Judge: Christopher K. Lui, Case: 22STCV30280, Date: 2023-02-08 Tentative Ruling

Case Number: 22STCV30280    Hearing Date: February 8, 2023    Dept: 76

Pursuant to California Rule of Court 3.1308(a)(1), the Court does not desire oral argument on the demurrer addressed herein.  As required by Rule 3.1308(a)(2), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 of their intent to appear and argue.  Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.  If notice of intention to appear is not given and the parties do not appear, the Court will adopt the tentative ruling as the final ruling.

            Plaintiff alleges that Defendants recorded conversations Plaintiff had with Defendants over Plaintiff’s cellular telephone without his prior express consent or knowledge, during which sensitive confidential information was discussed.  

Defendants OptumInsight, Inc. and United Behavioral Health of New York, I.P.A. demur to the First Amended Complaint.

TENTATIVE RULING

            Defendants OptumInsight, Inc. and United Behavioral Health of New York, I.P.A.’s demurrer to the entire 1AC on the ground of uncertainty is OVERRULED.        

            The demurrer to the third cause of action is SUSTAINED with leave to amend.

            Plaintiff is given 30 days’ leave to amend.

ANALYSIS

Demurrer

Meet and Confer

            The Declaration of Kyle C. Wong reflects that  Defendant’s counsel satisfied the meet and confer requirement set forth in CCP § 430.41.

Discussion

Defendants OptumInsight, Inc. and United Behavioral Health of New York, I.P.A. demur to the First Amended Complaint in its entirety and as to the B & P Code § 17200 claim.

1.         Entire 1AC.

            Defendants argue that the entire 1AC is uncertain, ambiguous and unintelligible because Plaintiff improperly lumps together both Defendants in conclusory fashion and ambiguously attributes each of this asserts against an unspecified “Defendant” without explaining which of the two defendants did what act.

            A demurrer for uncertainty is properly sustained where the complaint is so vague or uncertain that the defendant cannot reasonably respond, i.e., when the defendant cannot determine what issues must be admitted or denied, or what counts are directed against the defendant. (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial, supra, ¶ 7:85.)  Demurrers for uncertainty are disfavored and strictly construed “because ambiguities can reasonably be clarified under modern rules of discovery.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.)

In ruling on a demurrer, the “allegations [of the complaint] must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452; see Rickley v. Goodfriend (2013) 212 Cal.App.4th 1136, 1141–1142 [151 Cal. Rptr. 3d 683] [court must liberally construe complaint, and draw all reasonable inferences in favor of its allegations].)

(Teva Pharmaceuticals USA, Inc. v. Superior Court (2013) 217 Cal.App.4th 96, 102.)

            Here, ¶ 4 alleges in pertinent part that Defendant Optum Health Services, Inc. is a wholly-owned subsidiary of UnitedHealth Group, Inc. Based on this allegation, it can reasonably be inferred that the “Defendant” which allegedly recorded Plaintiff’s calls was Optum Health Services, and that Plaintiff seeks to hold parent company UnitedHealth Group liable for the acts of the subsidiary. This can be clarified in discovery. 

            The demurrer to the entire 1AC on the ground of uncertainty is not persuasive and is OVERRULED.              

2.         Third Cause of action (Violation of Unfair Competition Law, Bus. & Prof. Code, § 17200 et seq.)

            Defendants argue that the vague, conclusory allegation that Defendants allegedly violated the UCL by “misrepresenting their services,” which caused Plaintiff to be “economically harmed by foregoing alternative, reasonably comparable services” (1AC, ¶ 41) does not plead with particularity the underlying misrepresentations, nor the actual economic harm suffered.

Defendants argue that there are no facts pled to demonstrate economic injury caused by unfair competition to confer standing upon Plaintiff to bring a UCL claim.

The 1AC alleges at ¶¶ 41 – 43:

41. Here, Defendant engaged in unfair, unlawful, and fraudulent conduct in violation of the UCL by misrepresenting their services to Plaintiff when reasonable alternatives were available, and Plaintiff was economically harmed by foregoing alternative, reasonably comparable services. 

42. Defendant engaged in the aforementioned conduct as matter of standard business practice and therefore will not cease without an order from the court enjoining them from so doing. 

43. Defendant’s misrepresentations are likely to mislead consumers as they have no way of knowing that Defendant will not respect their rights in connection with debt collection or their privacy rights at the time of transacting with Defendant.  

            “[S]tatutory causes of action must be pleaded with particularity.” (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.) 

To satisfy the narrower standing requirement, “a party must now (1) establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e., caused by, the unfair business practice or false advertising that is the gravamen of the claim.” (Citation omitted.)

The “injury in fact” requirement incorporates the established federal meaning of that phrase. (Citation omitted.) Under federal law, an injury in fact “is ‘an invasion of a legally protected interest which is (a) concrete and particularized … and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical.’”’” (Citation omitted.) “‘Particularized’ in this context means simply that ‘the injury must affect the plaintiff in a personal and individual way.’” (Id. at p. 323.) In addition to requiring “injury in fact,” the UCL requires that the “injury be economic” (citation omitted), that is, it must take the form of “lost money or property” (Citations omitted). The requirement that the “injury be economic renders standing under [Business and Professions Code] section 17204 substantially narrower than federal standing under article III, section 2 of the United States Constitution, which may be predicated on a broader range of injuries.” (Kwikset, at p. 324.) Thus, “in sharp contrast to the state of the law before passage of Proposition 64, a private plaintiff filing suit now must establish that he or she has personally suffered” economic injury in fact caused by the alleged unfair competition. (Citations omitted.)

(Rincon Band of Luiseño Mission Indians etc. v. Flyn (2021) 70 Cal.App.5th 1059, 1097.)

“‘The purpose of the UCL [citation] “is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services. [Citation.]”’ (Citation omitted.) ‘A UCL action is equitable in nature; damages cannot be recovered. [Citation.] … [U]nder the UCL, “[p]revailing plaintiffs are generally limited to injunctive relief and restitution.”’ (Citations omitted.)

(Gray v. Dignity Health (2021) 70 Cal.App.5th 225, 236.)

Here, Plaintiff does not plead with particularity what misrepresentation of services were made to Plaintiff. Moreover, Plaintiff does not plead actual economic harm in the form of lost money or property for purposes of standing. Plaintiff’s claim that he was economically harmed by foregoing alternative, reasonably comparable services is a claim for damages, which are not recoverable under B & P Code § 17200.                    

The demurrer to the third cause of action is SUSTAINED with leave to amend.  

Plaintiff is given 30 days’ leave to amend.