Case 4:21-cv-06770-JSW Document 34 Filed 03/31/22 Page 1 of 5
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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 MOTION TO
`DISMISS
`Re: Dkt. No. 22
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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 the Court HEREBY GRANTS Lenovo’s motion.
`BACKGROUND
`Plaintiffs Andrew Axelrod and Elliot Burk (collectively “Plaintiffs”), allege that Lenovo
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`displays regular prices for computers on its website that are false and then advertises false
`discounts based on the allegedly false regular prices. (See, e.g., FAC ¶¶ 1-11.) Plaintiffs assert
`claims for (1) breach of contract, (2) breach of express warranty, (3) negligent and intentional
`misrepresentation, (4) unjust enrichment, (5) violations of California’s Consumer Legal Remedies
`Act, Civil Code sections 1750 et seq. (the “CLRA claim”); (6)-(7) violations of California’s False
`Advertising Law, Business and Professions Code sections 17500 and 17501 (the “FAL claims”),
`and (8) California’s Unfair Competition Law, Business and Professions Code sections 17200, et
`seq. (the “UCL claim”). Plaintiffs seek, inter alia, damages (actual and punitive), restitution,
`disgorgement, and injunctive relief. (FAC, Prayer for Relief, ¶¶ B-E.)
`According to Plaintiffs, Lenovo’s “regular prices are false because they do not represent
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`Case 4:21-cv-06770-JSW Document 34 Filed 03/31/22 Page 2 of 5
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`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.) 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. They also
`allege they either would not have purchased the computers or would have paid less for them had
`they known the true “regular” price. (Id. ¶¶ 75-99.)
`On January 4, 2022, the Court granted, in part, and denied, in part Lenovo’s motion to
`dismiss Plaintiffs’ claims for equitable relief on the basis that Plaintiffs failed to allege they had an
`inadequate remedy at law. (Dkt. No. 18, “Order on Motion to Dismiss”). On January 25, 2022,
`Plaintiffs filed the FAC and now allege they:
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`lack an adequate remedy at law with respect to their claim for
`restitution because they have not yet retained an expert to determine
`whether an award of damages can or will adequately remedy their
`monetary losses caused by Lenovo. In particular, because damages
`focus remedying the injury to Plaintiffs, and restitution focuses
`wholly on restoring money wrongly obtained by Lenovo, legal
`damages are inadequate because Plaintiff does not know at this
`juncture whether a model for legal damages (as opposed to equitable
`restitution) will be viable or adequately compensate Plaintiffs for
`their injuries.
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`(FAC ¶ 179.)
`Plaintiffs also allege they seek restitution as an alternative form of relief to the damages
`they seek in the first through fifth claims for relief because there are elements on those claims that
`they would not be required to prove to obtain restitution. According to Plaintiffs, this means their
`legal remedies are not equally prompt, certain, and efficient. (See id. ¶¶ 177.a-177.3, 173, 192.a-
`192.e. 193, 201.a-201.e, 202.)
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`The Court will address additional facts as necessary.
`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
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`Case 4:21-cv-06770-JSW Document 34 Filed 03/31/22 Page 3 of 5
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`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).1
`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 &
`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 Lenovo’s Motion.
`Lenovo argues Plaintiffs’ allegations still are insufficient to plead they have an inadequate
`remedy at law. It is well-established that claims for relief under the FAL and UCL are limited to
`restitution and injunctive relief. See, e.g., Korea Supply Co. v. Lockheed Martin, 29 Cal. 4th 1134,
`1146-49 (2003)). In contrast, the CLRA provides for damages and equitable relief. Further, as the
`Court previously stated, 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.” Sonner, 971
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`Plaintiffs request that the Court take judicial notice of a previous lawsuit against Lenovo
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`raising similar claims, which resulted in a settlement. (Dkt. No. 29-1, Plaintiffs’ RJN, Exs. 1-2.)
`That lawsuit and the allegations therein are not relevant to the dispute before the Court.
`Accordingly, the Court DENIES Plaintiffs’ request to take judicial notice of those documents.
`Plaintiffs also ask the Court to take judicial notice of the first and second amended complaints
`from the Sonner v. Premier Nutrition, 971 F.3d 834 (9th Cir. 2020). The Court did not need to
`rely on those documents to resolve the motion, and it DENIES those requests as moot.
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`Case 4:21-cv-06770-JSW Document 34 Filed 03/31/22 Page 4 of 5
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`F.3d at 843-44. Because the plaintiff in Sonner “concede[d] that she seeks the same sum in
`equitable restitution as ‘a full refund of the purchase price’—$32,000,000—as she requested in
`damages to compensate her for the same past harm” and “fail[ed] to explain how the same amount
`of money for the exact same harm is inadequate or incomplete,” the court concluded she had not
`shown she had an inadequate remedy at law. Id. at 844.2
`Plaintiffs assert the facts alleged now show why their legal remedies are inadequate. First,
`they cite to the paragraphs in the FAC, in which they allege their legal claims include elements
`they would not be required to prove to prevail on their equitable claims. The Court is not
`persuaded. First, Plaintiffs still do not differentiate the facts that support their claims under the
`various prongs of the UCL, FAL, or CLRA from the facts that support their other claims. For that
`reason, the Court concludes Elgindy v. AGA Service Company remains distinguishable from this
`case. No. 20-cv-06304-JST, 2021 WL 1176535 (N.D. Cal. Mar. 29, 2021).
`Second, in Johnson, the court concluded that while a plaintiff can seek alternative
`remedies, a plaintiff cannot satisfy Sonner through conditional allegations. 2022 WL 74163, at
`*3. Here, Plaintiffs have alleged no more than they may lack an adequate remedy at law because it
`will be harder to prove their legal claims. As in Johnson, that does no more than allege Plaintiffs
`“seek equitable remedies to the extent legal remedies are in adequate or if legal remedies are
`inadequate.” Id. Thus, “these allegations do not establish that the damages [Plaintiffs] seek[] are
`necessarily inadequate or incomplete. That is, [Plaintiffs have] not demonstrated that there is an
`inherent limitation of the legal remedy that renders it inadequate.’” Hanscom v. Reynolds
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`Plaintiffs continue to argue that Sonner’s unique procedural posture renders it
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`distinguishable. The Court previously rejected Plaintiffs’ argument to distinguish Sonner on that
`basis, and it finds no basis to revisit that decision.
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`The Court also determined that while Sonner would not preclude Plaintiffs from pleading
`legal and equitable claims in the alternative, that does not mean the Court can ignore the
`allegations in favor of Rule 8’s general principles: Plaintiffs must plead they lack adequate
`remedies at law. See Guthrie v. Transamerica Life Ins. Co., No. 21-cv-04688-WHO, -- F. Supp.
`3d --, 2021 WL 4314909, at *4 (N.D. Cal. Sept. 23, 2021) (citing cases); Nacarino v. Chobani,
`LLC, No. 20-cv-7437-EMC, 2022 WL 344966, at *10 (N.D. Cal. Feb. 4, 2022); Johnson v.
`Trumpet Behavioral Health, No. 21-cv-3221-WHO, 2022 WL 74163, at *3 (N.D. Cal. Jan. 7,
`2022); IntegrityMessageBoards.com v. Facebook, Inc., No. 18-CV-05286-PJH, 2020 WL
`6544411, at *5 (N.D. Cal. Nov. 6, 2020). The Court also finds no basis to revisit that decision.
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`Case 4:21-cv-06770-JSW Document 34 Filed 03/31/22 Page 5 of 5
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`Consumer Prods., No. 21-cv-3434-JSW, 2022 WL 591466, at * (N.D. Cal. Jan. 21, 2022) (quoting
`Nacarino, 2021 WL 3487117, at *12).
`Plaintiffs also argue the allegations that they have not retained an expert are sufficient to
`allege they lack an adequate remedy at law. In support of this argument, Plaintiffs again rely on
`Adams v. Cole Haan, LLC, No. SACV 20-913 JVS (DFMx), 2021 WL 4907248, at *2-*4 (C.D.
`Cal. Mar. 1, 2021) (“Adams II”). Adams is not binding on this Court, and the plaintiff in Adams
`did not pursue the type of legal claims Plaintiffs are pursuing here. Id., at *1. This allegation does
`no more than speculate that “restitution and damages could be different[.]” Phan v. Sargento
`Foods, Inc., No. 20-cv-9251-EMC, 2021 WL 2224260, at *5 (N.D. Cal. June 2, 2021) (noting that
`“speculation is questionable” given that Section 17200 does not permit nonrestitutionary
`disgorgement) (quoting Julian v. TTE Tech., Inc., No. 20-cv-22857-EMC, 2020 WL 6743912, at
`*4-5 (N.D. Cal. Nov. 17, 2020)). Accordingly, the Court concludes those allegations are not
`sufficient to satisfy Sonner.
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`CONCLUSION
`For the foregoing reasons, the Court GRANTS Lenovo’s motion to dismiss. The Court’s
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`dismissal will be without prejudice “should Plaintiff[s] find facts, during discovery, showing that
`the legal remedy would not be adequate.” Phan, 2021 WL 2224260, at *6.
`IT IS SO ORDERED.
`Dated: March 31, 2022
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`______________________________________
`JEFFREY S. WHITE
`United States District Judge
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