Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 1 of 7
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`UNITED STATES DISTRICT COURT
`NORTHERN DISTRICT OF CALIFORNIA
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`ANDREW AXELROD, et al.,
`Plaintiffs,
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`v.
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`LENOVO (UNITED STATES) INC.,
`Defendant.
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`Case No. 21-cv-06770-JSW
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`
`ORDER GRANTING, IN PART, AND
`DENYING, IN PART, MOTION TO
`DISMISS AND SETTING INITIAL
`CASE MANAGEMENT CONFERENCE
`Re: Dkt. No. 13
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`Now before the Court for consideration is the motion to dismiss filed by Defendant
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`Lenovo (United States) Inc. (“Lenovo”). The Court has considered the parties’ papers, relevant
`legal authority, and the record in this case, and it finds the motion is suitable for disposition
`without oral argument. See N.D. Civ. L.R. 7-1(b). The Court VACATES the hearing scheduled
`for January 14, 2022, and it HEREBY GRANTS, IN PART, AND DENIES, IN PART, Lenovo’s
`motion.
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`BACKGROUND
`Plaintiffs, Andrew Axelrod (“Axelrod”) and Elliot Burk (“Burk”) (collectively
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`“Plaintiffs”), allege that Lenovo displays regular prices for computers on its website that are false
`and then advertises false discounts based on the allegedly false regular prices. (See generally
`Compl. ¶¶ 1-11, 23-70.) “The regular prices are false because they do not represent the price at
`which Lenovo actually sells its products. The discounts are false because they do not represent the
`actual savings obtained by customers. This unlawful marketing practice, commonly known as
`false reference pricing, artificially increases demand for Lenovo’s products and induces customers
`to pay more for Lenovo-branded products based on a false impression of their value.” (Id. ¶ 1.)
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`Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 2 of 7
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`Plaintiffs each allege they purchased a computer from Lenovo’s website based on the
`representation that they were receiving a substantial discount on the regular price and allege they
`either would not have purchased the computer or would have paid less for them had they known
`the true “regular” price. (Id. ¶¶ 75-99.) Based on these and other allegations that the Court shall
`address as necessary in the analysis, Plaintiffs assert claims for breach of contract, breach of
`express warranty, negligent and intentional misrepresentation, unjust enrichment, violations of
`California’s False Advertising Law, Business and Professions Code sections 17500 and 17501 (the
`“FAL claims”), violations of California’s Consumer Legal Remedies Act, Civil Code sections
`1750 et seq. (the “CLRA claim”), and California’s Unfair Competition Law, Business and
`Professions Code sections 17200, et seq. (the “UCL claim”). Plaintiffs seek damages, restitution,
`and injunctive relief. (Compl., Prayer for Relief, ¶¶ B-E.)
`ANALYSIS
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`A.
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`Applicable Legal Standards.
`A motion to dismiss is proper under Federal Rule of Civil Procedure 12(b)(6) where the
`pleadings fail to state a claim upon which relief can be granted. The Court’s “inquiry is limited to
`the allegations in the complaint, which are accepted as true and construed in the light most
`favorable to the plaintiff.” Lazy Y Ranch LTD v. Behrens, 546 F.3d 580, 588 (9th Cir. 2008).
`Even under the liberal pleading standard of Federal Rule of Civil Procedure 8(a)(2), “a plaintiff’s
`obligation to provide the ‘grounds’ of his ‘entitle[ment] to relief’ requires more than labels and
`conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atl.
`Corp. v. Twombly, 550 U.S. 544, 555 (2007) (citing Papasan v. Allain, 478 U.S. 265, 286 (1986)).
`Pursuant to Twombly, a plaintiff must not merely allege conduct that is conceivable but
`must instead allege “enough facts to state a claim to relief that is plausible on its face.” Id. at 570.
`“A claim has facial plausibility when the 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 (2009) (citing Twombly, 550 U.S. at 556). If the allegations are
`insufficient to state a claim, a court should grant leave to amend, unless amendment would be
`futile. See, e.g., Reddy v. Litton Indus., Inc., 912 F.2d 291, 296 (9th Cir. 1990); Cook, Perkiss &
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`Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 3 of 7
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`Liehe, Inc. v. N. Cal. Collection Serv., Inc., 911 F.2d 242, 246-47 (9th Cir. 1990).
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`B.
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`The Court Grants, in Part, and Denies, in Part, Lenovo’s Motion.
`Lenovo argues Plaintiffs’ claims for equitable relief must be dismissed because Plaintiffs
`fail to plead they have an inadequate remedy at law. It is well-established that claims for relief
`under the FAL and the UCL are limited to restitution and injunctive relief. See, e.g., Korea Supply
`Co. v. Lockheed Martin, 29 Cal. 4th 1134, 1146-49 (2003)). The claim for unjust enrichment also
`seeks equitable relief. In contrast, the CLRA provides for equitable relief and for damages.
`In Sonner v. Premier Nutrition, Inc., the Ninth Circuit recently held “that the traditional
`principles governing equitable remedies in federal courts, including the requisite inadequacy of
`legal remedies, apply when a party requests restitution under the UCL and CLRA in a diversity
`action.” 971 F.3d 834, 843-44 (9th Cir. 2020). There, the plaintiff dropped her claims for
`damages shortly before trial. Because the plaintiff failed to allege an adequate legal remedy in her
`complaint and conceded her claim for restitution was the same amount of money she had been
`seeking in damages, the court determined she failed to state a claim for relief. “Sonner fails to
`explain how the same amount of money for the exact same harm is inadequate or incomplete[.]”
`Id. at 844.
`Plaintiffs argue that Sonner is distinguishable based on its procedural posture. Sonner
`addressed the issue of plaintiff’s equitable claim for restitution on the eve of trial, unlike here,
`where the proceedings are at the pleading stage. The Court previously rejected this argument and
`continues to reject Plaintiffs’ attempt to distinguish Sonner on this basis. See Gardiner v.
`WalMart, Inc., No. 20-cv-4618-JSW, 2021 WL 4992539, at *7 (N.D. Cal. July 28, 2021)
`(“Gardiner II”) (citing cases); see also Jerome’s Furniture Warehouse v. Ashley Furniture Indus.,
`Inc., No. 20-cv-1765-GPC (BGS), 2021 WL 1541649, at *9 (S.D. Cal. Apr. 20, 2021) (citing
`cases); In re California Gasoline Spot Mkt. Antitrust Litig., No. 20-CV-03131-JSC, 2021 WL
`1176645, at *7 (N.D. Cal. Mar. 29, 2021); IntegrityMessageBoards.com v. Facebook, Inc., No.
`18-CV-05286-PJH, 2020 WL 6544411, at *4 (N.D. Cal. Nov. 6, 2020).
`Plaintiffs also argue that Sonner does not preclude parties from pleading claims for relief
`in the alternative, as permitted by Federal Rule of Civil Procedure 8(a)(2). For reasons that
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`Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 4 of 7
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`follow, the Court does not find this argument persuasive. Before the Ninth Circuit issued its
`opinion in Sonner, there was an inter-circuit split on whether a plaintiff could plead equitable and
`legal claims in the alternative even where the plaintiff would have a remedy at law. See, e.g.,
`Anderson v. Apple, Inc., 500 F. Supp. 3d 993, 1009 (N.D. Cal. 2021) (stating Sonner “appears to
`have resolved” the split); but see Cepelak v. HP Inc., No. 20-cv-02450-VC, 2021 WL 5298022, at
`*2 (N.D. Cal. Nov. 15, 2021) (“Sonner … should not be understood as a categorical bar to
`pleading claims for equitable relief under the UCL and damages under the LCRA in a single
`complaint, as plaintiffs can bring claims in the alternative under different legal theories.”).
`In Cepelak, on which Plaintiffs rely, the court concluded the relevant inquiry under Sonner
`should not be “what other claims the plaintiffs have raised, but whether they have plausibly
`alleged the inadequacy of legal remedies for each claim for equitable relief that they seek.” Id.
`Notably, the court concluded that the plaintiffs had not alleged facts to show “the inadequacy of
`remedy at law with respect to their claims for equitable monetary relief” but found they had done
`so for their claim for injunctive relief. Id., at *3. Thus, Cepelak does not suggest that a court can
`ignore the allegations in favor of Rule 8’s general principles. Cf. IntegrityMessageBoards.com,
`2020 WL 6544411, at *5 (rejecting argument where the “plaintiff failed to explain why Rule 8’s
`general permission for alternative pleading limits otherwise applicable principles of federal
`common law” and stating that “[g]iven the clear and unequivocal statement of the subject principle
`by the panel in Sonner… the court will not impose any such limitation here”).
`Similarly, in Anderson the court determined that Sonner required the plaintiffs, “at a
`minimum, to plead that they lack an adequate remedy at law. Because they also request money
`damages, it is possible their legal remedy is sufficient; on this record, they have not yet disproven
`that.” 500 F. Supp. 3d at 1009; see also id. (concluding motion was not premature because
`“plaintiffs have not pleaded inadequate remedies at law to begin with and they offer no reason
`why the remedies at law they request in the complaint would be adequate”) (emphasis in original).
`With regard to their requests for restitution and disgorgement, Plaintiffs have not alleged facts to
`show they lack an adequate remedy at law; nor are the allegations sufficient to show why the
`remedies at law requested would be inadequate. That fact distinguishes this case from Adams v.
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`Cole Haan, LLC, on which they rely. No. SACV 20-913 JVS (DFMx), 2021 WL 4907248, at *2-
`*4 (C.D. Cal. Mar. 1, 2021) (“Adams II”).
`Plaintiffs argue their legal claims do not “afford [them] relief that is as equally prompt,
`certain, and efficient” as the alleged violations of Business and Professions Code section 17501
`and of each prong of the UCL. In support of this argument, Plaintiffs rely on Elgindy v. AGA
`Service Company, No. 20-cv-06304-JST, 2021 WL 1176535 (N.D. Cal. Mar. 29, 2021). In that
`case, the plaintiffs purchased insurance policies for events or for travel and alleged the defendants
`bundled “a non-optional assistance services fee with the sale of these insurance policies,” without
`“fully disclosing the inclusion of that fee[.]” Id., at *1. In support of their claims, which included,
`inter alia, claims under the UCL and for common law fraud, Plaintiffs advanced two theories: (1)
`that the challenged service fee was an unlawful “agent” fee or insurance premium upcharge; and
`(2) that the defendants acted fraudulently by concealing the fact that the service fees were included
`in the insurance policy’s total price. Id. at *4.
`The court permitted the plaintiff to pursue equitable relief under the first theory because
`only equitable claims were available on that theory. Id. at *15. However, with regard to the
`fraud-based claims, the plaintiffs were required to demonstrate that they lacked an adequate
`remedy at law to show an entitlement to equitable relief. Id. The court concluded the plaintiffs
`had shown they lacked a remedy that was equally as prompt and certain as their equitable claims
`because “the elements of a common-law fraud claim require proof of conduct beyond that which
`must be shown to establish liability under the UCL and FAL[;]” a difference highlighted by the
`court’s dismissal of the plaintiffs’ common law fraud claim. Id. Plaintiffs here argue that at least
`some of their equitable claims are premised on different legal theories. The Court is not
`persuaded. Plaintiffs incorporate by reference earlier allegations into each claim for relief and do
`not clearly differentiate the facts that support their claims under the various prongs of the UCL.
`For that reason, the Court finds Elgindy is distinguishable.
`Accordingly, the Court GRANTS, IN PART, Lenovo’s motion to dismiss and dismisses
`the equitable claims to the extent they seek equitable monetary relief. Because it is possible that
`Plaintiffs could allege facts to show they lack an adequate monetary remedy at law, the Court will
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`Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 6 of 7
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`grant them leave to amend. See Anderson, 500 F. Supp. 3d at 1009-10; Adams II, 2021 WL
`4907248, at *4.
`The Court concludes, however, that Plaintiffs have adequately alleged facts that would
`permit them to pursue claims for prospective injunctive relief. For example, in Ziegler v. WellPet
`LLC, the court reasoned that damages for past harm were not an adequate remedy for prospective
`harm caused by alleged false advertising because damages “would [not] ensure that [the plaintiff]
`(and other consumers) can rely on WellPet’s representations in the future.” 526 F. Supp. 3d 652,
`687 (N.D. Cal. 2021). Similarly, in Adams II, the plaintiff alleged she could not rely on the
`defendant to truthfully label or advertise its merchandise and alleged “[a]n injunction is the only
`form of relief which will guarantee [p]laintiff and other consumers the appropriate assurances.”
`Adams II, 2021 WL 4907248, at *2. The court concluded those allegations were sufficient to
`show monetary damages “would not necessarily be sufficient to remedy” the alleged harm, and the
`court permitted her to proceed with claims for injunctive relief. Id., at *4; see also Brooks v.
`Thomson Reuters Corp., No. 21-CV-01418-EMC, 2021 WL 3621837, at *11 (N.D. Cal. Aug. 16,
`2021) (declining to apply Sonner to bar UCL claims for prospective injunctive relief because “the
`prospect of paying damages is sometimes insufficient to deter a defendant from engaging in an
`alleged unlawful, unfair, or fraudulent business practice”).
`Here, as in Ziegler and Adams II, Plaintiffs allege they would like to purchase products
`from Lenovo’s website in the future but are deterred from doing so because they cannot be certain
`that Lenovo’s representations about its prices are truthful. Accordingly, the Court DENIES, IN
`PART, Lenovo’s motion to dismiss claims seeking prospective injunctive relief.
`CONCLUSION
`For the foregoing reasons, the Court GRANTS, IN PART, AND DENIES, IN PART,
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`Lenovo’s motion to dismiss. Plaintiffs may file an amended complaint by January 25, 2022, and
`Lenovo shall answer or otherwise respond by no later than February 15, 2022. The parties shall
`appear for an initial case management conference on March 4, 2022 at 11:00 a.m., and they shall
`//
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`Case 4:21-cv-06770-JSW Document 18 Filed 01/04/22 Page 7 of 7
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`submit a joint case management conference statement by February 25, 2022.
`IT IS SO ORDERED.
`Dated: January 4, 2022
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`______________________________________
`JEFFREY S. WHITE
`United States District Judge
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