Rodney Harmon v. Hilton Group, Plc

FILED
NOT FOR PUBLICATION FEB 10 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
RODNEY HARMON, individually and on No. 11-18056
behalf of a class of similarly situated
consumers, D.C. No. 3:11-cv-03677-JCS
Plaintiff - Appellant,
MEMORANDUM*
v.
HILTON GROUP, PLC; HILTON
INTERNATIONAL CO.; HILTON
HOTELS CORPORATION,
Defendants - Appellees.
Appeal from the United States District Court
for the Northern District of California
Joseph C. Spero, Magistrate Judge, Presiding
Argued and Submitted January 17, 2014
San Francisco, California
Before: WALLACE and BYBEE, Circuit Judges, and GETTLEMAN, Senior
District Judge.**
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The Honorable Robert W. Gettleman, Senior District Judge for the
U.S. District Court for the Northern District of Illinois, sitting by designation.
Rodney Harmon filed a class action complaint against the Hilton Group,
alleging several violations of California’s Unfair Competition Law (“UCL”), two
violations of the California Consumer Legal Remedies Act (“CLRA”), and unjust
enrichment. The district court dismissed the complaint with prejudice1 because
Harmon suffered no damages and Hilton disclosed the possibility of $.75 refund2
for customers who refuse a newspaper. Harmon appeals, arguing that the district
court made erroneous findings of fact when it decided that Harmon lacked standing
to bring his claims and that the district court erroneously decided that the
newspaper disclosures were adequate as a matter of law. We have jurisdiction
under 28 U.S.C. § 1291. Our review is de novo, Manzarek v. St. Paul Fire &
Marine Ins. Co., 519 F.3d 1025, 1030 (9th Cir. 2008), and we affirm.
California’s UCL prohibits any “unlawful, unfair or fraudulent business act
or practice.” Cal. Bus. & Prof. Code §§ 17200, 17204. UCL claims are governed
1
We do not address whether the district court should have given Harmon
leave to amend his complaint because Harmon failed to preserve this issue.
Greenwood v. FAA, 28 F.3d 971, 977 (9th Cir. 1994) (holding that courts will
review only issues that are argued specifically and distinctly in an opening brief);
Fed. R. App. P. 28(a)(5) (an appellant’s brief must state the issues presented for
review, a summary of the argument, and the appellant’s contentions and the
reasons for them).
2
We acknowledge that Harmon refers to the $.75 as a fee or a charge,
whereas Hilton uses the terms “credit” or “refund.” We do not address this
difference because it does not affect our decision.
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by the “reasonable consumer standard,” which requires evidence that “members of
the public are likely to be deceived.” Williams v. Gerber Prods. Co., 523 F.3d 934,
938 (9th Cir. 2008) (internal citations and quotation marks omitted).
Here, Harmon alleges that Hilton violated all three of the UCL’s prongs.
We disagree. Harmon’s unlawful business practice claim fails because the factual
allegations of his complaint do not support a plausible inference that Hilton’s
newspaper policy violates the CRLA, as seen below. Harmon’s unfair business
practice claim fails under all three tests3 that California courts apply to unfairness
claims because his complaint fails to allege that a reasonable consumer could not
avoid any harm allegedly caused by the disclosure policy by closely reading the
disclosure. Lastly, Harmon’s complaint fails to plead that Hilton’s newspaper
disclosure was a fraudulent business practice, because he offers no allegations that
the disclosure had “a likelihood of confounding an appreciable number of
reasonably prudent purchasers exercising ordinary care,” and only offered one
“isolated example[ ] of actual deception”—himself. Clemens v. DaimlerChrysler
Corp., 534 F.3d 1017, 1026 (9th Cir. 2008). Thus, regardless of whether Harmon
3
See Davis v. Ford Motor Credit Co., 179 Cal. App. 4th 581, 593-97 (Cal.
Ct. App. 2009) (discussing the three unfair business tests).
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suffered economic harm, the facts in his complaint do not state a plausible UCL
claim.
Harmon’s CLRA claim is without merit. California Civil Code
§ 1770(a)(14) proscribes “representing that a transaction confers or involves rights,
remedies, or obligations which it does not have or involve.” Section 1770(a)(19)
bars insertion of unconscionable provisions into a contract. Here, regardless of
damages, Harmon’s complaint does not show that he is entitled to relief because it
does not adequately allege that the disclosure policy had “the likely effect of
misleading the public.” Daugherty v. Am. Honda Mot. Co., Inc., 144 Cal. App. 4th
824, 836 (Cal. Ct. App. 2006). Nor does he plead that Hilton’s disclosure is
unconscionable.
Harmon’s unjust enrichment claim fails because he failed to plead that
Hilton was “unjustly” enriched.
Accordingly, the district court did not err by dismissing Harmon’s
complaint.
AFFIRMED.
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