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TVI, Inc. v. Ferguson

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

April 3, 2018

TVI Inc. dba SAVERS and VALUE VILLAGE, Plaintiff,
ROBERT W. FERGUSON, in his official capacity as Attorney General of the State of Washington, Defendant.




         This matter comes before the Court on Defendant Washington State Attorney General Robert W. Ferguson (“Attorney General” or “AGO”)'s Motion to Dismiss under Rules 12(b)(1) and 12(b)(6). Dkt. #12. The Attorney General argues that that all of the claims in this case must be dismissed with prejudice based on “Younger abstention and principles of equity, comity, and federalism.” Id. at 2. Plaintiff TVI, Inc. d/b/a Savers and Value Village (“TVI”) opposes this Motion. Dkt. #16. For the reasons stated below, the Court GRANTS Defendant's Motion and dismisses this case with prejudice.

         II. BACKGROUND [1]

         Plaintiff TVI is a Washington-based for-profit company that operates 20 Value Village stores in the State and is a registered commercial fundraiser under the Washington Charitable Solicitation Act (“CSA”), RCW 19.09. TVI's business is to work with non-profit organizations to collect used goods from donors and pay charity partners for these goods. Through this process, TVI has paid roughly $13 million to Washington charities in 2016, and over $120 million in the last ten years.

         In December of 2014, the Washington State Attorney General's Office (“AGO”) began an investigation into TVI's business practices as they relate to applicable Washington State law. In July of 2016, it presented TVI with twelve non-monetary demands regarding practices and disclosures. TVI agreed to nine of the twelve requests, but rejected the AGO's demands that it post signs in stores disclosing TVI's contractual payment arrangements with charities for the purchase of goods[2] and instruct employees to disclose the “bulk purchase price” paid to charities.

         In August 2017, the AGO made a presentation to TVI contending it is a deceptive practice that TVI does not disclose to its customers the portion of sales prices paid to charity partners. TVI continued to try to work with the AGO to resolve this and other issues. However, in a meeting on December 8, 2017, and correspondence thereafter, the AGO indicated it was poised to file suit against TVI.

         In response, TVI brought this action on December 11, 2017, under 42 U.S.C. §1983 and the Declaratory Judgment Act. See Dkt. #1. TVI alleges that the Attorney General has violated its free speech rights under the First and Fourteenth Amendments by dictating its contractual relationships with charities and mandating disclosure of its contractual payment terms with charities. Id. at 10.

         After learning that TVI filed this suit, the AGO indicated it would discontinue all efforts to reach resolution if TVI did not immediately withdraw and dismiss this action and issue a press statement apologizing that it had “misunderstood” the AGO's demands. TVI rejected this request. The Attorney General issued a press release and otherwise began a press campaign to publicize its position in this case. TVI alleges that the AGO's claims in press statements were false or deceptive.

         On December 20, 2017, nine days after the instant suit was filed, the AGO filed a complaint in state court asserting claims against TVI under the state Consumer Protection Act (“CPA”) and the Washington Charitable Solicitation Act (“CSA”). That suit alleges that TVI violated the CPA by, inter alia, deceiving donors into thinking that donations of furniture and household goods to TVI would benefit TVI's charity partners when in certain circumstances these charity partners receive nothing. See Dkt. #8-1 at ¶¶ 1.2, 5.8.-5.12, 5.44-5.52, 6.1-6.12. The suit also alleges that TVI violated the CSA by soliciting donations with false, misleading, or deceptive information. Id. at ¶¶ 7.1-7.8. TVI alleges that this State Complaint is false or deceptive.


         A. Legal Standard

         Under Rule 12(b)(1), a defendant may challenge the plaintiff's jurisdictional allegations in one of two ways: (1) a “facial” attack that accepts the truth of the plaintiff's allegations but asserts that they are insufficient on their face to invoke federal jurisdiction, or (2) a “factual” attack that contests the truth of the plaintiff's factual allegations, usually by introducing evidence outside the pleadings. Leite v. Crane Co., 749 F.3d 1117, 1121-22 (9th Cir. 2014). When a party raises a facial attack, the court resolves the motion as it would under Rule 12(b)(6), accepting all reasonable inferences in the plaintiff's favor and determining whether the allegations are sufficient as a legal matter to invoke the court's jurisdiction. Id. at 1122.

         In making a 12(b)(6) assessment, the court accepts all facts alleged in the complaint as true, and makes all inferences in the light most favorable to the non-moving party. Baker v. Riverside County Office of Educ., 584 F.3d 821, 824 (9th Cir. 2009) (internal citations omitted). However, the court is not required to accept as true a “legal conclusion couched as a factual allegation.” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007)). The complaint “must contain sufficient factual matter, accepted as true, to state a claim to relief that is plausible on its face.” Id. at 678. This requirement is met when the plaintiff “pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Id. The complaint need not include detailed allegations, but it must ...

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