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O&R Construction, LLC v. Dun & Bradstreet Credibility Corp.

United States District Court, W.D. Washington, Seattle

December 21, 2017



          Thomas S. Zilly United States District Judge.

         THIS MATTER comes before the Court on a motion to dismiss, docket no. 95 in Case No. 14-1021 TSZ, brought by defendant Dun & Bradstreet Credibility Corporation (“DBCC”). Having reviewed all papers filed in support of, and in opposition to, DBCC's motion, the Court enters the following order.


         Plaintiffs Vinotemp International Corporation (“Vinotemp”) and CPrint, Inc. (“CPrint”) brought an action on behalf of themselves and a class of all entities in California that purchased DBCC's product known as CreditBuilder, which is an Internet-based system for credit self-monitoring. Plaintiffs' suit has since been consolidated with four other matters involving residents in other states, see Order at 9-10 (docket no. 241); however, DBCC's motion is focused solely on the claims pursued under California law. DBCC acquired CreditBuilder from defendants Dun & Bradstreet Corporation and Dun & Bradstreet, Inc. (collectively, “D&B”), along with licenses to use the “Dun & Bradstreet” name, brand, logo, and trade dress. D&B collects financial information and issues credit reports, scores, and ratings on businesses, which are used by the government, as well as private companies, to make contracting and other commercial decisions.

         According to plaintiffs, when businesses contact D&B concerning any problem with their credit reports, they are “uniformly and seamlessly routed to a DBCC sales representative who tries to sell them CreditBuilder, rather than attempt to fix the problem.” Am. Compl. at ¶ 22 (C14-1021, docket no. 93). Plaintiffs do not allege, however, that they were solicited in this manner by DBCC. Instead, Vinotemp indicates that it received marketing materials bearing the “Dun & Bradstreet” logo, presumably via U.S. mail, as well as two e-mails, one in October 2010, from a (D&B) address, and one in May 2011. Id. at ¶¶ 57-59. The latter e-mail “positioned CreditBuilder as a D&B related product” and touted it as “the only way to improve [credit] scores.” Id. at ¶ 59.

         Vinotemp was also solicited in January 2012, but the Amended Complaint does not specify whether the contact was by letter, e-mail, or telephone. See id. at ¶¶ 44, 46, & 52. During this communication, which apparently occurred on January 23, 2012, see Id. at ¶ 52, DBCC allegedly told Vinotemp that a “high volume of companies” had made inquiries about it, and that its scores indicated “a ‘significant' likelihood of severe financial stress” in the upcoming year and a “low proportion of satisfactory payment experiences to total payment experiences.” Id. at ¶¶ 44, 46, & 52. Plaintiffs do not assert that these statements were inconsistent with Vinotemp's D&B profile, but rather that its D&B credit report was premised on false or inaccurate data.

         CPrint also received marketing materials bearing the “Dun & Bradstreet” logo, but the date and manner in which the items were sent by DBCC is not described in the operative pleading. See id. at ¶ 82. CPrint alleges it was advised by DBCC in June 2011 that “CreditBuilder was a ‘D&B solution' to its poor scores, ” but it fails to indicate how this information was conveyed. See id. at ¶ 83. Plaintiffs assert that, in addition to using marketing materials bearing D&B's logo, DBCC referred to D&B's databases as “our” databases, described credit reporting functions performed by D&B as something “we” do, and indicated that “companies are coming to us” (as opposed to D&B) for credit reports. Id. at ¶ 28 (emphasis in original). Plaintiffs have not, however, set forth when or in what context DBCC made such statements to either of them.

         Plaintiffs contend that, because D&B “seeded” their respective credit reports with false information, [1] each company “believed it had no choice” but to enroll in or purchase CreditBuilder. Id. at ¶¶ 60 & 84. Vinotemp bought the product on three occasions, namely on October 28, 2010, for $549.00, on November 21, 2012, for $799.00, and on November 29, 2013, for $1, 100.00. Id. at ¶ 42. CPrint made two purchases, first in June 2011 for approximately $850.00, and then again in June 2012 for $799.00. Id. at ¶ 67. Plaintiffs allege that they were confused by various representations made by DBCC and would not have bought CreditBuilder but for these representations. See id. at ¶¶ 63- 64 & 87-88.

         Plaintiffs accuse DBCC of representing that CreditBuilder was “the solution to false entries” on their respective credit reports, and indicate that they would not have purchased the product but for such representation. Id. at ¶¶ 64 & 88. Plaintiffs assert that, despite purchasing CreditBuilder, false items continued to appear on their respective credit reports. Id. at ¶¶ 65 & 89. Plaintiffs have brought three claims against DBCC, namely violation of California's Unfair Competition Law (“UCL”), violation of California's False Advertising Law (“FAL”), and negligent misrepresentation. DBCC has moved pursuant to Federal Rule of Civil Procedure 12(b)(6) to dismiss these claims.


         A. Standard for Motion to Dismiss

         Although a complaint challenged by a Rule 12(b)(6) motion to dismiss need not provide detailed factual allegations, it must offer “more than labels and conclusions” and contain more than a “formulaic recitation of the elements of a cause of action.” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007). The complaint must indicate more than mere speculation of a right to relief. Id. When a complaint fails to adequately state a claim, such deficiency should be “exposed at the point of minimum expenditure of time and money by the parties and the court.” Id. at 558. A complaint may be lacking for one of two reasons: (i) absence of a cognizable legal theory, or (ii) insufficient facts under a cognizable legal claim. Robertson v. Dean Witter Reynolds, Inc., 749 F.2d 530, 534 (9th Cir. 1984). In ruling on a motion to dismiss, the Court must assume the truth of the plaintiff's allegations and draw all reasonable inferences in the plaintiff's favor. E.g., Usher v. City of Los Angeles, 828 F.2d 556, 561 (9th Cir. 1987). The question for the Court is whether the facts in the complaint sufficiently state a “plausible” ground for relief. Twombly, 550 U.S. at 570. If the Court dismisses the complaint or portions thereof, it must consider whether to grant leave to amend. Lopez v. Smith, 203 F.3d 1122, 1130 (9th Cir. 2000).

         B. California's Unfair Competition Law and False Advertising Law

         The UCL defines “unfair competition” to include any business act or practice that is (1) unlawful, (2) unfair, or (3) fraudulent, as well as (4) any advertising that is “unfair, deceptive, untrue or misleading” and (5) any act prohibited by the FAL. Cal. Bus. & Prof. Code § 17200. The FAL prohibits the dissemination of advertising that is “untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.” Id. at § 17500; see In re Vioxx Class Cases, 103 Cal.Rptr.3d 83, 95 (Cal.Ct.App. 2009). The remedies available under the UCL and FAL are limited; prevailing plaintiffs are entitled only to injunctive relief and restitution, [2] and they may not recover damages. In re Vioxx, 103 Cal.Rptr.3d at 95; see Prakashpalan v. Engstrom, Lipscomb & Lack, 167 Cal.Rptr.3d 832, 856 (Cal.Ct.App. 2014); see also Cacique, Inc. v. Robert Reiser & Co., 169 F.3d 619, 624 (9th Cir. 1999). Moreover, attorney fees are not available under the UCL or the FAL. See Cel-Tech Commc'ns, Inc. v. L.A. Cellular Tel. Co., 973 P.2d 527, 539 (Cal. 1999); see also Benson v. S. Cal. Auto ...

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