Mojdeh Omidi v. Wal-Mart Stores, Inc.

• Court: Court of Appeals for the Ninth Circuit
• Decided: July 23, 2018
• Docket: 17-55539
• Status: Unpublished

Opinion

NOT FOR PUBLICATION FILED UNITED STATES COURT OF APPEALS JUL 23 2018 MOLLY C. DWYER, CLERK U.S. COURT OF APPEALS FOR THE NINTH CIRCUIT

MOJDEH OMIDI, individually and as No. 17-55539 representatives of the class and AURORA TELLERIA, individually and as D.C. No. representatives of the class, 3:14-cv-00857-JAH-BLM

Plaintiffs-Appellants, MEMORANDUM* v.

WAL-MART STORES, INC., a Delaware corporation and FIRSTSIGHT VISION SERVICES, INC., a California corporation,

Defendants-Appellees.

Appeal from the United States District Court for the Southern District of California John A. Houston, District Judge, Presiding

Argued and Submitted July 9, 2018 Pasadena, California

Before: PAEZ, FISHER,** and CHRISTEN, Circuit Judges. Mojdeh Omidi filed this putative class-action suit against appellees Wal-Mart

* This disposition is not appropriate for publication and is not precedent except as provided by Ninth Circuit Rule 36-3. ** The Honorable D. Michael Fisher, United States Circuit Judge for the U.S. Court of Appeals for the Third Circuit, sitting by designation. Stores, Inc., and FirstSight Vision Services, Inc. Wal-Mart operates as a registered

optician within California and leases space in its stores to FirstSight, a licensed

vision health care plan. FirstSight, in turn, leases space to individual optometrists,

who provide routine eye exams for a fee. Wal-Mart and FirstSight advertise the

availability of “Independent Doctors of Optometry” at Wal-Mart, and Omidi claims

that this representation induced her to purchase an eye exam at a San Diego-area

location from Dr. Ho. Omidi’s complaint alleges that Dr. Ho was not “independent”

as advertised, and that she would not have purchased the eye exam if she had known

this. Omidi seeks relief under various California consumer protection statutes.1 The

District Court dismissed the complaint for lack of standing, concluding that Omidi

failed to establish an economic injury in fact. For the reasons stated below, we vacate

in part, reverse in part, and remand for further proceedings.

To establish standing under Article III, a plaintiff must have “(1) suffered an

injury in fact, (2) that is fairly traceable to the challenged conduct of the defendant,

and (3) that is likely to be redressed by a favorable judicial decision.” Spokeo, Inc.

v. Robins, 136 S. Ct. 1540, 1547 (2016). At the pleading stage, the complaint must

“‘clearly allege facts demonstrating’ each element” of standing. Id. (ellipsis omitted)

(quoting Warth v. Seldin, 422 U.S. 490, 518 (1975)). An injury in fact is the invasion

1 The Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200, et seq., the False Advertising Law (FAL), Cal. Bus. & Prof. Code § 17500 et seq., and the Consumer Legal Remedies Act (CLRA), Cal. Civ. Code § 1750 et seq.

2 of a legally protected interest which is both “concrete and particularized,” Lujan v.

Defs. of Wildlife, 504 U.S. 555, 560 (1992), as opposed to merely “conjectural or

hypothetical,” id. (internal quotation marks omitted) (quoting Whitmore v. Arkansas,

495 U.S. 149, 155 (1990)). Under California law, a plaintiff suffers an economic

injury in fact for purposes of statutory standing if she “would not have bought [a]

product but for [some] misrepresentation.” Hinojos v. Kohl’s Corp., 718 F.3d 1098,

1104 (9th Cir. 2013) (quoting Kwikset Corp. v. Superior Court, 246 P.3d 877, 890

(Cal. 2011)).

The key question in this case is whether Omidi has adequately alleged that her

optometrist lacked independence. The complaint lacks specific allegations about Dr.

Ho, and instead points to various lease provisions indicating that Wal-Mart and

FirstSight were able to exercise undue influence over all of their resident

optometrists. These provisions include: setting rent as a percentage of revenue,

prescribing minimum operating hours, and permitting the lessor to terminate leases

at will. In addition, the complaint contains several anecdotes concerning other

optometrists at other Wal-Mart locations, all of which suggest that Dr. Ho was

constrained in the rates he could charge and the therapies he could recommend.

“[I]njury in fact is not a substantial or insurmountable hurdle,” Kwikset at 886, and

the complaint’s allegations are sufficient to raise Omidi’s claimed injury—paying

for an eye exam that she would not have purchased had she known Dr. Ho was not

3 independent—above the conjectural or hypothetical level. Because this injury is

fairly traceable to the misleading advertisements and is likely to be redressed by a

favorable judicial decision, Omidi has established standing under Article III and the

relevant state statutes.

Independent of the misleading advertisements, Omidi claims entitlement to

relief under the “unlawful” prong of the UCL because the business arrangement

between Wal-Mart, FirstSight, and Dr. Ho was illegal under then-prevailing

California law. See Cal. Bus. & Prof. Code § 655 (2015) (amended 2017); Cal Bus.

& Prof. Code § 2556 (2015) (amended 2016). Setting aside the legality or illegality

of appellees’ arrangement, Omidi fails to establish how her injury was fairly

traceable to the purported statutory violations, rather than the misleading

advertisements themselves. The District Court properly concluded that Omidi lacks

standing on this claim, but improperly dismissed it with prejudice. See Hampton v.

Pac. Inv. Mgmt. Co. LLC, 869 F.3d 844, 847 (9th Cir. 2017). We vacate this

judgment and remand for dismissal of Omidi’s “unlawful” claim without prejudice.

The judgment of the District Court is VACATED in part, REVERSED in part,

and REMANDED for consideration under Federal Rules of Civil Procedure 12(b)(6)

and 9(b).