I. INTRODUCTION
Plaintiffs in each of these individual actions have filed suit against ABC Legal Services, Inc., (“ABC”), and individual process servers who worked for ABC. ABC is in the business of filing and processing legal forms. Each Plaintiff raises claims against ABC and the process servers for alleged instances of “sewer service.” See Freeman v. ABC Legal Services Inc.,
II. DISCUSSION
ABC styles its motions under various Federal Rules of Civil Procedure. First, it states that it brings a Rule 12(c) motion for partial judgment on the pleadings as to Plaintiffs’ claims for injunctive relief and violation of Cal. Bus. & Prof. Code § 17200 (“UCL”). Docket No. 61 at 1-2. Second, it states that it brings a Rule 12(b)(1) motion to dismiss for lack of subject-matter jurisdiction, on the basis that there is no case or controversy regarding Plaintiffs’ UCL claim. Id. at 2. Third, for the cases in which ABC has not yet filed responsive pleadings, ABC substitutes a 12(b)(6) motion for the 12(c) motion described above, and also asserts a Rule 12(f) motion to strike Plaintiffs’ injunctive relief claims.
The Court’s subject matter jurisdiction over these actions as a whole is not in dispute in these cases because each Plaintiff asserts claims arising under federal law, namely the FDCPA. ABC does not
(1) Whether Plaintiffs have standing and have stated a claim under the UCL; and
(2) Whether injunctive relief is available under any of Plaintiffs’ claims.
A. Legal Standard
“Because standing and ripeness pertain to federal courts’ subject matter jurisdiction, they are properly raised in a [Federal] Rule [of Civil Procedure] 12(b)(1) motion to dismiss.” Chandler v. State Farm Mut. Auto. Ins. Co.,
Under Rule 12(b)(6), a party may move to dismiss based on the failure to state a claim upon which relief may be granted. Fed.R.Civ.P. 12(b)(6). A motion to dismiss based on Rule 12(b)(6) challenges the legal sufficiency of the claims alleged. See Parks Sch. of Bus. v. Symington,
Under Rule 12(c), “a party may move for judgment on the pleadings” after the pleadings are closed “but early enough not to delay trial.” Fed.R.Civ.P. 12(c). A Rule 12(c) motion is “ ‘functionally identical’ ” to a Rule 12(b)(6) motion to dismiss for failure to state a claim, and therefore the same legal standard applies. Cafasso v. General Dynamics C4 Sys., Inc.,
Under Rule 12(f), “[a] court may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed.R.Civ.P. 12(f). “Immaterial matter is that which has no essential or important relationship to the claim for relief or the defenses being pleaded.” Fantasy, Inc. v. Fogerty,
B. Standing under the UCL
The parties disagree as to both the legal standard for UCL standing and its application to Plaintiffs. ABC argues that the constitutional standing requirement for injunctive relief applies, and that Plaintiffs cannot demonstrate a threat of future harm. Plaintiffs argue they need only satisfy the statutory UCL standing requirements in § 17204, and that regardless, they have shown a likelihood of future harm.
1. Legal Standard
At a constitutional minimum, standing requires the party invoking federal jurisdiction to show that it has “suffered some actual or threatened injury as a result of the putatively illegal conduct of the defendant, and that the injury can be traced to the challenged action and is likely to be redressed by a favorable decision.” Valley Forge Christian Coll. v. Ams. United for Separation of Church & State, Inc.,
The UCL statutory standing requirements differ from standing requirements in federal court. Cal. Bus. & Prof. Code § 17204 provides that a plaintiff “who has suffered injury in fact and has lost money or property as a result of the unfair competition” has standing to seek relief under the UCL. Only two forms of relief are available: restitution and/or an injunction. Korea Supply Co. v. Lockheed Martin Corp.,
Plaintiffs argue that the § 17204 standard should apply here, as the California Supreme Court has held that once a plaintiff satisfies § 17204, which ABC does not dispute Plaintiffs satisfy, she may seek injunctive relief under the UCL. However, in federal court, a plaintiff must still demonstrate Article III standing to seek injunctive relief, even if she would otherwise have standing in state court. In Hangarter v. Provident Life & Acc. Ins. Co.,
Plaintiffs point out that some cases appear to evaluate UCL standing without regard to constitutional standing for injunctive relief, even where it is questionable whether constitutional standing was present. See, e.g., Swain v. CACH, LLC,
Other cases similarly address only UCL standing, but the fact patterns suggest constitutional standing would not have been a concern. See, e.g., White v. Trans Union LLC,
In contrast, other cases have explicitly applied the constitutional, rather than UCL, standing requirement. Trew v. Volvo Cars of N. Am., LLC, CIV-S-051379DFLPAN,
Despite the variousness among lower courts, Ninth Circuit authority is clear on the question. The Ninth Circuit’s recent opinion in Pom Wonderful LLC does not change this conclusion. In that case, the court merely confirmed the California Supreme Court’s holding that a plaintiff need not demonstrate eligibility for restitution in order to seek injunctive relief.
Accordingly, the constitutional standing requirement applies, and Plaintiffs must meet it in order to assert their UCL claims for injunctive relief.
2. Application to this Case
In the instant case, it is a close call whether Plaintiffs meet the standing requirement for injunctive relief. Although Plaintiffs adequately allege past damages, they must allege facts sufficient to show a “real and immediate threat of repeated injury” in order to seek injunctive relief in federal court. O’Shea v. Littleton,
In Armstrong, the Ninth Circuit described two ways in which a plaintiff can show that an injury is likely to recur. First, a plaintiff may show that the defendant had, at the time of the injury, a written policy, and that the injury “stems from” that policy.275 F.3d at 861 . “[W]here the harm alleged is directly traceable to a written policy, there is an implicit likelihood of its repetition in the immediate future.” Id. (citation and quotation omitted). Second, the plaintiff may demonstrate that the harm is part of a “pattern of officially sanctioned ... behavior, violative of the plaintiffs’ [federal] rights.” Id. (quoting LaDuke v. Nelson,762 F.2d 1318 , 1323 (9th Cir.1985)). “[W]here the defendants have repeatedly engaged in the injurious acts in the past, there is a sufficient possibility that they will engage in them in the near future to satisfy the ‘realistic repetition’ requirement.” Id.
Here, although it is a close call whether Plaintiffs have adequately alleged a realistic threat of future harm, the Court concludes that their current allegations fall short. On the one hand, Plaintiffs have alleged widespread illegal practices by ABC. In its previous order, the Court has already found that Plaintiff Freeman alleged a practice of unlawful conduct by ABC:
[T]he Court finds that Plaintiff has sufficiently alleged that Defendants engaged in the practice of “sewer service” so as to forfeit the process server exemption. As alleged, ABC advertises its process service to debt collectors and then induces process servers, like Smith, to file false Proofs of Service, by paying them substantially less for service that is not complete. FAC ¶ 62. Plaintiff also alleges that Smith provides ABC with his facsimile signature, and ABC used this to produce the fraudulent Proof of Service of Summons like the one that CIR paid for. FAC ¶28. Plaintiff further alleges that ABC knew that fraud, perjury, and breach of official duty were being committed by Smith, and ABC approved and encouraged this conduct by continuing to employ Smith and givehim process server assignments even after learning he had engaged in “sewer service.” FAC ¶¶29, 37-39. Although just one instance of “sewer service” is arguably enough to forfeit the exemption, Plaintiffs allegation that his has occurred over forty times makes the contention that this was a fraudulent operation much more plausible. FAC ¶ 67.
Freeman v. ABC Legal Services Inc.,
Plaintiff pointed out that Defendants’ record on June 19, 2010, showed Defendant Smith simultaneously completed two different serves, in two different locations. Tanabe Deck, Docket No. 31, at 14. Mr. Tanabe’s declaration also stated that after replicating Defendant Smith’s route, he found it would have been impossible to complete the alleged number of serves on June 10, 2010. Tanabe Deck at 5.
Id. Thus, based on the Court’s findings to date, one could argue that Plaintiffs have adequately alleged a pattern of officially sanctioned conduct, if not a written policy, that makes their fear of future harm plausible so as to confer standing to seek injunctive relief. Indeed, beyond the allegations to which the Court has already referred, Plaintiffs allege that ABC maintains digital copies of its process servers’ signatures so that it can “manufacture process server returns” that appear to comply with the law. FAC ¶28. Plaintiffs also allege that ABC gave assistance and encouragement to its process servers’ evasion of the law, FAC pp. 29, and that they ratified their conduct, FAC ¶¶ 38-39. Specifically, Plaintiffs allege ABC “knowingly promotes the use of false process server returns” through the way that it composes and sells those returns. FAC ¶ 62.
On the other hand, Plaintiffs’ current allegations establish only that ABC will (allegedly) harm many people, but not necessarily that it will harm Plaintiffs again. See, e.g., Hodgers-Durgin,
In Armstrong, the court found that a class of disabled prisoners and parolees had adequately alleged standing by showing that the Board employed a discriminatory written policy, adopted practices that “routinely deprives disabled prisoners and parolees of their rights under the ADA,” and that the treatment of the class as a whole, including the fact that “named plaintiffs suffered repeated acts of discrimination,” demonstrated a likelihood of fu
The problem for Plaintiffs is that, as currently alleged, whether they are subject to ABC’s purportedly unlawful conduct in the future depends largely on undefined contingencies. A defendant’s practices, even if allegedly routine, must still distinguish the plaintiff from “any other citizen” in order for the plaintiff to demonstrate entitlement to an injunction. Lyons,
Here, no Plaintiff alleges, e.g., that he or she has additional consumer debt that has or may be sent to collection, that he or she has been a defendant in other lawsuits in the past or has a reasonable prospect of being subjected to additional litigation in the near future. Nor have Plaintiffs alleged ABC’s share of the process server market is such that if they were sued again there is a reasonable likelihood that the creditor’s attorneys would employ ABC. Thus, even if Defendants’ practices are routine, the Court cannot conclude based on the current allegations that any predicted future harm is more than speculative. See Hodgers-Durgin,
The Court notes that some Plaintiffs are closer to stating plausible claims of standing than others. For example, the Ansari Plaintiffs state that they have purportedly incurred two debts, from Target and Capital One, to which ABC was assigned to collect. Ansari Compl., 11-3542, Docket No. 1, ¶¶ 28-29. They allege that law firm clients of ABC initiated two different lawsuits against them, and that in those suits, ABC filed three false proofs of service in 2010 and 2011. Id. ¶¶ 30, 32, 39, 43-44, 50, 59. The Paule Plaintiffs make substantially similar allegations, based on two purported debts and two allegedly false proofs of service in 2011. Paule Compl., 12-642, Docket No. 1, ¶¶ 46-47, 59, 73. With respect to those Plaintiffs who have already experienced the same unlawful conduct more than once, their claims of future harm appear more plausible. However, as explained above, Plaintiffs’ allegations are still short of demonstrating a likelihood of future harm.
In addition, as currently pled, Plaintiffs admit they do not allege any basis for restitution. See Mot. at 8. Thus, Plaintiffs do not currently have standing to seek any form of relief under the UCL.
Accordingly, the Court GRANTS Defendant’s motion to dismiss Plaintiffs’ UCL claims without prejudice. Plaintiffs may amend and attempt to assert a basis for their standing to seek either injunctive relief and/or restitution.
C. Injunctive Relief for Other Claims
ABC also argues injunctive relief is not available for any of Plaintiffs’ claims besides their UCL claims. Because the Court has concluded above that Plaintiffs have not sufficiently alleged standing to seek injunctive relief, such a ruling necessarily applies to any cause of action. However, Plaintiffs do not appear to request such relief for non-UCL causes of action in their complaints. Accordingly, the Court DENIES as moot Defendant’s motion to dismiss Plaintiffs’ claims for injunctive relief with respect to any non-UCL causes of action.
III. CONCLUSION
For the . foregoing reasons, the Court GRANTS Defendant’s motions to dismiss Plaintiffs’ UCL claims without prejudice. Plaintiffs shall file any amended complaint within 30 days of the date of this order. As Plaintiffs have not sought injunctive relief pursuant to any non-UCL cause of action, the Court DENIES as moot Defendant’s motion to dismiss Plaintiffs injunctive relief claims with respect to those causes of action.
IT IS SO ORDERED.
Notes
. This is the lead case in a collection of related cases regarding the same allegations of "sewer service” by ABC Legal Services. Defendant's motion in the lead Freeman matter is at Docket No. 61. Defendant ABC has filed the same or substantially the same motion or joinder in each of the following cases: Walker, 12-678 EMC (Docket No. 9); Paule, 12-642 EMC (Docket No. 9); Sparacino, 12-624 EMC (Docket No. 9); Wyckoff, 12-644 EMC (Docket No. 9); Clohan, 12-1696 EMC (Docket No. 7); Rosales, 11-3805 EMC (Docket No. 34); Barreto, 11-5152 EMC (Docket No. 20); Jones, 11-3824 EMC (Docket No. 36); Ansari, 11-3542 EMC (Docket No. 40); Brown, 12-1911 EMC (Docket No. 12); Dohn, 12-1914 EMC (Docket No. 14); Kamin, 12-1693 EMC (Docket No. 14); and Younger, 12-1904 EMC (Docket No. 13). The 2012 cases have joined in the Walker (12-678) motions, and the 2011 cases have joined in the Freeman (11-3007) cases.
Because the factual issues relevant to the motions are largely identical between the cases (except as otherwise stated), the Court refers generically to "Plaintiffs” and "Defendant” in this Order, and all docket citations are to the Freeman matter unless otherwise noted. Most cases also name the individual process server as a defendant, but only ABC has filed and joined each of the pending motions.
. Plaintiffs’ reference to CRST Van Expedited, Inc. v. Werner Enterprises, Inc., is inapposite. That case, which noted that “[a] business act or practice need not be an ongoing pattern of conduct” in order to qualify as an unlawful practice, did not address the issue of standing but rather the Rule 12(b)(6) standard for stating a UCL claim.
. Similarly, although the Federal Circuit did not consider constitutional standing requirements in Allergan, it was clear on the facts of that case that the only bar to plaintiffs’ standing was their ineligibility for restitution, as they complained of an ongoing practice that continued to injure them specifically. Allergan,
