Judge: Kenneth J. Medel, Case: 37-2022-00043997-CU-BT-CTL, Date: 2023-09-08 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 07, 2023

09/08/2023  09:30:00 AM  C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited  Business Tort Demurrer / Motion to Strike 37-2022-00043997-CU-BT-CTL JEZDIMIROVIC VS VOLCOM LLC [E-FILE] CAUSAL DOCUMENT/DATE FILED: Demurrer, 02/08/2023

Defendants VOLCOM, LLC and VOLCOM RETAIL, LLC's Demurrer to the Second Amended Complaint is OVERRULED. Defendant demurs to each cause of action for failure to state a cause of action and uncertainty.

First Cause of Action for Violation of the Fair Advertising Law The FAL prohibits 'advertising that contains any statement ... which is untrue or misleading, and which is known, or...should be known, to be untrue or misleading...' (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 226, internal quotations omitted.) Business & Professions Code §17500 requires Plaintiff to allege the following elements: i. The person or company made a false or misleading statement in connection with a service, product or the sale of a service/product/property; and, ii. The person or company knew, or should have known, that the statement was false or misleading. Business & Professions Code §17500.

'To prevail on a claim under the false advertising law, [a plaintiff] must show that members of the public are likely to be deceived and must do so as adjudged through the eyes of 'the reasonable consumer'.' (Shaeffer, supra, 44 Cal.App.5th at p. 1136, internal citations and quotations omitted.) The 'primary evidence in a false advertising case is the advertising itself.' (Brockey v. Moore (2003) 107 Cal.App.4th 86, 100.) Defendant argues that Plaintiff has failed to plead sufficient facts in the SAC alleging that any of the various statements from Volcom's policies quoted in the SAC are false or misleading. Defendant contends that conclusions are mere legal conclusions and not facts.

Plaintiff relies on paragraphs 1-3, 6, 18, 32,54, 65,66, 71, and 82 for 'misleading statements as to all products'. Paragraph 18 pleads: 'Volcom's misrepresentations are not made specific (or limited) to any individual or particular Volcom product. Rather, the Volcom statements at issue are part of a comprehensive marketing scheme that speaks to every Volcom product in a general sense, not just the products Plaintiff personally purchased from Volcom.' Beginning at page 12 of the SAC, plaintiff alleges 'Volcom's 'Eco True' and 'Sustainability' Claims' and gives specific examples of the claims. For example: 51. The Defendants prominently display claims that Volcom employs a 'New Future - Environmental Sustainability' program, on its website, social media profiles and within its marketing tools and devices. The advertisements often use the phrase 'Eco True' and/or 'sustainability.' 52. For example, and among other misrepresentations, Volcom claims the following: Volcom was built on our 'True To This' beliefs, and as part of that, our commitment to the environment and responsible sourcing is a fundamental Calendar No.: Event ID:  TENTATIVE RULINGS

3002662  39 CASE NUMBER: CASE TITLE:  JEZDIMIROVIC VS VOLCOM LLC [E-FILE]  37-2022-00043997-CU-BT-CTL pillar of the brand. There are three things that drive our compliance and environmental programs: Strong Oceans, a Stable Climate, and a Smart Society. These core drivers support health and stability on this planet and allow us to chase our passions around the globe. (Please see Exhibit G).

Second and Third examples are given but not quoted here. Beginning at paragraph 55, plaintiff alleges that the statements are false and misleading. 'In reality, Volcom does not employ 'sustainability initiatives,' does not 'protect and preserve' natural resources, does not ensure compliance with the highest global social and chemical regulatory practices, and does not 'recycle' its products, as defined by California law.' The third example is the logo of the company. Paragraph 56 alleges the misleading nature of the logo: 'Volcom's (mis)use of the chasing arrows symbol is patently misleading. For example, Plaintiff purchased a cotton short sleeve shirt from Volcom with a 'chasing arrows' sign on it's tag, which led Plaintiff to believe that the shirt was able to be recycled. In actuality, cotton (and most other textiles) cannot be recycled, as that term is commonly understood.' These examples are specific enough to allege misrepresentations.

Defendant focuses on plaintiff's alleged 'examples' of vendor misconduct. Paragraph 60 alleges: 'Volcom also prominently display claims that it affirmatively acts to prohibit and/or preclude certain illegal labor practices, including 'slavery and human trafficking.' Specifically, Volcom represents that 'As a company, we strongly condemn these practices and do not allow them to have a place in our supply chains.' (Please see Exhibit D). The statement is specifically quoted in Paragraph 61. Paragraph 62 alleges: 'The above statements (and others made by Volcom) are false, untrue and/or misleading, because (as an example) in reality, Volcom does not employ, or require its vendors to comply with, its P.A.S.S. program, and at least some of Volcom's current vendors are in non-compliance with the P.A.S.S. program.' Defendant argues that plaintiff's allegations and exhibits 'only show that Volcom's robust compliance procedure as stated in its Vendor Workplace Code of Conduct is being implemented. (Ex. C to the SAC.) None of Volcom's representations pled by Plaintiff guarantee that its vendors will never violate any of its policies. Rather, the Vendor Workplace Code of Conduct clearly states (1) that noncompliance by a vendor is expected, and (2) when an event of noncompliance occurs, Volcom expects that the noncomplying vendor will take remediation efforts. [Ex. C to SAC, p. 3.] Plaintiff has pled no facts to show that Volcom has not taken action to investigate or address any of the incidents with the vendors alleged in the SAC as 'examples' purportedly showing Volcom's misrepresentations, or that the vendors have failed to implement remedial measures required of them by Volcom.' Volcom argues that it has an effective compliance program.

These 'evidentiary' issues are beyond the pleadings. The allegation is that 'Volcom does not employ, or require its vendors to comply with, its P.A.S.S. program.' [Paragraph 62] For pleading purposes, this is sufficient.

Second Cause of Action for Violation of the UCL The UCL prohibits 'any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising, and any act prohibited by the false advertising law.' (Chapman, supra, 220 Cal.App.4th at p. 226, internal quotations omitted.) Each of the prongs-unlawful, unfair, and fraudulent-'is its own independent ground for liability under the unfair competition law.' (Shaeffer, supra, 44 Cal.App.5th at p. 1135.) Still, a 'plaintiff alleging unfair business practices under these statutes must state with reasonable particularity the facts supporting the statutory elements of the violation.' (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 619) Defendant argues that Plaintiff has not alleged any 'clear and precise' facts 'with reasonable particularity' showing violation of any specific law, so the UCL cause of action fails. However, defendant concedes: 'To be sure, Plaintiff does identify the FAL as allegedly being violated...' and thus argues that the UCL is redundant and unnecessary.' Courts have held that '[a]ny violation of the false advertising law ... necessarily violates' the UCL.' Kasky v. Nike, Inc., 27 Cal. 4th 939, 950–51 (2002). Both causes of action can be alleged and no court has held that they are unnecessarily redundant.

Defendant argues that Plaintiff alleges 'no facts identifying who violated which specific Volcom policy and how that person's or vendor's conduct amounted to a violation of that policy.' Defendant then argues that the evidence provided in the Complaint only shows a 'robust compliance program in place Calendar No.: Event ID:  TENTATIVE RULINGS

3002662  39 CASE NUMBER: CASE TITLE:  JEZDIMIROVIC VS VOLCOM LLC [E-FILE]  37-2022-00043997-CU-BT-CTL as stated in its Vendor Workplace Code of Conduct.' 'Particularized fact pleading is not required for a UCL claim.' Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 46-47. Courts have held a higher pleading standard for UCL, CLRA and FAL.

Plaintiff must plead facts with particularity greater than other complaints, yet less than that required for fraud. (See e.g., Amiodarone Cases (2022) 84 Cal.App.5th 1091, 1115 ['statutory claims 'must be stated with reasonable particularity, rather than the specificity required for claims of fraud']; Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal.App.5th 1234, 1261 ['we conclude causes of action under the CLRA and UCL must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims']. As discussed above, the Second Amended alleges the false advertising with sufficient particularity.

Third Cause of Action - Violation of the CLRA The CLRA prohibits specified 'unfair methods of competition and unfair or deceptive acts or practices in connection with the sale or lease of goods or services to consumer, including misrepresenting the characteristics, uses or benefits of goods or services, and advertising goods or services with the intent not to sell them as advertised.' (Chapman v. Skype Inc., supra, 220 Cal.App.4th at p. 230) C.C.P. §1750 requires Plaintiff to allege the following: (1) Defendant is a seller of goods within the definition provided in Cal. Civ. Code §1761(a); (2) Plaintiff purchased at least one of Defendant's products for personal or household use; (3) Defendant engaged in one or more prohibited practices described in California Civil Code §1770(a); (4) Plaintiff was harmed, and (5) Plaintiff's harm resulted from the Defendant's conduct. CACI 4700.

Relief under the CLRA is limited to '[a]ny consumer who suffers any damage as a result of the use or employment by any person of a method, act,or practice' unlawful under the act. (Civ. Code, § 1780(a).) Thus, plaintiffs in a CLRA action must show not only that a defendant's conduct was deceptive, but that the deception caused harm. (Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1292.) Defendant argues, as with other causes of action, that 'Plaintiff only makes conclusory allegations that Volcom violated CLRA and...fails to allege sufficient facts in support of his legal conclusion that Volcom's statements are false or misleading. [See SAC ¶¶ 14-62; 98-111.]' Plaintiff alleges he purchased specific products on specific dates and did so in reliance on the alleged misrepresentations and false advertising. Plaintiff has alleged harm.

Class Action Allegations Cases hold that the court can sustain a demurrer to meritless class action suits prior to certification (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 440) 'Judicial policy in California has long discouraged trial courts from determining class sufficiency at the pleading stage and directed that this issue be determined by a motion for class certification.' Gutierrez v. California Commerce Club (2010) 187 Cal.App.4th969,976.) The Court finds that the pleading sufficiently alleges class allegations and will reserve any issues as to tye viability of the class procedure for certification.

Punitive Damages Defendants' Motion for Strike Punitive Damages is DENIED.

Equitable remedies are available under the FAL and UCL, so punitive damages cannot be awarded under either the First Cause of Action or Second Cause of Action in any circumstance. (See e.g., Hambrick v. Healthcare Partners Medical Group, Inc. (2015) 238 Cal.App.4th 124, 155 ['The UCL and FAL provide for only equitable relief, specifically injunctive relief and restitution.']; see also, Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 695 ['Damages are not available under the False Advertising and Unfair Competition Laws because restitution is the only available remedy under those statutes.'].) As for the Third Cause of Action under the CLRA, punitive damages are available based on Civil Code Section 3294. At this stage, plaintiff has alleged 'fraud' or 'malice' to support punitives.

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