Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_07-cv-02231/USCOURTS-casd-3_07-cv-02231-2/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1332 Diversity-Breach of Contract

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UNITED STATES DISTRICT COURT

FOR THE SOUTHERN DISTRICT OF CALIFORNIA

UTILITY CONSUMERS’ ACTION

NETWORK and ERIC TAYLOR, on behalf

of themselves, their members and/or all others

similarly situated, as applicable,

Plaintiffs,

v.

SPRINT SOLUTIONS, INC.; SPRINT

SPECTRUM L.P.; SPRINT-NEXTEL

CORPORATION,

Defendants.

Case No. C07-CV-2231-W (RJB)

ORDER ON

DEFENDANTS’ MOTION

TO DISMISS AND,

ALTERNATIVELY,

MOTION TO STRIKE

This matter comes before the court on Defendants’ Motion to Dismiss and, Alternatively, Motion

to Strike. Dkt. 12. The court has considered the relevant documents and the remainder of the file herein.

PROCEDURAL HISTORY

On November 21, 2007, plaintiffs Utility Consumers’ Action Network (UCAN) and Eric Taylor

filed a civil action against defendants Sprint Solutions, Inc., Sprint Spectrum L.P., and Sprint-Nextel

Corporation (Sprint). Dkt. 1. On January 2, 2008, plaintiffs filed an amended complaint, alleging that

Sprint improperly included taxes, fees and other charges on monthly invoices to customers who obtained

data service or data card plans from Sprint, and improperly charged these customers for text messages. 

Dkt. 9. The amended complaint asserts class action claims for (1) violation of California Business and

Professions Code § 17200; (2) breach of contract; (3) violation of the Consumers Legal Remedies Act,

Cal. Civ. Code § 1750 et seq.; (4) declaratory relief; (5) violation of the Federal Communications Act,47

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U.S.C. § 201(b); (6) money had and received, money paid and unjust enrichment; (7) conversion; and (8)

cramming, pursuant to California Public Utilities Code § 2890. Id. The amended complaint requests

certification of this case as a class action; declaratory, equitable, injunctive and/or monetary relief; actual,

direct, incidental, consequential, statutory and exemplary damages; pre- and post-judgment interest;

attorneys’ fees; and other relief as the court may deem just and proper. Dkt. 9, at 26.

On January 23, 2007, Sprint filed a motion to dismiss pursuant to Fed.R.Civ.P. 12(b)(6) and 12(f).

Dkt. 12.

MOTION TO DISMISS

Sprint moves to dismiss plaintiffs’ claims for violation of California Business and Professions Code

§ 17200; violation of the Consumer Legal Remedies Act, Cal. Civ. Code § 1750 et seq; violation of the

Federal Communications Act, 47 U.S.C. § 201(b); conversion; and cramming, on the basis that they fail to

state a claim. Dkt. 12, at 2. In addition, Sprint moves under Fed.R.Civ.P. 12(f) to strike ¶¶ 45, 61, 79,

and ¶ 3 of the prayer for relief, on the basis that they contain immaterial and impertinent matters. Id.

Plaintiffs oppose the motion, contending that the causes of action in the amended complaint state a claim

and that there is not basis for striking the identified portions of the amended complaint.

LEGAL STANDARD

A complaint must be dismissed under Fed.R.Civ.P.12(b)(1) if, considering the factual allegations in

the light most favorable to the plaintiff, the action: (1) does not arise under the Constitution, laws, or

treaties of the United States, or does not fall within one of the other enumerated categories of Article III,

Section 2, of the Constitution; (2) is not a case or controversy within the meaning of the Constitution; or

(3) is not one described by any jurisdictional statute. Baker v. Carr, 369 U.S. 186, 198 (1962); D.G.

Rung Indus., Inc. v. Tinnerman, 626 F.Supp. 1062, 1063 (W.D. Wash. 1986). When considering a motion

to dismiss pursuant to Rule 12(b)(1), the court is not restricted to the face of the pleadings, but may review

any evidence to resolve factual disputes concerning the existence of jurisdiction. McCarthy v. United

States, 850 F.2d 558, 560 (9th Cir. 1988), cert. denied, 489 U.S. 1052 (1989); Biotics Research Corp. v.

Heckler, 710 F.2d 1375, 1379 (9th Cir. 1983). A federal court is presumed to lack subject matter

jurisdiction until plaintiff establishes otherwise. Kokkonen v. Guardian Life Ins. Co. of America, 511 U.S.

375 (1994); Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 (9th Cir. 1989). Therefore,

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plaintiff bears the burden of proving the existence of subject matter jurisdiction. Stock West, 873 F.2d at

1225; Thornhill Publishing Co., Inc. v. Gen’l Tel & Elect. Corp., 594 F.2d 730, 733 (9th Cir. 1979).

Pursuant to Fed.R.Civ.P. 12(f), the court may strike from a pleading an insufficient defense or any

redundant, immaterial, impertinent, or scandalous matter.

DISCUSSION

1. Violation of Business and Professions Code § 17200, et seq. (Unfair Competition Law, or

UCL)

In the first amended complaint, plaintiffs allege that defendants’ acts and practices, as alleged in the

amended complaint, “constitute acts of unfair competition. Defendants have engaged in an unlawful, unfair

or fraudulent business act and/or practice within the meaning of California Business & Professions Code

§17200 et seq.” Dkt. 9, at 17, ¶ 43. The amended complaint alleges that “[t]hese business acts and

practices violated numerous provisions of law, including, inter alia, California Civil Code §1565,

California Civil Code §1670.5, California Civil Code §1709 and §1770, et seq. Id. at 17, ¶ 45.

Sprint contends that the court should dismiss and strike from the amended complaint that part of

the UCL claim that is alleges “unlawful” conduct based upon violation of Civil Code §§ 1565 and 1670.4. 

Dkt. 12-2. Sprint also contends that UCAN’s UCL claim against Sprint should be dismissed because UCL

has failed to allege it suffered any injury as a result of the conduct it complains of. Id.

The UCL creates a private right of action for “any unlawful, unfair, or fraudulent business act or

practice and unfair, deceptive, untrue or misleading advertising.” Cal. Bus. & Prof.Code § 17200. The

UCL's purpose is to protect both consumers and competitors from unlawful, unfair or fraudulent business

practices by promoting fair competition in commercial markets for goods and services. Kasky v. Nike, Inc.

(2002) 27 Cal.4th 939, 949 (2002)

An “unlawful business activity” includes “'anything that can properly be called a business practice

and that at the same time is forbidden by law.”' People v. McKale, 25 Cal.3d 626, 632, quoting Barquis v.

Merchants Collection Assn. 7 Cal.3d 94 (1972). In essence, an action based on section § 17200 to redress

unlawful business practices “borrows” violations of other laws and treats them as unlawful practices

independently actionable under § 17200. (2 Cal.4th at p. 383; Saunders v. Superior Court, 27 Cal.App.4th

832, 839 (1994).

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Plaintiffs base their UCL claims in part on an “unlawful” business act or practice, in violation of

Cal.Civ.Code §§ 1565 and 1670.5. Sprint contends that these are contract provisions that may not serve

as the basis for an “unlawful” business act or practice, and request that the citation to these sections of the

California Civil Code be stricken. Sprint is correct with respect to § 1565, which provides the elements of

consent for purposes of a contract. This section does not proscribe any behavior, and as such, cannot

serve as the basis for an unlawful business act or practice. Section 1670.5, however, addresses an

unconscionable contract or clause of a contract, finding unconscionability as a matter of law, and remedies.

A claim for unlawful business act or practice could conceivably be based upon the unconscionability

section of the California Civil Code. See National Rural Telecommunications Cooperative v. DirecTV,

Inc., 319 F. Supp. 2d 1059 (C.D. Cal. 2003)(citing Bondanza v. Peninsula Hosp. and Med. Center, 23

Cal. 3d 260, 266 (1979). Reliance on an unconsionability section of the California Civil Code is

distinguishable from the facts in In re Microsoft Cor. Antitrust Litigation, 274 F.Supp 2d 747 (D.Md.

2003), in which the district court of Maryland concluded that common law breach of contract and breach

of the covenant of good faith could not be relied upon to establish the “unlawful” prong of the UCL. 

The court should grant Sprint’s motion to strike Cal.Civ.Code § 1565 as providing a basis a claim

of unlawful business act or practice, in violation of Business and Professions Code § 17200, et seq.; and

should deny the motion with regard to Sprint’s request that the court strike Cal.Civ.Code § 1670.5 as a

basis for a claim of unlawful business act or practice, in violation of Business and Professions Code §

17200, et seq.

2. Consumer Legal Remedies Act, Cal. Civ. Code § 1750, et seq (CLRA)

Sprint moves to dismiss plaintiffs’ claims under the CLRA because plaintiffs failed to follow the

procedure set forth in Cal.Civ. Code § 1782(a) by giving Sprint at least 30 days to correct the violations

before filing suit.

The threshold issue is whether the issue regarding prefiling notice is appropriate to resolve on a

motion to dismiss or whether the court should convert this issue to a motion for summary judgment.

 In Cattie v. Wal-Mart Stores, Inc. v. 504 F.Supp.2d 939, 949-950 (S.D.Cal. 2007), the district

court for the Southern District of California concluded that the notice requirement of the CLRA should be

resolved on a motion to dismiss under Fed.R.Civ.P. 12(b)(6), noting that “[t]he CLRA's notice requirement

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is not jurisdictional, but compliance with this requirement is necessary to state a claim.” See Outboard

Marine Corp. v. Superior Court, 52 Cal.App.3d 30, 40-41, 124 Cal.Rptr. 852 (1975) (addressing failure to

give notice under demurrer standard); Laster v. T-Mobile U.S.A., Inc., 407 F.Supp.2d, 1181, 1195-96

(dismissing CLRA damages claim with prejudice under Rule 12(b)(6) for failing to comply with notice

requirements); Von Grabe v. Sprint, 312 F.Supp.2d 1285, 1304 (S.D.Cal.2003 (dismissing premature

claims for damages with prejudice).

A court may consider material which is properly submitted as part of the complaint on a motion to

dismiss without converting into a motion for summary judgment. Lee v. City of Los Angeles, 250 F.3d

668, 688 (9th Cir. 2001). Where the documents are not physically attached to the complaint, they may be

considered if the documents’ “authenticity ... is not contested” and “the plaintiff's complaint necessarily

relies” on them.” Branch v. Tunnell, 14 F.3d 449, 453 (9th Cir. 1994)) (quoting Parrino v. FHP, Inc.,

146 F.3d 699, 705-06 (9th Cir. 1998)). Sprint has requested that the court take judicial notice of the

November 20, 2007, letter from Mr. Taylor to Sprint (Dkt. 12-3, at 5-7). Plaintiffs have requested that the

court take judicial notice of two January 4, 2008 letters from Sprint’s counsel to plaintiffs’ counsel (Dkt.

18-2, at 4-6); and the January 8, 2008 letter from plaintiffs’ counsel to Sprint’s counsel (Dkt. 18-2, at 8-

10). The authenticity of these documents is not contested and the complaint necessarily relies on them. 

Accordingly, the court has considered these documents in connection with this motion to dismiss and has

not converted this motion to a motion for summary judgment. The issue of the adequacy of notice under

the CLRA is ripe for decision.

Cal.Civ.Code § 1750(a) lists unfair methods of competition and unfair or deceptive acts or

practices, and provides that these methods and acts, undertaken by any person in a transaction intended to

result or which results in the sale or lease of goods or services to any consumer are unlawful. Plaintiffs

allege that defendants violated the following provisions of Section 1750(a):

(2) Misrepresenting the source, sponsorship, approval, or certification of goods or services.

****************

(5) Representing that goods or services have sponsorship, approval, characteristics, ingredients,

uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval,

status, affiliation, or connection which he or she does not have.

****************

(9) Advertising goods or services with intent not to sell them as advertised.

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****************

(14) Representing that a transaction confers or involves rights, remedies, or obligations which it

does not have or involve, or which are prohibited by law.

****************

(16) Representing that the subject of a transaction has been supplied in accordance with a previous

representation when it has not.

****************

(19) Inserting an unconscionable provision in the contract.

Dkt. 9, at 20-21.

Cal.Civ.Code § 1780(a) provides for the following relief:

(a) Any consumer who suffers any damage as a result of the use or employment by any person of a

method, act, or practice declared to be unlawful by Section 1770 may bring an action against that

person to recover or obtain any of the following:

(1) Actual damages, but in no case shall the total award of damages in a class action be less than

one thousand dollars ($1,000).

(2) An order enjoining the methods, acts, or practices.

(3) Restitution of property.

(4) Punitive damages.

(5) Any other relief that the court deems proper.

Before damages may be sought under the CLRA, the plaintiff must satisfy the CLRA'S pre-filing

notice requirement. The CLRA requires that, at least 30 days before filing a complaint for its violation, the

consumer send written notice, by certified or registered mail, return receipt requested, to the person

alleged to have violated the CLRA, indicating the particular violation alleged and demanding correction or

rectification of the violations. (Cal.Civ.Code, § 1782 (a)).

“The purpose of the notice requirement of [Civil Code] section 1782 is to give the manufacturer or

vendor sufficient notice of alleged defects to permit appropriate corrections or replacements. The notice

requirement commences the running of certain time constraints upon the manufacturer or vendor within

which to comply with the corrective provisions. The clear intent of the act is to ... establish a limited period

during which such settlement may be accomplished. This clear purpose may only be accomplished by a

literal application of the notice provisions.” Outboard Marine Corp. v. Superior Court , 52 Cal.App.3d 30,

40-41 (1975)(fn. omitted.).

Sprint contends that plaintiffs served a demand letter on defendants on November 20, 2007, one

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day before filing this civil complaint, which included a claim for damages. Sprint contends that the claim for

damages under the CLRA should be dismissed and that ¶ 61 of the amended complaint should be stricken. 

The original complaint, filed November 21, 2007, alleged as follows: 

60. In compliance with the provisions of California Civil Code § 1782, plaintiff is giving written

notice to Sprint Nextel of the intention to seek damages under California Civil Code § 1750, et

seq., unless Sprint Nextel provides an appropriate correction or refund plus interest and other

appropriate relief to all Class members entitled to relief under the CLRA.

61. If Sprint Nextel fails to provide such relief and adequately respond to the demand to stop

charging such fees in toto, provide clear and unambiguous notice of the change, pay refunds and

interest and otherwise rectify the wrongful conduct described above on behalf of all Class members

who may be entitled to relief under the CLRA, plaintiff will seek an award of all actual and

exemplary damages permitted for violation of the CLRA, including for statutory damages of $1,000

and/or up to $5,000 per consumer who qualify as a “senior citizen” under the CLRA. The Class

members are presently entitled to and plaintiff seeks, pursuant to California Civil Code §

1780(a)(2), an order enjoining the above-described wrongful acts and practices of defendants,

providing restitution to all members of the Class who are so entitled, ordering the payment of costs

and attorneys’ fees, and such other relief as deemed appropriate and proper by the Court under

California Civil Code § 1780.

Dkt. 1, at 21. The original complaint included as part of the prayer for relief the following: “For actual,

direct, incidental, consequential, statutory and exemplary damages, as appropriate for the particular Causes

of Action.” Dkt. 1, at 26. The amended complaint includes the same prayer for relief. Dkt. 9, at 26.

In the amended complaint, filed January 2, 2008, plaintiffs alleged as follows:

60. In compliance with the provisions of California Civil Code § 1782, plaintiff is giving written

notice to Sprint Nextel of the intention to seek damages under California Civil Code § 1750, et

seq., unless Sprint Nextel provides an appropriate correction or refund plus interest and other

appropriate relief to all Class members entitled to relief under the CLRA.

61. As Sprint Nextel failed within 30 days of receipt of such notice to provide such relief and

adequately respond to the demand to stop charging all the fees identified herein in toto, provide

clear and unambiguous notice of the change, pay refunds plus interest, and otherwise rectify the

wrongful conduct described above on behalf of all Class members who may be entitled to relief

under the CLRA, plaintiff Taylor seeks an award of all actual and exemplary damages permitted for

violation of the CLRA, including for statutory damages of $1,000 and/or up to $5,000 per

consumer who qualify as a “senior citizen” under the CLRA. The Class members are presently

entitled to and plaintiff seeks, pursuant to California Civil Code § 1780(a)(2), an order enjoining

the above-described wrongful acts and practices of defendants, providing restitution to all members

of the Class who are so entitled, ordering the payment of costs and attorneys’ fees, and such other

relief as deemed appropriate and proper by the Court under California Civil Code § 1780.

Dkt. 9, at 21.

Plaintiff maintain that (1) at the time they filed the original complaint, they believed that they would

need to seek immediate injunctive relief, “which we were later able to resolve, at least in part, with Sprint”

(Dkt. 18, at 5); (2) that the original complaint did not seek damages under the CLRA but informed Sprint

that, if Sprint failed to provide the full response the demand letter demanded, the complaint would be

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amended to seek actual, punitive and statutory damages; and (3) in any event, Sprint did not correct the

deficiencies within thirty days, as requested in the demand letter; and (4) even if damages were not

permitted, a claim for restitution would stand. Dkt. 18.

The complaint and amended complaint allege that UCAN attempted to “informally resolve” billing

issues with Sprint on June 22, 2007. Dkt. 1, at 13 and Dkt. 9, at 13. Sprint submitted, as part of this

motion, a copy of a November 20, 2007 letter, referencing the requirements of Cal.Civ.Code, § 1782 (a).

Dkt. 12-3, at 5-7. Sprint also provided a copy of January 8, 2008 letter from plaintiffs’ counsel to Sprint’s

counsel, stating that “[y]our procedural claim about the CLRA is in error. Mr. Taylor and UCAN had

made several pre-litigation demands that went unanswered; the letter Sprint received merely summarized

these demands.” Dkt. 18-2, at 9. 

Plaintiffs’ arguments regarding the timeliness of the demand letter and filing of the complaint are

unavailing. Neither the complaint nor the amended complaint alleged that plaintiffs had given the proper

notice under the CLRA. See Von Grabe v. Sprint PCS, 312 F.Supp.2d 1285, 1303-1304. The original and

amended complaints do not allege that the “informal” attempts to resolve the issue before the lawsuit was

filed referenced Cal.Civ.Code § 1770 or any specific violations of the CLRA, as was the case in Stickrath

v. Globalstar, Inc., 527 F.Supp. 992, 1001-02 (N.D.Cal. 2007)(notice that did not strictly comply with

requirements of Section 1782(a), were nonetheless adequate where violations of CLRA were explicitly

alleged). Further, Sprint’s January 8, 2008 letter from plaintiffs’ counsel to Sprint’s counsel did not state or

otherwise indicate that plaintiffs had referenced any specific violations of the CLRA in their “several prelitigation demands.” 

The CLRA requires a prefiling notice before a plaintiff files a civil complaint seeking damages

under the CLRA. The notice is required so that the parties can, in good faith, attempt to resolve the issues

by settlement, thus obviating the need to pursue claims by means of a civil action. Although the prefiling

notice is required only if a plaintiff seeks damages, settlement regarding damages would more than likely

obviate, or at least severely limit, any CLRA claims for injunctive relief, restitution, and other equitable

remedies. The prefiling notice serves to avoid litigation, not to put additional pressure on a defendant

during the course of litigation. Even though plaintiffs did not ultimately reach complete agreement with

Sprint on all the issues raised by plaintiffs in their CLRA demand letter, Sprint should have been afforded

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the opportunity to attempt to resolve those issues before litigation was instituted. Threatening to sue for

damages in a complaint, and then doing so in an amended complaint, does not serve the purposes of

prefiling notice. See Cattie v. Wal-Mart Stores, Inc. v. 504 F.Supp.2d at 950 (“Permitting Plaintiff to seek

damages first and then later, in the midst of a lawsuit, give notice and amend would destroy the notice

requirement's utility, and undermine the possibility of early settlement.”). Further, although plaintiffs

contend that, at the time they filed this lawsuit, they thought they might need to seek “immediate injunctive

relief,” obtaining injunctive relief, after affording due process to all parties, would likely have taken at least

thirty days. The CLRA claim for damages should be dismissed on the basis that plaintiffs did not comply

with the prefiling notice requirements of Cal.Civ.Code, § 1782 (a); the claim for damages in ¶ 61 of the

amended complaint should be dismissed; plaintiffs’ claim for damages, set forth in ¶ 61 of the amended

complaint should be stricken.

Sprint requests that the court dismiss the CLRA claim for restitution, because it is essentially the

same as a claim for damages. While the claim for damages and restitution are overlapping to some extent,

they are identified as separate forms of relief Cal.Civ.Code § 1780(a). Prefiling notice is not required for a

CLRA claim for restitution. Accordingly, the claim for restitution under the CLRA may proceed.

3. Claim for Violation of the Federal Communications Act (FCA), 47 U.S.C. § 201(b)

Sprint contends that plaintiffs have not complied with Fed.R.Civ.P. 8's requirement that a claim be

set forth in a short and plain statement of the claim showing that the pleader is entitled to relief.

In the Fifth Cause of Action, plaintiffs allege as follows:

68. Section 201(b) of the Federal Communications Act requires: “All charges, practices,

classifications, and regulations for and in connection with interstate communications by radio shall

be just and reasonable, and any such charge, practice, classification, or regulation that is unjust or

unreasonable is declared to be unlawful.”

69. Sprint Nextel’s practice of collecting the charges set forth in detail above, and refusing to

return such monies and/or disseminating bills that do not provide accurate information to customers

as required by law, was unjust and unreasonable and in violation of §201(b) of the Federal

Communications Act, 47 U.S.C. §201(b).

70. Pursuant to FCC Declaratory Ruling 22 F.C.C.R. 5901, information services are not subject to

the title II provisions of the Federal Communication Act. As such, Class members are exempt from

paying any Title II obligations. Any charges associated with “telecommunications services” charged

to data services only customers are unjust and unreasonable, as are any charges that are the result

of “cramming” such as the SMS text message charges at issue herein.

71. Members of the Class suffered damages and will continue to suffer damages as a result of the

above-described violations and Sprint Nextel’s failure to refund previously collected monies, in an

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amount to be determined at trial.

72. Pursuant to, inter alia, §§206 and 207 of the Federal Communication Act, 47 U.S.C. §§ 206

and 207, members of the Class are entitled to recover the full amount of damages sustained due to

Sprint Nextel’s above-described violations and obtain appropriate injunctive relief, together with

reasonable attorneys’ fees and costs.

Dkt. 9, at 23-24.

The court is unable to determine the basis for plaintiff’s FCA claim. In the court’s April 15, 2008

order denying Sprint’s request that this claim be referred to the FCC, the court concluded as follows:

At this point, the court cannot determine whether there is an issue or issues that are within the

jurisdiction of the FCC, or issues that require expertise or uniformity in administration. It is unclear

to the court, at this stage, what questions and issues would be presented to the FCC for

determination. For example, plaintiffs appear to assert a contradictory basis for the FCC claim, by

claiming that certain charges to customers who obtained data service or data card plans were

improperly applied because these plans are excluded from the requirements of 47 U.S.C. § 201,

while also claiming that these charges are not “just and reasonable,” as required by 47 U.S.C. §

201(b). At this point, a referral to the FCC is not warranted. Such a referral, however, may be

appropriate at some point, after the issues are clarified. The court should deny without prejudice

Sprint’s motion to refer the FCA claim to the FCC on the basis of primary jurisdiction. Sprint’s

request that the court stay claims other than the FCA claim is moot.

Dkt. 26, at 7-8.

The court concurs with Sprint that plaintiffs’ FCA claim is not pled with sufficient particularity in

order for Sprint to file an answer to the allegations. Plaintiffs should be required to provide a more definite

statement, connecting facts with violations of the specific sections of the FCA, and the basis upon which

plaintiffs are claiming that those facts violate the FCA.

4. Conversion

In the amended complaint, plaintiffs allege that, as result of misleading billing statements and

demands for payment, plaintiffs transferred money to defendants when defendants were not entitled to that

money. Dkt. 9, at 25. Plaintiffs allege that Sprint wrongfully received and retained money and refused to

return all of it, with interest.

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Sprint contends that a claim for refund of an overpayment cannot form the basis of a conversion

claim, where, as here, there is no fiduciary relationship between the parties.

Conversion is the wrongful exercise of dominion over the property of another. 43 Cal.App.4th 539,

451 (1996). The elements of a conversion are the plaintiff's ownership or right to possession of the

property at the time of the conversion; the defendant's conversion by a wrongful act or disposition of

property rights; and damages. Id. It is not necessary that there be a manual taking of the property; it is only

necessary to show an assumption of control or ownership over the property, or that the alleged converter

has applied the property to his own use. Id. at 451-52. Money can be the subject of an action for

conversion if a specific sum capable of identification is involved. Weiss v. Marcus, 51 Cal.App.3d 590, 599

(1975).

As a general rule, “where the relationship of debtor and creditor only exists, conversion of the funds

representing the indebtedness will not lie against the debtor, unless he holds the deposit in a fiduciary

capacity and is bound to return” the money to the owner. Watson v. Stockton Morris Plan Co, 34

Cal.App.2d 393, 403 (1939). A claim for conversion may be stated when there is a special relationship

between the parties where the defendant has a duty to retain or apply funds on the plaintiff’s behalf. See

Fischer v. Machado, 50 Cal.App.4th 1069, 1072 (1996)(when agent required to turn over to principal a

definite sum received by agent on behalf of principal, remedy of conversion proper); Chazen v. Centennial

Bank, 61 Cal.App.4th 532, 543 (1998)(conversion proper in claim against bank for disbursements from

money held in trust accounts); Haigler v. Donnelley, 18 Cal.2d 674, 681 (1941)(conversion claim proper

against real estate broker who refused to turn over funds paid by tenant to broker for benefit of plaintiffs). 

Further, in McKell v. Washington Mutual, Inc., 142 Cal.App.4th 1457, 1491-92, in an action by borrowers

against a lender, the California Court of Appeals noted that “[p]laintiffs cite no authority for the proposition

that a cause of action for conversion may be based on an overcharge.”

Plaintiffs have not stated a claim for conversion. Sprint’s motion to dismiss this claim should be

granted and the claim should be dismissed.

5. Cramming under California Public Utility Code § 2890

The amended complaint alleges that Sprint violated Cal.Pub.Util.Code § 2890, which requires,

under Section (a) that “[a] telephone bill may only contain charges for products or services, the purchase of

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which the subscriber has authorized.” Dkt. 9, at 26. The amended complaint alleges that certain charges

were not proper. Id.

Sprint maintains that this claim should be dismissed because the claim is inconsistent with plaintiffs’

claims that they received information services, not telephone services. Plaintiffs contend that the monthly

bill sent by Sprint is a telephone bill; that Sprint’s Terms and Conditions of Service apply uniformly to all

services provided by Sprint; that certain of the charges are either “an invisible telecommunication service

they did not authorize or taxes, fees, and surcharges that are improperly assessed to Mobile Broadband

Internet Data Plans as an ‘information service’.” Dkt. 18, at 12. 

It is unclear at this point whether the requirements of California Public Utility Code § 2890 apply to

the bills and services Sprint provided to plaintiffs. Plaintiffs have stated an arguable claim for relief. 

Sprint’s motion to dismiss the cramming claim under Cal.Pub.Util.Code § 2890 should be denied.

6. Punitive Damages

Plaintiffs’ prayer for relief includes punitive (“exemplary”) damages pursuant to the CLRA and

conversion claims. Dkt. 9, at 21 and 26. Sprint requests that the court strike plaintiffs’ claim for punitive

damages. Plaintiffs’ damages claims under the CLRA and for conversion are dismissed by this order. 

Accordingly, the claim for punitive damages should be stricken. 

Therefore, it is hereby

ORDERED that Defendants’ Motion to Dismiss and, Alternatively, Motion to Strike (Dkt. 12) is

GRANTED IN PART AND DENIED IN PART as follows:

1. Sprint’s motion to strike Cal.Civ.Code § 1565 as providing a basis a claim of unlawful business

act or practice, in violation of Business and Professions Code § 17200, et seq. is GRANTED, and § 1565

is STRICKEN from ¶ 14 of the amended complaint. Sprint’s motion to strike Cal.Civ.Code § 1670.5 as a

basis for a claim of unlawful business act or practice, in violation of Business and Professions Code §

17200, et seq. is DENIED, and that claim may proceed.

2. Sprint’s motion to dismiss plaintiffs’ CLRA claim for damages is GRANTED. The CLRA claim

for damages is DISMISSED on the basis that plaintiffs did not comply with the prefiling notice

requirements of Cal.Civ.Code, § 1782 (a), and the claim for damages in ¶ 61 of the amended complaint is

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STRICKEN. Sprint’s request that the court strike plaintiffs’ claim for restitution is DENIED, and that

claim may proceed.

3. Sprint’s motion to dismiss plaintiffs’ claim under the FCA, 47 U.S.C. §201(b), or, in the

alternative, for a more definite statement is GRANTED insofar as plaintiffs are ORDERED to provide,

forthwith, a more definite statement, connecting facts with violations of the specific sections of the FCA,

and the basis upon which plaintiffs are claiming that those facts violate the FCA. Sprint’s motion to dismiss

the FCA claim outright is DENIED.

4. Sprint’s motion to dismiss plaintiffs’ claim for conversion is GRANTED, and this claim is

DISMISSED.

5. Sprint’s motion to dismiss the cramming claim under Cal.Pub.Util.Code § 2890 is DENIED.

6. Sprint’s motion to dismiss plaintiffs’ claim for punitive damages GRANTED and this claim is

DISMISSED. 

The Clerk is directed to send uncertified copies of this Order to all counsel of record and to any

party appearing pro se at said party’s last known address. 

Dated this 25th day of April, 2008.

ARobert J. Bryan

United States District Judge

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