Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-caed-2_07-cv-00456/USCOURTS-caed-2_07-cv-00456-2/pdf.json

Nature of Suit Code: 370
Nature of Suit: Other Fraud
Cause of Action: 28:1332 Diversity-Fraud

---

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28 1 All future references to “Rule” are to the Federal

Rules of Civil Procedure, unless otherwise noted.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF CALIFORNIA

----oo0oo----

CAROL LEE MEINHOLD, suing

individually and on behalf of

all others similarly situated,

NO. 2:07-cv-0456 FCD EFB

Plaintiff,

v. MEMORANDUM AND ORDER

SPRINT SPECTRUM, L.P., a

Delaware limited partnership;

and defendant DOES 1 through

100, inclusive,

Defendants.

----oo0oo----

This matter comes before the court on defendant Sprint

Spectrum, L.P.’s (“Sprint”) motion to dismiss plaintiff Carol Lee

Meinhold’s (“Meinhold”) first amended complaint pursuant to Rules

12(b)(6) and 23(b)(3) of the Federal Rules of Civil Procedure.1

The court heard oral argument on August 10, 2007. Subsequently,

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 1 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

2 The facts of this case are taken from plaintiff’s

allegations in the first amended complaint. 

2

the court allowed the parties to submit supplemental briefing to

address its concerns regarding plaintiff’s class action

allegations. In her supplemental briefing, plaintiff redefined

the putative class and stated that she would not be asserting

claims based upon some of the theories advanced in her first

amended complaint. As such, the court interprets plaintiff’s

supplemental brief as a motion to amend the first amended

complaint. Thus, defendant’s motion to dismiss plaintiff’s first

amended complaint is GRANTED. The court will address the parties

arguments in their briefing on defendant’s motion to dismiss in

determining whether leave to amend should be granted.

BACKGROUND2

Defendant advertises, markets, and sells cellular phone

services to consumers, such as plaintiff. (Pl.’s First Amend.

Compl., filed June 5, 2007 (“FAC”) ¶ 2.) As part of their

advertising campaign, defendant broadly represents that consumers

will only be charged for roaming fees if they make calls outside

of the Sprint Nationwide PCS Network or local service area (the

“Network”). (Id.) Defendant also represents that consumers will

not be charged excess roaming fees if they pay an additional sum

of money to include roaming coverage in their plans, such as

through Sprint’s America Plan Roaming. (Id.) Plaintiff alleges

these representations appeared both on defendant’s website and in

its billing statements. (Id. ¶ 3, 5.) Plaintiff further alleges

defendant represents to consumers that they will only be

responsible for download charges that are in excess of the

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 2 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3

promotional credit that is included in their service plans, plus

any applicable taxes. (Id. ¶ 8.) 

In May 2004, plaintiff Meinhold and defendant Sprint entered

into defendant’s cellular phone service agreement (the

“Agreement”) in Rocklin, California. (Id. ¶ 6.) Plaintiff

alleges that after entering into the Agreement, defendant began

to charge her for roaming minutes although her calls were made

within the Network. (Id. ¶ 3.) Plaintiff further alleges

defendant continued to charge her for roaming minutes even after

she paid an additional monthly fee to add America Plan Roaming to

her plan. (Id.) Plaintiff also noticed that she was charged

fees that were in excess of the promotional credit included in

her plan for downloads that she did not request or receive. (Id.

¶ 8.)

On February 5, 2007, plaintiff filed this action in the

Superior Court of the State of California for the County of

Placer, asserting claims for violations of Business and

Professions Code §§ 17200 and 17500 and violations of California

Civil Code §§ 1710(2) and 1710(3). Plaintiff’s claims are based

upon defendant’s alleged “unlawful, unfair, and fraudulent

conduct in (1) charging excess roaming fees to consumers who

signed up for defendant’s cellular service plans, and (2)

charging excess fees to consumers for downloading games,

applications, ringers, screensavers, etc..” (FAC ¶ 1). On March

9, 2007, defendant removed the case to this court on the basis of

diversity jurisdiction. 

Plaintiff’s first amended complaint seeks to bring a

putative class action on behalf of “[a]ll persons residing in

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 3 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4

California who purchased Defendant’s cellular phone service and

were charged roaming and/or download fees, during the four year

period prior to the filing of this lawsuit to present.” (FAC ¶

20.) Defendant moved to dismiss each of plaintiff’s claims for

failure to state a claim upon which relief may be granted and for

failure to adequately allege class claims. (Def.’s Mot. to

Dismiss Pl.’s First Amended Complaint, filed July 9, 2007

(“Mot.”) at 1.) 

The court heard oral argument on the matter on August 10,

2007, and subsequently, allowed the parties to submit

supplemental briefing. In this briefing, plaintiff proffered a

modified class definition. (Pls.’ Brief Answering the Court’s

Questions as Stated on the Record on 8/10/2007, filed August 24,

2007 (“Brief”), at 2.) Plaintiff’s revised, putative class is

defined as

All persons residing in California who, during the

period from February 5, 2003 through September 30,

2006, (1) purchased Defendant’s cellular phone service;

(2) paid an additional monthly fee to add roaming

coverage (e.g., the America Plan Roaming option) to

his/her plan; and (3) were charged roaming fees while

he/she paid for such coverage. Excluded from the Class

are persons to whom Defendant credited back the total

of all roaming fees charged while such persons had

roaming coverage on their plan.

(Id.) Plaintiff clarified that her amended class definition

effectively abandons her class claims regarding download charges

and includes only those persons charged roaming fees when roaming

coverage was part of a class member’s phone plan. (Id.) 

Plaintiff further clarified that her class claims for fraud are

based only upon fraudulent representations contained in

defendant’s billing statements. (Id. at 8.) As such, the

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 4 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

5

gravamen of plaintiff’s class allegations is that after paying an

additional monthly fee to add America Plan Roaming to her plan in

reliance on Sprint’s representations that no roaming charges

would be assessed under that option, defendant continued to

charge her and other similarly situated persons for roaming

minutes. 

STANDARD

Pursuant to Rule 15(a), “leave [to amend] is to be freely

given when justice so requires.” “[L]eave to amend should be

granted unless amendment would cause prejudice to the opposing

party, is sought in bad faith, is futile, or creates undue

delay.” Martinez v. Newport Beach, 125 F.3d 777, 785 (9th Cir.

1997). Amendment is futile when no amendment could render the

complaint sufficient to support plaintiff’s claim. See Miller v.

Rykoff-Sexton, Inc., 845 F.2d 209, 214 (1988) (“[A]mendment is

futile only if no set of facts can be proved under the amendment

to the pleadings that would constitute a valid and sufficient

claim or defense.”) (citation omitted); Johnson v. Am. Airlines,

Inc., 834 F.2d 721, 724 (9th Cir. 1987). The proper test to

determine whether a proposed amendment is legally sufficient is

identical to the one used when considering the sufficiency of a

pleading challenged under Rule 12(b)(6). Baker v. Pacific Far

East Lines, Inc., 451 F. Supp. 84, 89 (1978). Therefore, “if

there is no set of facts which could be proved under the

amendment to the pleadings which would constitute a valid and

sufficient claim or defense, leave should be denied.” Id.

/////

/////

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 5 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

3 Defendant also contends that plaintiff is an inadequate

class representative and that a class action is not a superior

means of litigation in this case because plaintiff’s putative

class claims are not susceptible to common proof. Because of the

court’s findings herein, it need not reach the merits of those

contentions.

6

ANALYSIS

Defendant argues that plaintiff’s amended putative class

definition and allegations do not satisfy the requirements of

Rule 23(b)(3), and thus, leave to amend should not be granted.3

Specifically, defendant argues that plaintiff and class members

could not have reasonably relied on fraudulent bills received

after they signed up for Sprint’s America Plan Roaming. 

(Response at 7.) As such, defendant asserts that plaintiff has

not alleged Sprint engaged in a common course of fraudulent

conduct. (Id. at 10; Response at 6-8.) 

Rule 23(a) sets forth four prerequisites necessary to state

a class action claim. Plaintiff must allege facts demonstrating:

(1) “numerous” affected persons; (2) “common questions” of law

and fact; (3) that the named representative’s claim is “typical”

of the class; and (4) that the class is “adequately” represented. 

Absence of any one of the required elements of Rule 23(a) will

preclude recovery. See Rutledge v. Electric Hose & Rubber Co.,

511 F.2d 668, 673 (9th Cir. 1975). Furthermore, a class action

brought pursuant to Rule 23(b)(3), like plaintiff’s, requires

that (1) “questions of law or fact common to the members of the

class predominate over any questions affecting individual

members;” and (2) that the class action device is superior to

other available methods for fair and efficient adjudication of

the controversy. See Jackson v. Motel 6 Multipurpose, Inc., 130

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 6 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

7

F.3d 999, 1005 (11th Cir. 1997) (plaintiff must demonstrate that

issues subject to generalized proof predominate over issues

requiring individualized proof); In re Home-Stake Prod. Co. Sec.

Litig., 76 F.R.D. 351, 375 (N.D. Ok. 1977) (observing that

“superiority requirement includes the problem of manageability,

which encompasses the entire range of practical problems which

may render any class action inappropriate”). 

In addition to satisfying the requirements of Rule 23,

plaintiff’s class allegations must sufficiently set forth a claim

for fraud. To establish a claim for fraud or deceit, plaintiff

must allege (1) a knowingly false misrepresentation by defendant;

(2) made with the intent to deceive or induce reliance by the

plaintiff; (3) justifiable reliance by the plaintiff; and (4)

damages. See Leegin Creative Leather Prods. Inc. v. Diaz, 131

Cal. App. 4th 1517 (2005) (enumerating elements of fraud). 

Defendant argues that plaintiff’s class allegations of fraud

fail with respect to the element of justifiable reliance. To

sufficiently plead justifiable reliance, plaintiff must allege

that defendant made a fraudulent representation which induced

plaintiff to change position, thereby resulting in damages. 

Kruse v. Bank of Am., 202 Cal. App. 3d 38, 62-63 (1988); see also

Cal. Civ. Code § 1709. “Where representations have been made in

regard to a material matter and an action has been taken [by the

plaintiff],” the court may then infer reliance across the

putative class. Vasquez v. Superior Court, 4 Cal. 3d 800, 814

(1971) (internal citation omitted). 

Plaintiff’s change in position must necessarily occur after

defendant’s alleged misrepresentation. See Conrad v. Bank of

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 7 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

8

Am., 45 Cal. App. 4th 133, 157 (1996) (in order to establish a

claim for fraud, it must be shown “that defendant knowingly made

a false representation. . . [and] that the defendant thereby

intended to induce the plaintiff to act to his detriment in

reliance upon the false representation”); Bank of St. Helena v.

Lilienthal-Brayton Co., 89 Cal. App. 258, 262 (1928) (“[T]here

can be no reliance on statements which do not come to the

knowledge of a contracting party until after he has consummated

the transaction.”) (internal citation omitted). A plaintiff

cannot rely on a misrepresentation of which she had no knowledge

at the time she changed position. See e.g., Slakey Bros.

Sacramento, Inc. v. Parker, 265 Cal. App. 2d 204, 208 (1968)

(stating that a party cannot be defrauded by misrepresentation of

which he had no knowledge at the time of his loss). “Reliance

exists when the misrepresentation . . . was an immediate cause of

the plaintiff’s conduct which altered his or her legal relations,

and when without such misrepresentation or non-disclosure he or

she would not, in all reasonable probability, have entered into

the contract or other transaction.” City Solutions, Inc., v.

Clear Channel Communications, 365 F.3d 835 (9th Cir. 2005)

(quoting Alliance Mortgage Co. v. Rothwell, 10 Cal. 4th 1226,

1239 (1995)).

Plaintiff’s first amended complaint alleges that she changed

her position by paying an additional $5 per month to add the

America Plan Roaming plan. (FAC ¶ 5). Plaintiff also alleges

that the fraudulent representations appeared in each billing

statement she received, “since adding the America Plan Roaming

///

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 8 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

4 Plaintiff alleged in her first amended complaint that

defendant made misrepresentations on its website. (FAC ¶ 2.) 

However, plaintiff’s supplemental brief clarified that she

abandoned her class allegations based upon these online

misrepresentations, and that her class claims are based “simply”

upon defendant’s written misrepresentations on its bills. (Brief

at 8.)

5 Plaintiff cites Pace Industries v. Three Phoenix Co., 813 F.2d 234 (9th Cir. 1987) in an attempt to argue that a “cause

of action arises each time the plaintiff is injured.” Id. at

237. However, plaintiff’s reliance on Pace is misplaced. The

court in Pace did not discuss justifiable reliance in the context

of fraud. Rather, the section quoted by plaintiff discusses the

necessity of a last overt act in order to restart the statute of

limitations in a cause of action in antitrust. Id. at 237. 

9

option to her plan.”4 (FAC ¶ 5) (emphasis added). Plaintiff

alleges defendant’s misrepresentations appeared monthly and that

each bill was a “new [fraudulent] representation.” (Brief at 6

(quoting August 10, 2007 Oral Arguments); FAC ¶ 5.)5 However,

plaintiff does not allege that she changed her position after or

in reliance on those alleged new misrepresentations contained in

the billing statements. 

Plaintiff’s allegations relating to reliance on the

representations contained in her billing statements are analogous

to the assertions made by the plaintiff and rejected by the court

in Conrad. 45 Cal. App. 4th at 159. In Conrad, the plaintiff

argued that he made purchase orders in reliance on Bank of

America’s fraudulent promise to issue a loan. Id. However, the

Court of Appeals held that the plaintiff’s purchase orders could

not demonstrate justifiable reliance because they were dated

prior to the Bank’s alleged promise. Therefore “it [was]

apparent that these purchase orders could not have been issued in

reliance on [Bank of America’s] alleged short-lived promise of a

loan. Id. Likewise, plaintiff alleges that she changed her

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 9 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

10

position by signing up for Sprint’s America Plan Roaming and

paying an additional fee. However, as in Conrad, plaintiff’s

conduct occurred prior to the alleged misrepresentations in her

bills. As such, plaintiff’s actions could not have been

conducted in reliance on the defendant’s written statements in

her bills. 

Furthermore, the basis for plaintiff’s claim of justifiable

reliance is materially different from her class allegations with

respect to this element. As set forth above, plaintiff alleges

that she justifiably relied on the misrepresentations contained

in her bills received after “adding the America Plan Roaming

option to her plan.” (Brief at 5 (quoting Mr. Westrup, Oral

Arguments, August 10, 2007). In contrast, plaintiff asserts that

“class members paid an additional monthly fee to add roaming

coverage to their plan subsequent to defendant’s representations

on each monthly bill.” (Brief at 9) (emphasis added). As such,

plaintiff’s alleged reliance is not only non-actionable, but also

dissimilar to the class she purports to represent. 

For these reasons, plaintiff does not have an actionable

claim for fraud based upon her assertion that her billing

statements from Sprint contained fraudulent representations. 

Plaintiff has not alleged that she justifiably relied upon any

misrepresentations made by defendant. Therefore, plaintiff

cannot represent the putative class. Moreover, it would be

futile to permit plaintiff to amend her complaint because she

///

///

///

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 10 of 11
1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

6 Defendant argued in its motion to dismiss that

plaintiff’s claims should be dismissed for failure to state a

claim. In support of its contention, defendant sought to rely on

extrinsic evidence, including a declaration and a spreadsheet of

plaintiff’s bills created by defendant. Such evidence is not

subject to judicial notice. Moreover, plaintiff objected to the

court’s consideration of defendant’s records. Cf. Branch v.

Tunnell, 14 F.3d 449, 454 (9th Cir. 1994) (considering documents

“whose authenticity no party questions” on a motion to dismiss)

(overruled on other grounds by Galbraith v. County of Santa

Clara, 307 F.3d 1119 (9th Cir. 2002). A motion brought pursuant to Rule 12(b)(6) addresses only

the sufficiency of the allegations in the complaint. Cruz v.

Beto, 405 U.S. 319, 322 (1972). To the extent defendant’s

arguments relating to injury are based on facts outside of the

complaint, the court cannot consider such facts under a Rule

12(b)(6) analysis or under a futility analysis under Rule 15(a).

7 Plaintiff’s case was removed to federal court on the

basis of diversity jurisdiction because plaintiff’s class

allegations satisfied the amount in controversy requirement;

plaintiff’s individual claims do not satisfy the amount in

controversy requirement. 

11

cannot do so without contradicting her current, proposed

allegations.6 

CONCLUSION

For the foregoing reasons, defendant’s motion to dismiss

plaintiff’s first amended complaint is GRANTED and plaintiff’s

motion to amend her class allegations and file a second amended

complaint is DENIED. Plaintiff’s individual claims do not give

rise to federal subject matter jurisdiction.7 Therefore,

plaintiff’s individual claims are REMANDED to state court.

 IT IS SO ORDERED.

DATED: October 2, 2007

Case 2:07-cv-00456-FCD-EFB Document 33 Filed 10/02/07 Page 11 of 11