Opinion

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 SOUTHERN DISTRICT OF CALIFORNIA 10 Case No.: 25cv2044 DMS (JAC) QASEM HASHIMI, on behalf of himself 11 and all others similarly situated, ORDER GRANTING IN PART AND 12 Plaintiff, DENYING IN PART DEFENDANT’S v. MOTION TO DISMISS 13 PLAINTIFF’S CLASS ACTION MOVADO GROUP, INC., a New York 14 COMPLAINT Corporation, and DOES 1-50, inclusive, 15 Defendants. [ECF No. 9] 16 17 18 19 Before the Court is Defendant Movado Group, Inc.’s motion to dismiss Plaintiff 20 Qasem Hashimi’s Class Action Complaint. (Mot., ECF No. 9-1.) This matter is fully 21 briefed, (see Opp’n, ECF No. 11; Reply, ECF No. 16), and suitable for decision without 22 oral argument, (ECF No. 18). For the following reasons, the Court grants in part and denies 23 in part Defendant’s motion to dismiss. 24 I. BACKGROUND 25 The Court assumes the Complaint’s allegations are true while resolving the motion. 26 Defendant markets, distributes, and sells watches, jewelry, and other items at its mainline 27 and outlet stores. (Compl., ECF No. 1, ¶ 55.) Plaintiff purchased a Veturi watch from 28 Defendant’s outlet store in Carlsbad, California (“Outlet Store”) on April 9, 2025. (Id. ¶ 1 42.) The watch bore an “original” price of approximately $599 and an actual sales price 2 of $249; Plaintiff paid an after-tax total of $268.30. (Id.) Because of “Defendant’s signage 3 and labeling,” Plaintiff “reasonably believed” he received a “substantial bargain” on a 4 mainline watch, and this belief was material to his purchasing decision. (Id. ¶¶ 43, 45.) 5 He would not have purchased the watch or paid the price he did had he known the 6 advertised discounts were false. (Id. ¶ 44.) 7 The Outlet Store’s display cases use “List Price Plaques” which show a “list” price 8 (the “original” price) immediately below an actual sales price of the watches. (Id. ¶¶ 21, 9 37, 43.) In some cases, the List Price Plaques refer to a group of watches and, therefore, 10 the list and sale prices are displayed as ranges. (Id. ¶ 19.) The Outlet Store does not 11 disclose when any watch was last offered at the list prices, if ever. (Id. ¶ 20.) Additionally, 12 the List Price Plaques do not include any comparison to Defendant’s mainline stores or to 13 third-party retailers. (Id. ¶ 22.) Thus, using the list and sales prices on the same List Price 14 Plaques creates an “unmistakable impression that the advertised discounts reflect 15 reductions” from “bona fide, in-store, former selling price[s].” (Id.) In other words, 16 Defendant allegedly fabricates inflated “original” prices, described as list prices, then 17 claims to offer its merchandise at a “steep discount.” (See id. ¶¶ 4, 19.) Defendant 18 allegedly uses this false advertising scheme for its “apparel, accessories, sportswear, 19 leather goods, and related products” at its outlet stores nationwide, “regardless of 20 geography or date of observation.” (Id. ¶¶ 3, 20, 37.) 21 Plaintiff’s counsel alleges he investigated Defendant’s pricing practices at its outlet 22 stores between March 25 and July 10, 2025. (Id. ¶ 36.) “[N]early all items are 23 accompanied by a pricing placard showing the actual sales prices immediately above a 24 ‘List’ or ‘List Price’ reference price.” (Id. ¶ 37.) During the investigation, “[h]undreds of 25 products were observed as continuously ‘on sale,’” but were at no point offered at the list 26 price. (See id. ¶¶ 37, 38.) Thus, Plaintiff believes Defendant’s outlet merchandise is not, 27 as a general practice, offered at the list prices. (Id. ¶ 37.) Further, Plaintiff’s counsel was 28 unable to locate the watches from the Outlet Store on Defendant’s mainline website. (Id. 1 ¶ 24.) Plaintiff also is informed and believes the merchandise offered on Defendant’s 2 mainline website is not offered on its outlet website, and vice versa. (Id.) Thus, Plaintiff 3 suspects at least some of the items available at Defendant’s outlet website and stores are 4 “specifically manufactured or designated for outlet sale” (including different materials, 5 construction methods, and design specifications than the mainline counterparts), rather 6 than being “discounted overstock or past-season goods” from Defendant’s mainline stores. 7 (See id. ¶¶ 23, 24, 39, 23 n.21.) The investigation confirms the list prices attached to 8 Defendant’s “outlet products—including those purchased by Plaintiff—do not reflect 9 genuine, bona fide former prices,” but “function solely as artificial anchors designed to 10 create the illusion of a discount.” (Id. ¶ 38.) 11 In sum, Plaintiff alleges Defendant’s products are rarely, if ever, offered for sale at 12 the “original” (“list”) prices and, thus, “serve no function other than to create a false sense 13 of urgency and value, deceiving consumers into believing that they are purchasing high- 14 quality goods at a substantial markdown.” (Id. ¶ 28.) “In reality, consumers are . . . 15 purchasing lower-quality, [made-for-outlet] goods—often older, discontinued, or 16 overstock items—for which the reference prices are outdated, unverified, or no longer 17 reflect any actual or recent sales in [Defendant’s] mainline retail channels.” (Id.) 18 Defendant purportedly knows its reference price advertising is “false, deceptive, 19 misleading, unconscionable, and unlawful.” (Id. ¶ 57.) Defendant conceals from 20 consumers the true nature and quality of its outlet store products and advertising practices 21 to “provoke” Plaintiff and class members to purchase the products sold in its outlet stores. 22 (Id. ¶¶ 58, 59.) 23 Plaintiff alleges violations of California’s (1) False Advertising Law (“FAL”), Cal. 24 Bus. & Prof. Code § 17500 et seq.; (2) Consumers Legal Remedies Act (“CLRA”), Cal. 25 Civ. Code § 1750 et seq.; and (3) Unfair Competition Law (“UCL”), Cal. Bus. & Prof. 26 Code § 17200 et seq. (Id. at 24–30.) Plaintiff brings this action on behalf of himself and 27 “all other similarly situated” class members (“Class”). (Id. ¶ 61.) The Class is defined as: 28 1 [a]ll persons within the State of California, who, within the applicable statute of limitations preceding the filing of this action . . . , purchased from a Movado 2 Company Store one or more products at discounts from an advertised 3 reference price and who have not received a refund or credit for their purchase(s). 4 5 (Id.) Plaintiff seeks damages and injunctive relief. (Compl., Prayer for Relief.) Defendant 6 moves to dismiss the entire Complaint under Federal Rules of Civil Procedure 9(b), 7 12(b)(1), and 12(b)(6). (See generally Mot.) 8 II. LEGAL STANDARDS 9 A. Standing 10 Article III of the Constitution requires courts to adjudicate only actual cases or 11 controversies. See U.S. Const. art. III, § 2, cl. 1. “One element of the case-or-controversy 12 requirement is that plaintiffs must establish that they have standing to sue.” Clapper v. 13 Amnesty Int’l USA, 568 U.S. 398, 401 (2013). A party may “move to dismiss a claim based 14 on lack of subject matter jurisdiction, including the absence of standing,” under Rule 15 12(b)(1). Sywula v. Teleport Mobility, Inc., 652 F. Supp. 3d 1195, 1208 (S.D. Cal. 2023) 16 (citing Chandler v. State Farm Mut. Auto. Ins. Co., 598 F.3d 1115, 1123 (9th Cir. 2010)). 17 B. Sufficiency of Pleading 18 Under Rule 12(b)(6), a party may move to dismiss on the grounds that a complaint 19 “fail[s] to state a claim upon which relief can be granted.” Fed. R. Civ. P. 12(b)(6). A 20 12(b)(6) motion “tests the legal sufficiency of a claim.” Navarro v. Block, 250 F.3d 729, 21 732 (9th Cir. 2001). To survive such a motion, “a complaint must contain sufficient factual 22 matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. 23 Iqbal, 556 U.S. 662, 678 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 24 (2007)). “A claim has facial plausibility when the plaintiff pleads factual content that 25 allows the court to draw the reasonable inference that the defendant is liable for the 26 misconduct alleged.” Id. “Determining whether a complaint states a plausible claim for 27 relief will . . . be a context-specific task that requires the reviewing court to draw on its 28 judicial experience and common sense.” Id. at 679. “Factual allegations must be enough 1 to raise a right to relief above the speculative level.” Twombly, 550 U.S. at 555. If a 2 plaintiff “ha[s] not nudged [his] claims across the line from conceivable to plausible,” the 3 complaint “must be dismissed.” Id. at 570. 4 In reviewing the plausibility of a complaint on a motion to dismiss, a court must 5 “accept factual allegations in the complaint as true and construe the pleadings in the light 6 most favorable to the nonmoving party.” Manzarek v. St. Paul Fire & Marine Ins., 519 7 F.3d 1025, 1031 (9th Cir. 2008). But courts are not “required to accept as true allegations 8 that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences.” 9 In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (quoting Sprewell v. 10 Golden State Warriors, 266 F.3d 979, 988 (9th Cir. 2001)). 11 “In alleging fraud or mistake, a party must state with particularity the circumstances 12 constituting fraud or mistake.” Fed. R. Civ. P. 9(b). “To properly plead fraud with 13 particularity under Rule 9(b), a pleading must identify the who, what, when, where, and 14 how of the misconduct charged, as well as what is false or misleading about the purportedly 15 fraudulent statement, and why it is false.” Davidson v. Kimberly-Clark Corp., 889 F.3d 16 956, 964 (9th Cir. 2018) (citation modified). 17 III. DISCUSSION 18 A. Standing 19 1. Article III Standing–Products Not Purchased by Plaintiff 20 Defendant argues Plaintiff lacks Article III standing to “bring claims for any 21 products he did not purchase.” (Mot. 21.) To the Court’s knowledge, there is no 22 controlling authority on whether a plaintiff has standing to bring claims on behalf of others 23 for products that are similar to the product plaintiff purchased. See Anderberg v. Hain 24 Celestial Grp., Inc., 652 F. Supp. 3d 1232, 1240 (S.D. Cal. 2023) (noting no controlling 25 authority). In this vacuum, 26 “[c]ourts . . . have adopted three diverging approaches for analyzing standing 27 to pursue claims for nonpurchased products.” Under the first approach, the court dismisses all claims based upon unpurchased products. Under the 28 second “middle ground” approach, the court concludes that substantial 1 similarity between purchased and unpurchased products is sufficient to satisfy Article III requirements as to claims based upon unpurchased products. “In 2 applying the ‘substantial similarity’ test, Courts look to a series of factors 3 including whether the challenged products are of the same kind, comprised of largely the same ingredients, and whether each of the challenged products 4 bears the same alleged mislabeling.” Finally, under the third approach, the 5 court concludes that as long as a plaintiff has Article III standing to sue for the products that he/she purchased, any questions regarding standing to sue 6 for unpurchased products should be left for resolution at the class certification 7 stage. 8 Itzhak v. Keurig Dr Pepper Inc., No. 25-cv-00235, 2025 WL 2020029, at *6 (C.D. Cal. 9 June 11, 2025) (citations omitted). Defendant argues Plaintiff lacks standing to assert 10 claims based on products he did not buy, even if the products at issue purportedly bear the 11 “same labeling statements” or “similar commonalities.” (See Mot. 21.) Defendant also 12 argues Plaintiff’s allegations do not show substantial similarity, should the Court adopt the 13 second approach. (See Reply 11.) Conversely, Plaintiff contends this issue is best resolved 14 at the class certification stage, rather than on a motion to dismiss. (See Opp’n 21.) 15 Defendant concedes “some courts delay resolution of such issues until the class 16 certification stage . . . but no controlling Ninth Circuit authority requires this Court to do 17 so.” (Reply 10–11.) In line with other courts in this Circuit, the Court will “defer ruling 18 on the issue until the class certification stage.” See, e.g., Koh v. S.C. Johnson & Son, Inc., 19 No. C-09-00927, 2010 WL 94265, at *3 (N.D. Cal. Jan. 6, 2010). 20 2. Standing to Seek Injunctive Relief 21 Injunctive relief is unavailable “absent a showing of . . . real or immediate threat that 22 the plaintiff will be wronged again.” City of Los Angeles v. Lyons, 461 U.S. 95, 111. Here, 23 Plaintiff seeks an injunction “enjoining Defendant from continuing the unlawful practices” 24 alleged in the Complaint. (Compl., Prayer for Relief, ¶ E.) 25 The Court finds Plaintiff has standing to seek injunctive relief. Defendant argues 26 Plaintiff failed to show he regularly shops at Defendant’s stores or actually desired to 27 purchase from the retailer and, thus, lacks standing to seek injunctive relief. (Mot. 23–24 28 1 However, “in some cases, the threat of future harm may be the consumer’s plausible 2 allegations that [he] will be unable to rely on the product’s advertising or labeling in the 3 future, and so will not purchase the product although [he] would like to.” Davidson, 889 4 F.3d at 969–70. Here, Plaintiff alleges he desires to continuously shop at Defendant’s 5 outlet stores because he “likes the brand and the watches and the other jewelry that is 6 offered”; however, he “cannot be certain that Defendant will have corrected [its] deceptive 7 pricing scheme.” (Compl. ¶ 49.) Further, he alleges he “may again, by mistake, purchase 8 a falsely discounted product at one of [Defendant’s] outlet stores under the reasonable, but 9 false, impression that Defendant corrected the scheme.” (Id. ¶ 50.) The Court is “required 10 at this stage of the proceedings to presume the truth of [Plaintiff’s] allegations and to 11 construe all of the allegations in [his] favor.” Davidson, 889 F.3d at 970–71. Thus, 12 Plaintiff’s allegations sufficiently establish standing for injunctive relief. The Court 13 DENIES Defendant’s motion to dismiss on standing grounds. 14 B. Sufficiency of Pleading 15 1. Actionable Misrepresentation 16 Defendant argues, as an initial matter, Plaintiff has not pled an “actionable 17 representation” under the FAL, CLRA, or UCL. (Mot. 8.) According to Defendant, 18 Plaintiff’s allegations—that he relied on an “original” price and an “actual sales price,” 19 (Compl. ¶¶ 42–43)—are insufficient because “pricing about the product alone cannot 20 constitute a[n] [actionable] representation or statement about the product,” (Mot. 9). 21 Plaintiff argues that the two-tier signage is an actionable representation. (Opp’n 3–4.) 22 The Court finds Plaintiff sufficiently alleged an actionable representation. The 23 Complaint alleges Defendant uses throughout its outlet stores standardized point-of-sale 24 List Price Plaques, which display a lower sale price immediately above a higher list price. 25 (See id. at 3, 7.) Further, the List Price Plaques do not contain a comparison to Defendant’s 26 mainline stores or to third-party retailers or disclose when the items were last offered at the 27 list prices. (See id. at 3.) Thus, the Complaint’s allegations go beyond simply a price, but 28 instead allege Defendant used two prices, one described as a list price and one as a sale 1 price, which together create a false sense of a bargain. On these facts and at this early 2 stage, the Court finds the alleged former price comparison is an actionable representation. 3 See Knapp v. Art.com, Inc., No. 16-CV-00768, 2016 WL 3268995, at *4 (N.D. Cal. June 4 15, 2016). 5 2. Rule 9(b) Pleading Requirements 6 While the elements for claims brought under the FAL, CLRA, and UCL differ, “in 7 all three claims a plaintiff ‘must allege [a defendant’s] alleged pricing scheme with 8 particularity.’” Nguyen v. Lovesac Co., No. 24-CV-01293, 2025 WL 950511, at *4 (E.D. 9 Cal. Mar. 28, 2025) (citation omitted). “This includes allegations that the Defendants made 10 a false representation about a product that Plaintiffs purchased.” Haley v. Macy’s, Inc., 11 263 F. Supp. 3d 819, 823 (N.D. Cal. 2017). A plaintiff must also “allege with specificity 12 what products they purchased, on what statements they relied in making those purchases, 13 and why those statements were false or misleading.” Nguyen, 2025 WL 950511, at *4 14 (citations omitted). 15 Here, Defendant argues Plaintiff failed to sufficiently plead what representation he 16 relied upon, or how and why he was deceived. (Mot. 9–10.) Specifically, Defendant argues 17 Plaintiff failed to allege whether (1) the price he relied upon was designated as a list price; 18 (2) the prices he viewed were displayed on the List Price Plaques; and (3) he viewed and 19 relied upon other numbers, symbols, or language (such us “formerly”) near the two 20 numbers. (Id. at 9.) Plaintiff argues the Compliant satisfies Rule 9(b)’s heightened 21 pleading standard. (Opp’n 3–5.) 22 The Court agrees with Plaintiff. Plaintiff contends Defendant (the “who”) sold 23 Plaintiff a Veturi watch (the “what”), at Defendant’s Outlet Store (the “where”) on April 24 9, 2025 (the “when”). (Compl. ¶ 42); see Calcagno v. Kipling Apparel Corp., No. 23-CV- 25 2247, 2024 WL 3261205, at *5 (S.D. Cal. July 1, 2024). Plaintiff alleges “nearly all” of 26 Defendant’s outlet products are accompanied by List Price Plaques, which show the sales 27 prices immediately above list prices (the “original” prices). (See Compl. ¶¶ 21, 37, 43.) 28 The Complaint includes multiple photos of Defendant’s display cases using these List Price 1 Plaques. (See id. at 7.) Plaintiff also alleges the investigation showed “[h]undreds of 2 products . . . as continuously ‘on sale,’” but never offered at the list price, (see id. ¶¶ 37, 3 38), and the List Price Plaques create an “unmistakable impression that the advertised 4 discounts reflect reductions” from “bona fide, in-store, former selling price[s],” (id. ¶ 22). 5 Specific to Plaintiff’s purchase, his Veturi watch allegedly bore an “original” price of 6 approximately $599 and an actual sales price of $249. (Id. ¶ 42.) It was because of 7 “Defendant’s signage and labeling” that Plaintiff “reasonably believed” he received a 8 “substantial bargain” on a mainline watch, and this belief was material to his purchasing 9 decision (the “how” and “why”). (Id. ¶¶ 43, 45.) 10 Defendant takes issue with Plaintiff’s failure to explicitly allege his Venturi watch 11 was accompanied by a List Price Plaque that bore the prices he purportedly relied upon. 12 (See Mot. 9.) Conversely, Plaintiff correctly argues “it is reasonable to infer” from his 13 allegations “that the watch Plaintiff purchased was subject to the same uniform signage 14 system.” (Opp’n 5 (citation omitted).) “[T]he Court is not required to view a single 15 allegation in isolation.” Shimono v. Harbor Freight Tools USA, Inc., No. EDCV161052, 16 2016 WL 6238483, at *6 (C.D. Cal. Oct. 24, 2016). When viewing the Complaint as a 17 whole, the Court finds Plaintiff “offered detailed factual allegations supporting his general 18 claim that [D]efendant’s advertising scheme is misleading, that he purchased a product 19 advertised pursuant to said scheme, and that he did so in reliance upon the misleading 20 pricing scheme.” Id. For these reasons, the Court finds the Complaint identifies “the who, 21 what, when, where, and how of the misconduct charged, as well as what is false or 22 misleading about the purportedly fraudulent statement, and why it is false.” Davidson, 889 23 F.3d at 964. 24 Next, Defendant argues Plaintiff failed to allege facts showing his Veturi watch had 25 not been previously sold at the list price at Defendant’s stores; in fact, “Plaintiff alleges no 26 facts at all regarding the Veturi watch’s price on any date other than the date of his alleged 27 purchase on April 9, 2025.” (Mot. 12–13.) Defendant further argues Plaintiff’s counsel’s 28 “purported investigation . . . say[s] nothing about the former price of the Veturi watch in 1 question, much less during the relevant 3-month period prior to Plaintiff’s alleged 2 purchase.” (Id. at 13.) However, Plaintiff need not “plead enough investigatory facts to 3 ‘prove that [the] items were never offered at the “original” or “regular” price during the 4 relevant period;’ it is sufficient that the investigation ‘plausibly suggest that they were 5 not.’” Gonzalez v. Childrens Place, Inc., No. SACV22-0816, 2024 WL 5413173, at *7 6 (C.D. Cal. Nov. 21, 2024) (emphasis in original) (citing Azimpour v. Sears, Roebuck & 7 Co., No. 15-CV-2798, 2017 WL 1496255, at *8 (S.D. Cal. Apr. 26, 2017)), reconsideration 8 denied, No. SACV 22-0816, 2025 WL 3190128 (C.D. Cal. Oct. 31, 2025). Here, Plaintiff 9 alleges Defendant’s “entire pricing scheme, not just the prices at the time of [his] purchase, 10 is deceptive.” Real v. Y.M.I. Jeanswear, Inc., No. EDCV 17-0870, 2017 WL 11675686, at 11 *5 (C.D. Cal. Sept. 1, 2017). Plaintiff also alleges during his counsel’s investigation, which 12 started a couple weeks before Plaintiff’s purchase, “[h]undreds of products were observed 13 as continuously ‘on sale,’” but were at no point offered at the list price. (See Compl. ¶¶ 14 36–38, 42.) “The sample of [Plaintiff’s] investigative findings, combined with the 15 allegations specific to [Plaintiff’s] experience, raise enough facts to state plausible UCL, 16 FAL, and CLRA claims that sound in fraud.” Gonzalez, 2024 WL 5413173, at *7. 17 3. Reasonable Consumer Test 18 Whether a business practice is deceptive or misleading under California’s FAL, 19 CLRA, and UCL is governed by the “reasonable consumer” test. Moore v. Mars Petcare 20 US, Inc., 966 F.3d 1007, 1017 (9th Cir. 2020) (citing Williams v. Gerber Prods. Co., 552 21 F.3d 934, 938 (9th Cir. 2008)). “Under the reasonable consumer standard, one must show 22 that members of the public are likely to be deceived.” Real, 2017 WL 11675686, at *3 23 (citation omitted). “Because whether a practice is deceptive or misleading is generally a 24 question of fact, the ‘reasonable consumer’ test is satisfied at the pleading stage if a plaintiff 25 plausibly alleges ‘that a significant portion of the general consuming public or of targeted 26 consumers, acting reasonably in the circumstances, could be misled.’” James v. Chocmod 27 USA Inc., 773 F. Supp. 3d 945, 955 (E.D. Cal. 2025). 28 1 Defendant argues Plaintiff failed to plead facts showing that list prices are 2 “understood by ordinary, reasonable consumers as ‘former prices.’” (Mot. 12.) Defendant 3 further argues, “[a]s federal regulations explain, ordinary consumers associate ‘List Prices’ 4 with the manufacturer’s suggested retail price and interpret them as reflecting prices in the 5 general trade area, not as former prices at which the good in question was previously sold.” 6 (Id. at 11–12 (citing 16 C.F.R. § 233.3(a); id. § 233.3(d)).) However, “[g]ranting a motion 7 to dismiss is appropriate only in ‘the rare situation’ where ‘the advertisement itself [makes] 8 it impossible for the plaintiff to prove that a reasonable consumer was likely to be 9 deceived.’” Coe v. Gen. Mills, Inc., No. 15-CV-05112, 2016 WL 4208287, at *5 (N.D. 10 Cal. Aug. 10, 2016) (citing Williams, 552 F.3d at 939). 11 Here, Plaintiff’s theory does not fail as a matter of law. Federal regulations provide 12 in part that “[m]any members of the purchasing public believe that a manufacturer’s list 13 price, or suggested retail price, is the price at which an article is generally sold.” 16 C.F.R. 14 § 233.3(a). While federal regulations assert “many” members of the public view a list price 15 as a suggested retail price, that does not necessarily mean Plaintiff is unable to prove 16 “members of the public are likely to be deceived.” Real, 2017 WL 11675686, at *3 17 (citation omitted). Further, under California Code of Regulations (“CCR”), “former price” 18 as used in section 17501, “includes but is not limited to the following words and phrases 19 when used in connection with advertised prices; ‘formerly--,’ ‘regularly--,’ ‘usually--,’ 20 ‘originally--,’ ‘reduced from__________,’ ‘was __________ now__________,’ 21 ‘__________% off.’” 4 C.C.R. § 1301 (emphasis added). Thus, Plaintiff’s theory is not 22 barred by the CCR’s non-exhaustive list. Nor is the “purported plain meaning” of a “list 23 price” so obvious that it would be impossible for a reasonable consumer to be misled by 24 Defendant’s alleged pricing scheme. See Calcagno, 2024 WL 3261205, at *6 (citation 25 omitted). 26 In addition, Plaintiff alleges the products’ prices are displayed on List Price Plaques, 27 whereon the list price (the “original” price) is immediately below an actual sales price of 28 the watches. (Compl. ¶¶ 21, 37, 43.) The List Price Plaques do not include any comparison 1 to Defendant’s mainline stores or to third-party retailers. (Id. ¶ 22.) The Complaint also 2 alleges Defendant “does not disclose when any product was last offered at that price” and 3 Plaintiff counsel’s “multi-month investigation observed products continuously offered at 4 discounted prices and never at the full ‘original’ price.” (Opp’n 7.) Based on these 5 allegations, reasonable consumers could “understand and rely on [Defendant’s] two-tier 6 ‘List Price’ plaques as conveying a markdown from a former in-store price.” (See id.) 7 Defendant’s contention that list prices cannot be perceived as former prices “is a 8 factual question about the likelihood of consumer confusion which is generally 9 inappropriate for a motion to dismiss.” Calcagno, 2024 WL 3261205, at *6 (citation 10 omitted). And because Plaintiff offers factual allegations explaining why he and other 11 consumers believe Defendant’s list price reflects the product’s former price, the Court finds 12 Plaintiff sufficiently alleged a deceptive practice under the reasonable consumer test.1 13 4. FAL Claim 14 The FAL “prohibits any ‘unfair, deceptive, untrue, or misleading advertising.’” 15 Gonzalez, 2024 WL 5413173, at *6 (C.D. Cal. Nov. 21, 2024) (citing Cal. Bus. & Prof. 16 Code § 17500). “This statute makes it unlawful for a business to disseminate any statement 17 ‘which is untrue or misleading, and which is known, or which by the exercise of reasonable 18 care should be known, to be untrue or misleading.’” Id. (citation omitted). The FAL further 19 provides that “[n]o price shall be advertised as a former price of any advertised thing, unless 20 the alleged former price was the prevailing market price . . . within three months next 21 immediately preceding the publication of the advertisement or unless the date when the 22 alleged former price did prevail is clearly, exactly and conspicuously stated in the 23 24 25 1 Defendant argues Plaintiff fails to establish a “deceptive comparative pricing theory.” (Mot. 13–16.) “For comparative prices, courts apply the reasonable consumer test according to whether the product is 26 ‘exclusive’ or ‘non-exclusive.’” Calcagno, 2024 WL 3261205, at *4; see also Krantz v. Old Copper Co., Inc., 794 F. Supp. 3d 724, 740 (C.D. Cal. 2025). Here, Plaintiff represents he “does not bring a competitor 27 price-comparison theory”—only a “former-price / illusory-discount scheme.” (Opp’n 9.) Based on this representation, Plaintiff will not proceed on a price-comparison theory; thus, the Court declines to address 28 1 advertisement.” Id. (citing Cal. Bus. & Prof. Code § 17501). “The statute has been 2 interpreted broadly to encompass not only advertising which is false, but also advertising 3 which, although true, is either actually misleading or which has a capacity, likelihood or 4 tendency to deceive or confuse the public.” Id. 5 a. Knowledge of Untrue/Misleading Statements (Section 17500) 6 Defendant argues Plaintiff failed to sufficiently allege it made statements that were 7 “known, or which by the exercise of reasonable care should be known, to be untrue or 8 misleading” as required by section 17500 of the FAL. (Mot. 18–19); Cal. Bus. & Prof. 9 Code § 17500. Plaintiff argues from the structure of the scheme alleged and duration of 10 that scheme, “it is reasonable to infer that [Defendant] knew—or at minimum should have 11 known through the exercise of reasonable care—that its price advertising was untrue or 12 misleading.” (Opp’n 15.) The Court finds Plaintiff met his burden. “Defendant designed 13 and implemented the pricing scheme in question,” and thus, “[i]t plausibly follows that 14 Defendant knew whether the listed comparative prices or former prices were false or 15 misleading.” Calcagno, 2024 WL 3261205, at *8. “This is sufficient to establish 16 knowledge, which need only be [pled] generally.” Id. 17 b. Former Prices (Section 17501) 18 Next, Defendant argues “Plaintiff alleges no well-pled facts showing why reasonable 19 consumers would think Company Stores’ alleged ‘List Prices’ are former prices.” (Mot. 20 19.) However, as explained above, Plaintiff sufficiently alleged a reasonable consumer 21 could interpret Defendant’s list prices as former prices. (See supra III.B.3.) For these 22 reasons, the Court DENIES Defendant’s motion to dismiss Plaintiff’s FAL claim. 23 5. CLRA Claim 24 The CLRA prohibits “unfair methods of competition and unfair or deceptive acts or 25 practices.” Gonzalez, 2024 WL 5413173, at *6 (citing Cal. Civ. Code § 1770). California 26 Civil Code section 1770(a)(9) prohibits “[a]dvertising goods or services with intent not to 27 sell them as advertised,” Safransky v. Fossil Grp., Inc., No. 17cv1865, 2018 WL 1726620, 28 1 1770(a)(13) prohibits “[m]aking false or misleading statements of fact concerning reasons 2 for, existence of, or amounts of price reductions,” id. (quoting Cal. Civ. Code § 3 1770(a)(13)). Plaintiff alleges violations of both subdivisions. (Compl. ¶ 97.) 4 a. Section 1770(a)(9) & (a)(13) 5 Defendant argues “because Plaintiff does not allege that [Defendant] changed any 6 representation made to Plaintiff or required Plaintiff to pay a price higher than he had 7 previously been quoted, he cannot recover under subsection (a)(9).” (Mot. 19–20 (citations 8 omitted).) Defendant also contends “Plaintiff has not alleged facts showing [Defendant] 9 made any ‘false or misleading statements of fact’ regarding ‘price reductions,’ as the ‘List 10 Prices’ are not references to former prices,” and “therefore fails to allege a violation of 11 subsection (a)(13).” (Id. at 20.) 12 Plaintiff has sufficiently pled his CLRA claim under both subdivisions. He alleges 13 he is a consumer who purchased a watch from Defendant and that Defendant’s pricing 14 practices are misleading because the List Price Plaques falsely create the impression that 15 products have been marked down, when they were never sold at the list price. (Compl. ¶¶ 16 22, 37, 38, 42.) These allegations are sufficient—especially when accepting Plaintiff’s 17 factual allegations as true and construing the pleadings in the light most favorable to him— 18 to establish Defendant “[a]dvertis[ed] goods or services with intent not to sell them as 19 advertised,” Cal. Civ. Code § 1770(a)(9), or made “false or misleading statements of fact 20 concerning reasons for, existence of, or amounts of, price reductions,” id. § 1770(a)(13). 21 “[T]hat is all that must be alleged at the pleading stage.” Evans v. DSW, Inc., No. CV 16– 22 3791, 2017 WL 7058233, at *10 (C.D. Cal. Feb. 2, 2017). 23 b. Prelitigation Notice 24 “Plaintiffs intending to bring a CLRA cause of action seeking damages must notify 25 defendants at least 30 days in advance and give them that amount of time to correct the 26 alleged wrongs.” Waller v. Hewlett-Packard Co., No. 11CV0454, 2011 WL 6325972, at 27 *5 (S.D. Cal. Dec. 16, 2011). However, the CLRA expressly allows for a plaintiff who 28 “originally seeks only injunctive relief under § 1750, for which no notice is required,” to 1 later send a notice letter and amend his complaint to seek damages under the statute. Id. 2 (citing Cal. Civ. Code § 1782(d)). 3 Here, Plaintiff filed his action on August 8, 2025, (see generally Compl.), and served 4 Defendant a CLRA notice letter on the same day, (id. ¶ 99). The Complaint alleges “[i]f 5 Defendant fails to adequately respond within thirty (30) days of service, Plaintiff will seek 6 damages and attorneys’ fees under the CLRA, in addition to the equitable relief already 7 sought pursuant to [California Civil Code section] 1782(d).” (Id.) Plaintiff also alleges he 8 “expressly reserves the right to pursue such damages and fees and hereby incorporates that 9 request into this Complaint with the intention—and to the maximum extent permitted by 10 law—of obviating the need for any further amendment following expiration of the statutory 11 notice period.” (Id. (emphases added).) In the Prayer for Relief, Plaintiff seeks “damages 12 and attorneys’ fees under the CLRA . . . contingent upon Defendant’s failure to cure the 13 violations within thirty (30) days of service of Plaintiff’s notice pursuant to California Civil 14 Code § 1782(a).” (Compl., Prayer for Relief, ¶ C.) Plaintiff has not filed an amended 15 Complaint to date. 16 Defendant argues Plaintiff’s request for damages under the CLRA should be 17 dismissed with prejudice because Plaintiff failed to comply with the statute’s prelitigation 18 notice requirements. (Mot. 20.) Conversely, Plaintiff argues that the “notice letter . . . 19 expressly incorporated into the Complaint a request for CLRA damages and attorneys’ fees 20 to take effect upon expiration of the statutory notice period,” and “acknowledges that a 21 formal amendment may be required depending on the Court’s interpretation of the [section] 22 1782 compliance at the pleading stage.” (Opp’n 19–20; see also Compl. ¶ 99.) Plaintiff 23 contends this practice is “designed to conserve judicial resources and avoid unnecessary 24 amendment practice.” (Opp’n 20.) Thus, Plaintiff argues this is “at most, a technical 25 sequencing issue—not a statutory violation—and the CLRA does not authorize dismissal 26 (let alone dismissal with prejudice) on that basis.” (Id.) 27 In Morgan v. AT&T Wireless Servs., Inc., the plaintiff’s complaint “made clear . . . 28 that no damages were sought under the CLRA,” and warned the defendant that failure to 1 correct, repair, replace or otherwise rectify the alleged deceptive practices “will result in 2 Plaintiff amending this Complaint to seek damages for such deceptive practices pursuant 3 to” section 1782. 99 Cal. Rptr. 3d 768, 774 (Ct. App. 2009). The pleading in Morgan is 4 in line with the CLRA. However, here, the allegations and Prayer for Relief in the 5 Complaint clearly express an intent to pursue damages under the CLRA. It is also clear 6 Plaintiff intends for his original Complaint to automatically seek damages upon the 7 expiration of the 30-day period set by section 1782. Section 1782 provides that “[n]ot less 8 than 30 days after the commencement of an action for injunctive relief, and after 9 compliance with subdivision (a), the consumer may amend his or her complaint without 10 leave of court to include a request for damages.” Cal. Civ. Code § 1782(d) (emphasis 11 added). The statute does not authorize a Complaint to include allegations seeking damages 12 under the CLRA to take effect upon expiration of the notice period. Thus, the Court finds 13 the Complaint cannot automatically incorporate Plaintiff’s request for damages upon 14 expiration of the 30-day period. Although Plaintiff has not complied with the CLRA’s 15 prelitigation notice requirement, the Court declines to dismiss the CLRA claim with 16 prejudice. “Instead, the claim must simply be dismissed until 30 days or more after the 17 plaintiff complies with the notice requirements.” Bitton v. Gencor Nutrientes, Inc., 654 F. 18 App’x 358, 362 (9th Cir. 2016) (quoting Morgan, 99 Cal. Rptr. 3d at 789). Plaintiff’s 19 CLRA claim for damages (including attorney fees, Benson v. S. Cal. Auto Sales, Inc., 192 20 Cal. Rptr. 3d 67, 76 (Ct. App. 2015)) is DISMISSED without prejudice. Plaintiff’s claim 21 for injunctive relief under § 1750 will stand. 22 6. UCL Claim 23 Lastly, the UCL prohibits “any unlawful, unfair or fraudulent business act or practice 24 and unfair, deceptive, untrue or misleading advertising.” Gonzalez, 2024 WL 5413173, at 25 *6 (citing Cal. Bus. & Prof. Code § 17200). “The UCL provides a separate theory of 26 liability under the ‘unlawful,’ ‘unfair,’ or ‘fraudulent’ prongs.” Id. (citations omitted). 27 Plaintiff alleges Defendant violated all three prongs of the UCL. (Compl. 24–27.) 28 1 Defendant argues Plaintiff failed to sufficiently allege the “unlawful” and “unfair” prongs. 2 (Mot. 16–17.) 3 a. Unlawful Prong 4 Under the unlawful prong, the UCL “‘borrows’ violations of other laws and treats 5 them as unlawful practices that the [UCL] makes independently actionable.” Chabner v. 6 United of Omaha Life Ins. Co., 225 F.3d 1042, 1048 (9th Cir. 2000) (quoting Cel–Tech 7 Commc’ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal. 4th 163 (1999)). Defendant argues that 8 because Plaintiff’s FAL and CLRA claims are insufficiently pled, Plaintiff’s “unlawful” 9 UCL claim also fails. (Mot. 18.) However, because the Court finds the FAL claim and 10 CLRA claim for injunctive relief are sufficient, Plaintiff has stated a claim under the UCL’s 11 “unlawful” prong. 12 Plaintiff also asserts an “unlawful” prong claim based on a predicate violation of the 13 Federal Tort Claims Act (“FTCA”), 15 U.S.C. § 52(a). (Compl. ¶ 79.) Defendant argues 14 the UCL claim via this theory fails because § 52(a) “only applies to false advertisements 15 of ‘food, drugs, devices, services, or cosmetics,’” and Defendant’s products fall outside the 16 scope of the statute’s coverage. (Mot. 18 (citing 15 U.S.C. § 52(a)).) Plaintiff does not 17 contend in his Opposition that Defendant’s products fall under § 52(a); but, instead, argues 18 the Complaint “pleads facts tracking the [Federal Trade Commission’s] former-price 19 guidance” (“FTC Guides”)—namely, 16 C.F.R. § 233.1(a)–(b)—“which condemns the use 20 of fictitious, inflated ‘former’ prices to create false bargains.” (Opp’n 17.) Plaintiff further 21 argues Ninth Circuit courts “recognize that allegations tracking the FTC Guides may 22 support UCL unlawful-prong claims at the pleading stage,” (id. (citing Rubenstein v. 23 Neiman Marcus Grp. LLC, 687 F. App’x 564, 567 (9th Cir. 2017))), and Plaintiff alleges 24 “exactly the conduct the FTC Guides condemn: fictitious reference prices, perpetual ‘sale’ 25 pricing, and the absence of bona fide former prices,” (id.). 26 First, because Plaintiff does not address Defendant’s argument pertaining to § 52(a) 27 in his Opposition, he concedes it. Kenney v. Bank of Am., N.A., No. 2:25-CV-02726, 2025 28 WL 2117409, at *10 (C.D. Cal. July 14, 2025). Accordingly, the Court finds Plaintiff 1 cannot proceed on his UCL “unfair” claim under the theory that Defendant violated § 52(a) 2 of the FTCA. As to the alleged FTC Guides violation, “although the FTC Guides do not 3 provide a private civil right of action, ‘[v]irtually any state, federal or local law can serve 4 as the predicate for an action under [the UCL].’” Rubenstein, 687 F. App’x at 567 (citation 5 omitted). Here, Plaintiff alleges a § 233.1(a) violation (i.e., “where an artificial, inflated 6 price was established for the purpose of enabling the subsequent offer of a large 7 reduction—the ‘bargain’ being advertised is a false one”), and these allegations are 8 sufficient to state a claim under the UCL. See id. As explained above, Plaintiff alleges 9 Defendant orchestrated a false advertising scheme by using the List Price Plaques and 10 creating an “unmistakable impression that the advertised discounts reflect reductions” from 11 “bona fide, in-store, former selling price[s].” (Compl. ¶ 22.) Accordingly, the Court 12 DISMISSES with prejudice Plaintiff’s UCL “unlawful” claim to the extent Plaintiff 13 argues Defendant violated § 52(a) of the FTCA, and DENIES Defendant’s motion to 14 dismiss the UCL claim under Plaintiff’s remaining theories. 15 b. Unfair Prong 16 Under the “unfairness” prong, courts can consider: (1) “whether the challenged 17 conduct is ‘tethered to any underlying constitutional, statutory or regulatory provision, or 18 that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of 19 an antitrust law’”; (2) whether the practice is “immoral, unethical, oppressive, 20 unscrupulous or substantially injurious to consumers”; or (3) “whether the practice’s 21 impact on the victim outweighs ‘the reasons, justifications and motives of the alleged 22 wrongdoer.’” Doe v. CVS Pharmacy, Inc., 982 F.3d 1204, 1214–15 (9th Cir. 2020) 23 (citations omitted). 24 The Court finds Plaintiff has plausibly alleged a claim under “unfair” prong. 25 Plaintiff’s “unfair” UCL claim is tethered to statutory and regulatory provisions: the 26 CLRA, FAL, and FTC Guides, which the Court has found are sufficiently pled. Further, 27 Plaintiff alleges that Defendant’s actions are “immoral, unethical, oppressive, 28 unscrupulous or substantially injurious to consumers” because “Defendant engaged in 1 |}misleading and deceptive price comparison advertising that represented false reference 2 || prices and corresponding deeply discounted phantom ‘sale’ prices.” (Compl. 474.) These 3 || allegations plausibly allege a violation of the UCL’s “unfair” prong. Defendant’s motion 4 || to dismiss the “unfair” prong claim is therefore DENIED. 5 IV. CONCLUSION 6 Based on the foregoing, the Court GRANTS IN PART AND DENIES IN PART 7 ||Defendant’s motion to dismiss. Specifically, the Court DISMISSES Plaintiff's CLRA 8 ||claim for damages without prejudice and DISMISSES with prejudice Plaintiff's UCL 9 “unlawful” claim to the extent Plaintiff argues Defendant violated § 52(a) of the FTCA. 10 || The remainder of Defendant’s motion is DENIED. Defendant will answer the Complaint 11 || within fourteen (14) days of the entry of this Order. If Plaintiff wishes to pursue a CLRA 12 ||claim for damages, he must file an Amended Complaint. 13 IT IS SO ORDERED. 14 || Dated: August 10, 2026 15 2 in Yn. Lh) 16 Hon. Dana M. Sabraw United States District Judge 17 18 19 20 21 22 23 24 25 26 27 28