Blain v. Liberty Mutual Fire Insurance Company, No. 3:2022cv00970 - Document 27 (S.D. Cal. 2023)
Court Description: ORDER granting in part and denying in part Defendant's Motion to Dismiss Plaintiff's Complaint 15 . Liberty Mutuals Motion to Dismiss is Granted in Part and Denied in Part. Plaintiffs Claim for Injunctive Relief is Dismissed Without Le ave to Amend. Plaintiffs Unjust Enrichment Claim is Dismissed Without Leave to Amend. Plaintiffs UCL Claim is Dismissed with Leave to Amend. Should Plaintiff Desire to Amend her Complaint, she must file a First Amended Complaint no later than March 24, 2023. Liberty Mutual must file a Responsive Pleading no later than April 7, 2023. . Signed by Judge Anthony J. Battaglia on 3/9/2023. (maq)
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Blain v. Liberty Mutual Fire Insurance Company Doc. 27 Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.539 Page 1 of 23 1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 11 12 13 14 15 16 SARAH BLAIN, individually and on behalf of all others similarly situated, Plaintiff, 19 20 21 LIBERTY MUTUAL FIRE INSURANCE COMPANY, Defendant. 24 25 26 27 (Doc. No. 15) Presently pending before the Court is Defendant Liberty Mutual Fire Insurance Company’s (“Liberty Mutual”) motion to dismiss Plaintiff Sarah Blain’s Class Action Complaint pursuant to Federal Rules of Civil Procedure 12(b)(1) and 12(b)(6). (Doc. No. 15.) Plaintiff filed an opposition to the motion to dismiss, (Doc. No. 20), to which Liberty Mutual replied, (Doc. No. 21). 22 23 ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT’S MOTION TO DISMISS PLAINTIFF’S COMPLAINT v. 17 18 Case No.: 22-cv-0970-AJB-DEB Pursuant to Civil Local Rule 7.1.d.1, the Court finds the instant matter suitable for determination on the papers and without oral argument. For the reasons stated herein, the Court GRANTS IN PART AND DENIES IN PART the motion to dismiss Plaintiff’s Complaint. /// /// 28 1 22-cv-0970-AJB-DEB Dockets.Justia.com Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.540 Page 2 of 23 1 I. BACKGROUND 1 2 Plaintiff has been, and remains, a Liberty Mutual policy holder at all times relevant 3 to this lawsuit. (Complaint (“Compl.”), Doc. No. 1, ¶ 33.) The time period relevant to this 4 lawsuit is from March 1, 2020, to the present. (Id. ¶ 44.) Beginning in March 2020, 5 California began implementing various mandates, including “stay-at-home” orders, to 6 combat the COVID-19 pandemic. (Id. ¶ 2.) These measures resulted in reduced driving 7 across the state which respectively lowered the number of claims likely to be paid by 8 automobile insurance providers, such as Liberty Mutual. (Id. ¶ 19.) In light of the decreased 9 traffic volume, Plaintiff alleges Liberty Mutual collected excessive premiums, which led 10 to a substantial windfall at the expense of its customers and failed to act in good faith when 11 exercising its discretion to adjust the premiums charged to Liberty Mutual customers. (Id. 12 ¶¶ 23, 29, 36.) 13 In April 2020, Liberty Mutual announced it would issue a 15% refund to all auto 14 insurance policyholders for two months’ worth of premiums. (Id. ¶ 30.) From June 2020 15 through May 2021, Liberty Mutual continued to refund policyholders at a rate of 5% for 16 that twelve-month period. (Id. ¶ 31.) Plaintiff concedes she received premium refunds in 17 both 2020 and 2021. (Id. ¶ 34.) The issue instead, as Plaintiff alleges, is that the distributed 18 refunds of 15% were inadequate, and that she and other class members should have 19 received “at least a 30% average refund of paid premiums” to offset the unfair windfall 20 enjoyed by Liberty Mutual from mid-March through the end of April 2020 due to the 21 COVID-19 pandemic. (Id. ¶ 4.) Plaintiff further alleges that the subsequent refunds of 5% 22 were similarly inadequate, though does not indicate what an appropriate amount would 23 have been for that timeframe. (Id. ¶ 5.) 24 25 26 27 28 1 The facts incorporated herein are taken from Plaintiff’s Complaint and are construed as true for the limited purpose of resolving the instant motion. See Brown v. Elec. Arts, Inc., 724 F.3d 1235, 1247 (9th Cir. 2013). 2 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.541 Page 3 of 23 1 Plaintiff contends that under the applicable “CHANGE” provision of the Liberty 2 Guard Auto Policy, Liberty Mutual retained contractual discretion to make downward 3 premium adjustments based on changed circumstances at any point during the coverage 4 term, and that, in the case of Plaintiff and the members of the putative class, Liberty Mutual 5 failed to exercise this discretion in good faith during the COVID-19 pandemic. (Id. ¶¶ 25– 6 27, 35–36.) 7 Plaintiff asserts three claims against Liberty Mutual: (1) breach of contract under the 8 implied covenant of good faith and fair dealing; (2) unjust enrichment; and (3) violation of 9 California’s Unfair Competition Law (“UCL”) under its unfairness prong. (See Compl.) 10 Liberty Mutual filed the instant motion to dismiss under Federal Rule of Civil Procedure 11 12(b)(1), asserting the Court lacks subject matter jurisdiction, and under Federal Rule of 12 Civil Procedure 12(b)(6) asserting that Plaintiff’s Complaint fails to state a claim for which 13 relief can be granted. (Doc. No. 15.) 14 II. LEGAL STANDARDS 15 A. 16 A motion to dismiss pursuant to Federal Rule of Civil Procedure 12(b)(1) tests 17 whether the court has subject matter jurisdiction. While lack of “statutory standing” 18 requires dismissal for failure to state a claim under Rule 12(b)(6), lack of Article III 19 standing requires dismissal for want of subject matter jurisdiction under Rule 12(b)(1). See 20 Nw. Requirements Utilities v. F.E.R.C., 798 F.3d 796, 808 (9th Cir. 2015) (“Unlike Article 21 III standing, however, ‘statutory standing’ does not implicate our subject-matter 22 jurisdiction.”) (citing Lexmark Int’l, Inc. v. Static Control Components, Inc., 572 U.S. 118, 23 128 n.4 (2014)); Maya v. Centex Corp., 658 F.3d 1060, 1067 (9th Cir. 2011). Rule 12(b)(1) 24 “A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for 25 Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack, the challenger 26 asserts that the allegations contained in a complaint are insufficient on their face to invoke 27 federal jurisdiction.” Id. The court “resolves a facial attack as it would a motion to dismiss 28 under Rule 12(b)(6): accepting the plaintiff’s allegations as true and drawing all reasonable 3 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.542 Page 4 of 23 1 inferences in the plaintiff’s favor, the court determines whether the allegations are 2 sufficient as a legal matter to invoke the court’s jurisdiction.” Leite v. Crane Co., 749 F.3d 3 1117, 1121 (9th Cir. 2014). 4 “[I]n a factual attack,” on the other hand, “the challenger disputes the truth of the 5 allegations that, by themselves, would otherwise invoke federal jurisdiction.” Safe Air for 6 Everyone, 373 F.3d at 1039. In resolving such an attack, unlike with a motion to dismiss 7 under Rule 12(b)(6), a court “may review evidence beyond the complaint without 8 converting the motion to dismiss into a motion for summary judgment.” Id. Moreover, the 9 court “need not presume the truthfulness of the plaintiff’s allegations.” Id. Once the 10 defendant has moved to dismiss for lack of subject matter jurisdiction under Rule 12(b)(1), 11 the plaintiff bears the burden of establishing the court’s jurisdiction. See Chandler v. State 12 Farm Mut. Auto Ins. Co., 598 F.3d 1115, 1122 (9th Cir. 2010). 13 B. 14 A motion to dismiss under Rule 12(b)(6) tests the legal sufficiency of the pleadings 15 and allows a court to dismiss a complaint upon a finding that the plaintiff has failed to state 16 a claim upon which relief may be granted. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 17 2001). The court may dismiss a complaint as a matter of law for: “(1) lack of cognizable 18 legal theory or (2) insufficient facts under a cognizable legal claim.” SmileCare Dental 19 Grp. v. Delta Dental Plan of Cal., 88 F.3d 780, 783 (9th Cir. 1996) (citation omitted). 20 However, a complaint survives a motion to dismiss if it contains “enough facts to state a 21 claim to relief that is plausible on its face.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 22 (2007). Rule 12(b)(6) 23 Notwithstanding this deference, the reviewing court need not accept legal 24 conclusions as true. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). It is also improper for the 25 court to assume “the [plaintiff] can prove facts that [he or she] has not alleged . . . .” 26 Associated Gen. Contractors of Cal., Inc. v. Cal. State Council of Carpenters, 459 U.S. 27 519, 526 (1983). On the other hand, “[w]hen there are well-pleaded factual allegations, a 28 court should assume their veracity and then determine whether they plausibly give rise to 4 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.543 Page 5 of 23 1 an entitlement to relief.” Iqbal, 556 U.S. at 679. The court only reviews the contents of the 2 complaint, accepting all factual allegations as true, and drawing all reasonable inferences 3 in favor of the nonmoving party. Thompson v. Davis, 295 F.3d 890, 895 (9th Cir. 2002). 4 III. REQUESTS FOR JUDICIAL NOTICE 5 While the scope of review on a motion to dismiss for failure to state a claim is limited 6 to the complaint, a court may consider evidence on which the complaint necessarily relies 7 if: “(1) the complaint refers to the document; (2) the document is central to the plaintiff[’s] 8 claim; and (3) no party questions the authenticity of the copy attached to the 12(b)(6) 9 motion.” Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 (9th Cir. 2010) (internal 10 quotation marks and citations omitted). Furthermore, Federal Rule of Evidence 201 permits 11 judicial notice of a fact when it is “not subject to reasonable dispute because it: (1) is 12 generally known within the trial court’s territorial jurisdiction; or (2) can be accurately and 13 readily determined from sources whose accuracy cannot reasonably be questioned.” Welk 14 v. Beam Suntory Imp. Co., 124 F. Supp. 3d 1039, 1041–42 (S.D. Cal. 2015). 15 Here, only Liberty Mutual requests judicial notice, and these requests are unopposed. 16 As part of its motion, Liberty Mutual requests the Court to take judicial notice of the 17 following exhibits in support of its Motion to Dismiss: 18 A. 19 First, Exhibit (A), is Bulletin 2020-3, issued by Insurance Commissioner Ricardo 20 Lara (“Lara”) on April 13, 2020. (Doc. No. 15-6 at 2.) Exhibit (B) is Bulletin 2020-4, issued 21 by Lara on May 15, 2020. (Id. at 2.) Exhibit (C) is Bulletin 2020-8, issued by Lara on 22 December 3, 2020. (Id. at 3.) Exhibit (D) is Bulletin 2021-3, issued by Lara on March 11, 23 2021. (Id. at 3.) Exhibits (A)–(D) are public bulletins available on the California 24 Department of Insurance (“DOI”) webpage regarding premium refunds in response to the 25 COVID-19 pandemic. Judicial notice is appropriate for records and “reports of 26 administrative bodies.” Interstate Nat. Gas Co. v. S. Cal. Gas Co., 209 F.2d 380, 385 (9th 27 Cir. 1954). Therefore, the Court GRANTS Liberty Mutual’s request for judicial notice of 28 Exhibits (A)–(D). Request for Judicial Notice in Defendant’s Support of Motion to Dismiss 5 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.544 Page 6 of 23 1 Next, Liberty Mutual requests judicial notice of Exhibit (E), a press release issued 2 by the DOI, dated March 11, 2021, regarding the overcharge of auto insurance premiums 3 during the COVID-19 pandemic. (Id. at 3.) The press release has a public nature and is 4 released through an administrative body. Therefore, the Court GRANTS Liberty Mutual’s 5 request for judicial notice of Exhibit (E). 6 Exhibits (F) and (G) are Liberty Mutual’s Memorandum Responses to Bulletin 7 2020-3 and Bulletin 2021-3, respectively. (Id. at 3.) Exhibits (F) and (G) are publicly 8 available on the DOI’s webpage. Therefore, the Court GRANTS Liberty Mutual’s request 9 for judicial notice of Exhibit (F) and Exhibit (G). 10 Exhibit (H) is a brief filed by Lara in Rejoice! Coffee Co., LLC v. Hartford Financial 11 Services Group., Inc., No.: 20-CV-06789-EMC, 2021 WL 5879118 (N.D. Cal. Dec 9, 12 2021). (Doc. No. 15-6 at 4.) The Court may take judicial notice of court filings. See 13 Rowland v. Paris Las Vegas, No. 3:13-CV-02630-GPC-DHB, 2014 WL 769.93, at *2 (S.D. 14 Cal. Feb. 25, 2014) (citing Reyn’s Pasta Bella, LLC v. Visa USA, Inc., 442 F.3d 741, 746 15 n.6 (9th Cir. 2006)). However, “[w]hile the authenticity and existence of a particular order, 16 motion, pleading or judicial proceeding, which is a matter of public record, is judicially 17 noticeable, veracity and validity of its contents . . . are not.” United States v. S. Cal. Edison 18 Co., 300 F. Supp. 2d 964, 974 (E.D. Cal. 2004). Therefore, the Court GRANTS Liberty 19 Mutual’s requests for judicial notice of Exhibit (H) for the stated purpose that these 20 documents exist. 21 Exhibit (I) is Liberty Mutual’s Rate Filing for its LibertyGuard Personal Automobile 22 Policy Program with the DOI to become effective January 1, 2020. (Doc. No. 15-6 at 4.) 23 This filing is publicly available through the National Association of Insurance 24 Commissioners’ (“NAIC”) online System for Electronic Rates and Forms Filing 25 (“SERFF”) webpage. Exhibit (J) is a template letter from Lara regarding premium refunds 26 in response to the COVID-19 pandemic. (Id. at 4.) Liberty Mutual discovered the template 27 in connection with a news article that was published by ABC 10 News on September 30, 28 2022. (Id.) Exhibit (K) is Public Notice #2022-39, issued by the DOI, regarding Insurance 6 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.545 Page 7 of 23 1 Companies Rate Filing. (Id. at 4.) However, the Court does not rely on these documents in 2 reaching its conclusion below. Accordingly, the Court DENIES AS MOOT Plaintiff’s 3 requests for judicial notice as to these exhibits. 4 B. 5 Support of Defendant’s Motion to Dismiss 6 Additionally, Liberty Mutual requests judicial notice for the following documents 7 which are incorporated in the Declaration of Randall Lawrence-Hurt in support of Liberty 8 Mutual’s Motion to Dismiss as Exhibits (A)–(D). (Doc. No. 15-1.) Exhibits (A)–(D), as 9 incorporated in the Declaration, are Plaintiff’s auto insurance policy as issued by Liberty 10 Mutual beginning in 2019 until 2023. (Id. at 2.) There is no dispute between the parties 11 over the policy records. Therefore, the Court GRANTS Liberty Mutual’s request for 12 judicial notice of Exhibits (A)–(D) as incorporated in the Declaration of Randall Lawrence- 13 Hurt. Request for Judicial Notice in Declaration of Randall Lawrence-Hurt in 14 C. 15 Dismiss 16 Lastly, Liberty Mutual filed an additional request for judicial notice on December 17 02, 2022. (Doc. 21-1.) This second request for judicial notice includes three exhibits, all of 18 which are publicly available through the online NAIC SERFF webpage. (Id. at 2.) Request for Judicial Notice in Support of Reply in Support of Motion to 19 First, Exhibit (A) is the Rate Filing cover page for Allstate Northbrook Indemnity 20 Company’s (“Allstate”) California Private Passenger Automobile Line of Insurance with 21 the DOI. (Id.) Exhibit (B) is the Rate Filing Questionnaire submitted by Allstate to the 22 DOI. (Id.) Finally, Exhibit (C) is Allstate’s Supplemental Exposure and Premium Template 23 for COVID Impacted Lines submitted to the DOI. (Id.) However, the Court does not rely 24 on these documents in reaching its conclusion below. Accordingly, the Court DENIES AS 25 MOOT Plaintiff’s requests for judicial notice as to these exhibits. 26 IV. DISCUSSION 27 Liberty Mutual moves to dismiss Plaintiff’s claims on the following grounds: 28 (1) Plaintiff fails to state a claim under Federal Rule of Civil Procedure 12(b)(6) for each 7 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.546 Page 8 of 23 1 allegation included in the Complaint; (2) the DOI has exclusive jurisdiction over Plaintiff’s 2 claims or, in the alternative, the Court should defer to the DOI’s primary jurisdiction; 3 (3) Plaintiff’s claim for injunctive relief lacks factual information to support Article III 4 standing; and (4) Plaintiff’s equitable claims are precluded by Sonner v. Premier Nutrition 5 Corp., 971 F.3d 834, 844 (9th Cir. 2020). In addition to challenging the merits of each of 6 Plaintiff’s claims, Liberty Mutual contends Plaintiff’s case should be dismissed on grounds 7 of equitable abstention. (Doc. No. 21 at 10.) 8 A. 9 Liberty Mutual first argues the DOI has exclusive jurisdiction over Plaintiff’s 10 claims—specifically over the ratemaking conduct at issue—pursuant to Section 1860.1(c) 11 of the California Insurance Code. (Doc. No. 15 at 17–18.) 2 Liberty Mutual characterizes 12 Plaintiff’s claims as a challenge to the reasonableness of rates that were preapproved by 13 the DOI prior to the COVID-19 pandemic and that such claims “unlawfully infring[e] upon 14 the Commissioner’s exclusive jurisdiction” of rate-setting. (Id. at 17.) Liberty Mutual 15 contends that under Section 1860.1, courts do not allow claims challenging insurance 16 practices if the conduct relates to ratemaking or charging of pre-approved rates. (Id. at 18.) 17 Liberty Mutual argues this principle applies to Plaintiff’s challenge on the adequacy of 18 refunds on pre-approved premium rates. (Id.) Exclusive Jurisdiction 19 Plaintiff disputes that her claims are precluded by California’s insurance rate 20 approval process. (Doc. No. 20 at 10.) Specifically, Plaintiff argues her claims are not 21 directed at filed, pre-approved rates, but rather challenge the unfair application of the pre- 22 approved rates. (Id.) 23 Section 1860.1 of the California Insurance Code states: “No act done, action taken, 24 or agreement made pursuant to the authority conferred by this chapter shall constitute a 25 26 2 27 28 Liberty Mutual’s subject matter jurisdiction challenge is a 12(b)(1) facial attack. See Safe Air for Everyone, 373 F.3d at 1039 (“[i]n a facial attack, the challenger asserts that the allegations contained in a complaint are insufficient on their face to invoke federal jurisdiction.”). The Court will accept Plaintiff’s allegations as true and draw all reasonable inferences in her favor. See Leite, 749 F.3d at 1121. 8 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.547 Page 9 of 23 1 violation of or grounds for prosecution or civil proceedings under any other law of this 2 State heretofore or hereafter enact which does not specifically refer to insurance.” 3 As noted by Plaintiff, several California district courts and the California Insurance 4 Commissioner have rejected Liberty Mutual’s argument. See Day v. GEICO Cas. Co., 580 5 F. Supp. 3d 830, 837 (N.D. Cal. Jan. 20, 2022); Rejoice! Coffee Co., 2021 WL 5879118, 6 at *4; Boobuli’s LLC v. State Farm Fire & Cas. Co., 562 F. Supp. 3d 469, 486 (N.D. Cal. 7 2021); Drawdy v. Nationwide Ins. Co. of Am., No. 2:22-cv-00271-JAM-KJN, 2022 WL 8 3020050, at *2 (E.D. Cal. July 29, 2022) (adopting the exclusive jurisdiction analysis of 9 Day, Rejoice!, and Boobuli’s); Torrez v. Infinity Ins. Co., No. 2:22-cv-05171-SVW-JC, 10 2022 WL 6819848, at *2–4 (C.D. Cal. Oct. 11, 2022) (preliminarily agreeing that 11 plaintiff’s UCL claim does not fall under the exclusive jurisdiction of the Insurance 12 Commissioner but using the court’s discretion to abstain from reaching the merits of the 13 case). The Court finds these cases persuasive and agrees with the detailed exclusive 14 jurisdiction analysis in Day, Rejoice!, and Boobuli’s. See 580 F. Supp. 3d at 837 (holding 15 plaintiff’s claims challenging GEICO’s application of its approved rate plan during the 16 COVID-19 pandemic “are not within the Insurance Commissioner’s exclusive jurisdiction 17 and thus not immunized by § 1860.1”); 2021 WL 5879118, at *3–8 (no immunity to claims 18 challenging premium credits during COVID-19); 562 F. Supp. 3d at 477–85 (same). 19 Moreover, the Court finds persuasive that in Rejoice!, a brief was filed by the Insurance 20 Commissioner in which he states that Section 1860.1 does not preclude insurance premium 21 rates claims from being raised in the courts. Rejoice!, 2021 WL 5879118, at *6. 22 Based on the foregoing, this Court too finds that Plaintiff’s challenge is to the 23 application of approved rates, not to the rates themselves, and therefore does not fall within 24 the Insurance Commissioner’s exclusive jurisdiction. 25 As such, Liberty Mutual’s motion to dismiss Plaintiff’s claims on this ground is 26 DENIED. 27 /// 28 /// 9 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.548 Page 10 of 23 1 B. 2 Liberty Mutual next asserts, in the alternative, that the DOI’s primary jurisdiction 3 should result in a stay or dismissal without prejudice of Plaintiff’s claims. (Doc. No. 15 at 4 24–25.) Specifically, Liberty Mutual argues that a ruling in this case would require the 5 Court to reset insurance rates by “engaging in the sort of complex policy analysis and 6 technical actuarial calculations that courts are ill-equipped to undertake,” (id. at 20), and 7 that such determinations are better left to “the expertise of the Department of Insurance[,]” 8 (id. at 5 (quoting Day, 580 F. Supp. 3d at 847)). Liberty Mutual asks the Court to 9 “determine that an otherwise cognizable claim implicates technical and policy questions 10 that should be addressed in the first instance by the agency with regulatory authority over 11 the relevant industry.” (Id. (quoting Astiana v. Hain Celestial Grp., 783 F.3d 753, 760 (9th 12 Cir. 2015)).) Primary Jurisdiction 13 In opposition, Plaintiff relies partly on the Commissioner’s Brief in response to 14 Rejoice!. (Doc. No. 20 at 18.) Namely, Plaintiffs assert “the Commissioner has opined that 15 cases like this are well-suited for litigation . . . even though the Department is still ‘actively 16 evaluating whether the insurance industry has issued sufficient refunds,’” (id. (citing Doc. 17 No. 20-2 at 2)), and that because this case questions the misapplication of Liberty Mutual’s 18 approved rates, the Court need not engage in any “complex policy, or to determine past or 19 future rates[,]” (id.). The Court agrees the Commissioner has acknowledged that cases 20 challenging insurance matters not related to rate-making are well-suited for litigation and 21 that “an administrative agency’s interpretation of statutes regulating the extent of its power 22 and responsibilities is entitled to a measure of respect.” Villanueva v. Fid. Nat’l Title Co., 23 11 Cal. 5th 104, 132 (2021) (citing Krumme v. Mercury Ins. Co., 123 Cal. App. 4th 924, 24 937 (2004) (finding no abuse of discretion when trial court declined to refer the case to 25 Commissioner based on Commissioner’s amicus curiae brief)). 26 In fact, the Eastern District of California recently decided a case similar in fact and 27 referred the case to the DOI through an application of the doctrine of primary jurisdiction. 28 Drawdy, 2022 WL 3020050, at *3. However, this case is distinguishable from Drawdy 10 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.549 Page 11 of 23 1 because the plaintiff in Drawdy did not offer an explanation to the court as to why the case 2 was better suited for adjudication rather than an administrative determination. Id. at *3. 3 Here, Plaintiff has proffered an argument for adjudication over administrative 4 determination, and the Court is swayed by Plaintiff’s explanation. (Doc. No. 20 at 17–20.) 5 Specifically, the Court is persuaded by Plaintiff’s argument that a dismissal of the 6 case would leave policyholders with no relief because the Commissioner’s authority to 7 order refunds has been called into question. (Doc. No. 20 at 19 (citing State Farm Gen. Ins. 8 Co. v. Lara, 71 Cal. App. 5th 148, 188–94 (2021)).) Additionally, the Commissioner has 9 expressly stated that although a “review of the sufficiency of the refunds is ongoing[,] [it] 10 in no way precludes this Court from adjudicating a UCL claim against an insurer.” 11 Rejoice!, 2021 WL 5879118, at *8. As opined by the Ninth Circuit, “common sense tells 12 us that even when agency expertise would be helpful, a court should not invoke primary 13 jurisdiction when the agency is aware of but has expressed no interest in the subject matter 14 of the litigation.” Astiana, 783 F.3d at 761. Although the Commissioner has shown some 15 interest in the issue of adequate premium refunds, the express permission for adjudication 16 of such claims indicates a willingness to relinquish the matter into the judicial system. 17 The questioning of the Commissioner’s authority in Lara, coupled with the 18 Commissioner’s own statements regarding the authority of the courts to adjudicate the type 19 of claims presently at bar, persuades the Court that even if Plaintiff’s claims were brought 20 before the DOI, it is likely the case would ultimately return to this Court, creating an 21 unnecessary detour that would not “enhance court decision-making and efficiency by 22 allowing the court to take advantage of administrative expertise.” Chabner v. United of 23 Omaha Life Ins. Co., 225 F.3d 1042, 1051 (9th Cir. 2000); Astiana, 783 F.3d at 760 24 (judicial efficiency is paramount to the primary jurisdiction doctrine). It is on this point 25 that the Court respectfully disagrees with the Eastern District’s application of the doctrine 26 of primary jurisdiction that resulted in the referral of a case that challenged the sufficiency 27 of premium refunds issued to auto insurance policy holders in response to the COVID-19 28 Pandemic to the DOI. See Kurshan v. Safeco Ins. Co. of America, No. 2:22-CV-0022511 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.550 Page 12 of 23 1 DAD-AC, 2023 WL 1070614, at *7 (E.D. Cal. Jan 27, 2023) (relying on primary 2 jurisdiction doctrine to grant motion to dismiss and refer Plaintiff’s claims challenging the 3 adequacy of auto insurer’s premium refunds in light of COVID-19 pandemic to DOI). 4 As discussed above, the Court finds Plaintiff’s challenge is to Liberty Mutual’s 5 application of approved rates, not to the rates themselves, and therefore will not require the 6 Court to partake in any complex calculations that would require the expertise of the DOI. 7 Furthermore, the Court respects the viewpoint of Commissioner Lara in the amicus curiae 8 brief responding to Rejoice!, and finds it is well within the Court’s purview to determine 9 the case at bar. 10 For the foregoing reasons, the Court declines to apply the primary jurisdiction 11 doctrine. Liberty Mutual’s motion to dismiss Plaintiff’s claims on this ground is DENIED. 12 C. 13 Liberty Mutual next asserts Plaintiff lacks Article III standing to properly seek an 14 injunction because Article III standing requires that the “threatened injury must be certainly 15 impending to constitute injury in fact, and . . . allegations of possible future injury are not 16 sufficient,” and Plaintiff “cannot plead any fact establishing a sufficient likelihood of 17 repetitive harm.” (Doc. No. 15 at 26–27 (quoting Clapper v. Amnesty Int’l USA, 568 U.S. 18 398, 409 (2013) (internal citations omitted)).) Plaintiff, in her opposition, does not address 19 Liberty Mutual’s argument regarding Article III standing for purposes of seeking an 20 injunction. (See generally Doc. No. 20.) The Court interprets Plaintiff’s silence on the 21 matter as conceding that she cannot allege a likelihood of repeated injury. Lopez v. Cnty. 22 of Los Angeles, No. 3:15-cv-03804-THE, 2016 WL 54123 at *2 (N.D. Cal. 2016) (failure 23 to oppose is implicit consent to the merits of the arguments asserted). Article III Standing 24 Furthermore, the State of California terminated all “stay-at-home” orders as of June 25 15, 2021, 3 and Plaintiff’s claims are premised on the factual allegation that the issuance of 26 27 3 28 “Current Safety Measures”, COVID.19.CA.GOV https://covid19.ca.gov/safely-reopening/. (last updated Aug. 15, 2022), 12 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.551 Page 13 of 23 1 these “stay-at-home” orders is what led Liberty Mutual to an unfair windfall and ultimately 2 caused Plaintiff to be injured. (Doc. No. 1 at 5.) Therefore, Plaintiff cannot reasonably 3 plead that the expired “stay-at-home” orders present a likelihood of future harm and so, 4 granting leave to amend as to this aspect of Plaintiff’s claim would be futile. Kurshan, 2023 5 WL 1070614, at *5 (leave to amend claim for injunctive relief futile when Plaintiff’s injury 6 is tied to inactive stay-at-home orders); Brown v. Stored Value Cards, Inc., 953 F.3d 567, 7 574 (9th Cir. 2020) (noting that leave to amend need not be granted where amendment 8 would be futile). 9 Therefore, the Court finds Plaintiff lacks Article III standing to seek injunctive relief 10 and Plaintiff’s claim for injunctive relief is DISMISSED WITHOUT LEAVE TO 11 AMEND. 12 D. 13 Liberty Mutual next asserts the doctrine of equitable abstention precludes the 14 entirety of Plaintiff’s claims. (Doc. No. 21 at 10.) Specifically, Liberty Mutual argues the 15 claims of this case “demand the Court engage in a highly technical rate-setting analysis.” 16 (Id.) Doctrine of Equitable Abstention 17 The doctrine of equitable abstention “gives courts discretion to abstain from 18 deciding a UCL claim.” Wehlage v. EmpRes Healthcare, Inc., 791 F. Supp. 2d 774, 784 19 (N.D. Cal. 2011). The doctrine “applies in rare instances.” Ellis v. J.P. Morgan Chase & 20 Co., 950 F. Supp. 2d 1062, 1082 (N.D. Cal. 2013). Courts may abstain under this doctrine 21 if: “(1) resolving the claim requires ‘determining complex economic policy, which is best 22 handled by the legislature or an administrative agency;’ (2) ‘granting injunctive relief 23 would be unnecessarily burdensome for the trial court to monitor and enforce given the 24 availability of more effective means of redress;’ or (3) ‘federal enforcement of the subject 25 law would be more orderly, more effectual, less burdensome to the affected interests.’” 26 Wehlage, 791 F. Supp. 2d at 784–85 (quoting Alvarado v. Selma Convalescent Hosp., 153 27 Cal. App. 4th 1292, 1298 (2007)). 28 /// 13 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.552 Page 14 of 23 1 The Court is persuaded that this case will not require it to determine complex 2 economic policy better handled by an administrative agency. As discussed above, the 3 California Insurance Commissioner filed a brief in Rejoice! Coffee Co., Case No. 20-cv- 4 06789-EMC (N.D. Cal.), stating “Section 1860.1 does not bar a private litigant from 5 enforcing UCL claims involving excessive premiums, unfair practices, or misapplication 6 of approved rates.” (Doc. No. 23-2 at 12.) The Insurance Commissioner thus concluded 7 that “a UCL action that challenges an insurer’s refusal to adjust its premiums in response 8 to circumstances caused by the pandemic” does not fall within the Commissioner’s 9 exclusive jurisdiction. (Id. at 15.) The Court thus also declines to find that the issues in this 10 case would be better handled by an administrative agency. Moreover, the Court will not be 11 required to determine “complex economic policy.” Plaintiff is not asking the Court to 12 engage in ratemaking, but rather to determine whether a refusal to adjust premiums was 13 “unfair” conduct. (See Doc. No. 23 at 16–17.) This question is firmly within the Court’s 14 purview. Therefore, the Court declines to apply the doctrine of equitable abstention here, 15 see Day, 2022 WL 17825119, at *1, and Liberty Mutual’s motion to dismiss on this ground 16 is DENIED. 17 Because the Court holds it has subject matter jurisdiction over Plaintiff’s claims, the 18 Court proceeds to evaluate each of the claim-specific arguments that Liberty Mutual makes 19 for dismissal. 20 E. 21 Turning to the merits of Plaintiff’s claims, Liberty Mutual first argues Plaintiff’s 22 allegation of breach of the implied covenant of good faith and fair dealing must fail because 23 Plaintiff does not identify any express contract provision that has been violated. (Doc. No. 24 15 at 27.) Plaintiff responds it is not necessary for a breach of the implied covenant of 25 good faith and fair dealing to be tied to an express provision contained within the contract. 26 (Doc. No. 20 at 32.) The purpose of the implied covenant of good faith and fair dealing is 27 to ensure that the act of one contracting party does not prevent the other party from enjoying 28 the benefits of the contract, and to require that the act relate to an express provision Breach of Contract – Implied Covenant of Good Faith and Fair Dealing 14 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.553 Page 15 of 23 1 included in the contract would render the entire covenant of good faith and fair dealing 2 moot. (Id. (citing Med. Sales & Consulting Grp. v. Plus Orthopedics USA, Inc., No. 3 08CV1595 BEN BGS, 2011 WL 1898600, at *4 (S.D. Cal. May 19, 2011)).) 4 The implied covenant of good faith and fair dealing is “implied by law in every 5 contract” and “exists merely to prevent one contracting party from unfairly frustrating the 6 other party’s right to receive the benefits actually made.” Guz v. Bechtel Nat’l, Inc., 24 Cal. 7 4th 317, 349 (2000). The California Supreme Court has explained that courts “cannot 8 impose substantive duties or limits on the contracting parties beyond those incorporated in 9 the specific terms of their agreement.” Id. at 349–50. Therefore, the covenant cannot 10 contradict the express terms of a contract. See Carma Devs. (Cal.), Inc. v. Marathon Dev. 11 Cal., Inc., 2 Cal. 4th 342, 374 (holding “implied terms should never be read to vary express 12 terms”). However, “[w]here a contract confers on one party a discretionary power affecting 13 the rights of the other, a duty is imposed to exercise that discretion in good faith and in 14 accordance with fair dealing.” Shirley v. L.L. Bean, Inc., No. 18-cv-02641-YGR, 2019 WL 15 1205089, at *3 (N.D. Cal. Mar. 14, 2019). Plaintiff’s implied covenant claim here is based 16 on Liberty Mutual’s alleged failure to exercise, in good faith, the discretion granted to it 17 under the insurance contract between the parties. Thus, Plaintiff’s failure to identify an 18 express contract provision does not defeat her claim. 19 Liberty Mutual next contends Plaintiff is attempting to use the covenant of good 20 faith and fair dealing to impose a duty contrary to what Plaintiff expressly agreed to in her 21 insurance policy contract. (Doc. No. 15 at 27.) Specifically, Liberty Mutual argues the 22 contract expressly requires Liberty Mutual to collect insurance premiums from Plaintiff, 23 subject to the terms of her policy agreement. (Id.) Plaintiff responds the implied covenant 24 of good faith and fair dealing can be breached “where one party is invested with a 25 discretionary power affecting the rights of another.” (Doc. No. 20 at 30 (quoting Bevis v. 26 Terrace View Partners, LP, 33 Cal. App. 5th 230, 252 (2019)).) Specifically, Plaintiff 27 argues Liberty Mutual had contractual discretion to adjust policy premiums, which is 28 demonstrated by the actual issuance of refunds, but failed to exercise its discretion 15 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.554 Page 16 of 23 1 adequately by offering insufficient refunds. (Doc. No. 20 at 31.) Plaintiff continues that 2 Liberty Mutual’s failure to make adequate premium adjustments in response to COVID- 3 19 “frustrated policyholders’ legitimate expectations that their premiums would accurately 4 reflect the risk that Liberty Mutual faced and that the company would not obtain an unfair 5 windfall.” (Id.) Plaintiff further contends she is not attempting to change the express terms 6 of the insurance contract because her claims focus on Liberty Mutual’s discretion to act in 7 good faith in accord with policyholder expectations. (Id. at 33.) 8 The Court agrees with Plaintiff. That Liberty Mutual is not required to make a 9 downward adjustment does not defeat Plaintiff’s breach of covenant claims. Plaintiff’s 10 claim is not simply that Liberty Mutual charged premiums calculated pursuant to approved 11 rates, it is that Liberty Mutual applied the approved rate during changed circumstances, 12 when it should have used its discretion,4 in good faith, to make the appropriate 13 adjustments. 5 See Boobuli’s, 562 F. Supp. 3d at 486; cf. Day, 580 F. Supp. 3d. at 841 14 (dismissing implied covenant claim with leave to amend where the contract provision cited 15 by the plaintiff did not give GEICO the power to make voluntary downward premium 16 adjustments, but acknowledging “that does not mean that GEICO does not possess the 17 inherent discretionary power” to make such downward adjustments). 18 19 Based on the foregoing, Liberty Mutual’s motion to dismiss Plaintiff’s first claim for violation of the implied covenant of good faith and fair dealing is DENIED. 20 21 22 23 24 25 26 27 28 4 The Court acknowledges Liberty Mutual’s reliance on Roby v. Liberty Mutual Personal Insurance Co., 20 C 6832, 2022 WL 204610, at *7 (N.D. Ill. Jan. 24, 2022), but finds it unpersuasive. (Doc. No. 15 at 37.) As discussed herein, the Court finds Liberty Mutual retained the discretion to adjust premiums based on circumstances such as the COVID-19 pandemic. Furthermore, Roby discusses the affairs of Illinois state law and is not binding on this Court. 5 Liberty Mutual contends Plaintiff must show that her “reasonable expectations” were not met, Careau & Co. v. Sec. Pac. Bus. Credit, Inc., 222 Cal. App. 3d 1371, 1395 (1990), and that it is unreasonable of Plaintiff to expect that Liberty Mutual should not receive any profit from its insurance contracts. (Doc. No. 15 at 29.) However, this is a misstatement of Plaintiff’s allegations. Nowhere in Plaintiff’s Complaint or subsequent filings does Plaintiff allege that Liberty Mutual should have relinquished all profit. Instead, Plaintiff alleges the profit collected by Liberty Mutual, as a result of inadequate refunds to the insured, was unreasonable in light of the changed circumstances caused by the COVID-19 pandemic. (Doc. No. 1 at 8.) 16 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.555 Page 17 of 23 1 F. 2 Under California law, “there is not a standalone cause of action for ‘unjust 3 enrichment,’ which is synonymous with ‘restitution’.” Astiana, 783 F.3d at 762. A court 4 “may construe a cause of action as a quasi-contract claim seeking restitution.” Id. However, 5 “a plaintiff may not . . . recover on a quasi-contract claim if the parties have an enforceable 6 agreement regarding a particular subject matter.” Klein v. Chevron U.S.A., Inc., 202 Cal. 7 App. 4th 1342, 1388 (2012). Unjust enrichment is a quasi-contract claim and depends on 8 the parties not having an express written agreement on the same subject matter. Sunpower 9 Corp. v. Sunpower Cal., LLC, No. 21-CV-375-CAB-MSB, 2021 WL 2781245, at *3 (citing 10 Lance v. Camper Mfg. Corp. v. Republic Indem. Co., 44 Cal. App. 4th 194, 203 (1996)). 11 “The elements of unjust enrichment are ‘the receipt of a benefit and the unjust retention of 12 the benefit at the expense of another.’” Peterson v. Cellco P’ship, 164 Cal. App. 4th 1583, 13 1593 (2008) (citing Lectrodryer v. SeoulBank, 77 Cal. App. 4th 723, 726 (2000)). Unjust Enrichment 14 First, Liberty Mutual contends California law does not recognize an unjust 15 enrichment claim where there is an existing contract on the same subject and thus, 16 Plaintiff’s claim fails. (Doc. No. 15 at 30.) Plaintiff responds that courts have declined to 17 dismiss unjust enrichment claims on this basis. (Doc. No. 20 at 33.) 18 The Court agrees with Liberty Mutual. “[A]n action based on implied-in-fact or 19 quasi-contract cannot lie where there exists between the parties a valid express contract 20 governing the same subject matter.” Rutherford Holdings, LLC v. Plaza Del Rey, 223 Cal. 21 App. 4th 221, 231 (2014). Here, there is no dispute about the existence or validity of the 22 insurance coverage contract between Plaintiff and Liberty Mutual, and Plaintiff does not 23 plead that the contract is unenforceable or void. See Steward v. Kodiak Cakes, LLC, 537 F. 24 Supp. 3d 1103, 1159 (S.D. Cal. 2021) (dismissing plaintiff’s unjust enrichment claim 25 where there existed a valid express contract); Day, 580 F. Supp. 3d at 841 (same); Saroya 26 v. Univ. of the Pacific, 503 F. Supp. 3d 986, 998–99 (N.D. Cal. 2020) (dismissing unjust 27 enrichment claim where plaintiff “did not deny the existence or enforceability” of the 28 contract between the parties). 17 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.556 Page 18 of 23 1 2 Accordingly, Plaintiff’s unjust enrichment claim is DISMISSED WITHOUT LEAVE TO AMEND. 3 G. 4 Plaintiff lastly asserts a violation of the unfair prong of the UCL. (Doc. No. 1 at 15– 5 17.) Plaintiff contends Liberty Mutual’s conduct was unfair because Liberty Mutual was 6 fully aware that its charged premiums were excessive, that the premiums were not based 7 on an accurate risk assessment, yet Liberty Mutual did not issue an adequate refund nor 8 did it disclose the excessive profits acquired. (Id. at 15.) Unfair Business Practice 9 To state a claim under the unfair prong of the UCL, a plaintiff must plead the conduct 10 is unfair because it either (1) “offends an established public policy” or (2) “is immoral, 11 unethical, oppressive, unscrupulous, or substantially injurious to consumers,” and the 12 utility of the conduct is outweighed by the harm to the consumer. Davis v. HSBC Bank 13 Nev., N.A., 691 F.3d 1152, 1169 (9th Cir. 2012). “[A] practice may be deemed unfair even 14 if not specifically proscribed by some other law.” Cel-Tech Commc’ns, Inc. v. L.A. Cellular 15 Tel. Co., 20 Cal. 4th 163, 180 (1999). 16 Liberty Mutual puts forth multiple arguments for dismissal: (1) Plaintiff’s claim is 17 barred by the UCL safe harbor provision, (2) Plaintiff lacks standing for failure to 18 adequately plead injury, (3) Plaintiff fails to plead unfair conduct on behalf of Liberty 19 Mutual, and (4) Plaintiff fails to establish a lack of legal remedy. 20 1. UCL Safe Harbor Provision 21 First, Liberty Mutual seeks safe harbor protection from Plaintiff’s UCL claim due to 22 a statutory obligation, under Cal. Ins. Code § 1861.05, that requires Liberty Mutual to 23 charge its approved rates. (Doc. No. 15 at 31.) Insurers are protected, under Cal. Ins. Code. 24 § 1861.01, from claims related to actions that were made pursuant to ratemaking, but does 25 not extend to actions taken beyond the scope of that authority. MacKay v. Superior Ct., 26 188 Cal. App. 4th 1427, 1450 (2010). The relevant question is whether Plaintiff’s claims 27 are directed at the ratemaking authority of the Commissioner or on some other act of the 28 insurer. As discussed above in § IV.A, Plaintiff’s claims are related to the alleged unfair 18 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.557 Page 19 of 23 1 conduct of issuing inadequate premium refunds and not a challenge to the Commissioner 2 approved rates. When claims against insurers are not related to the ratemaking process, 3 insurers are not immune from judicial resolution for alleged violations of California’s 4 Unfair Competition Law. Ellsworth v. U.S. Bank, N.A., 908 F. Supp. 2d 1063, 1082 (N.D. 5 Cal. 2012); Wahl v. Am. Sec. Ins. Co., No. C 08-0555 RS, 2010 WL 4509814, at *3 (N.D. 6 Cal. Nov. 1, 2010). 7 For the reasoning applied in § IV.A, the Court finds that Plaintiff’s claim is not 8 related to ratemaking and thus Liberty Mutual cannot seek refuge from Plaintiff’s UCL 9 claim under a theory of safe harbor. 10 11 12 2. UCL Standing Next, Liberty Mutual argues Plaintiff lacks standing under the UCL because she fails to adequately state that she suffered an actual, economic injury. (Doc. No. 15 at 32.) 13 In order to establish standing for a UCL claim, Plaintiff must show she personally 14 lost money or property “as a result of the unfair competition.” Cal. Bus. & Prof. Code 15 § 17204; Kwikset Corp. v. Sup. Ct., 51 Cal. 4th 310, 330 (2011). The California Supreme 16 Court has explained standing: 17 18 19 20 21 22 23 24 25 26 27 There are innumerable ways in which economic injury from unfair competition may be shown. A plaintiff may (1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary. Kwikset Corp., 51 Cal. 4th at 323. Plaintiff responds she “received less than she bargained for because the risk Liberty Mutual insured against was drastically reduced.” (Doc. No. 20 at 26.) Specifically, Plaintiff alleges she has experienced economic injury under the UCL by paying “excessive premiums . . . as a result of Liberty Mutual’s unfair business practices.” (Id.) The Court finds this is sufficient to establish standing under the UCL. “Courts in California have 28 19 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.558 Page 20 of 23 1 consistently held that benefit of the bargain damages represents economic injury for 2 purposes of the UCL.” In re Solara Med. Supplies, LLC Customer Data Sec. Breach Litig., 3 No. 3:19-CV-2284-H-KSC, 2020 WL 2214152, at *9 (S.D. Cal. May 7, 2020). 4 Plaintiff alleges “California has a longstanding public policy limiting an insurer’s 5 ability to impose rates in excess of a fair rate of return on the insured risk that is reflected 6 in various statutes and regulations.” (Doc. No. 1 at 16.) Liberty Mutual’s “conduct in 7 collecting and retaining premiums that have become excessive in light of the unforeseen 8 pandemic-related reduction in driving violates this vital public policy and the intent of the 9 statutes and regulations designed to ensure that the rates collected by insurers relate to the 10 risk insured and are limited to a fair rate of return.” (Id.) As a result of these unfair practices, 11 Plaintiff and other class members have allegedly “lost money or property and suffered 12 injury in fact because Liberty Mutual collected and retained, and continues to collect and 13 retain, premiums in excess of the limitations imposed by California public policy, which 14 rightfully belong to Plaintiff and the putative class.” (Id.) 15 Moreover, Liberty Mutual’s reliance on Schwartz v. Provident Life & Accident 16 Insurance Co., 216 Cal. App. 4th 607 (2013), and Tripp v. PHH Mortgage, No.: ED CV 17 15-01364-AB (DTBx), 2015 WL 12645023 (C.D. Cal. Aug. 20, 2015), is misplaced. In 18 Schwartz, the court found the plaintiff lacked standing for his UCL claim because he was 19 never denied disability coverage, and thus did not suffer economic injury of any kind, 20 unlike the purported class he sought to represent. 216 Cal. App. 4th at 611–12. Here, 21 Plaintiff alleges she suffered the same harm as the purported class, specifically, that they 22 received less than they bargained for because of the drastic reduction in driving-related 23 accidents. Likewise, in Tripp, the plaintiff failed to demonstrate she lost money or property 24 as a result of the defendants’ conduct. 2015 WL 12645023, at *3. Specifically, the 25 plaintiff’s claim that she lost money making loan payments did not constitute a loss because 26 she was legally obligated to make those payments. Id. Here, Plaintiff does not base her 27 claim on the premium payments themselves, but rather asserts she and the class suffer from 28 benefit of the bargain losses, which constitutes economic injury cognizable under the UCL. 20 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.559 Page 21 of 23 1 See Kwikset, 51 Cal. 4th at 330; In re Adobe Sys., Inc. Privacy Litig., 66 F. Supp. 3d 1197, 2 1224 (N.D. Cal. 2014) (finding standing under the UCL because “[f]our of the six 3 [p]laintiffs allege they personally spent more on Adobe products than they would had they 4 known Adobe was not providing the reasonable security Adobe represented it was 5 providing”); In re LinkedIn User Privacy Litig., No.: 5:12-CV-03088-EJD, 2014 WL 6 1323713, at *4 (N.D. Cal. Mar. 28, 2014) (finding that benefit of the bargain losses are 7 “sufficient to confer . . . statutory standing under the UCL”). 8 9 10 As such, the Court finds that Plaintiff’s UCL claim is plausibly pleaded in the Complaint. See Boobuli’s, 562 F. Supp. 3d at 485. 3. Unfair Conduct 11 Liberty Mutual further moves to dismiss Plaintiff’s claim for violation of the UCL 12 on the basis that Plaintiff failed to allege any unfair conduct by Liberty Mutual. (Doc. No. 13 15 at 34.) In response, Plaintiff applies Liberty Mutual’s alleged conduct to a balancing 14 test and a tethering test to demonstrate unfairness. (Doc. No. 20 at 20.) Under the balancing 15 test, unfairness is determined by weighing “the utility of the defendant’s conduct against 16 the gravity of the harm to the alleged victim.” Pemberton v. Nationstar Mortg. LLC, 331 17 F. Supp. 3d 1018, 1051 (S.D. Cal. 2018). Alternatively, the tethering test simply requires 18 the allegedly unfair conduct “be tethered to some legislatively declared policy.” Lozano v. 19 AT&T Wireless Servs., Inc., 504 F.3d 718, 735 (9th Cir. 2007). The Court finds that, under 20 either test, Plaintiff has alleged unfair conduct sufficient to surpass the relatively low 21 threshold for unfairness at the pleading stage. Kellman v. Whole Foods Mkt., Inc., 313 F. 22 Supp. 3d 1031, 1049 (N.D. Cal. 2018). Specifically, the Court is persuaded by the finding 23 in Day, 580 F. Supp. 3d at 837, that allegations of an unjust financial windfall in the context 24 of a global pandemic are sufficient to establish a claim for UCL unfairness against an 25 insurer because of the relation between the conduct and California’s public policy that “the 26 cost of insurance be fair, transparent and affordable.” 27 28 Therefore, the Court finds that Plaintiff sufficiently alleged unfair conduct by Liberty Mutual. 21 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.560 Page 22 of 23 1 4. Adequate Legal Remedy 2 Lastly, Liberty Mutual moves to dismiss Plaintiff’s equitable claim for violation of 3 the UCL on the basis that Plaintiff failed to establish that she lacks an adequate remedy at 4 law. (Doc. No. 15 at 25.) In support, Liberty Mutual relies on Sonner, 971 F.3d at 844, 5 which held a plaintiff “must establish that she lacks an adequate remedy at law before 6 securing equitable restitution for past harm . . . .” 7 Plaintiff responds that Sonner is inapplicable here because of a difference in 8 procedural posture. (Doc. No. 20 at 28.) However, a lack of adequate legal remedies must 9 be included in initial pleadings, contrary to Plaintiff’s attempt to distinguish Sonner based 10 on the stage of the litigation. (Id.) Regardless of the stage of the litigation, this District has 11 consistently ruled that the plaintiff must state they lack an adequate remedy at law when 12 raising equitable claims since Sonner was decided in 2020. See Ketayi v. Health Enrollment 13 Grp., 516 F. Supp. 3d 1092, 1140 (S.D. Cal. 2021) (“[T]he Ninth Circuit’s recent decision 14 in Sonner requires that a complaint seeking equitable relief allege that legal remedies are 15 inadequate.”) (citing Sonner, 971 F.3d at 844); Zaback v. Kellogg Sales Co., No.: 3:20- 16 CV-00268-BEN-MSB, 2020 WL 6381987, at *4 (S.D. Cal. Oct. 29, 2020). 17 While Plaintiff did not adequately plead lack of legal remedy, to do so does not 18 require a disposition of all other claims. Nacarino v. Chobani, LLC, No. 20-cv-07437- 19 EMC, 2022 WL 344966 (N.D. Cal. Feb. 4, 2022) (FRCP 8 expressly allows for pleading 20 in the alternative); Jeong v. Nexo Fin. LLC, No. 21-cv-02392-BLF, 2022 WL 174236, at 21 *27 (N.D. Cal. Jan. 19, 2022) (finding no binding precedent that pleading equitable 22 restitution in the alternative to contract damages is improper); Wildin v. FCA US LLC, No. 23 17-cv-02594-GPC, 2018 WL 3032986, at *7 (S.D. Cal. Jun. 19, 2018) (determining 24 availability of UCL remedy at pleading state is premature). 6 25 26 27 28 6 The Court’s application of Nacarino, Jeong, and Wildin to the present matter is parallel to an order recently issued in response to a motion to dismiss in a case with remarkably similar allegations. Caroll v. Progressive Cas. Ins. Co., No. 21-cv-09217-FMO, (C.D. Cal. Mar. 6, 2023). (Doc. No. 26-1 at 9.) 22 22-cv-0970-AJB-DEB Case 3:22-cv-00970-AJB-DEB Document 27 Filed 03/09/23 PageID.561 Page 23 of 23 1 Accordingly, the Court GRANTS Liberty Mutual’s motion to dismiss Plaintiff’s 2 UCL claim for failure to state a claim WITH LEAVE TO AMEND. 3 V. 4 5 6 7 8 9 10 CONCLUSION Based on the foregoing, the Court enters the following orders: • Liberty Mutual’s motion to dismiss is GRANTED IN PART AND DENIED IN PART. (Doc. No. 15.) • Plaintiff’s claim for injunctive relief is DISMISSED WITHOUT LEAVE TO AMEND. • Plaintiff’s unjust enrichment claim is DISMISSED WITHOUT LEAVE TO AMEND. 11 • Plaintiff’s UCL claim is DISMISSED WITH LEAVE TO AMEND. 12 • Should Plaintiff desire to amend her complaint, she must file a first amended 13 14 complaint no later than March 24, 2023. • Liberty Mutual must file a responsive pleading no later than April 7, 2023. 15 16 IT IS SO ORDERED. 17 18 Dated: March 9, 2023 19 20 21 22 23 24 25 26 27 28 23 22-cv-0970-AJB-DEB
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