Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 1 of 12
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`UNITED STATES DISTRICT COURT
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`NORTHERN DISTRICT OF CALIFORNIA
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`SAN JOSE DIVISION
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`RODNEY CARVALHO, et al.,
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`Plaintiffs,
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`v.
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`HP, INC.,
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`Case No. 21-cv-08015-BLF
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`ORDER GRANTING IN PART AND
`DENYING IN PART MOTION TO
`DISMISS SECOND AMENDED
`COMPLAINT
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`Defendant.
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`[Re: ECF No. 46]
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`In this case, Plaintiffs Rodney Carvalho and Mark Maher challenge the manner in which
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`Defendant HP Inc. advertises products on its website. Plaintiffs allege that HP displays false and
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`inflated “strikethrough” prices for its products that it then offers to consumers at a purported
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`“discount price.” HP allegedly markets its products this way to create the impression that
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`consumers are saving money when in fact HP never sells its products at the higher strikethrough
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`prices. Plaintiffs seek to represent classes of individuals who purchased purportedly discounted
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`products on HP’s website in the last five years.
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`Now before the Court is HP’s motion to dismiss the Second Amended Complaint under
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`Federal Rules of Civil Procedure 9(b) and 12(b)(6). See ECF No. 46 (“MTD”); see also ECF No.
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`54 (“Reply”). Plaintiffs oppose the motion. ECF No. 51 (“Opp.”). The Court held a hearing on
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`the motion on December 15, 2022. See ECF No. 56. For the following reasons, HP’s motion to
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`dismiss the Second Amended Complaint is GRANTED IN PART AND DENIED IN PART.
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`I. BACKGROUND
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`As alleged in the Second Amended Complaint and accepted as true for the purposes of this
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`motion, Defendant HP Inc. is a technology company that sells computers and related peripheral
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`parts, software, and services to consumers in the United States through its website HP.com. ECF
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 2 of 12
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`No. 43 (“SAC”) ¶¶ 1, 15, 20.
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`Plaintiffs allege that HP creates an illusion of savings on its website by advertising false
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`strikethrough prices and discounts based on those prices. SAC ¶ 23. For any given product, HP’s
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`website displays a price in strikethrough typeface (i.e., $999.99). Id. ¶ 24. At the bottom of each
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`page, HP includes a section entitled “Disclaimer +”. ECF No. 19-1, Ex. A (“HP RJN”)1, ECF No.
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`22-1 (“Rozenblatt Decl.”) Ex. 2. Clicking on the “+” expands the Disclaimer section. Rozenblatt
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`Decl. Exs. 2–3. One of the disclaimers makes clear that the strikethrough price is a
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`Manufacturer’s Suggested Retail Price (“MSRP”). It states:
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`HP’s MSRP is subject to discount. HP’s MSRP price is shown as
`either a stand-alone price or as a strikethrough price with a discounted
`or promotional price also listed. Discounted or promotional pricing
`is indicated by the presence of an additional higher MSRP
`strikethrough price.
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`See HP RJN. No asterisk or other indication of a disclaimer appears next to the strikethrough
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`prices. Rozenblatt Decl. Ex. 1.
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` Near the strikethrough price and typically in a larger and bolder font, HP advertises a “sale
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`price,” the price at which the product is currently offered for sale. SAC ¶ 25. Throughout its
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`website, HP also advertises discounts of savings using words such as “Save,” “You’ll Save,” and
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`“You Saved.” Id. ¶ 26. As a customer goes through the purchasing process and after their order,
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`HP displays many of these same representations that the customer has saved money. Id. ¶¶ 28–31.
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`Plaintiffs allege that approximately 35% of the products HP sells on its website are sold in this
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`manner. Id. ¶ 32.
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`In general, however, the savings HP advertises on its website do not represent the actual
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`savings that customers receive because the strikethrough prices do not represent the actual prices
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`at which computers were sold or offered for sale for a reasonably substantial period of time. SAC
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`¶ 32. For example, on March 27, 2021, HP advertised its HP ENVY laptop for sale at $799.99
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`and represented to customers that they were saving $150 from the strikethrough price of $949.99.
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`Id. ¶ 34. But Plaintiffs allege that in the months that followed, HP rarely, if ever, sold the ENVY
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`1 The Court previously granted HP’s request for judicial notice.
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 3 of 12
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`laptop at a price of $949.99. Id. ¶ 35. HP engages in similar pricing practices for other products,
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`including products other than computers. Id. ¶¶ 36–37 (charts showing prices of other products
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`over multiple months). Plaintiffs allege that they have no way of determining if the prices HP
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`advertises as strikethrough prices are in fact prices at which HP ever sells its products. Id. ¶ 50.
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`Additionally, according to Plaintiffs, HP falsely advertises that the discounts are available
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`only for a limited time when in fact those discounts continue beyond their advertised expiration
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`date. SAC ¶ 38. For example, HP advertises “Weekly Deals,” but those deals in fact last longer
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`than one week and in some cases don’t end for months. Id. ¶¶ 40–42. HP also advertises similar
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`sales, such as a “Memorial Day Special” and “Flash Sales”. Id. ¶¶ 43–47. This practice induces
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`consumers to make purchases they otherwise may not have made due to a false sense of urgency
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`in obtaining a lower price. Id. ¶ 38.
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`Further, according to Plaintiffs, the “vast majority” of computers sold on HP’s website are
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`sold exclusively on HP’s website and not from traditional big box retailers. SAC ¶ 52. Plaintiffs
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`allege that, as of June 29, 2022, HP advertised 155 desktop computers at a discount on its website
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`and of those, only three were available for purchase directly from a Big Box Retailer. Id. ¶ 53, Ex.
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`A. Similarly, Plaintiffs allege that, as of June 29, 2022, HP advertised 121 laptop and notebook
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`computers at a discount on its website and of those, only two were available for purchase directly
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`from a Big Box Retailer. Id. ¶ 54, Ex. B. Plaintiffs further allege that the precise number and
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`identity of products sold exclusively on HP’s website as opposed to non-exclusively is information
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`that is “peculiarly within HP’s knowledge.” Id. ¶¶ 56-57.
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`On September 7, 2021, Plaintiff Rodney Carvalho purchased from HP’s website an HP
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`All-in-One 24-dp1056qe PC and HP X3000 G2 Wireless Mouse. SAC ¶ 58. The All-in-One PC
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`was advertised as being on sale for $899.99 from a strikethrough price of $999.99, which HP
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`represented was a savings of $100. Id. ¶ 59. HP also advertised an additional 5% savings with a
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`coupon code for a Labor Day sale. Id. Carvalho added the All-in-One PC to his cart and was then
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`told that he could purchase the G2 Mouse for $11.99, $5.00 off the strikethrough price of $16.99.
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`Id. ¶¶ 60–61. He added the G2 Mouse to his cart. Id. ¶ 62. In his shopping cart, HP stated that
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`“YOU SAVED $105.00 ON YOUR ORDER.” Id. ¶ 63. Carvalho typed in the coupon code and
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 4 of 12
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`received an additional 5% for the Labor Day sale. Id. ¶ 64. Two further checkout pages, the order
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`confirmation page, and an order confirmation email told Carvalho that he saved $168.60 on his
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`order. Id. ¶¶ 65–68. Carvalho alleges that HP did not sell the All-in-One PC at $999.99 or the G2
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`Mouse at $16.99 for any reasonably substantial period of time in the three months prior to his
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`purchase or in the one month following his purchase. Id. ¶ 70-71. Carvalho alleges that neither
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`item was available for purchase directly from a big box retailer. Id. ¶¶ 73-74.
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`On June 14, 2021, Plaintiff Mark Maher purchased from HP’s website an HP Laptop 17t-
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`by400. SAC ¶ 75. The 17t Laptop was advertised as being on sale for $599.99, $130 off the
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`strikethrough price of $729.99. Id. ¶ 76. Maher added the product to his cart and purchased an
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`additional Wi-Fi adapter to bring his total purchase to $699.99. Id. ¶ 78. In his shopping cart, HP
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`stated that “YOU SAVED $130.00 ON YOUR ORDER.” Id. ¶ 79. Two further checkout pages
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`and the order confirmation page indicated that Maher saved $130. Id. ¶¶ 80–81, 83. Maher
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`alleges that HP did not sell the 17t Laptop at $729.99 for any reasonably substantial period of
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`time. Id. ¶ 85. Maher alleges that this item was not available for purchase directly from a big box
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`retailer. Id. ¶ 87.
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`Plaintiffs filed this lawsuit on October 13, 2021, see ECF No. 1, and filed the First
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`Amended Complaint on December 30, 2021, see ECF No. 18 (“FAC”). The FAC was dismissed
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`with leave to amend. Carvalho v. HP, Inc., No. 21-cv-08015-BLF, 2022 WL 2290595 (N.D. Cal.
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`June 24, 2022) (“First MTD Order”). Plaintiffs filed the operative Second Amended Complaint
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`on July 15, 2022. See SAC. The Second Amended Complaint asserts four causes of action: (1)
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`violation of California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. Code § 1750, SAC
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`¶¶ 96–103; (2) unjust enrichment, SAC ¶¶ 104–115; (3) violation of California’s False Advertising
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`Law (“FAL”), Cal. Bus. & Prof. Code § 17500, SAC ¶¶ 116–129; and (4) violation of California’s
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`Unfair Competition Law (“UCL”), SAC ¶¶ 130–136. Plaintiffs seek to represent a class of all
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`individuals and entities that, on or after October 13, 2017, purchased one or more HP products on
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`HP’s website that were advertised as discounted from a strikethrough price. SAC ¶ 88. Plaintiffs
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`also seek to represent one subclass of class members who are “consumers” within the meaning of
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`Cal. Civ. Code § 1761(d) and made their purchases on or after October 13, 2018. Id.
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 5 of 12
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`II. LEGAL STANDARD
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`“A motion to dismiss under Federal Rule of Civil Procedure 12(b)(6) for failure to state a
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`claim upon which relief can be granted ‘tests the legal sufficiency of a claim.’” Conservation
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`Force v. Salazar, 646 F.3d 1240, 1241–42 (9th Cir. 2011) (quoting Navarro v. Block, 250 F.3d
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`729, 732 (9th Cir. 2001)). When determining whether a claim has been stated, the Court accepts
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`as true all well-pled factual allegations and construes them in the light most favorable to the
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`plaintiff. Reese v. BP Expl. (Alaska) Inc., 643 F.3d 681, 690 (9th Cir. 2011). However, the Court
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`need not “accept as true allegations that contradict matters properly subject to judicial notice” or
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`“allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable
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`inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted).
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`While a complaint need not contain detailed factual allegations, it “must contain sufficient factual
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`matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal,
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`556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). A
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`claim is facially plausible when it “allows the court to draw the reasonable inference that the
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`defendant is liable for the misconduct alleged.” Id. On a motion to dismiss, the Court’s review is
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`limited to the face of the complaint and matters judicially noticeable. MGIC Indem. Corp. v.
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`Weisman, 803 F.2d 500, 504 (9th Cir. 1986); N. Star Int’l v. Ariz. Corp. Comm’n, 720 F.2d 578,
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`581 (9th Cir. 1983).
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`“In alleging fraud or mistake, a party must state with particularity the circumstances
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`constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “Malice, intent, knowledge, and other
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`conditions of a person’s mind may be alleged generally.” Id. Rule 9(b) demands that the
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`circumstances constituting any alleged fraud be plead “specific[ally] enough to give defendants
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`notice of the particular misconduct . . . so that they can defend against the charge and not just deny
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`that they have done anything wrong.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1124 (9th Cir.
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`2009) (internal citation omitted). Claims of fraud must be accompanied by the “who, what, when,
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`where, and how” of the misconduct alleged. Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1997),
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`superseded by statute on other grounds (internal citation omitted).
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 6 of 12
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`III.
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`JUDICIAL NOTICE
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`HP filed a request for judicial notice in connection with its motion to dismiss. ECF No.
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`46-1 (“RJN”). HP requests that the Court take judicial notice of eleven exhibits, all of which are
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`printouts of webpages listing various HP products for sale. See id. Plaintiffs oppose the request.
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`ECF No. 51-1 (“RJN Opp.”). They dispute the information contained in the printouts, particularly
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`HP’s allegation that certain retailers sell certain products, and they argue that one exhibit omits
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`essential information. RJN Opp. at 2-3; see also ECF No. 51-2 (“Rozenblatt RJN Decl.”) ¶¶ 5-7.
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`They further argue that the exhibits that are printouts of mouses are not of the same mouse
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`purchased by Carvalho. RJN Opp. at 3; see also Rozenblatt RJN Decl. ¶¶ 2-4.
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`The Court finds that it is difficult to understand the relevance of these documents without
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`an analysis from HP or an outside expert. Further, the Court is concerned that taking judicial
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`notice of these documents will turn this motion to dismiss into a de facto motion for summary
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`judgment. And the Court further notes the several objections made by Plaintiffs. The Court
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`therefore DENIES HP’s request for judicial notice.
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`IV. DISCUSSION
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`The Court evaluates each of HP’s arguments in turn.
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`A. Limited Time and Limited Quantity Offers
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`The SAC alleges that HP falsely advertises limited time and limited quantity offers. SAC
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`¶¶ 7-12, 38-47. HP argues that neither Carvalho nor Maher has standing to bring a claim as to
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`limited quantity offers because they do not allege that they relied on a limited quantity offer in
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`purchasing their products. MTD at 12-13. It further argues that Maher does not have standing to
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`bring a claim as to limited time offers because he does not allege that he relied on any limited time
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`offers. Id. Plaintiffs do not disagree, but they emphasize that the Court already decided that
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`Carvalho has provided sufficient allegations as to limited time offers. Opp. at 12.
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`1.
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`The Court agrees with the parties. The portion of Plaintiffs’ SAC naming the
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`causes of action and their bases does not mention limited quantity offers, see SAC ¶¶ 96-136, but
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`the Court will still make clear that Plaintiffs may not move forward on a theory as to limited
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`quantity offers. As to limited time offers, the Court reiterates that Carvalho has standing to
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`proceed on this theory. The motion to dismiss the FAL, UCL, and CLRA claims as to a limited
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`quantity theory is GRANTED. The motion to dismiss the FAL, UCL, and CLRA claims as to a
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`limited time theory is DENIED as to Carvalho and GRANTED as to Maher.
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`B. FAL, UCL, and CLRA Claims
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`HP moves to dismiss the UCL, CLRA, and FAL claims. HP argues that Plaintiffs have not
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`shown that the strikethrough prices are false or misleading. MTD at 6-12. It also argues that
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`Plaintiffs have not shown the prices are likely to deceive a reasonable consumer. Id. at 13-14.
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`California’s UCL prohibits any “unlawful, unfair or fraudulent business act or practice.”
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`Cal. Bus. & Prof. Code § 17200. “California’s FAL prohibits any unfair, deceptive, untrue or
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`misleading advertising.” Id. (internal quotation marks and citation omitted). A violation of the
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`FAL necessarily constitutes a violation of the UCL. See id. Finally, “California’s CLRA
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`prohibits ‘unfair methods of competition and unfair or deceptive acts or practices.’” Id. (quoting
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`Cal. Civ. Code § 1770).
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`“Whether a business practice is deceptive or misleading under these California statutes [is]
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`governed by the reasonable consumer test.” Mars Petcare US, Inc. v. Moore, 966 F.3d at 1017
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`(internal quotation marks and citations omitted). Under this standard, Plaintiffs “must show that
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`members of the public are likely to be deceived.” Williams v. Gerber Prod. Co., 552 F.3d 934,
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`938 (9th Cir. 2008) (internal quotation marks and citation omitted). The reasonable consumer test
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`may be satisfied by advertising that is false or, alternatively, advertising that is true but
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`nonetheless misleading. See id. However, “a plaintiff’s unreasonable assumptions about
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`[advertising] will not suffice.” Moore v. Trader Joe’s Co., 4 F.4th 874, 882 (9th Cir. 2021). Thus,
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`while application of the reasonable consumer test typically involves question of fact that may not
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`be resolved on a motion to dismiss, dismissal is appropriate where the court determines that the
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`plaintiff’s claims are not plausible. See id. at 886. (“In sum, the district court properly dismissed
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`this action under Federal Rule of Civil Procedure 12(b)(6) because Trader Joe’s representations on
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`the front label and the ingredients statement of its Manuka Honey product are not misleading to a
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`reasonable consumer as a matter of law.”); Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225,
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`1231 (9th Cir. 2019) (“Becerra has not sufficiently alleged that Diet Dr Pepper’s labeling is false
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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 8 of 12
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`or misleading and dismissal was therefore proper.”).
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`1. False or Misleading Prices
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`Courts in this circuit applying the reasonable consumer test to cases like this one have
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`divided price comparison cases into two categories: cases involving “exclusive products” and
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`those involving “non-exclusive products.” See Sperling v. Stein Mart, Inc., 291 F. Supp. 3d 1076,
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`1084 (C.D. Cal. 2018).2 “In exclusive product cases, a store, often an outlet store, sells a lower-
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`price, different version of a product sold in traditional retail stores. The outlet uses the price of the
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`product made for the retail store as a comparative reference price on price tags. However, the
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`actual product being sold in the outlet is made exclusively for the outlet and is never sold for the
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`comparative reference price at a traditional retail store.” Id. Courts allow those cases to proceed
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`based on allegations specific to that outlet or retail store exclusively selling the product. See, e.g.,
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`Rubenstein v. Neiman Marcus Grp. LLC, 687 F. App’x 564, 567 (9th Cir. 2017) (reversing grant
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`of motion to dismiss where plaintiff alleged that Neiman Marcus outlet used reference prices to
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`products sold at Neiman Marcus retail stores, but products were made exclusively for the outlet
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`store); Branca v. Nordstrom, Inc., No. 14cv2062-MMA (JMA), 2015 WL 10436858, at *7 (N.D.
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`Cal. Oct. 9, 2015) (denying motion to dismiss on similar basis as to Nordstrom Rack and
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`Nordstrom retail stores). “In non-exclusive product cases, on the other hand, more than one
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`retailer offers the product at issue for sale. Because other retailers offer the same product for sale,
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`there are legitimate prices to which to compare the defendant's comparative reference price. In
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`those cases, courts tend to reject claims unless the plaintiff establishes that the comparative
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`reference price is misleading.” Stein Mart, 291 F. Supp. 3d at 1084.
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`This Court previously stated there was “no dispute that this is a ‘non-exclusive products’
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`case in which ‘more than one retailer offers the product at issue for sale.’” Carvalho, 2022 WL
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`2290595, at *4 (quoting Stein Mart, 291 F. Supp. 3d at 1084). But Plaintiffs now dispute this
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`characterization. Plaintiffs allege that the “vast majority” of HP’s desktop, laptop, and notebook
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`2 Although Stein Mart adjudicated a motion for class certification and motion for summary
`judgment, its discussion of the different standards for exclusive products and non-exclusive
`products cases remains instructive. Several of the decisions it cites (which are also cited in this
`Order) adjudicated motions to dismiss.
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`computers are not sold at big box retailers. See SAC ¶¶ 52-57. If this is the case, then the Court
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`cannot look to “comparative reference price[s]” from these retailers to tell whether the
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`strikethrough price is misleading. See Stein Mart, 291 F. Supp. 3d at 1084. Instead, Plaintiffs
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`argue, the Court has to look at the prices at which HP sells the products, which it alleges are
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`usually below the strikethrough price. Opp. at 11. HP argues that the products are sold at other
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`retailers. MTD at 6-12.
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`The Court finds that the exclusive vs. non-exclusive product framework is not particularly
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`instructive in this case, as the facts do not fit neatly into either category. According to Plaintiffs’
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`allegations, which are based on a thorough investigation and must be taken as true at this stage, the
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`majority of the relevant HP products are not sold at traditional big box retailers, suggesting they
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`are not non-exclusive products. See SAC ¶¶ 52-57. On the other hand, this is not a traditional
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`exclusive product case, as there are no allegations that HP is selling these products at some sort of
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`discount or outlet store. See, e.g., Rubenstein, 687 F. App’x 564 (Neiman Marcus outlet vs.
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`Neiman Marcus retail store); Branca, 2015 WL 10436858 (Nordstrom vs. Nordstrom Rack). The
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`Court declines to attempt to put this case into a category that is not a good fit. Instead, the Court
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`will look at the reasoning underlying both non-exclusive and exclusive products cases: whether a
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`price is false or misleading in light of the price(s) at which that item is generally available for
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`purchase. Cf. Fisher v. Eddie Bauer LLC, No. 19cv857 JM (WVG), 2020 WL 4218228, at *4
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`(S.D. Cal. Feb. 3, 2020) (“[T]he alleged fraud, i.e. that the discounted merchandise was not truly
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`discounted, is the same regardless of whether the product is exclusive or not.”).
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`Plaintiffs allege that the strikethrough prices displayed on HP’s website did not reflect the
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`price at which the products were sold on HP’s website in the weeks and months prior to their
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`purchases. See SAC ¶¶ 4, 35, 36, 37, 70, 71, 85. And Plaintiffs allege that, based on an
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`investigation in June 2022, very few of these products are available for purchase at third-party
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`retailers. Id. ¶¶ 52-57. Of those that are available, the prices are all somewhere between the HP
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`strikethrough price and the HP sale price. See Id. Exs. A, B. The Court further notes that “the
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`particular facts as to whether the [strikethrough] prices are fictitious are likely only known to
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`[HP].” See Rubenstein, 687 F. App’x at 568.
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`9
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`United States District Court
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`

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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 10 of 12
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`HP makes several arguments as to why the strikethrough prices are not misleading. They
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`argue that Plaintiffs’ investigation as to whether the products were sold at third-party retailers was
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`not thorough, that Plaintiffs’ investigation shows the strikethrough prices are not misleading, that
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`Plaintiffs’ investigation was too late in time, and that Plaintiffs’ investigation did not include all
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`the relevant products. MTD at 7-12. As to the first argument, whether Plaintiffs’ allegations as to
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`sale at third-party retailers is accurate, the Court notes its discussion on the request for judicial
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`notice. The Court accepts Plaintiffs’ allegations as to the availability of the products at third-party
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`retailers, which was based on a thorough investigation, as true. See SAC Exs. A, B. HP next
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`argues that when Plaintiffs did find the items for sale at third-party retailers, their prices were
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`“uniformly higher than HP’s sale prices and very close to the strikethrough prices.” MTD at 9-10.
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`The Court agrees that all the prices at third-party retailers were higher than HP’s sale prices, but it
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`notes that they were also uniformly lower than HP’s strikethrough prices. See SAC Exs. A, B.
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`And while some third-party prices were quite close to the strikethrough price, others were not. See
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`id. Further, the Court’s analysis is based not only on these prices, but also the prices for which
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`products were available at HP before and after Plaintiffs’ purchase. Third, HP argues that the
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`investigation into sale prices at third-party retailers was insufficient because it took place about a
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`year after the purchases at issue in this case. MTD at 9. The Court notes that Plaintiffs provide
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`the date of their investigation as required by Rule 9(b). The Court also notes that “in cases where
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`fraud is alleged, we relax pleading requirements where the relevant facts are known only to the
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`defendant.” Rubenstein, 687 F. App’x at 568 (quoting Concha v. London, 62 F.3d 1493, 1503 (9th
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`Cir. 1995)). Information as to availability and price at third-party retailers in June and September
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`2021 is likely better known to HP. The Court finds the date of Plaintiffs’ investigation is
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`sufficiently close to the date of the purchases for purposes of a motion to dismiss. And finally, HP
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`argues that Plaintiffs did not do an investigation of third-party retailers for the non-computer
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`products in the case. MTD at 10-12. But Plaintiffs did provide an allegation as to the one non-
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`computer product that they purchased. SAC ¶ 74. And Plaintiffs are not required at this early
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`stage to do an investigation of every HP product. The investigation was sufficient as to HP
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`products as a whole to survive a motion to dismiss. See id. Exs. A, B.
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`10
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`Northern District of California
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`United States District Court
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`

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`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 11 of 12
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`The Court finds that the totality of Plaintiffs’ allegations as to the prices for which the
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`products are sold at HP and for which they are sold (or not sold) at third-party retailers show “why
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`[the strikethrough prices] [did] not accurately reflect prevailing market prices.” See Stein Mart,
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`291 F. Supp. 3d at 1084 (quoting Sperling v. DSW Inc., No. EDCV 15-1366-JGB (SPx), 2015 WL
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`13309476, at *9 (C.D. Cal. Nov. 19, 2015)). The Court therefore concludes that Plaintiffs have
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`adequately alleged that the strikethrough prices are misleading.
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`2. Reasonable Consumer
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`HP also argues that Plaintiffs have not shown that the strikethrough prices are likely to
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`deceive a reasonable consumer. MTD at 13–14. HP points to the fact that it provides a disclaimer
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`explaining that the strikethrough prices are MSRPs, and HP argues that it does not use the
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`“descriptive terminology” that is used to indicate former price comparisons under federal
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`regulation or that courts have found to be misleading. Id. at 14. These include terms such as
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`“regularly,” “usually,” “formerly,” and “reduced to.” Id. And HP argues that consumers
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`understand that manufacturers often provide a discount from the MSRP. Id.
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`But as the Court stated in its First MTD Order, “the fact that a consumer could only learn
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`that the strikethrough price is a MSRP upon reading the fine print at the bottom of the webpage
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`and then clicking on the ‘+’ suggests that a reasonable consumer could justifiably be unaware of
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`that disclaimer.” Carvalho, 2022 WL 2290595, at *5; see also Sperling v. Stein Mart, Inc., No.
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`CV 15-01411 BRO (KKx), 2016 WL 11265686, at *5-6 (C.D. Cal. Mar. 15, 2016) (declining to
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`resolve on motion to dismiss whether reasonable consumer would be deceived by a “compare at”
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`price where consumer must go beyond the price tag to find the pricing policy, even though the
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`“compare at” language included an asterisk). The fact that HP uses a strikethrough instead of the
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`identified terms is not determinative as to whether it will deceive a reasonable consumer. The
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`Court continues to find that “whether the price or the disclaimer is advertised in a way that is
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`‘likely to deceive” a reasonable consumer in violation of the broad provisions of the FAL, UCL,
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`and CLRA is an issue the Court cannot resolve at this juncture.” Carvalho, 2022 WL 2290595, at
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`*5; see also Nunez v. Saks Inc., 771 F. App’x 401, 403 (9th Cir. 2019) (“Misinformation about a
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`product’s ‘normal’ price is . . . significant to many consumers in the same way as a false product
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`11
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`

`

`Case 5:21-cv-08015-BLF Document 57 Filed 12/20/22 Page 12 of 12
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`label would be.” (quoting Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1106 (9th Cir. 2003), as
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`amended on denial of reh’g and reh’g en banc (July 8, 2013))). The Court therefore concludes
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`that Plaintiffs have adequately alleged that a reasonable consumer is likely to be deceived by the
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`strikethrough prices.
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`***
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`HP’s motion to dismiss the FAL, UCL, and CLRA claims is DENIED.
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`C. Unjust Enrichment Claim
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`HP argues that Plaintiffs’ unjust enrichment claim should be dismissed if the underlying
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`fraud-based claims are dismissed. MTD at 14–15. Because the Court does not dismiss the
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`underlying fraud-based claims, HP’s motion to dismiss the unjust enrichment claim on this basis is
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`DENIED.
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`V. ORDER
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`For the foregoing reasons, IT IS HEREBY ORDERED that HP’s motion to dismiss is:
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`2.
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`3.
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`GRANTED as to a limited quantity theory for the FAL, UCL, and CLRA claims;
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`DENIED as to a limited time theory for the FAL, UCL, and CLRA claims for
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`Carvalho and GRANTED as to a limited time theory for the FAL, UCL, and CLRA claims for
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`Maher;
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`4.
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`5.
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`DENIED as to the FAL, UCL, and CLRA claims; and
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`DENIED as to the unjust enrichment claim.
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`Dated: December 20, 2022
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`
`
`______________________________________
`BETH LABSON FREEMAN
`United States District Judge
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