Allen v. Shutterfly, Inc.

District Court, N.D. California·Decided September 14, 2020·No. 5:20-cv-02448·Unknown

Opinion

SHAWNA ALLEN, Case No. 20-cv-02448-BLF

Plaintiff, ORDER GRANTING MOTION TO DISMISS DEFENDANTS LIFETOUCH, v. INC. AND LIFETOUCH SCHOOL STUDIOS, INC. FOR LACK OF SHUTTERFLY, INC., et al., PERSONAL JURISDICTION Defendants. [Re: ECF 22]

Plaintiff, Shawna Allen, brings this consumer fraud class action against Shutterfly, Inc., (“Shutterfly”), Lifetouch, Inc. and Lifetouch National School Studios, Inc. (together, “Lifetouch” or “Lifetouch entities”) arising from the purchase of school portraits. Before the Court is Lifetouch’s Motion to Dismiss for Lack of Personal Jurisdiction. Motion, ECF 22. The Court heard oral arguments on August 14, 2020. For the reasons stated below, the Court GRANTS Lifetouch’s Motion WITH LEAVE TO AMEND. I. BACKGROUND Plaintiff resides in Olathe, Kansas and has children who attend schools in the Olathe School District. Complaint (“Compl.”) ¶¶ 7, 26, 30, ECF 1-1. Defendants are in the business of selling school pictures, by contracting with schools to provide bi-annual portrait sessions within schools and sell the portraits to students’ parents and guardians. Id. ¶ 1. Defendants have described themselves as “the national leader in school portraits.” Id. ¶ 18. Plaintiff’s claims arise from the pictures sold through a “Family Approval” model. Compl. ¶ 2. Under this model, the students’ portraits are taken in school; the students are sent home with the portraits (and/or other products printed with the students’ pictures); and their parents or guardians are directed to pay for the products or return them. Id. ¶ 26. Parents and guardians are not asked to and do not pre-order the portraits and products. Id. ¶ 48. Plaintiff alleges that Defendants sent unordered portraits and/or products home with Plaintiff’s children each spring during the past three years under the Family Approval model. Id. ¶¶ 29-30. Plaintiff contends these portraits and products are “unconditional gifts that do not require payment or return.” Compl. ¶ 49. According to Plaintiff, the Family Approval model is “illegal, misleading and unconscionable” because it “unfairly pressures” parents into buying the portraits “or risk disappointing their children and/or face embarrassment in front of teachers and school administrators.” Id. ¶ 54. Plaintiff seeks to represent a class of “[a]ll individuals who received and paid for unordered school portraits and/or products from Defendants within the past four years.” Id. ¶ 59. Plaintiff brings the following causes of action under California law: (1) Solicitation of Payment for Unordered Goods in violation of California Civil Code § 1716; (2) Violation of California Civil Code § 1584.5; (3) Violation of the California Consumers Legal Remedies Act, Civil Code § 1750 et seq.; (4) Violation of the California Unfair Competition Law, Business and Professional Code § 17200 et seq.; and (5) Unjust Enrichment. See generally, Compl. Defendant Shutterfly, Inc. is incorporated in Delaware and has its principal place of business in Redwood City, California. Compl. ¶ 8. Defendants Lifetouch, Inc. and its wholly owned subsidiary, Lifetouch National School Studios, Inc., are Minnesota corporations with their principal place of businesses in Minnesota. Id. ¶ 9. Lifetouch submits, and Plaintiff does not dispute, that there has been a recent corporate restructuring amongst Defendants. See Motion at 1 n.1. At the time of Plaintiff’s most recent transactions, Shutterfly, Inc. was the parent company of both Lifetouch, Inc. and Lifetouch National School Studios, Inc. See Declaration of John Grant (“Grant Decl.”) ¶¶ 4–7, ECF 22-1. On October 31, 2019, Shutterfly, Inc. was converted to a limited liability company under Delaware law and renamed Shutterfly, LLC, with its principal place of business remaining in Redwood City, California. Id. ¶ 4. On the same day, Lifetouch, Inc. was converted to a limited liability company National School Studios, Inc. was converted into a limited liability company on October 31, 2019 and then on December 31, 2019, it was renamed Shutterfly Lifetouch, LLC. Id. ¶ 6. Thus, Defendant Lifetouch, Inc. no longer exists. Defendant Lifetouch National School Studios, Inc. is now named Shutterfly Lifetouch, LLC, is organized under the laws of Minnesota and has its principal place of business in Eden Prairie, Minnesota. Id. ¶ 6. Federal Rule of Civil Procedure 12(b)(2) authorizes a defendant to seek dismissal of an action for lack of personal jurisdiction. See Fed. R. Civ. P. 12(b)(2). “In opposing a defendant’s motion to dismiss for lack of personal jurisdiction, the plaintiff bears the burden of establishing that jurisdiction is proper.” CollegeSource, Inc. v. AcademyOne, Inc., 653 F.3d 1066, 1073 (9th Cir. 2011). Courts may consider evidence presented in affidavits and declarations in determining personal jurisdiction. Doe v. Unocal Corp., 248 F.3d 915, 922 (9th Cir. 2001). “Where, as here, the defendant’s motion is based on written materials rather than an evidentiary hearing, the plaintiff need only make a prima facie showing of jurisdictional facts to withstand the motion to dismiss.” Ranza v. Nike, Inc., 793 F.3d 1059, 1068 (9th Cir. 2015) (internal quotation marks and citation omitted). “Uncontroverted allegations in the complaint must be taken as true, and factual disputes are construed in the plaintiff’s favor.” Freestream Aircraft (Bermuda) Ltd. v. Aero Law Grp., 905 F.3d 597, 602 (9th Cir. 2018). If, however, the defendant adduces evidence controverting the allegations, the plaintiff must “come forward with facts, by affidavit or otherwise, supporting personal jurisdiction,” Scott v. Breeland, 792 F.2d 925, 927 (9th Cir. 1986), for a court “may not assume the truth of allegations in a pleading which are contradicted by affidavit.” Data Disc, Inc. v. Sys. Tech. Assocs., Inc., 557 F.2d 1280, 1284 (9th Cir. 1977). Moreover, conclusory allegations or “formulaic recitation of the elements” of a claim are not entitled to the presumption of truth. Ashcroft v. Iqbal, 556 U.S. 662, 681 (2009). “Nor is the court required to accept as true allegations that are . . . unwarranted deductions of fact, or unreasonable inferences.” In re Gilead Scis. Sec. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008). the forum state.” Id.; see Fed. R. Civ. P. 4(k)(1)(A) (service of process is effective to establish personal jurisdiction over a defendant “who is subject to the jurisdiction of a court of general jurisdiction in the state where the district court is located”). “California’s long-arm statute allows the exercise of personal jurisdiction to the full extent permissible under the U.S. Constitution.” Daimler AG v. Bauman, 571 U.S. 117, 125 (2014) (citing Cal. Civ. Proc. Code Ann. § 410.10). Constitutional due process, in turn, requires that a defendant “have certain minimum contacts” with the forum state “such that the maintenance of the suit does not offend traditional notions of fair play and substantial justice.” Freestream Aircraft, 905 F.3d at 602 (quoting Int’l Shoe Co. v. Washington, 326 U.S. 310, 316 (194

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