Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-3_10-cv-01210/USCOURTS-cand-3_10-cv-01210-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:1331 Fed. Question

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United States District Court

For the Northern District of California

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IN THE UNITED STATES DISTRICT COURT

FOR THE NORTHERN DISTRICT OF CALIFORNIA

JAMES COLLINS,

Plaintiff,

v.

GAMESTOP CORP., et al.,

Defendants.

NO. C10-1210 TEH

ORDER GRANTING IN PART

AND DENYING IN PART

DEFENDANTS’ MOTION TO

STRIKE CLASS ALLEGATIONS

This matter comes before the Court on Defendants’ motion to strike the class

allegations from the first amended complaint. After carefully considering the parties’ written

arguments, the Court finds oral argument to be unnecessary and VACATES the motion

hearing scheduled for August 16, 2010. The Court now GRANTS IN PART and DENIES

IN PART Defendants’ motion for the reasons discussed below.

BACKGROUND

Plaintiff James Collins filed this putative class action against Defendants GameStop

Corporation and GameStop.com, Inc. (collectively, “GameStop”) to challenge GameStop’s

alleged practices concerning the sale of used video games. Collins alleges that certain video

games include use codes that permit consumers to download additional content, and that the

availability of such content is advertised on these games’ packaging. Collins further alleges

that GameStop “was and is aware” that the used games it sells “do not include the use code

required to obtain the additional features of the game,” First Am. Compl. ¶ 25, but that

GameStop fails to “inform[] consumers that they will not receive all the advertised features

of the game,” id. ¶ 23.

Case 3:10-cv-01210-TEH Document 28 Filed 08/06/10 Page 1 of 6
United States District Court

For the Northern District of California

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Collins alleges that he purchased a used version of the “Dragon Age Origins” video

game from a GameStop retail store “in part because of the box cover, which advertised that

an additional character and quest could be downloaded for free upon the retail purchase” of

the game. Id. ¶ 32. The cost of the used game was approximately $5 less than the cost of a

new game.

Approximately two weeks later,

Plaintiff discovered that he would not have access to the full

features of the game, such as the downloadable character and

quest that was featured on the back of the game’s box. Plaintiff

had relied on the representations on the back of the box and

believed that when he purchased the game, he would have access

to these features without paying an additional fee. These features

were material to Plaintiff, and in fact, the availability of the

downloadable character and quest was a reason why he chose to

purchase the game.

Id. ¶ 33. Collins attempted to return the game to GameStop, but he was not permitted to do

so because the store’s seven-day return period had expired. He subsequently purchased the

downloadable features of the game for an additional $15, meaning that he ultimately paid

$10 more for a used version of the game, complete with downloadable features, than he

would have for a new version of the same game.

Collins seeks to represent California and nationwide classes of individuals “who

purchased a video game from GameStop and were not able to access certain content without

paying an additional fee because the game was used.” Id. ¶ 38. The first amended complaint

asserts four causes of action: violation of the Consumers Legal Remedies Act (“CLRA”),

Cal. Civil Code §§ 1750 et seq.; violation of the Unfair Competition Law (“UCL”), Cal. Bus.

& Prof. Code §§ 17200 et seq.; violation of “Consumer Protection Statutes of the Remaining

49 States, District of Columbia, and Puerto Rico,” id. at 19; and common law fraud.

GameStop’s motion to strike all class allegations from the complaint is now before the Court.

LEGAL STANDARD

Under Federal Rule of Civil Procedure 12(f), a “court may strike from a pleading an

insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” 

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United States District Court

For the Northern District of California

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Motions to strike are regarded with disfavor, as they are often used as delaying tactics, and

should not be granted “unless it is clear that the matter to be stricken could have no possible

bearing on the subject matter of the litigation.” Colaprico v. Sun Microsystems, Inc., 758 F.

Supp. 1335, 1339 (N.D. Cal. 1991). “However, where the motion may have the effect of

making the trial of the action less complicated, or have the effect of otherwise streamlining

the ultimate resolution of the action, the motion to strike will be well taken.” California ex

rel. State Lands Comm’n v. United States, 512 F. Supp. 36, 38 (N.D. Cal. 1981). When

considering a motion to strike, a court must view the pleadings in a light most favorable to

the non-moving party. Id. at 39.

Class allegations are generally not tested at the pleadings stage and instead are usually

tested after one party has filed a motion for class certification. E.g., Thorpe v. Abbott Labs.,

Inc., 534 F. Supp. 2d 1120, 1125 (N.D. Cal. 2008); In re Wal-Mart Stores, Inc. Wage & Hour

Litig., 505 F. Supp. 2d 609, 615 (N.D. Cal. 2007). However, as the Supreme Court has

explained, “[s]ometimes the issues are plain enough from the pleadings to determine whether

the interests of the absent parties are fairly encompassed within the named plaintiff’s claim.” 

Gen. Tel. Co. of Sw. v. Falcon, 457 U.S. 147, 160 (1982). Thus, a court may grant a motion

to strike class allegations if it is clear from the complaint that the class claims cannot be

maintained. E.g., Sanders v. Apple, Inc., 672 F. Supp. 2d 978, 990-91 (N.D. Cal. 2009).

DISCUSSION

As GameStop correctly observes, Collins failed to oppose GameStop’s motion to

strike the nationwide class claims as to the first and second causes of action for violation of

the CLRA and UCL, respectively, and also failed to oppose the motion to strike the third

claim for violation of consumer protection laws in non-California jurisdictions. In particular,

Collins does not contest that he does not have standing to pursue claims based on laws in

jurisdictions besides California; that a class action based on laws of fifty-two jurisdictions

would be unmanageable; or that a nationwide UCL or CLRA class would be improper

because those statutes do not reach conduct lacking any connection to California. 

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United States District Court

For the Northern District of California

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Accordingly, the Court GRANTS GameStop’s motion to strike these class allegations from

the complaint without leave to amend.

GameStop’s motion to strike the remaining class allegations relies on its argument that

Article III requires all members of the class to have standing, which in turn, according to

GameStop, requires a showing of actual reliance. As a result, GameStop argues, a

nationwide fraud claim would require individualized inquiries making class treatment

inappropriate, and the UCL and CLRA putative classes cannot be certified because they

include individuals who did not rely on the allegedly concealed facts and therefore lack

standing.

The Court finds GameStop’s motion as to these claims to be premature and is not

prepared to find, based on the pleadings alone, that Collins cannot state valid class claims. 

For example, although GameStop relies heavily on Sanders for the proposition that a

nationwide fraud claim cannot be certified because individualized issues as to reliance would

predominate, the Sanders court did not state that no such class could be certified; instead, the

court granted leave to amend and “urge[d] Plaintiffs to consider whether a more narrowly

defined class might be appropriate.” Sanders, 672 F. Supp. 2d at 991 (emphasis added). 

Moreover, in a later case, the same court rejected an argument similar to GameStop’s here:

Defendants argue that Plaintiffs cannot sustain classwide claims

on their fraud-based claims because they must demonstrate

individual reliance on the alleged concealment. However,

“courts have recognized that this element, which is often phrased

in terms of reliance or causation, may be presumed in the case of

a material fraudulent omission.”

Tietsworth v. Sears, Roebuck & Co., Case No. C09-0288 JF (HRL), — F. Supp. 2d —, 2010

WL 1268093, at *20 (N.D. Cal. Mar. 31, 2010) (quoting Plascensia v. Lending 1st Mortg.,

259 F.R.D. 437, 447 (N.D. Cal. 2009)).

More recently, another court in this district certified a nationwide class for UCL,

CLRA, and common law fraud claims based on the defendants’ alleged omissions. Chavez v.

Blue Sky Natural Beverage Co., Case No. C06-6609 VRW, — F.R.D. —, 2010 WL 2528525

//

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United States District Court

For the Northern District of California

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The court allowed nationwide UCL and CLRA claims because, unlike here,

“Defendants are headquartered in California and their misconduct allegedly originated in

California”; thus, “application of the California consumer protection laws would not be

arbitrary or unfair to defendants.” Chavez, 2010 WL 2528525, at *14.

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Nor, of course, does the Court find that a motion for class certification will ultimately

be successful.

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(N.D. Cal. June 18, 2010).1

 The Chavez court specifically rejected defendants’ arguments

that the class could not be certified because no unnamed class members established

Article III standing and that plaintiffs’ UCL, CLRA, and common law fraud claims required

individualized proof of reliance. Id. at *9-11, 13.

Another court in this district has similarly certified a class action that raised a UCL

fraud claim among other causes of action. Estrella v. Freedom Fin. Network, LLC, Case No.

C09-3156 SI, 2010 WL 2231790 (N.D. Cal. June 2, 2010). The defendant “argue[d] that

neither plaintiff can show typicality under [the UCL fraud] claim because reliance is an

individualized inquiry.” Id. at *10. The court rejected that argument, concluding that

“[i]ndividualized reliance may be presumed . . . where the alleged misrepresentation is

material,” and that, “[f]or purposes of the class certification inquiry, plaintiffs have

sufficiently alleged that the misrepresentations they have identified were material.” Id.

In light of the above case law, the Court does not find it clear from the complaint’s

allegations that a class action cannot be maintained.2

 GameStop’s motion to strike is

therefore DENIED as to the fraud class allegations for the nationwide and California classes,

and as to the UCL and CLRA class allegations for the California class.

CONCLUSION

As discussed above, GameStop’s motion to strike the class allegations from the

complaint is GRANTED IN PART and DENIED IN PART. The motion is GRANTED, with

prejudice, as to the nationwide class allegations on the first cause of action for violation of

the CLRA and the second cause of action for violation of the UCL, and as to the third cause

of action for violation of non-California consumer protection statutes in its entirety. The

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For the Northern District of California

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motion is DENIED as to the California class allegations on the CLRA and UCL causes of

action, and as to the fourth cause of action for fraud in its entirety.

IT IS SO ORDERED.

Dated: 08/06/10 

THELTON E. HENDERSON, JUDGE

UNITED STATES DISTRICT COURT

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