Charlotte Maloney v. Verizon Internet Services, Inc

FILED
NOT FOR PUBLICATION FEB 16 2011
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U .S. C O U R T OF APPE ALS
FOR THE NINTH CIRCUIT
CHARLOTTE MALONEY, on behalf of No. 09-56805
herself and all persons similarly situated,
D.C. No. 5:08-cv-01885-SGL-
Plaintiff - Appellant, AGR
v.
MEMORANDUM *
VERIZON INTERNET SERVICES, INC.;
and GTE.NET LLC, d/b/a/ Verizon
Internet Solutions,
Defendants - Appellees.
Appeal from the United States District Court
for the Central District of California
Stephen G. Larson, District Judge, Presiding
Submitted February 14, 2011 **
Pasadena, California
Before: KLEINFELD, LUCERO ,*** and GRABER, Circuit Judges.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
**
The panel unanimously concludes this case is suitable for decision
without oral argument. Fed. R. App. P. 34(a)(2).
*** The Honorable Carlos F. Lucero, United States Circuit Judge for the
Tenth Circuit, sitting by designation.
Plaintiff Charlotte Maloney appeals from the district court’s dismissal, under
Federal Rule of Civil Procedure 12(b)(6), of this diversity action against
Defendants Verizon Internet Services, Inc., and GTE.NET LLC, d/b/a Verizon
Internet Solutions. Reviewing de novo, Manzarek v. St. Paul Fire & Marine Ins.
Co., 519 F.3d 1025, 1030 (9th Cir. 2008), we affirm.
Defendants stated that a subscriber would receive Internet service at a speed
"up to 3 Mbps." 1 As the "Terms of Service" contract explained, Defendants
promised to provide "qualified [high-speed Internet] lines at the maximum line rate
available to your location . . . . The speed of the Service will vary based on
network or Internet congestion, your computer configuration, the condition of your
telephone line and the wiring inside your location, among other factors." Because
the maximum line rate available at Plaintiff’s location was 1.792 Mbps,
Defendants provided her high-speed Internet line at that maximum speed.
The district court properly dismissed Plaintiff’s claim that Defendants
engaged in a "fraudulent business act or practice" under the Unfair Competition
Law ("UCL"), Cal. Bus. & Prof. Code § 17200. The "reasonable consumer"
standard applies to that claim. Williams v. Gerber Prods. Co., 552 F.3d 934, 938
(9th Cir. 2008). "Under the reasonable consumer standard, [Plaintiff] must show
1
Mbps means megabits per second, or one million bits per second.
2
that members of the public are likely to be deceived." Id. (internal quotation marks
omitted). A reasonable consumer would not have been deceived by Defendants’
statements, which included the qualifier "up to" (meaning the same or less than)
and an explanation that each consumer’s maximum speed would vary depending
on several listed customer-specific factors, including factors that applied to
Plaintiff.
For similar reasons, the district court properly dismissed Plaintiff’s claim
that Defendants engaged in an "unfair . . . business act or practice" under the UCL,
Cal. Bus. & Prof. Code § 17200. Because Defendants’ statements were not
misleading and because it is reasonable to charge the same fee to customers
receiving a range of speeds, no unfairness occurred.2
The district court properly dismissed Plaintiff’s claims under the Consumer
Legal Remedies Act ("CLRA"), Cal. Civ. Code § 1770. As Plaintiff concedes in
her opening brief, "the same criteria" apply to the CLRA claims as to the UCL
claims. Because the UCL claims fail, so do the CLRA claims.
2
The proper test for determining whether a business practice is "unfair" in
the consumer action context under California law is unclear. Lozano v. AT&T
Wireless Servs., Inc., 504 F.3d 718, 736 (9th Cir. 2007). We assume that the
balancing test continues to apply. Plaintiff makes no argument under any other
test.
3
The district court properly dismissed Plaintiff’s contract claim because
Defendants did not breach the contract. See Walsh v. W. Valley Mission Cmty.
Coll. Dist., 78 Cal. Rptr. 2d 725, 733 (Ct. App. 1998) (stating elements of a
contract claim, which includes breach). Defendants provided Plaintiff with
Internet service with a speed "up to 3 Mbps," subject to the express disclaimer that
a lower maximum speed might apply depending on, among other factors,
Plaintiff’s location.
The district court properly dismissed Plaintiff’s claim that Defendants
breached the implied covenant of good faith and fair dealing, because the contract
was not silent or ambiguous on the question of maximum speed. See Rose v.
Wells Fargo & Co., 902 F.2d 1417, 1426 (9th Cir. 1990) (holding that a claim of
breach of the implied covenant is available only "when the contract between the
parties is silent or ambiguous on that subject" (citing Gerdlund v. Elec. Dispensers
Int’l, 235 Cal. Rptr. 279, 286 (Ct. App. 1987)).
AFFIRMED.
4