`restaurants by suggesting that Lona’s is not an option. Id. ¶ 32. In fact, Lona’s provides curb-
`
`side, pick-up service, so therefore DoorDash’s representations that Lona’s is too far away for
`
`delivery, not taking pick-up orders, or closed are not true. Id. ¶ 33.
`
`Accordingly, DoorDash is publishing false and deceptive information about the ability to
`
`get food from Lona’s as a means of punishing Lona’s for not partnering with it, and/or pressuring
`
`Lona’s to partner with it, and to redirect would-be Lona’s business to its partner restaurants. Id. ¶
`
`34. And several customers were, in fact, misled by DoorDash’s misrepresentation that Lona’s was
`
`closed and did not know whether Lona’s was actually open. Id. ¶ 18. Some of these customers
`
`reached out to Lona’s to ask if they were actually open. Id. After a number of such
`
`communications, on June 5, 2020, Lona’s posted on its Facebook page that, contrary to
`
`DoorDash’s fake webpage, Lona’s was indeed open:
`
`6
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 7 of 26
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`
`Id. At some point thereafter, the false “closed” designation was removed. Id. ¶ 19. Lona’s lost
`
`business because of DoorDash’s misrepresentation, and there is nothing going forward preventing
`
`DoorDash from again misrepresenting that Lona’s and similarly situated restaurants are closed.
`
`Id. ¶ 20.
`
`In essence, DoorDash’s creating a misleading landing page for Lona’s is unfairly
`
`pressuring Lona’s to “partner up, or else.” Id. ¶ 34. Defendant’s conduct has an obvious,
`
`significant, and unfair impact upon the competitive landscape within the restaurant industry and
`
`results in damage to Plaintiff and members of the Class. Id. This behavior is particularly
`
`troubling in the context of the COVID-19 pandemic: at a time when many restaurants—and in
`
`particular locally-owned restaurants—are struggling to stay open and have been forced to radically
`
`change their business model to survive, DoorDash is engaged in predatory, deceptive, and
`
`anticompetitive behavior that takes unfair advantage of their market position. Id. ¶ 35. To the
`
`extent that DoorDash has allegedly removed its false advertisements and misrepresentations as
`
`alleged herein, there is nothing to prevent it from reinstating such misrepresentations as to Lona’s
`
`or any member of the putative class. Id. ¶ 36.
`
`Lola’s three-count Amended Complaint (“FAC”) asserts a claim of false advertising under
`
`the Lanham Act § 43(a), 15 U.S.C. § 1125(a); a violation of California False Advertising Law
`
`(“FAL”), California Business and Professions Code §§ 17500, et seq.; and a violation of
`
`California Unfair Competition Law (“UCL”), California Business and Professions Code §§ 17200,
`
`et seq.
`
`7
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 8 of 26
`
`
`
`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
`
`III. LEGAL STANDARDS
`
`Defendants move for dismissal pursuant to Federal Rules of Civil Procedure 12(b)(1) and
`
`12(b)(6). A motion to dismiss under Rule 12(b)(1) tests the subject matter jurisdiction of the
`
`court. Dismissal is appropriate under Rule 12(b)(1) if a plaintiff’s allegations fail to establish that
`
`the Court has subject matter jurisdiction over the action. Fareed Sephery-Fard v. Santa Clara
`
`Court, 2018 WL 6025606, at *1 (N.D. Cal. Nov. 16, 2018). “On a motion to dismiss pursuant to
`
`Rule 12(b)(1) . . . the burden is on the plaintiff, as the party asserting jurisdiction, to establish that
`
`subject matter jurisdiction exists.” Id. A plaintiff seeking injunctive relief must have Article III
`
`standing to seek that relief, which requires a plausible allegation of potential future harm to the
`
`plaintiff. See Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018).
`
`Also, under the federal rules a complaint must contain a “short and plain statement of the
`
`claim showing that the pleader is entitled to relief.” Fed. R. Civ. P. 8(a)(2). To survive a Rule
`
`12(b)(6) motion to dismiss for “failure to state a claim upon which relief can be granted,” Fed. R.
`
`Civ. P. 12(b)(6), a complaint must plead “sufficient factual matter, accepted as true, to ‘state a
`
`claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting
`
`Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). Plausibility does not mean probability, but
`
`it requires “more than a sheer possibility that a defendant has acted unlawfully.” Iqbal, 556 U.S.
`
`at 687. In considering a motion to dismiss, the court accepts factual allegations in the complaint
`
`as true and construes 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); Erickson v. Pardus, 551
`
`U.S. 89, 93-94 (2007). However, “the tenet that a court must accept a complaint’s allegations as
`
`true is inapplicable to threadbare recitals of a cause of action’s elements, supported by mere
`
`conclusory statements.” Iqbal, 556 U.S. at 678.
`
`Moreover, “[a] plaintiff alleging fraud must overcome a heightened pleading standard
`
`under Rule 9(b),” ESG Capital Partners, LP v. Stratos, 828 F.3d 1023, 1031 (9th Cir. 2016),
`
`which provides that, “[i]n alleging fraud or mistake, a party must state with particularity the
`
`circumstances constituting fraud or mistake,” Fed. R. Civ. P. 9(b). The rule “serves not only to
`
`give notice to defendants of the specific fraudulent conduct against which they must defend, but
`
`8
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 9 of 26
`
`
`
`also to deter the filing of complaints as a pretext for the discovery of unknown wrongs, to protect
`
`defendants from the harm that comes from being subject to fraud charges, and to prohibit plaintiffs
`
`from unilaterally imposing upon the court, the parties and society enormous social and economic
`
`costs absent some factual basis.” Bly-Magee v. California, 236 F.3d 1014, 1018 (9th Cir. 2001)
`
`(citations and internal quotations omitted). Accordingly, in order to survive a motion to dismiss
`
`for failure to plead fraud with the particularity required by Rule 9(b), “‘[a]verments of fraud must
`
`be accompanied by “the who, what, when, where, and how” of the misconduct charged.’” Kearns
`
`v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir. 2009) (quoting Vess v. Ciba-Geigy Corp. USA,
`
`317 F.3d 1097, 1106 (9th Cir. 2003)).
`
`A.
`
`Lona’s’ Latham Act Claim
`
`IV. DISCUSSION
`
`To succeed on a false advertisement claim under Lanham Act § 43(a), a plaintiff must
`
`show each of the following:
`
`(1) a false statement of fact by the defendant in a commercial
`advertisement about its own or another’s product; (2) the statement
`actually deceived or has the tendency to deceive a substantial segment
`of its audience; (3) the deception is material, in that it is likely to
`influence the purchasing decision; (4) the defendant caused its false
`statement to enter interstate commerce; and (5) the plaintiff has been
`or is likely to be injured as a result of the false statement, either by
`direct diversion of sales from itself to defendant or by lessening of the
`goodwill associated with its products.
`
`Wells Fargo & Co. v. ABD Ins. & Fin. Servs., 758 F.3d 1069, 1071 (9th Cir. 2014) (citation
`
`omitted). Lanham Act claims based on alleged false advertising must meet the heightened
`
`pleading requirements of Rule 9(b). Factory Direct Wholesale, LLC v. iTouchless Housewares &
`
`Products, Inc., 411 F. Supp. 3d 905, 923 (N.D. Cal. 2019) (citations omitted).
`
`DoorDash argues that Lona’s has failed to meet its pleading burden with respect to its
`
`Lanham Act claim for four separate reasons, each of which DoorDash argues provides an
`
`independent basis for dismissal: first, Lona’s has not pled the existence of a “false statement” with
`
`particularity; second Lona’s has not pled that DoorDash made its purported statement in a
`
`“commercial advertisement”; third, Lona’s has not adequately pled that DoorDash’s statements
`
`actually deceived or had a tendency to deceive any segment of DoorDash’s audience; and fourth,
`
`9
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 10 of 26
`
`
`
`Lona’s has not adequately pled that it was injured.
`
`1.
`
`False Statements
`
`DoorDash argues first that Lona’s has not alleged a false statement with the particularity
`
`required by Rule 9(b). “To properly plead fraud with particularity under Rule 9(b), a pleading
`
`must identify the who, what, when, where, and how of the misconduct charged, as well as what is
`
`false or misleading about the purportedly fraudulent statement, and why it is false.” Davidson,
`
`889 F.3d at 964 (citation and internal quotations omitted). Lona’s contends that it alleged two
`
`literally false statements and one statement that was true but likely to mislead consumers. The two
`
`false statements are contained in Lona’s’ allegation that in June 2020, DoorDash falsely
`
`represented that Lona’s was “closed” when it was in fact open, FAC ¶¶ 17-20, and its allegation
`
`that DoorDash falsely represented and is still representing that Lona’s is “unavailable” for pick-up
`
`orders, id. ¶¶ 27-31. As to the misleading statement, Lona’s points to its allegation that DoorDash
`
`misrepresented that it was “unavailable” for delivery services because it was “too far away.” Id.
`
`¶¶ 21-26. DoorDash contends that Lona’s did not allege the who, what, when, or where for any of
`
`these statements, Reply at 5, but Lona’s clearly has.
`
`For each of the statements, Lona’s plainly alleges that DoorDash made the statements (the
`
`“who”). DoorDash complains that Lona’s “does not allege who at DoorDash made the purported
`
`designation,” MTD at 15, but it is sufficient at the pleading stage to allege that DoorDash made
`
`the statement. DoorDash points to no legal authority suggesting that an individual employee must
`
`be named in the complaint, and it’s hard to see how Lona’s could get that information at this point
`
`or who even at DoorDash would be considered the maker of the statement in lieu of the company
`
`itself. Additionally, Lona’s identifies who was misled by the allegedly deceptive statements—
`
`would-be customers. E.g., FAC ¶ 18 (“Several customers were, in fact, misled by DoorDash’s
`
`misrepresentation that Lona’s was closed, and they did not know whether Lona’s was actually
`
`open. Some of these customers reached out to Lona’s to ask if they were actually open.”).
`
`DoorDash complains that Lona’s has not identified any specific customers who called Lona’s, but
`
`it doesn’t cite to any authority suggesting that Lona’s must do so at the pleading stage. In this
`
`case, where the plaintiff has alleged that a statement was made to the purchasing public and that at
`
`10
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 11 of 26
`
`
`
`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
`
`least some of the public communicated that they were misled by those statements, that is enough
`
`specificity at the pleading stage. See, e.g., 23andMe, Inc. v. Ancestry.com DNA, LLC, 356 F.
`
`Supp. 3d 889, 910 (N.D. Cal. 2018) (misrepresentations made on a website were actionable where
`
`plaintiff had alleged that the misrepresentations were “misleading consumers”); Axis Imex, Inc. v.
`
`Sunset Bay Rattan, Inc., 2009 WL 55178, at *4 (N.D. Cal. Jan. 7, 2009) (rejecting that a “false
`
`advertising claim should be dismissed because it fails to aver evidence of actual or likely
`
`deception to purchasers”); id. (“While the facts may show nothing more than one mislabeled
`
`shipment, at this stage, the averment that the mislabeled boxes were commercially available for
`
`sale to customers who could be deceived as to their origin is sufficient to plead deception for
`
`purposes of maintaining the claim.”).
`
`The “where” and “how” are also clearly alleged. At paragraph 17, Lona’s alleges that
`
`“several customers informed Lona’s that it was being represented as closed online on DoorDash’s
`
`landing page for Lona’s.” FAC ¶ 17. Again, at paragraphs 18 and 19, it alleges that “contrary to
`
`DoorDash’s fake webpage, Lona’s was indeed open,” and that “[a]t some point” after it informed
`
`customers that “Lona’s was indeed open,” “the false ‘closed’ designation was removed.” Id. ¶¶
`
`18-19. For the “unavailable” and “too far away” representations, Lona’s alleges that “on a
`
`DoorDash website (i.e. the [fake] Lona’s landing page),” “DoorDash’s site would let the customer
`
`go through the process of placing an order,” only for the customer to be told that, “[t]he order,
`
`however, could not be completed, because . . . the site would say that it was ‘unavailable’ on
`
`account of being ‘out of the delivery area’ and ‘too far.’” Id. ¶¶ 21-23. These allegations were
`
`complete with screenshots showing the progression of screens which led a user to the alleged
`
`statements on the website. Short of alleging the actual URL for the DoorDash website (which can,
`
`as a matter of fact, be read in at least one screenshot), it’s hard to see how Lona’s could be more
`
`specific about where or how the statements were alleged. And for the mobile app statements,
`
`Lona’s alleges that “DoorDash’s mobile app misrepresents that Lona’s is not available for delivery
`
`and, also, not accepting orders,” and also provides a screenshot from the mobile app showing the
`
`restaurant listed as “Unavailable” “too far away” for delivery, and another showing it as
`
`“unavailable” for pick-up from a location 200 feet away. Id. ¶¶ 27-31.
`
`11
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 12 of 26
`
`
`
`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
`
`As to the question of “when” the statements were made, DoorDash asserts that “neither the
`
`actual date the screenshot was taken nor any date range as to when the ‘unavailable’ designation
`
`appeared” is alleged. MTD at 15. But that’s just not accurate. Lona’s clearly alleges the date the
`
`screenshots were taken. FAC ¶¶ 21, 28. The dates the screenshots were taken obviously indicate
`
`that the statements were made on those dates. DoorDash makes the point that “documents
`
`included in a complaint may be considered in ruling on a Rule 12(b)(6) motion only if no party
`
`contests their authenticity.” Reply at 6 (citing Postier v. Lousiana-Pacific Corp., 2009 WL
`
`3320470, at *7 (N.D. Cal. Oct. 13, 2009) (“[U]nder the ‘incorporation by reference’ rule,
`
`‘documents whose contents are alleged in a complaint and whose authenticity no party questions,
`
`but which are not physically attached to the pleading, may be considered in ruling on a Rule
`
`12(b)(6) motion to dismiss.’”) (quoting Branch v. Tunnell, 14 F.3d 449, 454 (9th Cir. 1994)). But
`
`DoorDash doesn’t actually contest the authenticity of the screenshots, so that point is moot.1 And
`
`even if the Court ignores the content of the screenshot images, the dates on which they were taken
`
`(and hence, the dates the statements were made) are alleged separately.
`
`In sum, Lona’s alleges clearly who made the statements (DoorDash) to whom (potential
`
`Lona’s customers), what the statements represented (Lona’s was “closed,” “unavailable,” or “too
`
`far away”), where and how they were made (on DoorDash’s website and mobile app by leading
`
`customers to believe DoorDash “had a business relationship” with Lona’s), and when (June 2020,
`
`August 18, 2020, and November 11, 2020). The specificity requirements of Rule 9(b) are met as
`
`to the allegedly misleading statements.
`
`2.
`
`Commercial Advertisement
`
`The Ninth Circuit explained in Coastal Abstract Serv. v. First Am. Title Ins. Co., 173 F.3d
`
`725 (1999) that,
`
`[i]n order for representations to constitute “commercial advertising or
`promotion” under Section 43(a)(1)(B), they must be: [] commercial
`speech; [] by a defendant who is in commercial competition with
`plaintiff; [] for the purpose of influencing consumers to buy
`
`
`1 DoorDash objects that screenshots “contain[] no DoorDash branding,” MTD at 6, but it does not
`dispute that the app shown in the screenshot is its own and presumably it would know if that were
`the case, and also it did not move to strike the screenshots from the Complaint.
`12
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 13 of 26
`
`
`
`defendant’s goods or services. While the representations need not be
`made in a “classic advertising campaign,” but may consist instead of
`more informal types of “promotion,” the representations [] must be
`disseminated sufficiently to the relevant purchasing public to
`constitute “advertising” or “promotion” within that industry.
`
`
`Id. at 735 (citations omitted). However, in Lexmark Int’l, Inc. v. Static Control Components, Inc.,
`
`572 U.S. 118 (2014), the Supreme Court expressly rejected “a categorical test permitting only
`
`direct competitors to sue for false advertising,” holding instead that an “application of the zone-of-
`
`interests test and the proximate-cause requirement supplies the relevant limits on who may sue”
`
`under § 1125(a). Id. at 134. While the Ninth Circuit has not overruled Coastal Abstract in light of
`
`Lexmark, the second element of the Coastal Abstract test is no longer good law. Lexmark, 572
`
`U.S. at 136 (“[A] rule categorically prohibiting all suits by noncompetitors would read too much
`
`into the Act’s reference to ‘unfair competition’ in [15 U.S.C.] §1127.”); see also Ariix, LLC v.
`
`Nutrisearch Corp., 2018 WL 1456928, at *4 (S.D. Cal. Mar. 23, 2018) (“After Lexmark, the
`
`second element is likely in need of revision. But the first and fourth elements were not implicated
`
`by Lexmark’s holding, and remain good law.”); Handsome Brook Farm, LLC v. Humane Farm
`
`Animal Care, Inc., 700 Fed. Appx. 251, 257 (4th Cir. 2017) (“Taking into account Lexmark, the
`
`lack of a competition requirement in the statute’s false advertising prohibition, the fact that our
`
`sister circuits adopting the competition factor did so before Lexmark, and that the only circuit to
`
`examine the Gordon & Breach factors post-Lexmark has rejected the competition factor, we also
`
`do not require a competitive relationship when determining whether a communication is
`
`advertising or promotion.”) (referencing Gordon & Breach Sci. Publrs. S.A. v. Am. Inst. of
`
`Physics, 905 F. Supp. 169 (S.D.N.Y. 1995)). Accordingly, for representations to constitute
`
`“commercial advertising or promotion” post-Lexmark, they must be: (1) commercial speech; (2)
`
`for the purpose of influencing consumers to buy defendant’s goods or services; and (3)
`
`disseminated sufficiently to the relevant purchasing public to constitute “advertising” or
`
`“promotion” within that industry. To be able to sue under § 1125(a), a plaintiff’s injuries must be
`
`to the type of commercial interests which the Act protects, and the injuries must have been
`
`proximately caused by the defendant’s representations. Lexmark, 572 U.S. at 137.
`
`As to the first element of the test, DoorDash argues that “a page on DoorDash’s website or
`
`13
`
`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
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 14 of 26
`
`
`
`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
`
`app where a customer completes an order is not ‘commerical speech’ for purposes of a false
`
`advertising claim under the Lanham Act.” MTD at 17. But DoorDash doesn’t genuinely argue
`
`that the statements were not commercial speech. In its memorandum of law, it proceeds to argue
`
`the third element of the test, whether the statements were disseminated sufficiently to the
`
`purchasing public to constitute “advertising” or “promotion.” See MTD at 17. And in its reply, it
`
`devotes only a sentence to discussing whether the statements were commercial speech, making the
`
`point that the “alleged statements at issue were not in an advertising format . . . .” Reply at 6. But
`
`as DoorDash itself notes, the Supreme Court has relied on more than just that one factor to
`
`determine whether statements amounted to commercial speech. “The Supreme Court [has] relied
`
`on three factors to determine whether statements amounted to commercial speech: whether they
`
`were in an advertising format, whether they referred to a specific product, and economic
`
`motivation for publication.” Ariix, 2018 WL 1456928, at *4 (citing Bolger v. Youngs Drug Prods.
`
`Corp., 463 U.S. 60, 66-68 (1983)). Because DoorDash ignores those other factors and makes only
`
`a cursory argument as to whether the statements were commercial speech, the Court considers the
`
`argument waived. (Though, however, Lona’s argues an economic motive for the statements which
`
`is supported by allegations in the complaint: “increasing its commissions and strong-arming
`
`Plaintiff to partner with it.” Opp’n at 14; see FAC ¶ 13)
`
`Turning to the second element, the Amended Complaint can read as alleging that
`
`DoorDash’s statements were “for the purpose of influencing consumers” to use DoorDash’s
`
`services. Specifically, Lona’s alleges that DoorDash misrepresented the availability of services
`
`and products and that the landing pages and misleading or false statements “steered non-Partner
`
`restaurants’ would-be customers to DoorDash’s Partner Restaurants,” restaurants who “pay
`
`exorbitant fees and commissions” to DoorDash. FAC ¶¶ 13, 15. DoorDash argues that nowhere
`
`does the Complaint allege that “closed” or “unavailable” designations were made to convince
`
`customers to purchase DoorDash’s products because DoorDash does not sell food. That is
`
`irrelevant. Lexmark made clear that a defendant need not be a direct competitor. 572 U.S. at 136
`
`(“It is [] a mistake to infer that because the Lanham Act treats false advertising as a form of unfair
`
`competition, it can protect only the false-advertiser’s direct competitors.”). DoorDash’s product is
`
`14
`
`Northern District of California
`
`United States District Court
`
`

`

`Case 3:20-cv-06703-TSH Document 32 Filed 01/18/21 Page 15 of 26
`
`
`
`1
`
`2
`
`3
`
`4
`
`5
`
`6
`
`7
`
`8
`
`9
`
`10
`
`11
`
`12
`
`13
`
`14
`
`15
`
`16
`
`17
`
`18
`
`19
`
`20
`
`2