Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-casd-3_16-cv-00369/USCOURTS-casd-3_16-cv-00369-0/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 15:0045 Federal Trade Commission Act (unfair or deceptive acts)

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UNITED STATES DISTRICT COURT 

SOUTHERN DISTRICT OF CALIFORNIA 

MONICA RAEL, on behalf of 

herself and others similarly situated, 

 Plaintiff,

Case No. 16-cv-369-BAS(JMA) 

ORDER GRANTING 

DEFENDANTS’ MOTION TO 

DISMISS WITH LEAVE TO 

AMEND 

[ECF No. 13] 

 v. 

NEW YORK & COMPANY, INC., 

et al., 

 Defendants. 

Plaintiff Monica Rael brings this case pursuant to the Class Action Fairness 

Act, 28 U.S.C. §1332(d)(2), asserting four causes of action for violations of: (1) 

California’s Unfair Competition Law (“UCL”), Cal. Bus. & Prof. Code § 17200, et 

seq.; (2) California’s False Advertising Law (“FAL”), Cal. Bus. & Prof. Code § 

17500 et seq.; (3) California’s Consumer Legal Remedies Act (“CLRA”), Cal. Civ. 

Code § 1750 et seq.; and (4) Forty-one different consumer-protection laws on behalf 

of classes in states with similar laws. Defendants New York & Company Stores, Inc. 

and New York & Company, Inc. now move to dismiss the Second Amended 

Complaint (“SAC”) pursuant to Federal Rules of Civil Procedure 12(b)(1), 12(b)(6), 

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and 9. (ECF No. 13.) Alternatively, Defendants move to strike the fourth cause of 

action. (Id.) 

The Court finds this motion suitable for determination on the papers submitted 

and without oral argument. See Fed. R. Civ. P. 78(b); Civ. L.R. 7.1(d)(1). For the 

reasons discussed below, the Court GRANTS the motion to dismiss for lack of 

particularity and GRANTS the motion with respect to the Fourth Cause of Action 

and injunctive relief for lack of standing, and finds the motion to strike is, therefore, 

moot. Because Plaintiff may be able to allege sufficient facts, the Court GRANTS

Plaintiff leave to amend the First, Second, and Third Causes of Action only. 

I. BACKGROUND 

 Plaintiff is a resident of San Diego, California. (SAC ¶ 10.) Defendants sell 

clothing and accessories via New York & Company (“NY&C”) retail stores, outlet 

stores, and an online store throughout the United States, including California. (Id. ¶ 

13.) This case concerns allegations that Defendants engaged and continue to engage 

in false discount pricing, commonly known as phantom markdowns, throughout their 

retail and outlet stores. (Id. ¶ 1.) 

In her original complaint, Plaintiff claims to have bought “a pair of women’s 

pants” for $16.171

 from an NY&C store, referring to the store first as a retail store, 

and later as an outlet store. (Compl. ¶¶ 10, 15.) In Plaintiff’s First Amended 

Complaint (“FAC”), she claimed to have instead purchased “a pair of women’s 

shoes” for $16.17 at an NY&C store, again referring to the store first as a retail store, 

and later as an outlet store. (FAC ¶¶ 10, 15.) In Plaintiff’s SAC, she maintains her 

amended assertion that she bought a pair of shoes, specifically, Jute Espadrille 

Wedges, for $16.17. (SAC ¶¶ 10 n.1, 15.) Additionally, Plaintiff clarifies the previous 

 1

 Plaintiff states that she purchased the product from Defendants for both $14.98 and $16.17 

in all three of her complaints. (Compl. ¶¶ 15-16; FAC ¶¶ 15-16; SAC ¶¶ 15-16.) The Court assumes 

that the $14.98 price is the price before sales tax and the $16.17 is the price Plaintiff actually paid, 

although she does not clarify this discrepancy in any of her complaints. 

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inconsistencies in her SAC by stating that she “went shopping at an outlet mall” but 

purchased the shoes at an NY&C retail store. (SAC ¶ 15.) Plaintiff alleges she bought 

the shoes after observing both “signage within the store and the price tag on the 

shoes,” advertising that the shoes were 70% off their original price of $49.94. (Id.) 

Specifically, the shoe’s price tag, according to Plaintiff, “indicated the ‘Original’ or 

‘Market’ price of the shoes was, ‘$49.94,’” and that Defendants “offered [the shoes] 

at a discount, described as: ‘70% off.’” (Id. ¶ 16.) 

Plaintiff alleges that the shoes’ $49.94 price was “false and misleading” 

because it was not “the prevailing retail price for the shoes during the three months 

immediately prior to [her] purchase,” as mandated by California’s FAL. (SAC ¶ 16.) 

She further contends that Defendants “fraudulently concealed from and intentionally 

failed to disclose . . . the truth about their advertised price and former prices.” (Id. ¶ 

19.) Without Defendants’ alleged misrepresentations, Plaintiff states that she would 

not have purchased the shoes and suffered economic injury as a result. (Id. ¶ 17.) 

Plaintiff seeks: (1) an order certifying the class; (2) damages to herself and the 

proposed Class; (3) restitution and disgorgement of all profits; (4) unjust enrichment; 

(5) declaratory and injunctive relief; (6) an order requiring Defendants to engage in 

a corrective advertising campaign; and (7) attorneys’ fees and costs. (Id. ¶ 112.) 

 

II. STANDING 

A. Legal Standard 

Under Rule 12(b)(1) of the Federal Rules of Civil Procedure, a party may move 

to dismiss a claim based on the court’s lack of subject matter jurisdiction. “A federal 

court is presumed to lack jurisdiction in a particular case unless the contrary 

affirmatively appears.” Stock West, Inc. v. Confederated Tribes, 873 F.2d 1221, 1225 

(9th Cir. 1989) (citation omitted). “Article III of the Constitution confines the federal 

courts to adjudication of actual ‘Cases’ and ‘Controversies.’” Lujan v. Defenders of 

Wildlife, 504 U.S. 555, 590 (1992). “[T]he core component of standing is an essential 

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and unchanging part of the case-or-controversy requirement of Article III.” Id. at 560 

(citation omitted). Consequently, a case that lacks Article III standing must be 

dismissed for a lack of subject matter jurisdiction. See Maya v. Centex Corp., 658 

F.3d 1060, 1067 (9th Cir. 2001). Because standing is essential for a federal court to 

have subject matter jurisdiction, the issue of standing is properly raised in a Rule 

12(b)(1) motion to dismiss. Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 

1115, 1122 (9th Cir. 2010) (citations omitted). 

The “irreducible constitutional minimum” of Article III standing is comprised 

of three elements: (1) “the plaintiff must have suffered an injury in fact” which is 

both “concrete and particularized” and “actual or imminent, not conjectural or 

hypothetical”; (2) “there must be a causal connection between the injury and the 

conduct complained of”; and (3) “it must be likely, as opposed to merely speculative, 

that the injury will be redressed by a favorable decision.” Lujan, 504 U.S. at 560-61 

(quotations omitted). The party soliciting federal jurisdiction has the burden of 

establishing these elements. Id. 

In a factual jurisdictional attack, the challenger provides evidence that an 

alleged fact in the complaint is false, thereby resulting in a lack of subject matter 

jurisdiction. Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). 

The allegations in the complaint are not presumed to be true under a factual attack, 

and “the district court is not restricted to the face of the pleadings, but may review 

any evidence, such as affidavits and testimony, to resolve factual disputes concerning 

the existence of jurisdiction.” McCarthy v. United States, 850 F.2d 558, 560 (9th Cir. 

1988). However, “when ‘the jurisdictional issue and the substantive issues are so 

intertwined that the question of jurisdiction is dependent on the resolution of factual 

issues going to the merits’” of a case, then the district court’s “jurisdictional finding 

of genuinely disputed facts is inappropriate.” Sun Valley Gasoline Inc. v. Ernst Enter. 

Inc., 711 F.2d 138, 139 (9th Cir. 1983) (quoting Augustine v. United States, 704 F.2d 

1074, 1077 (9th Cir. 1983)). Jurisdictional and substantive issues are “considered 

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intertwined where . . . ‘a statute provides the basis for both the subject matter 

jurisdiction of the federal court and the plaintiff’s substantive claim for relief.’” Id.

(quoting Timberland Lumber Co. v. Bank of Am., 549 F.2d 597, 602 (9th Cir. 1976)). 

B. First (UCL), Second (FAL), and Third (CLRA) Causes of Action 

Defendants make a factual jurisdictional attack on Plaintiff’s allegations in in 

her first three causes of action in the SAC. (Defs.’ Mot. 4:11-28, 5:1-3.) Defendants 

argue that Plaintiff did not suffer any injury-in-fact, so she does not possess standing 

to bring this case. Specifically, Defendants offer into evidence a declaration from 

Christine Tracz, Vice President of Merchandising for NY&C outlet stores. (Tracz 

Decl. Ex. A, ECF No. 13-2.) Ms. Tracz asserts that “the only NY&C stores located 

in outlet malls are NY&C outlets,” and NY&C did not sell the “Jute Espadrille 

Wedges” in any San Diego outlets after August 2015. (Tracz Decl. ¶¶ 3-4.) 

Therefore, Defendants dispute the possibility that Plaintiff actually bought the shoes 

in question from an NY&C store because: (1) “NY&C’s price tags do not resemble 

those alleged in Plaintiff’s SAC,” and (2) “the Jute Espadrille Wedges did not sell in 

NY&C’s San Diego outlets at any time near the date of Plaintiff’s alleged purchase.” 

(Defs.’ Mot. 4:23-27.) Thus, Defendants maintain that “it is impossible that Plaintiff 

bought the shoes as alleged.” (Id. at 4:28.) 

Because the issue disputed between parties is the validity of Plaintiff’s 

purchase of the shoes, which gives rise to the entirety of her claims, the Court 

determines that it is inappropriate to resolve this factual dispute at this time. The 

question of jurisdiction depends entirely on Plaintiff having purchased the shoes from 

an NY&C retail store, completely intertwining jurisdictional and substantive issues. 

As such, the Court declines to reach to issue of standing on Plaintiff’s causes of 

actions for violations of California’s UCL, FAL, and CLRA. 

// 

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C. Injunctive Relief 

Plaintiff requests injunctive relief to enjoin Defendants from continuing their 

alleged “unlawful practices.” (SAC ¶112.) In order for the Court to grant Plaintiff’s 

request for injunctive relief, she must demonstrate a substantial likelihood that an 

injunction will remedy her injury. See Lujan, 504 U.S. at 595 (citing Duke Power Co. 

v. Carolina Envtl. Study Grp., Inc., 438 U.S. 59, 79 (1978)). Nowhere in Plaintiff’s 

SAC does she allege that she is at risk of a future injury from Defendants. Defendants 

properly call attention to the fact that Plaintiff has neither stated “that she is likely to 

buy other shoes from NY&C [nor] that she continues to be misled by NY&C’s 

pricing.” (Defs.’ Mot. 5:13-14); see, e.g., Luman v. Theismann, 647 F. App’x 804, 

807 (9th Cir. 2016) (holding that the district court property dismissed the plaintiff’s 

request for injunctive relieve when the plaintiffs did not allege that they intended to 

purchase the defendants products in the future). 

Plaintiff asserts in her opposition that courts in California’s federal districts 

have found plaintiffs to have standing to seek injunctive relief in “company-wide 

false sales schemes.” (Pl.’s Opp’n 5:22-26). However, there is a split among districts 

as to whether plaintiffs have standing to seek injunctive relief on consumer-protection 

claims where the plaintiff faces no threat of future harm. Compare Henderson v. 

Gruma Corp., No. CV 10–04173 AHM (AJWx), 2011 WL 1362188, at *7 (C.D. Cal. 

Apr. 11, 2011) (“If the Court were to construe Article III standing for FAL and UCL 

claims as narrowly as the Defendant advocates, federal courts would be precluded 

from enjoining false advertising under California consumer protection laws because 

a plaintiff who had been injured would always be deemed to avoid the case of the 

injury there after[.]”), with Mason v. Nature’s Innovation, Inc., No. 12cv3019 

BTM(DHB), 2014 WL 1969957, at *5 (S.D. Cal. May 13, 2013) (“[A]s important as 

consumer protection is, it is not within the Court’s authority to carve out an exception 

to Article III’s standing requirements to further the purpose of California consumer 

protection laws.”). The Court agrees with what has previously been held in this 

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district. Article III’s requirement that an injury is likely to be redressed by a favorable 

decision is not met where “there is no likelihood of injury in the future [because] a 

plaintiff has no interest in purchasing the product at issue again.” Mason, 2014 WL 

1969957, at *4. 

As previously acknowledged, Plaintiff does not state in her pleadings that she 

is likely to purchase a pair of Jute Espadrille Wedges, or any other product, from an 

NY&C store again, and as such, she is not at risk of any future injury from 

Defendants. Consistent with previous holdings from this district this Court finds 

Plaintiff thus lacks standing to seek injunctive relief. 

D. Fourth Cause of Action

Plaintiff brings the Fourth Cause of Action of her SAC “under the laws of 

California and on behalf of all other persons who have purchased merchandise in 

states having similar laws regarding consumer fraud and deceptive trade practices.” 

(SAC ¶ 65.) For Plaintiff to have standing, she “must demonstrate standing for each 

claim [she] seeks to press.” DaimlerChrysler Corp. v. Cuno, 547 U.S. 332, 352 

(2006). “To demonstrate standing ‘named plaintiffs who represent a class must allege 

and show that they personally have been injured, not that injury has been suffered by 

other, unidentified members of the class to which they belong and which they purport 

to represent.’” In re Ditropan XL Antitrust Litig., 529 F. Supp. 2d 1098, 1107 (N.D. 

Cal. 2007) (quoting Lewis v. Casey, 518 U.S. 343, 347 (1996)). If a named plaintiff 

is “lacking for a particular state, all claims based on that state’s laws are subject to 

dismissal.” In re Flash Memory Antitrust Litig., 643 F. Supp. 2d 1133, 1164 (N.D. 

Cal. 2009) (citing Ditropan, 529 F. Supp. 2d at 1106-07) (emphasis in original). 

 Plaintiff is a resident of California and allegedly purchased the shoes in 

question from a NY&C retail store in California. (SAC ¶ 10.) Although Plaintiff 

asserts claims under the consumer-protection laws of forty other states and the 

District of Columbia, no other plaintiffs are named in the SAC to represent claims 

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from these states. (See SAC ¶¶ 68-111.) Subsequently, Plaintiff lacks standing to 

bring consumer-protection claims in these forty states and District of Columbia, 

warranting dismissal of Plaintiff’s fourth cause of action. See, e.g., Morales v. 

Unilever United States, Inc., No. 2:13–2213 WBS EFB, 2014 WL 1389613, at *4 

(N.D. Cal. Apr. 9, 2014) (dismissing plaintiffs’ claims for lack of standing where 

plaintiffs sought to represent a nationwide class for twenty-one other states where 

neither plaintiffs lived nor purchased defendant’s products). 

III. SUFFICIENCY OF CLAIMS 

A. Legal Standard 

A motion to dismiss pursuant to Rule 12(b)(6) of the Federal Rules of Civil 

Procedure tests the legal sufficiency of the claims asserted in the complaint. Fed. R. 

Civ. P. 12(b)(6); Navarro v. Block, 250 F.3d 729, 731 (9th Cir. 2001). The court must 

accept all factual allegations pleaded in the complaint as true and must construe them 

and draw all reasonable inferences from them in favor of the nonmoving party. Cahill 

v. Liberty Mutual Ins. Co., 80 F.3d 336, 337-38 (9th Cir. 1996). To avoid a Rule 

12(b)(6) dismissal, a complaint need not contain detailed factual allegations, rather, 

it must plead “enough facts to state a claim to relief that is plausible on its face.” Bell 

Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007). 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). “Where a complaint 

pleads facts that are ‘merely consistent with’ a defendant’s liability, it stops short of 

the line between possibility and plausibility of ‘entitlement to relief.’” Iqbal, 556 U.S. 

at 678 (quoting Twombly, 550 U.S. at 557). 

// 

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// 

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“[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.” Twombly, 550 U.S. at 555 (quoting 

Papasan v. Allain, 478 U.S. 265, 286 (1986)) (alteration in original). A court need 

not accept “legal conclusions” as true. Iqbal, 556 U.S. at 678. Despite the deference 

the court must pay to the plaintiff’s allegations, it is not proper for the court to assume 

that “the [plaintiff] can prove facts that [he or she] has not alleged or that defendants 

have violated the . . . laws in ways that have not been alleged.” Associated Gen. 

Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 519, 526 

(1983). 

Generally, courts may not consider material outside the complaint when ruling 

on a motion to dismiss. Hal Roach Studios, Inc. v. Richard Feiner & Co., 896 F.2d 

1542, 1555 n.19 (9th Cir. 1990). However, documents specifically identified in the 

complaint whose authenticity is not questioned by parties may also be considered. 

Fecht v. Price Co., 70 F.3d 1078, 1080 n.1 (9th Cir. 1995) (superseded by statutes on 

other grounds). Moreover, the court may consider the full text of those documents, 

even when the complaint quotes only selected portions. Id. It may also consider 

material properly subject to judicial notice without converting the motion into one 

for summary judgment. Barron v. Reich, 13 F.3d 1370, 1377 (9th Cir. 1994). 

1. Claims Sounding in Fraud 

When fraud is alleged, Rule 9(b) requires that “a party must state with 

particularity the circumstances constituting fraud” in the pleading. Fed. R. Civ. P. 

9(b). “Averments of fraud must be accompanied by ‘the who, what, where, and how’ 

of the misconduct charged.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 

(9th Cir. 2003) (quoting Cooper v. Pickett, 137 F.3d 616, 627 (9th Cir. 1993)). 

Specificity includes an account of the “time, place, and specific content of the false 

representations.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (quoting 

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Edwards v. Marin Park Inc., 356 F.3d 1058, 1066 (9th Cir. 2004) (citation omitted)). 

This heightened pleading standard “serves three purposes: (1) to provide defendants 

with adequate notice to allow them to defend the charge and deter plaintiffs from the 

filing of complaints notice to allow them to defend the charge and deter plaintiffs 

from the filing of complaints ‘as a pretext for the discovery of unknown wrongs’; (2) 

to protect those whose reputation would be harmed as a result of being subject to 

fraud charges; and (3) to ‘prohibit [ ] plaintiff[s] from unilaterally imposing upon the 

court, the parties and society enormous social and economic costs absent some 

factual basis.’” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009) 

(quoting In re Stac Elecs. Sec. Litig., 89 F.3d 1399, 1405 (9th Cir. 1996)). 

“Irrespective of the source of subject matter jurisdiction, and irrespective of 

whether the substantive law at issue is state or federal,” federal courts will apply the 

Federal Rules of Civil Procedure. Vess, 317 F.3d at 1102 (citing Hanna v. Plumer, 

380 U.S. 460 (1965)). “Rule 9(b)’s heightened pleading standards apply to claims for 

violations of the CLRA and UCL.” Kearns, 567 F.3d at 1125 (citing Vess, 317 F.3d 

at 1102-05). Additionally, because Rule 9(b) applies to claims that are “grounded in 

fraud”, Rule 9(b) applies to claims under the FAL as well. In re Ferrero Litig., 794 

F. Supp. 2d 1107, 1114 (S.D. Cal. 2011). 

 2. Claims under the FAL, UCL and CLRA 

California’s UCL prohibits unfair competition, which is defined as “any 

unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue 

or misleading advertising[.]” Cal. Bus. & Prof. Code § 17200. Unfair competition 

under the UCL “expressly incorporates [California’s] FAL prohibition on unfair 

advertising as one form of unfair competition.” Hinojos v. Kohl’s Corp., 718 F.3d 

1098, 1103 (9th Cir. 2013). The FAL prohibition on unfair advertisings states that: 

// 

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No price shall be advertised as a former price of any 

advertised thing, unless the alleged former price was the 

prevailing market price . . . within three months next 

immediately preceding the publication of the 

advertisement or unless the date when the alleged former 

price did prevail is clearly, exactly and conspicuously 

stated in the advertisement. 

Cal. Bus. & Prof. Code § 17501. “To pursue a UCL claim, [p]laintiffs are required 

to establish that they have suffered an injury in fact and lost money or property as a 

result of the unfair competition.” Rosales v. Fitflop USA, LLC, 882 F. Supp. 2d 1168, 

1174 (S.D. Cal. 2012) (Whelan, J.). 

California’s CLRA outlaws “unfair methods of competition and unfair or 

deceptive practices acts or practices undertaken by any person in a transaction 

intended to result . . . in the sale . . . of goods . . . to any consumer.” Cal. Civ. Code 

§ 1770. Unfair methods of competition or deceptive practices include, but are not 

limited to, “[a]dvertising goods or services with intent not to sell them as advertised” 

and “[m]aking false or misleading statements of fact concerning reasons for, 

existence of, or amounts of, price reductions.” Cal. Civ. Code § 1770(a)(9), (13). 

“Similar to the standing requirement for the UCL, a CLRA action may be brought by 

‘[a]ny 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.’” 

Rosales, 882 F. Supp. 2d at 1177 (quoting Cal. Civ. Code § 1780(a)). 

To allege a claim under the UCL, FAL, and CLRA, “[p]laintiffs must allege 

facts showing that the advertisement in question is misleading to the reasonable 

consumer.” Jacobo v. Ross Stores, Inc., No. CV-15-04701-MWF-AGR, 2016 WL 

3482041, at *3 (C.D. Cal. Feb. 23, 2016) (citing Williams v. Gerber Prods. Co., 552 

F.3d 934, 938 (9th Cir. 2008)). “A reasonable consumer is ‘the ordinary consumer 

acting reasonably under the circumstances.’” Davis v. HSBC Bank Nevada, N.A., 691 

F.3d 1152 (9th Cir. 2012) (quoting Colgan v. Letherman Tool Grp., Inc., 135 Cal. 

App. 4th 663, 682 (2006)). 

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B. Discussion 

Plaintiff fails to meet Rule 9(b)’s pleading standards requiring particularity. 

Plaintiff states that the regular price of the shoes, $49.94, and the discounted price of 

$16.17 were “false and misleading” because the retail or market price for the shoes 

three months before her purchase was never $49.94. (SAC ¶ 16.) Plaintiff offers this 

conclusory allegation only and does not provide any facts that demonstrate why or 

how the original retail price of $49.94 is false. 

Furthermore, to decide whether to purchase the shoes or not, Plaintiff alleges 

that she “relied on Defendants’ misrepresentations and false and deceptive 

advertising,” which she describes only as “signage within the store and the price tag 

on the shoes.” (Id. ¶¶ 15-16.) Nowhere does Plaintiff give details as to what signs she 

relied on, what the signs said or looked like, or where they were located. The only 

concrete facts Plaintiff asserts are the date she allegedly purchased the shoes, what 

type of shoes she bought, the shoes’ former price, and the price she purchased the 

shoes at. (SAC ¶¶ 10 & n.1, 15.) Plaintiff does not even specify which NY&C store 

she visited, only that she visited an NY&C store located somewhere in San Diego. 

(Id. ¶¶ 10.) The SAC further contends that Defendants “intentionally concealed and 

failed to disclose material facts regarding the truth about false former price 

advertising” in their “retail store” and on their “Internet website.” (Id. ¶ 23.) Nowhere 

does Plaintiff allege in her SAC that she ever visited NY&C’s online store or provide 

specific details of any online false representations. 

In Plaintiff’s opposition, she states that her “experience” and “an investigation 

conducted by her attorneys demonstrate the reality of Defendants’ false pricing 

practices.” (Pl.’s Opp’n 8:20-21.) Disturbingly, Plaintiff attaches to her opposition a 

declaration from her attorney Todd Carpenter who seemingly purports to be the fact 

and expert witness in this case.2

 (Carpenter Decl., ECF No. 14-1.) In his declaration, 

 

2

 One might question who the Plaintiff is in this case, Ms. Rael or Mr. Carpenter. Mr. 

Carpenter would do well to consider the Professional Ethical rule that prohibits an attorney from 

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Mr. Carpenter claims he has personal knowledge that Plaintiff purchased the Jute 

Espadrille Wedges in November 2015 from a New York & Co. retail store, and that 

the receipt attached to his Declaration as Exhibit A is, in fact, a true and correct copy 

of Plaintiff’s receipt for this purchase. (Carpenter Decl. ¶¶ 1-3.) Mr. Carpenter further 

asserts that he “conducted an extensive investigation” and subsequently “determined 

that Defendant routinely and systematically discounts its products beyond the 

permissible 90-day time period.” (Id. ¶¶ 6-7.) 

The Court’s determination when ruling on a motion to dismiss is generally 

limited to the plaintiff’s complaint only. See Hal Roach Studios, 896 F.2d at 1555 

n.19. Even if the Court takes into account the new facts presented by Mr. Carpenter, 

his declaration does not specify a single detail of his alleged investigation. The 

declaration is simply a restatement of the conclusory allegations that Plaintiff states 

in her SAC. 

Plaintiff’s UCL, FAL, and CLRA claims are, therefore, legally insufficient 

under Rule 9(b) standards for failure to plead with specificity any factual allegations 

to support her contention that Defendants engaged in phantom markdown practices. 

In addition to her individual and class claims under California law, Plaintiff 

asserts a claim for “violations of the consumer protection laws on behalf of classes in 

states with similar laws.” (SAC ¶¶ 64-111.) Even if Plaintiff possessed standing to 

bring this claim, which she does not, she fails to offer any facts supporting her 

allegations that consumers in other states faced similar misrepresentations. She 

merely “repeats and re-alleges the allegations contained in every preceding 

paragraph” of the SAC. (Id. ¶ 64.) Because the Court determined that Plaintiff’s 

preceding claims do not meet Rule 9(b)’s standards, her fourth cause of action is 

likewise legally insufficient and warrants dismissal. 

// 

 

being a witness in his own case. See Cal. Rules of Prof. Conduct, Rule 5-210.

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IV. LEAVE TO AMEND 

As a general rule, a court freely grants leave to amend a complaint that has 

been dismissed “when justice so requires.” Fed. R. Civ. P. 15(a). However, leave to 

amend may be denied when “the court determines that the allegation of other facts 

consistent with the challenged pleading could not possibly cure the deficiency.” 

Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 

1986). The court may also deny amendments to the pleadings for ‘undue delay, bad 

faith or dilatory motive on the part of the movant, repeated failure to cure deficiencies 

by amendments previously allowed, undue prejudice to the opposing party by virtue 

of allowance of the amendment, [and] futility of amendment.” Foman v. Davis, 371 

U.S. 178, 182 (1962). 

Defendants request that the Court deny Plaintiff leave to amend, for she has 

twice amended her complaint and “is still no closer to stating a claim than she was in 

her original complaint.” (Defs.’ Mot. 18:4-5.) Defendants also put forward the 

possibility that Plaintiff filed her claim in bad faith because of her continuously 

changing story. (Id. at 1:11-17.) Plaintiff asserts that the modifications as to exactly 

what product she purchased was due to a “scrivener’s error” and was not made in bad 

faith. (Pl.’s Opp’n 14:24-25.) She does not provide an explanation for the confusion 

of whether she purchased the shoes from a retail or outlet store. 

Plaintiff has twice amended her complaint regarding the where and what she 

purchased from Defendants. Additionally, her complaint fails to meet Rule 9(b)’s 

heightened pleading standards. However, this is the first time Defendants have 

challenged her pleadings and, moreover, the first time the Court has determined the 

insufficiency of her pleadings. At the moment, the Court does not find that Plaintiff’s 

case was filed in bad faith, and because justice so requires, Plaintiff shall be given 

leave to amend the First, Second, and Third Causes of Action for the third time. 

// 

// 

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With respect to the Fourth Cause of Action, Plaintiff alleges she is a California 

resident and that she purchased Defendants’ product in California. Therefore, any 

amendment with respect to the fourth cause of action alleging violations of forty-one 

other state laws is futile. 

V. CONCLUSION & ORDER 

Plaintiff alleges that Defendants engaged in fraudulent behavior, but has yet to 

plead facts with enough specificity to meet Rule 9(b)’s heightened pleading 

standards. Additionally, Plaintiff lacks standing to seek (1) injunctive relief because 

she does not assert that she will continue to engage in consumer activities with 

Defendants, and (2) her fourth cause of action because she is a California resident 

and purchased Defendants’ product in California. 

In light of the foregoing, the Court GRANTS Defendants’ motion to dismiss 

and dismisses the SAC in its entirety. (ECF No. 13.) However, the Court GRANTS 

LEAVE TO AMEND Plaintiff’s First, Second, and Third Causes of Action only. 

The scope of leave to file an amended complaint is limited to amending only the three 

aforementioned causes of action in order to allege additional facts that cure the 

defects identified in this order. Plaintiff may not plead additional claims, add 

additional parties, or add allegations that are not intended to cure the specific defects 

the Court has noted. Should any amended complaint exceed the scope of leave to 

amend granted by this order, the court will strike the offending portions under Rule 

12(f). See Fed. R. Civ. P. 12(f) (“The court may [act on its own to] strike from a 

pleading an insufficient defense or any redundant, immaterial, impertinent, or 

scandalous matter.”); see also Barker v. Avila, No. 2:09-cv-00001-GEB-JFM, 2010 

WL 3171067, at *1-2 (E.D. Cal. Aug. 11, 2010) (striking an amendment to federallaw claim where the court had granted leave to amend only state-law claims). The 

Court DISMISSES WITHOUT LEAVE TO AMEND Plaintiff’s Fourth Cause of 

Action. 

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If Plaintiff chooses to file an amended complaint, she must do so no later than 

January 23, 2017. 

IT IS SO ORDERED. 

DATED: December 28, 2016 

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