Preview
FINEMAN POLINER LLP 9/19/2022
1 Phillip R. Poliner, Esq. – SBN 156145
Email: Phillip@FinemanPoliner.com
2 Neil B. Fineman, Esq. – SBN 177915
Email: Neil@FinemanPoliner.com
3 155 North Riverview Drive
4 Anaheim Hills, California 92808-1225
Tel. (714) 620-1125 - Fax (714) 701-0155
5
Attorneys for Plaintiff,
6 Valerie Harvey
7
SUPERIOR COURT FOR THE STATE OF CALIFORNIA
8
COUNTY OF IMPERIAL
9
10
VALERIE HARVEY on behalf of herself, the Case No.:22CV02127
11 General Public, and all others similarly CLASS ACTION
situated,
12 COMPLAINT FOR VIOLATIONS OF
Plaintiff, CONSUMER PROTECTION STATUTES
13 AND COMMON LAW CLAIMS:
14 v.
1. CIVIL CODE § 1749.5
15 BOOT BARN, INC., and DOES 1 through 20, 2. CIVIL CODE § 1750 ET SEQ.
(CONSUMERS LEGAL REMEDIES
16 Defendants.
ACT)
17 3. BUSINESS AND PROFESSIONS
CODE § 17200 ET SEQ. (UNFAIR
18 COMPETITION LAW)
19 4. BUSINESS AND PROFESSIONS
CODE 17500 ET SEQ. (FALSE
20 ADVERTISING LAW)
5. MONEY HAD AND RECEIVED
21
DECLARATORY RELIEF [CODE
22 CIV.PRO. § 1060]
23
24 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
25 All allegations made in this Complaint are based upon information and belief, except
26 those allegations which pertain to Valerie Harvey (“Plaintiff”) and Plaintiff’s counsel, which are
27 based on personal knowledge. Plaintiff’s information and belief are based upon, inter alia,
28 Plaintiff’s own investigation and the investigation conducted by Plaintiff’s attorneys.
1
COMPLAINT
1 Plaintiff hereby alleges:
2 INTRODUCTION
3 1. Over a decade ago, the California Legislature determined that gift cards were
4 increasingly popular as a means of gift-giving, but consumers were not able to redeem the full
5 value of the gift cards they received. (Senate Judiciary Committee, Bill Analysis, Senate Bill
6 250, (2007-2008 Reg. Session), March 27, 2007, p. 1.) A retail trade organization estimated that
7 billions of dollars in gift card sales were lost to consumers due to unredeemed value on the cards,
8 or expiration or loss of the gift card. (Id. at pp. 1-2.) It is also reported that in the U.S., 40 percent
9 of recipients do not use the full value of their gift cards. (Assembly Floor, Bill Analysis, Senate
10 Bill 885, (2009-2010 Reg. Session), May 28, 2010, p. 1.) Often the unredeemed amounts go back
11 to the retailers as revenue. (Id.) “This is a staggering amount of money for consumers to lose.”
12 (Id.)
13 2. In reaction to this inequity, California State Senator Ellen M. Corbett authored
14 Senate Bill 250, stating consumers with small values on their gift cards often cannot buy anything
15 sold by the gift card seller with the remaining value on the card, and they cannot get change for
16 the value. (Senate Judiciary Committee, Bill Analysis, Senate Bill 250, (2007-2008 Reg.
17 Session), March 27, 2007, p. 1.)
18 3. Senator Corbin and supporters of SB 250 also noted that often a consumer finds
19 himself or herself with a gift card with a small amount of money remaining on the card, the
20 retailer refuses to redeem the remaining value of the card for cash, and the consumer ends up
21 forfeiting the remaining value of the card, unless he or she makes an unnecessary purchase which
22 would likely involve additional out-of-pocket costs for the consumer. (Id.) Senator Corbett
23 argued that consumers should be relieved from this Hobson's choice.
24 4. Another scenario posited by Senator Corbett and supporters of SB 250 is when a
25 consumer receives a gift card that he or she cannot use because they do not have the requisite
26 equipment or product to go with the card, do not have ready access to a particular retailer, or do
27 not shop at a particular retailer. (Id.) In the above scenarios, the consumer loses the remaining
28 value of the card, which remains in the hands of the business, and thus amounts to a windfall
2
COMPLAINT
1 profit for the business. (Id.)
2 5. To alleviate this unfairness, in 2008, SB 250 was enacted, which amended our
3 State’s longstanding gift certificate and gift card statute to require that “any gift certificate with
4 a cash value of less than ten dollars ($10) is redeemable in cash for its cash value.” (Civil
5 Code section 1749.5(b)(2).) Accordingly, any consumer requesting cash back from a low-
6 balance gift card is entitled to just that.
7 6. While consumers gained new rights, many retailers are still failing to comply with
8 the law. For example, in 2016, Shell Oil was taken to court by the District Attorneys in seven
9 counties for failing to give cash back on gift cards with a balance under $10.00. Shell agreed to
10 pay $762,200 in restitution and civil penalties for not complying with the gift card law. (The
11 People of the State of California v. Equilon Enterprises LLC dba Shell Oil Products US, Alameda
12 County Sup. Ct., case no. HG16824067). In 2012, the District Attorneys of Solano County and
13 Shasta County obtained a judgment against Cinemark USA, Inc. consisting of an injunction and
14 significant civil penalties for its repeated violation of Civil Code section 1749.5(b)(2). (The
15 People of California v. Cinemark USA, Inc. dba Century Theaters, Solano County Sup. Ct., case
16 no. FSC039609). And in 2009, Starbucks was taken to court in three counties by the District
17 Attorney for failing to give cash back on gift cards with a balance under $10.00. Starbucks agreed
18 to pay $225,000 in civil penalties for not complying with the amended gift card law.
19 7. This putative class action arises from Defendant’s past, present, and future
20 noncompliance with Civil Code section 1749.5(b)(2). Plaintiff alleges that as a result of
21 Defendant’s ongoing policy and/or practice of failing to provide cash to consumers wishing to
22 redeem a gift card with a cash value less than $10.00, or alternatively, Defendant’s failure to
23 maintain a policy and/or practice of complying with Civil Code section 1749.5(b)(2), Defendant
24 has violated and will continue to violate consumers’ statutory rights pursuant to Civil Code
25 section 1749.5; Civil Code section 1770; and Business and Professions Code sections 17200 et
26 seq. and 17500 et seq.
27 8. In pursuing this action, Plaintiff does not seek any relief greater than or different
28 from the relief sought for the putative class of which Plaintiff is a member. The action, if
3
COMPLAINT
1 successful, will enforce an important, ongoing right of consumers affecting the public interest
2 and would confer a significant benefit, whether pecuniary or non-pecuniary, on a large class of
3 persons (i.e., all California consumers who possess Defendant’s gift cards with a balance of less
4 than $10.00). Private enforcement is necessary and places a disproportionate financial burden on
5 Plaintiff in relation to Plaintiff’s stake in the matter.
6
7 JURISDICTION
8 9. This Court has jurisdiction over Defendant pursuant to Code of Civil Procedure
9 section 410.10 and pursuant to the California Constitution, Article VI, Section 10.
10 10. This Court has jurisdiction over Defendant because Defendant intentionally avails
11 itself of the consumer markets within the County of Imperial in the State of California and
12 Defendant does business in the County of Imperial.
13 11. Further, section 17203 of the Business and Professions Code empowers “any
14 court of competent jurisdiction” to enter orders or judgments to prevent the use or employment
15 of any practice which constitutes unfair competition, which are alleged in this Complaint.
16 12. Additionally, Civil Code section 1780(d) allows actions commenced under the
17 Consumers Legal Remedies Act to be filed in a county in which Defendant is doing business.
18 13. Plaintiff does not seek judgment for Plaintiff or for any consumer of more than
19 $74,999.99 total per person, for all recovery, damages, interest, costs, or any other thing or type.
20 Similarly, the total benefit or value to Plaintiff or any consumer is not more than $74,999.99 total
21 per person, for all recovery, damages, interest, costs, or any other thing or type. The cost to
22 Defendant of all relief sought herein is less than $74,999.99 per person.
23 14. On information and belief, there are less than 10,000 gift cards that have been
24 sold by Defendant with a current balance of less than $10.00 in California. Accordingly, the total
25 relief, recovery, interest, costs, or any other thing or type in this action, inclusive of attorneys’
26 fees and costs, by Plaintiff and all others similarly situated, is less than $4,999,999.99.
27 ///
28 ///
4
COMPLAINT
1 PARTIES
2 15. Plaintiff is now, and was at all times mentioned in this Complaint, a consumer
3 and an individual who, during the past twelve months, acquired by purchase goods or services
4 for personal, family, or household purposes, to wit, one of Defendant’s gift cards. Further,
5 Plaintiff maintains all rights to the subject gift card and/or was assigned all rights to the gift card
6 and the rights and obligations that flow from the possession and use of the gift card.
7 16. Defendant, Boot Barn, Inc. (“Boot Barn”), sells western and work-related
8 footwear, apparel, and accessories to the general public in retail stores in California.
9 17. In addition to selling items, Boot Barn sells gift cards, which can be used to buy
10 items in its retail locations.
11 18. On information and belief, this Defendant has ultimate responsibility for the
12 establishment of rules, regulations, operations and practices attendant to the issuance and
13 redemption of its gift cards in the State of California, including those bearing Defendant’s brand
14 or mark and issued or redeemed by any other person or entity.
15 19. Defendant maintains the right to sufficiently control, and in fact does control, the
16 means and manner in which it issues and redeems gift cards, and, specifically, establishes the
17 policies and procedures for redemption of gift cards for cash.
18 20. The true names and capacities, whether individual, corporate, associate, or
19 otherwise, of Defendants sued herein as DOES 1 through 20, inclusive, is currently unknown to
20 Plaintiff, who therefore sues these Defendants by such fictitious names under Code of Civil
21 Procedure section 474. Plaintiff will seek leave of court to amend this Complaint to reflect the
22 true names and capacities of the Defendants designated hereinafter as DOES when such identities
23 become known.
24 21. Each of the Defendants sued herein was the principal, agent, or employee of the
25 other, and was acting within the scope of such agency or employment. Each Defendant sued
26 herein was the co-conspirator of the other and was acting within the course and scope of a
27 conspiracy formed amongst each of them. Each Defendant sued herein aided and abetted the
28 other with the intent that each would be successful in their mutual endeavors. Each Defendant
5
COMPLAINT
1 sued herein received money or property as a result of the conduct described herein without
2 consideration therefore and/or with knowledge that the money or property was obtained as a
3 result of the wrongful conduct described herein. Each entity Defendant sued herein is a shell
4 organization, and is actually the alter ego of the other Defendants sued herein.
5 22. As used in this Complaint, the words “Defendant” or “Defendants” are used
6 interchangeably and mean and include each and every Defendant sued herein, including DOES.
7 FACTUAL ALLEGATIONS
8 23. Plaintiff refers to and incorporates by reference each and every paragraph above
9 as though set forth fully herein.
10 24. As used herein, “Gift Card” means an electronic promise, plastic card, or other
11 payment code or device that is: (i) redeemable by Defendant; (ii) issued in a specified amount,
12 whether or not that amount may be increased in value or reloaded at the request of the holder;
13 (iii) purchased on a prepaid basis in exchange for payment; and (iv) honored upon presentation
14 by Defendant. The terms “Gift Card” and “Gift Certificate” are interchangeable.
15 25. Defendant sells gift cards in California to consumers that contain various stored
16 values, which represent the “balance” on the gift card.
17 26. According to the statements and advertising on Defendant’s gift cards,
18 Defendant’s gift cards are not redeemable for cash. Specifically, Defendant’s gift cards include
19 the following terms and conditions:
20 “This card may not be exchanged for cash … and no change will be
21 given.”
22 27. Within the last 12 months, Plaintiff visited a Boot Barn location in California with
23 a Boot Barn gift card and Plaintiff purchased items Plaintiff wanted using the Boot Barn gift card
24 to pay for the items.
25 28. After paying for the items selected using the Boot Barn gift card, Plaintiff’s gift
26 card balance was less than $10.00.
27 29. Plaintiff did not want any other items offered by Defendant, instead, Plaintiff
28 wanted the cash value of the gift card.
6
COMPLAINT
1 30. Plaintiff asked the Boot Barn employee if Plaintiff could obtain the cash balance
2 of the card, but the employee refused Plaintiff’s lawful request to redeem the gift card for cash
3 and told Plaintiff the balance remains on the gift card for future use.
4 31. Plaintiff was denied the cash balance of Plaintiff’s gift card despite the fact that
5 the balance on the card was less than $10.00 and Defendant’s employee was aware of the balance
6 on the card at the time of the request.
7 HOW DEFENDANT PROFITS FROM KEEPING THE CASH VALUE OF ITS
8 OUTSTANDING GIFT CARDS
9 32. Boot Barn profits from the redemption of gift cards both when a consumer uses a
10 gift card to purchase items from Boot Barn locations, and Boot Barn profits when a customer
11 fails to use a gift card and the gift card balance remains on the gift card for a certain period of
12 time.
13 33. Specifically, at the time a Boot Barn gift card is purchased and “loaded” with a
14 money balance, Boot Barn records the amount loaded on the gift card as an obligation that is
15 reflected as gift card liability.
16 34. Defendant then recognizes income from gift cards when (i) the customer uses the
17 gift card to pay for an item, or (ii) the likelihood of the gift card being redeemed by the customer
18 is remote, and Boot Barn determines that it does not have a legal obligation to remit the value of
19 unredeemed gift cards to the State of California (referred to as “breakage” income).
20 35. Defendant determines the gift card breakage amount based upon historical
21 redemption patterns and Defendant concludes that after a certain amount of inactivity the
22 likelihood of redemption becomes remote (or when the likelihood of the gift card being redeemed
23 by the customer is less than probable), and Defendant recognizes breakage as income at that time.
24 36. Accordingly, Defendant profits every time a gift card holder (1) fails to redeem a
25 Boot Barn gift card for Defendant’s items (either because the gift card holder does not want to
26 purchase any additional items or when the balance remaining on the gift card is too low to
27 purchase an item from Defendant), and (2) when a Boot Barn employee refuses a gift card
28 holder’s request for the cash balance of a gift card.
7
COMPLAINT
1 PRE-FILING COMPLIANCE AUDITS
2 37. Prior to filing this lawsuit, investigations were performed on Plaintiff’s behalf to
3 determine if this particular Boot Barn employee’s failure to comply with California’s gift card
4 law was an isolated incident.
5 38. The results of Plaintiff’s pre-filing investigations revealed that Boot Barn
6 employees consistently failed to honor valid requests for cash back on gift cards with a balance
7 of less than $10.00.
8 39. By Defendant’s actions in not having an existing policy of complying with Civil
9 Code section 1749.5(b)(2), or in failing to comply with such a policy to provide California
10 consumers cash for gift cards with a stored value of under $10.00, (e.g., failing to have a
11 consistent practice of honoring requests for cash pursuant to Civil Code section 1749.5(b)(2)),
12 all current and future holders of gift cards with a balance of less than $10.00 are denied certain
13 consumer protections afforded to consumers under the laws of this State.
14 40. In addition, by Defendant’s actions in falsely advertising that Defendant’s gift
15 cards cannot be redeemed for cash under any circumstance, all current and future holders of gift
16 cards with a balance of less than $10.00 are misled and deceived into believing that the gift card
17 holder has no opportunity or rights to obtain the balance of the gift card in cash.
18 41. Defendant has become unjustly enriched – and will continue to become unjustly
19 enriched – by Defendant retaining the actual cash paid for such gift cards and by requiring
20 consumers to redeem gift cards for Defendant’s items only, even when Plaintiff and other
21 California consumers do not wish to purchase Defendant’s items.
22
23 FIRST CAUSE OF ACTION
24 VIOLATION OF CIVIL CODE SECTION 1749.5
25 [CALIFORNIA GIFT CARD LAW]
26 (As Against All Defendants)
27 42. Plaintiff refers to and incorporates by reference each and every paragraph above
28 as though set forth fully herein.
8
COMPLAINT
1 43. Pursuant to Civil Code section 1749.5(b)(2), any gift card with a cash value of
2 less than $10.00 is redeemable in cash for its cash value.
3 44. Plaintiff owned and possessed a Boot Barn gift card with a cash value of less than
4 $10.00 and asked Defendant to redeem the gift card in cash for its cash value. Plaintiff did not
5 want more of Defendant’s items, nor could Plaintiff buy any items with the remaining balance
6 on the gift card, and therefore, Plaintiff wanted the cash value of the gift card.
7 45. As part of Defendant’s policy and practice – or with disregard to any policy
8 Defendant may have – Defendant’s employees refused to redeem Plaintiff’s gift card in cash for
9 its cash value and did not honor Plaintiff’s request for the cash value of the gift card, which was
10 less than $10.00.
11 46. Defendant was and is required by law – irrespective of any contract or agreement
12 that may have existed – to redeem Plaintiff’s gift card for cash, and any waiver of this
13 requirement is void and unenforceable pursuant to Civil Code section 1749.51.
14 47. Through its acts and practices, Defendant has violated Civil Code section
15 1749.5(b)(2), and will continue to violate this consumer protection statute, and Plaintiff and all
16 others similarly situated have suffered damages and will continue to suffer damages as a result,
17 to wit, Plaintiff and the members of the class Plaintiff purports to represent, have been denied –
18 and will continue to be denied – money to which Plaintiff and the putative class have a cognizable
19 claim. Plaintiff and all others similarly situated lost – and will lose – the cash value of the gift
20 cards by Defendant’s refusal to comply with Civil Code section 1749.5(b)(2) and honor
21 consumers’ past and future requests to obtain the cash value of gift cards containing a balance of
22 less than $10.00. Defendant’s acts and practices caused Plaintiff to keep a gift card that can only
23 be used for items Plaintiff does not wish to purchase and will cause consumers in California to
24 keep (or discard) Defendant’s gift cards that can only be used for items.
25 ///
26 ///
27 ///
28 ///
9
COMPLAINT
1 SECOND CAUSE OF ACTION
2 VIOLATION OF CIVIL CODE SECTIONS 1750 ET SEQ.
3 [CONSUMERS LEGAL REMEDIES ACT]
4 (As Against All Defendants)
5 48. Plaintiff refers to and incorporates by reference each and every paragraph above
6 as though set forth fully herein.
7 49. Civil Code section 1770 generally states:
“(a) The following unfair methods of competition and unfair or deceptive acts or
8
practices undertaken by any person in a transaction intended to result or which
9 results in the sale or lease of goods or services to any consumer is unlawful:
10 (14) Representing that a transaction confers or involves rights, remedies, or
obligations which it does not have or involve, or which is prohibited by law.” (Civ.
11 Code, § 1770(a)(14).)
12
13 50. Defendant, individually and/or through its agents and employees, engaged in the
14 following violations of Civil Code section 1770: Defendant represented – and continues to
15 represent – that the transaction (the sale and ownership of its gift cards) confers or involves rights,
16 remedies, or obligations that it does not have or involve, or which is prohibited by law.
17 Specifically, Defendant represented – and continues to represent – to purchasers and recipients
18 of its gift cards that the holder of a gift card was and is obligated to redeem the gift card for items
19 only and was not – and will not be – permitted to redeem the gift card for cash if the gift card’s
20 stored value is less than $10.00.
21 51. Further, Defendant represented – and continues to represent – that Defendant has
22 the right to retain (as a forfeiture) the value of the gift card under $10.00, whether or not the gift
23 card holder wants to actually purchase items from Defendant. This unlawful “right” to retain
24 money paid for a gift card is contrary to the intent and purpose of Civil Code section 1749.5.
25 52. Such claims, rights, and obligations violate the law and therefore the actions,
26 omissions, and misrepresentations being made by Defendant violate Civil Code sections 1750 et
27 seq. including but not limited to Civil Code section 1770(a)(14).
28 ///
10
COMPLAINT
1 53. Defendant continues to violate Civil Code sections 1750 et seq. and Plaintiff, and
2 all others similarly situated, have a statutory right to redeem Defendant’s gift cards for cash if
3 the gift card’s stored value is less than $10.00.
4 54. Plaintiff seeks injunctive relief pursuant to the Consumers Legal Remedies Act
5 and may amend this Complaint to demand nominal damages following Plaintiff’s compliance
6 with Civil Code section 1782(a).
7
8 THIRD CAUSE OF ACTION
9 VIOLATION OF BUSINESS AND PROFESSIONS CODE SECTIONS 17200 ET SEQ.
10 [UNFAIR COMPETITION LAW]
11 (As Against All Defendants)
12 55. Plaintiff refers to and incorporates by reference each and every paragraph above
13 as though set forth fully herein.
14 56. Beginning on a date unknown to Plaintiff, but within the four years preceding the
15 filing of this Complaint, Defendant sued herein has engaged in, is engaged in, and proposes to
16 engage in unfair competition, as that term is defined in Business and Professions Code section
17 17200. As used in this Complaint and in Section 17200, “unfair” means (1) an unlawful, unfair,
18 or fraudulent business act or practice; (2) unfair, deceptive, untrue, or misleading advertising;
19 and/or (3) an act prohibited by Chapter 1 (commencing with Section 1720) of Part 3 of Division
20 7 of the Business and Professions Code. This conduct is actionable pursuant to Business and
21 Professions Code sections 17200, 17203.
22 UNLAWFUL ACTS AND PRACTICES
23 57. Violation of Civil Code section 1749.5: Defendant’s acts and practices of failing
24 to provide Plaintiff, individually and/or all others similarly situated, cash back on gift cards with
25 a stored value of under $10.00 violates Civil Code section 1749.5; therefore, the continuing
26 violation constitutes an unlawful business act or practice within the meaning of Business and
27 Professions Code section 17200.
28 ///
11
COMPLAINT
1 58. Violation of Civil Code section 1770: Defendant’s acts and practices of
2 representing that the transaction (the sale and purchase of a gift card) confers or involves rights,
3 remedies, or obligations that it did not have or involve, or which is prohibited by law, and
4 Defendant’s representations that it has the right to retain (as a forfeiture) the value of gift cards
5 with a balance less than $10.00, whether or not the gift card holder wants to actually purchase
6 items from Defendant, violates Civil Code section 1770 (Consumers Legal Remedies Act) as
7 more fully set forth supra. Accordingly, the continuing violation of Civil Code section 1770
8 constitutes an unlawful business act or practice within the meaning of Business and Professions
9 Code section 17200.
10 59. Violation of Business and Professions Code section 17500 et seq.: Defendant’s
11 acts and practices of falsely advertising that Defendant’s gift cards cannot be redeemed for cash
12 is a violation of Business and Professions Code section 17500 et seq. Accordingly, the continuing
13 violation of Business and Professions Code section 17500 et seq. constitutes an unlawful
14 business act or practice within the meaning of Business and Professions Code section 17200.
15 UNFAIR ACTS AND PRACTICES
16 60. Defendant’s ongoing acts and practices are unfair, even if not unlawful, in that
17 Defendant failed to provide Plaintiff and all others similarly situated, the cash balance of gift
18 cards with a balance of less than $10.00, whereby the holder finds himself or herself with a gift
19 card with a small amount of money remaining on the card, the retailer refuses to redeem the
20 remaining value of the card for cash, and the consumer ends up forfeiting the remaining value of
21 the card, unless he or she makes an unnecessary purchase which would likely involve additional
22 out-of-pocket costs for the consumer. This is an unfair practice specifically addressed by the
23 Legislature when itamended Civil Code section 1749.5. (Senate Judiciary Committee, Bill
24 Analysis, Senate Bill 250, (2007-2008 Reg. Session), March 27, 2007, p. 1.)
25 61. Defendant’s continuing acts and practices are unfair, even if not unlawful, in that
26 in refusing to provide cash back for gift cards with a balance of less than $10.00, Plaintiff and all
27 others similarly situated are left with a gift card with a balance below the cost of Defendant’s
28 items, thus requiring the consumer to pay more to use the gift card. Therefore, the consumer
12
COMPLAINT
1 either loses the remaining value of the card, which remains in the hands of the business, and thus
2 amounts to a windfall profit for the business, or spends more at the Defendant’s establishment.
3 This is an unfair practice specifically addressed by the Legislature when it amended Civil Code
4 section 1749.5. (Id.)
5 62. Defendant’s continuing acts and practices are unfair, even if not unlawful, in that
6 Defendant denies consumers, like Plaintiff and all others similarly situated, with the right to
7 ready access to liquid assets, including the cash value of their gift cards. The remainder on their
8 unused gift cards could make the difference in paying bills and making ends meet. This problem
9 is so common that billions of dollars in gift cards goes unspent every year. After a few years, the
10 retailer gets to claim the consumer’s money as profit without supplying a product or paying sales
11 tax. This is an unfair practice specifically addressed by the Legislature when it amended Civil
12 Code section 1749.5. (Assembly Floor, Bill Analysis, SB 885 (2009-2010 Reg. Session), April
13 6, 2010.)
14 63. Plaintiff has suffered an injury in fact; Plaintiff, along with those similarly
15 situated, suffered – and continues to suffer – an invasion of a legally protected interest that is (a)
16 concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Plaintiff,
17 along with those similarly situated, have an ongoing legally protected interest (as evinced by
18 Civil Code sections 1749.5 and 1770(a)(14)) in obtaining the cash for the value of any gift card
19 sold by Defendant with a stored value of less than $10.00, and in not being misled as to the rights
20 and obligations of the parties in obtaining the cash equivalent of the stored value of the gift card
21 sold by Defendant in an amount less than $10.00. By and through Defendant’s ongoing policies
22 and practices, Plaintiff and all others similarly situated have suffered an actual invasion of their
23 legally protected interests and continue to suffer an actual invasion of their legally protected
24 interests.
25 64. Further, Plaintiff, along with those similarly situated, have lost, and will continue
26 to lose money and/or property as a result of such practices and unfair competition, in that these
27 consumers are denied the cash value of any gift cards sold by Defendant containing a balance
28 less than $10.00. Through Defendant’s policy and/or practices, Plaintiff and all others similarly
13
COMPLAINT
1 situated have suffered – and will continue to suffer – damages as a result, to wit, Plaintiff and the
2 members of the class Plaintiff purports to represent, have been denied and will be denied money
3 to which Plaintiff and the putative class have a cognizable claim.
4 65. Plaintiff does not want items sold by Defendant and Defendant’s conduct has
5 caused Plaintiff to have a gift card that can only be used for items Plaintiff does not wish to
6 purchase. Plaintiff and all others similarly situated have lost and will continue to lose the cash
7 value of the gift cards sold by Defendant by Defendant’s perpetual refusal to allow gift card
8 holders to obtain the cash value of gift cards containing a balance of less than $10.00.
9 66. The unlawful, unfair, and fraudulent business practices of Defendant, as described
10 above, present a continuing threat to members of the general public in that the public will be and
11 is deceived into thinking Defendant has the right to refuse to redeem for cash the cash value of
12 Defendant’s gift cards which have a balance of less than $10.00. Defendant continues to engage
13 in these practices and will not cease doing so unless and until an injunction is issued.
14 67. As a direct and proximate result of the aforementioned unlawful, unfair, or
15 fraudulent acts and/or practices, Defendant received and continues to hold monies paid by
16 Plaintiff and other California consumers, including interest and other revenues generated from
17 Defendant’s practices within California.
18
19 FOURTH CAUSE OF ACTION
20 VIOLATION OF BUSINESS AND PROFESSIONS CODE § 17500 ET SEQ.
21 [FALSE ADVERTISING LAW]
22 (As Against All Defendant)
23 68. Plaintiff refers to and incorporates by reference each and every paragraph above
24 as though set forth fully herein.
25 69. At all times relevant herein, Defendant has committed acts of untrue and
26 misleading advertising, as defined by Business and Professions Code section 17500 et seq., by
27 engaging in the acts and practices alleged above which were committed with the intent to induce
28 the public to enter into transactions which would profit Defendant.
14
COMPLAINT
1 70. Specifically, Defendant advertised to the general public that its gift cards could
2 not be redeemed for cash, when in fact and by law, any gift card with a cash value less than
3 ten dollars ($10.00) is redeemable in cash for its cash value in California.
4 71. Plaintiff has suffered an injury in fact; Plaintiff, along with those similarly
5 situated, suffered an invasion of a legally protected interest that is (a) concrete and particularized,
6 and (b) actual or imminent, not conjectural or hypothetical. Plaintiff, along with those similarly
7 situated, has a legally protected interest (as evinced by Civil Code sections 1749.5 and
8 1770(a)(14)) in obtaining the cash for the value of any gift card sold by Defendant with a stored
9 value of less than $10.00, and in not being misled as to rights and obligations of the parties in
10 obtaining the cash equivalent of the stored value of the gift card sold by Defendant in an amount
11 less than $10.00. By and through Defendant’s policies and practices, Plaintiff and all others
12 similarly situated suffered an actual invasion of their legally protected interests.
13 72. Further, Plaintiff, along with those similarly situated, lost money and/or property
14 as a result of such practices and unfair competition, in that these consumers are denied the cash
15 value of any gift cards sold by Defendant containing a balance less than $10.00. Through
16 Defendant’s policy and/or practices, Plaintiff and all others similarly situated have suffered
17 damages as a result, to wit, Plaintiff and the members of the class Plaintiff purports to represent,
18 have been denied money to which Plaintiff and the putative class have a cognizable claim.
19 Defendant’s conduct has caused Plaintiff to have a gift card that can only be used for items
20 Plaintiff does not wish to purchase. Plaintiff and all others similarly situated have lost the cash
21 value of the gift cards sold by Defendant by Defendant’s refusal to comply with Civil Code
22 section 1749.5 and honor consumers’ requests to obtain the cash value of gift cards containing a
23 balance of less than $10.00.
24 73. Defendant violated and continues to violate Business and Professions Code
25 section 17500 in that Defendant intended directly or indirectly to misrepresent the right of
26 California consumers to obtain the cash value of gift cards containing a balance of less than
27 $10.00. Defendant knew, or which by the exercise of reasonable care should have known, that
28 such statements claiming that its gift cards cannot be redeemed for cash is untrue or misleading
15
COMPLAINT
1 and in violation of State law.
2 74. The acts of untrue and misleading advertising
Preview
FINEMAN POLINER LLP 9/19/2022 1 Phillip R. Poliner, Esq. – SBN 156145 Email: Phillip@FinemanPoliner.com 2 Neil B. Fineman, Esq. – SBN 177915 Email: Neil@FinemanPoliner.com 3 155 North Riverview Drive 4 Anaheim Hills, California 92808-1225 Tel. (714) 620-1125 - Fax (714) 701-0155 5 Attorneys for Plaintiff, 6 Valerie Harvey 7 SUPERIOR COURT FOR THE STATE OF CALIFORNIA 8 COUNTY OF IMPERIAL 9 10 VALERIE HARVEY on behalf of herself, the Case No.:22CV02127 11 General Public, and all others similarly CLASS ACTION situated, 12 COMPLAINT FOR VIOLATIONS OF Plaintiff, CONSUMER PROTECTION STATUTES 13 AND COMMON LAW CLAIMS: 14 v. 1. CIVIL CODE § 1749.5 15 BOOT BARN, INC., and DOES 1 through 20, 2. CIVIL CODE § 1750 ET SEQ. (CONSUMERS LEGAL REMEDIES 16 Defendants. ACT) 17 3. BUSINESS AND PROFESSIONS CODE § 17200 ET SEQ. (UNFAIR 18 COMPETITION LAW) 19 4. BUSINESS AND PROFESSIONS CODE 17500 ET SEQ. (FALSE 20 ADVERTISING LAW) 5. MONEY HAD AND RECEIVED 21 DECLARATORY RELIEF [CODE 22 CIV.PRO. § 1060] 23 24 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 25 All allegations made in this Complaint are based upon information and belief, except 26 those allegations which pertain to Valerie Harvey (“Plaintiff”) and Plaintiff’s counsel, which are 27 based on personal knowledge. Plaintiff’s information and belief are based upon, inter alia, 28 Plaintiff’s own investigation and the investigation conducted by Plaintiff’s attorneys. 1 COMPLAINT 1 Plaintiff hereby alleges: 2 INTRODUCTION 3 1. Over a decade ago, the California Legislature determined that gift cards were 4 increasingly popular as a means of gift-giving, but consumers were not able to redeem the full 5 value of the gift cards they received. (Senate Judiciary Committee, Bill Analysis, Senate Bill 6 250, (2007-2008 Reg. Session), March 27, 2007, p. 1.) A retail trade organization estimated that 7 billions of dollars in gift card sales were lost to consumers due to unredeemed value on the cards, 8 or expiration or loss of the gift card. (Id. at pp. 1-2.) It is also reported that in the U.S., 40 percent 9 of recipients do not use the full value of their gift cards. (Assembly Floor, Bill Analysis, Senate 10 Bill 885, (2009-2010 Reg. Session), May 28, 2010, p. 1.) Often the unredeemed amounts go back 11 to the retailers as revenue. (Id.) “This is a staggering amount of money for consumers to lose.” 12 (Id.) 13 2. In reaction to this inequity, California State Senator Ellen M. Corbett authored 14 Senate Bill 250, stating consumers with small values on their gift cards often cannot buy anything 15 sold by the gift card seller with the remaining value on the card, and they cannot get change for 16 the value. (Senate Judiciary Committee, Bill Analysis, Senate Bill 250, (2007-2008 Reg. 17 Session), March 27, 2007, p. 1.) 18 3. Senator Corbin and supporters of SB 250 also noted that often a consumer finds 19 himself or herself with a gift card with a small amount of money remaining on the card, the 20 retailer refuses to redeem the remaining value of the card for cash, and the consumer ends up 21 forfeiting the remaining value of the card, unless he or she makes an unnecessary purchase which 22 would likely involve additional out-of-pocket costs for the consumer. (Id.) Senator Corbett 23 argued that consumers should be relieved from this Hobson's choice. 24 4. Another scenario posited by Senator Corbett and supporters of SB 250 is when a 25 consumer receives a gift card that he or she cannot use because they do not have the requisite 26 equipment or product to go with the card, do not have ready access to a particular retailer, or do 27 not shop at a particular retailer. (Id.) In the above scenarios, the consumer loses the remaining 28 value of the card, which remains in the hands of the business, and thus amounts to a windfall 2 COMPLAINT 1 profit for the business. (Id.) 2 5. To alleviate this unfairness, in 2008, SB 250 was enacted, which amended our 3 State’s longstanding gift certificate and gift card statute to require that “any gift certificate with 4 a cash value of less than ten dollars ($10) is redeemable in cash for its cash value.” (Civil 5 Code section 1749.5(b)(2).) Accordingly, any consumer requesting cash back from a low- 6 balance gift card is entitled to just that. 7 6. While consumers gained new rights, many retailers are still failing to comply with 8 the law. For example, in 2016, Shell Oil was taken to court by the District Attorneys in seven 9 counties for failing to give cash back on gift cards with a balance under $10.00. Shell agreed to 10 pay $762,200 in restitution and civil penalties for not complying with the gift card law. (The 11 People of the State of California v. Equilon Enterprises LLC dba Shell Oil Products US, Alameda 12 County Sup. Ct., case no. HG16824067). In 2012, the District Attorneys of Solano County and 13 Shasta County obtained a judgment against Cinemark USA, Inc. consisting of an injunction and 14 significant civil penalties for its repeated violation of Civil Code section 1749.5(b)(2). (The 15 People of California v. Cinemark USA, Inc. dba Century Theaters, Solano County Sup. Ct., case 16 no. FSC039609). And in 2009, Starbucks was taken to court in three counties by the District 17 Attorney for failing to give cash back on gift cards with a balance under $10.00. Starbucks agreed 18 to pay $225,000 in civil penalties for not complying with the amended gift card law. 19 7. This putative class action arises from Defendant’s past, present, and future 20 noncompliance with Civil Code section 1749.5(b)(2). Plaintiff alleges that as a result of 21 Defendant’s ongoing policy and/or practice of failing to provide cash to consumers wishing to 22 redeem a gift card with a cash value less than $10.00, or alternatively, Defendant’s failure to 23 maintain a policy and/or practice of complying with Civil Code section 1749.5(b)(2), Defendant 24 has violated and will continue to violate consumers’ statutory rights pursuant to Civil Code 25 section 1749.5; Civil Code section 1770; and Business and Professions Code sections 17200 et 26 seq. and 17500 et seq. 27 8. In pursuing this action, Plaintiff does not seek any relief greater than or different 28 from the relief sought for the putative class of which Plaintiff is a member. The action, if 3 COMPLAINT 1 successful, will enforce an important, ongoing right of consumers affecting the public interest 2 and would confer a significant benefit, whether pecuniary or non-pecuniary, on a large class of 3 persons (i.e., all California consumers who possess Defendant’s gift cards with a balance of less 4 than $10.00). Private enforcement is necessary and places a disproportionate financial burden on 5 Plaintiff in relation to Plaintiff’s stake in the matter. 6 7 JURISDICTION 8 9. This Court has jurisdiction over Defendant pursuant to Code of Civil Procedure 9 section 410.10 and pursuant to the California Constitution, Article VI, Section 10. 10 10. This Court has jurisdiction over Defendant because Defendant intentionally avails 11 itself of the consumer markets within the County of Imperial in the State of California and 12 Defendant does business in the County of Imperial. 13 11. Further, section 17203 of the Business and Professions Code empowers “any 14 court of competent jurisdiction” to enter orders or judgments to prevent the use or employment 15 of any practice which constitutes unfair competition, which are alleged in this Complaint. 16 12. Additionally, Civil Code section 1780(d) allows actions commenced under the 17 Consumers Legal Remedies Act to be filed in a county in which Defendant is doing business. 18 13. Plaintiff does not seek judgment for Plaintiff or for any consumer of more than 19 $74,999.99 total per person, for all recovery, damages, interest, costs, or any other thing or type. 20 Similarly, the total benefit or value to Plaintiff or any consumer is not more than $74,999.99 total 21 per person, for all recovery, damages, interest, costs, or any other thing or type. The cost to 22 Defendant of all relief sought herein is less than $74,999.99 per person. 23 14. On information and belief, there are less than 10,000 gift cards that have been 24 sold by Defendant with a current balance of less than $10.00 in California. Accordingly, the total 25 relief, recovery, interest, costs, or any other thing or type in this action, inclusive of attorneys’ 26 fees and costs, by Plaintiff and all others similarly situated, is less than $4,999,999.99. 27 /// 28 /// 4 COMPLAINT 1 PARTIES 2 15. Plaintiff is now, and was at all times mentioned in this Complaint, a consumer 3 and an individual who, during the past twelve months, acquired by purchase goods or services 4 for personal, family, or household purposes, to wit, one of Defendant’s gift cards. Further, 5 Plaintiff maintains all rights to the subject gift card and/or was assigned all rights to the gift card 6 and the rights and obligations that flow from the possession and use of the gift card. 7 16. Defendant, Boot Barn, Inc. (“Boot Barn”), sells western and work-related 8 footwear, apparel, and accessories to the general public in retail stores in California. 9 17. In addition to selling items, Boot Barn sells gift cards, which can be used to buy 10 items in its retail locations. 11 18. On information and belief, this Defendant has ultimate responsibility for the 12 establishment of rules, regulations, operations and practices attendant to the issuance and 13 redemption of its gift cards in the State of California, including those bearing Defendant’s brand 14 or mark and issued or redeemed by any other person or entity. 15 19. Defendant maintains the right to sufficiently control, and in fact does control, the 16 means and manner in which it issues and redeems gift cards, and, specifically, establishes the 17 policies and procedures for redemption of gift cards for cash. 18 20. The true names and capacities, whether individual, corporate, associate, or 19 otherwise, of Defendants sued herein as DOES 1 through 20, inclusive, is currently unknown to 20 Plaintiff, who therefore sues these Defendants by such fictitious names under Code of Civil 21 Procedure section 474. Plaintiff will seek leave of court to amend this Complaint to reflect the 22 true names and capacities of the Defendants designated hereinafter as DOES when such identities 23 become known. 24 21. Each of the Defendants sued herein was the principal, agent, or employee of the 25 other, and was acting within the scope of such agency or employment. Each Defendant sued 26 herein was the co-conspirator of the other and was acting within the course and scope of a 27 conspiracy formed amongst each of them. Each Defendant sued herein aided and abetted the 28 other with the intent that each would be successful in their mutual endeavors. Each Defendant 5 COMPLAINT 1 sued herein received money or property as a result of the conduct described herein without 2 consideration therefore and/or with knowledge that the money or property was obtained as a 3 result of the wrongful conduct described herein. Each entity Defendant sued herein is a shell 4 organization, and is actually the alter ego of the other Defendants sued herein. 5 22. As used in this Complaint, the words “Defendant” or “Defendants” are used 6 interchangeably and mean and include each and every Defendant sued herein, including DOES. 7 FACTUAL ALLEGATIONS 8 23. Plaintiff refers to and incorporates by reference each and every paragraph above 9 as though set forth fully herein. 10 24. As used herein, “Gift Card” means an electronic promise, plastic card, or other 11 payment code or device that is: (i) redeemable by Defendant; (ii) issued in a specified amount, 12 whether or not that amount may be increased in value or reloaded at the request of the holder; 13 (iii) purchased on a prepaid basis in exchange for payment; and (iv) honored upon presentation 14 by Defendant. The terms “Gift Card” and “Gift Certificate” are interchangeable. 15 25. Defendant sells gift cards in California to consumers that contain various stored 16 values, which represent the “balance” on the gift card. 17 26. According to the statements and advertising on Defendant’s gift cards, 18 Defendant’s gift cards are not redeemable for cash. Specifically, Defendant’s gift cards include 19 the following terms and conditions: 20 “This card may not be exchanged for cash … and no change will be 21 given.” 22 27. Within the last 12 months, Plaintiff visited a Boot Barn location in California with 23 a Boot Barn gift card and Plaintiff purchased items Plaintiff wanted using the Boot Barn gift card 24 to pay for the items. 25 28. After paying for the items selected using the Boot Barn gift card, Plaintiff’s gift 26 card balance was less than $10.00. 27 29. Plaintiff did not want any other items offered by Defendant, instead, Plaintiff 28 wanted the cash value of the gift card. 6 COMPLAINT 1 30. Plaintiff asked the Boot Barn employee if Plaintiff could obtain the cash balance 2 of the card, but the employee refused Plaintiff’s lawful request to redeem the gift card for cash 3 and told Plaintiff the balance remains on the gift card for future use. 4 31. Plaintiff was denied the cash balance of Plaintiff’s gift card despite the fact that 5 the balance on the card was less than $10.00 and Defendant’s employee was aware of the balance 6 on the card at the time of the request. 7 HOW DEFENDANT PROFITS FROM KEEPING THE CASH VALUE OF ITS 8 OUTSTANDING GIFT CARDS 9 32. Boot Barn profits from the redemption of gift cards both when a consumer uses a 10 gift card to purchase items from Boot Barn locations, and Boot Barn profits when a customer 11 fails to use a gift card and the gift card balance remains on the gift card for a certain period of 12 time. 13 33. Specifically, at the time a Boot Barn gift card is purchased and “loaded” with a 14 money balance, Boot Barn records the amount loaded on the gift card as an obligation that is 15 reflected as gift card liability. 16 34. Defendant then recognizes income from gift cards when (i) the customer uses the 17 gift card to pay for an item, or (ii) the likelihood of the gift card being redeemed by the customer 18 is remote, and Boot Barn determines that it does not have a legal obligation to remit the value of 19 unredeemed gift cards to the State of California (referred to as “breakage” income). 20 35. Defendant determines the gift card breakage amount based upon historical 21 redemption patterns and Defendant concludes that after a certain amount of inactivity the 22 likelihood of redemption becomes remote (or when the likelihood of the gift card being redeemed 23 by the customer is less than probable), and Defendant recognizes breakage as income at that time. 24 36. Accordingly, Defendant profits every time a gift card holder (1) fails to redeem a 25 Boot Barn gift card for Defendant’s items (either because the gift card holder does not want to 26 purchase any additional items or when the balance remaining on the gift card is too low to 27 purchase an item from Defendant), and (2) when a Boot Barn employee refuses a gift card 28 holder’s request for the cash balance of a gift card. 7 COMPLAINT 1 PRE-FILING COMPLIANCE AUDITS 2 37. Prior to filing this lawsuit, investigations were performed on Plaintiff’s behalf to 3 determine if this particular Boot Barn employee’s failure to comply with California’s gift card 4 law was an isolated incident. 5 38. The results of Plaintiff’s pre-filing investigations revealed that Boot Barn 6 employees consistently failed to honor valid requests for cash back on gift cards with a balance 7 of less than $10.00. 8 39. By Defendant’s actions in not having an existing policy of complying with Civil 9 Code section 1749.5(b)(2), or in failing to comply with such a policy to provide California 10 consumers cash for gift cards with a stored value of under $10.00, (e.g., failing to have a 11 consistent practice of honoring requests for cash pursuant to Civil Code section 1749.5(b)(2)), 12 all current and future holders of gift cards with a balance of less than $10.00 are denied certain 13 consumer protections afforded to consumers under the laws of this State. 14 40. In addition, by Defendant’s actions in falsely advertising that Defendant’s gift 15 cards cannot be redeemed for cash under any circumstance, all current and future holders of gift 16 cards with a balance of less than $10.00 are misled and deceived into believing that the gift card 17 holder has no opportunity or rights to obtain the balance of the gift card in cash. 18 41. Defendant has become unjustly enriched – and will continue to become unjustly 19 enriched – by Defendant retaining the actual cash paid for such gift cards and by requiring 20 consumers to redeem gift cards for Defendant’s items only, even when Plaintiff and other 21 California consumers do not wish to purchase Defendant’s items. 22 23 FIRST CAUSE OF ACTION 24 VIOLATION OF CIVIL CODE SECTION 1749.5 25 [CALIFORNIA GIFT CARD LAW] 26 (As Against All Defendants) 27 42. Plaintiff refers to and incorporates by reference each and every paragraph above 28 as though set forth fully herein. 8 COMPLAINT 1 43. Pursuant to Civil Code section 1749.5(b)(2), any gift card with a cash value of 2 less than $10.00 is redeemable in cash for its cash value. 3 44. Plaintiff owned and possessed a Boot Barn gift card with a cash value of less than 4 $10.00 and asked Defendant to redeem the gift card in cash for its cash value. Plaintiff did not 5 want more of Defendant’s items, nor could Plaintiff buy any items with the remaining balance 6 on the gift card, and therefore, Plaintiff wanted the cash value of the gift card. 7 45. As part of Defendant’s policy and practice – or with disregard to any policy 8 Defendant may have – Defendant’s employees refused to redeem Plaintiff’s gift card in cash for 9 its cash value and did not honor Plaintiff’s request for the cash value of the gift card, which was 10 less than $10.00. 11 46. Defendant was and is required by law – irrespective of any contract or agreement 12 that may have existed – to redeem Plaintiff’s gift card for cash, and any waiver of this 13 requirement is void and unenforceable pursuant to Civil Code section 1749.51. 14 47. Through its acts and practices, Defendant has violated Civil Code section 15 1749.5(b)(2), and will continue to violate this consumer protection statute, and Plaintiff and all 16 others similarly situated have suffered damages and will continue to suffer damages as a result, 17 to wit, Plaintiff and the members of the class Plaintiff purports to represent, have been denied – 18 and will continue to be denied – money to which Plaintiff and the putative class have a cognizable 19 claim. Plaintiff and all others similarly situated lost – and will lose – the cash value of the gift 20 cards by Defendant’s refusal to comply with Civil Code section 1749.5(b)(2) and honor 21 consumers’ past and future requests to obtain the cash value of gift cards containing a balance of 22 less than $10.00. Defendant’s acts and practices caused Plaintiff to keep a gift card that can only 23 be used for items Plaintiff does not wish to purchase and will cause consumers in California to 24 keep (or discard) Defendant’s gift cards that can only be used for items. 25 /// 26 /// 27 /// 28 /// 9 COMPLAINT 1 SECOND CAUSE OF ACTION 2 VIOLATION OF CIVIL CODE SECTIONS 1750 ET SEQ. 3 [CONSUMERS LEGAL REMEDIES ACT] 4 (As Against All Defendants) 5 48. Plaintiff refers to and incorporates by reference each and every paragraph above 6 as though set forth fully herein. 7 49. Civil Code section 1770 generally states: “(a) The following unfair methods of competition and unfair or deceptive acts or 8 practices undertaken by any person in a transaction intended to result or which 9 results in the sale or lease of goods or services to any consumer is unlawful: 10 (14) Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which is prohibited by law.” (Civ. 11 Code, § 1770(a)(14).) 12 13 50. Defendant, individually and/or through its agents and employees, engaged in the 14 following violations of Civil Code section 1770: Defendant represented – and continues to 15 represent – that the transaction (the sale and ownership of its gift cards) confers or involves rights, 16 remedies, or obligations that it does not have or involve, or which is prohibited by law. 17 Specifically, Defendant represented – and continues to represent – to purchasers and recipients 18 of its gift cards that the holder of a gift card was and is obligated to redeem the gift card for items 19 only and was not – and will not be – permitted to redeem the gift card for cash if the gift card’s 20 stored value is less than $10.00. 21 51. Further, Defendant represented – and continues to represent – that Defendant has 22 the right to retain (as a forfeiture) the value of the gift card under $10.00, whether or not the gift 23 card holder wants to actually purchase items from Defendant. This unlawful “right” to retain 24 money paid for a gift card is contrary to the intent and purpose of Civil Code section 1749.5. 25 52. Such claims, rights, and obligations violate the law and therefore the actions, 26 omissions, and misrepresentations being made by Defendant violate Civil Code sections 1750 et 27 seq. including but not limited to Civil Code section 1770(a)(14). 28 /// 10 COMPLAINT 1 53. Defendant continues to violate Civil Code sections 1750 et seq. and Plaintiff, and 2 all others similarly situated, have a statutory right to redeem Defendant’s gift cards for cash if 3 the gift card’s stored value is less than $10.00. 4 54. Plaintiff seeks injunctive relief pursuant to the Consumers Legal Remedies Act 5 and may amend this Complaint to demand nominal damages following Plaintiff’s compliance 6 with Civil Code section 1782(a). 7 8 THIRD CAUSE OF ACTION 9 VIOLATION OF BUSINESS AND PROFESSIONS CODE SECTIONS 17200 ET SEQ. 10 [UNFAIR COMPETITION LAW] 11 (As Against All Defendants) 12 55. Plaintiff refers to and incorporates by reference each and every paragraph above 13 as though set forth fully herein. 14 56. Beginning on a date unknown to Plaintiff, but within the four years preceding the 15 filing of this Complaint, Defendant sued herein has engaged in, is engaged in, and proposes to 16 engage in unfair competition, as that term is defined in Business and Professions Code section 17 17200. As used in this Complaint and in Section 17200, “unfair” means (1) an unlawful, unfair, 18 or fraudulent business act or practice; (2) unfair, deceptive, untrue, or misleading advertising; 19 and/or (3) an act prohibited by Chapter 1 (commencing with Section 1720) of Part 3 of Division 20 7 of the Business and Professions Code. This conduct is actionable pursuant to Business and 21 Professions Code sections 17200, 17203. 22 UNLAWFUL ACTS AND PRACTICES 23 57. Violation of Civil Code section 1749.5: Defendant’s acts and practices of failing 24 to provide Plaintiff, individually and/or all others similarly situated, cash back on gift cards with 25 a stored value of under $10.00 violates Civil Code section 1749.5; therefore, the continuing 26 violation constitutes an unlawful business act or practice within the meaning of Business and 27 Professions Code section 17200. 28 /// 11 COMPLAINT 1 58. Violation of Civil Code section 1770: Defendant’s acts and practices of 2 representing that the transaction (the sale and purchase of a gift card) confers or involves rights, 3 remedies, or obligations that it did not have or involve, or which is prohibited by law, and 4 Defendant’s representations that it has the right to retain (as a forfeiture) the value of gift cards 5 with a balance less than $10.00, whether or not the gift card holder wants to actually purchase 6 items from Defendant, violates Civil Code section 1770 (Consumers Legal Remedies Act) as 7 more fully set forth supra. Accordingly, the continuing violation of Civil Code section 1770 8 constitutes an unlawful business act or practice within the meaning of Business and Professions 9 Code section 17200. 10 59. Violation of Business and Professions Code section 17500 et seq.: Defendant’s 11 acts and practices of falsely advertising that Defendant’s gift cards cannot be redeemed for cash 12 is a violation of Business and Professions Code section 17500 et seq. Accordingly, the continuing 13 violation of Business and Professions Code section 17500 et seq. constitutes an unlawful 14 business act or practice within the meaning of Business and Professions Code section 17200. 15 UNFAIR ACTS AND PRACTICES 16 60. Defendant’s ongoing acts and practices are unfair, even if not unlawful, in that 17 Defendant failed to provide Plaintiff and all others similarly situated, the cash balance of gift 18 cards with a balance of less than $10.00, whereby the holder finds himself or herself with a gift 19 card with a small amount of money remaining on the card, the retailer refuses to redeem the 20 remaining value of the card for cash, and the consumer ends up forfeiting the remaining value of 21 the card, unless he or she makes an unnecessary purchase which would likely involve additional 22 out-of-pocket costs for the consumer. This is an unfair practice specifically addressed by the 23 Legislature when itamended Civil Code section 1749.5. (Senate Judiciary Committee, Bill 24 Analysis, Senate Bill 250, (2007-2008 Reg. Session), March 27, 2007, p. 1.) 25 61. Defendant’s continuing acts and practices are unfair, even if not unlawful, in that 26 in refusing to provide cash back for gift cards with a balance of less than $10.00, Plaintiff and all 27 others similarly situated are left with a gift card with a balance below the cost of Defendant’s 28 items, thus requiring the consumer to pay more to use the gift card. Therefore, the consumer 12 COMPLAINT 1 either loses the remaining value of the card, which remains in the hands of the business, and thus 2 amounts to a windfall profit for the business, or spends more at the Defendant’s establishment. 3 This is an unfair practice specifically addressed by the Legislature when it amended Civil Code 4 section 1749.5. (Id.) 5 62. Defendant’s continuing acts and practices are unfair, even if not unlawful, in that 6 Defendant denies consumers, like Plaintiff and all others similarly situated, with the right to 7 ready access to liquid assets, including the cash value of their gift cards. The remainder on their 8 unused gift cards could make the difference in paying bills and making ends meet. This problem 9 is so common that billions of dollars in gift cards goes unspent every year. After a few years, the 10 retailer gets to claim the consumer’s money as profit without supplying a product or paying sales 11 tax. This is an unfair practice specifically addressed by the Legislature when it amended Civil 12 Code section 1749.5. (Assembly Floor, Bill Analysis, SB 885 (2009-2010 Reg. Session), April 13 6, 2010.) 14 63. Plaintiff has suffered an injury in fact; Plaintiff, along with those similarly 15 situated, suffered – and continues to suffer – an invasion of a legally protected interest that is (a) 16 concrete and particularized, and (b) actual or imminent, not conjectural or hypothetical. Plaintiff, 17 along with those similarly situated, have an ongoing legally protected interest (as evinced by 18 Civil Code sections 1749.5 and 1770(a)(14)) in obtaining the cash for the value of any gift card 19 sold by Defendant with a stored value of less than $10.00, and in not being misled as to the rights 20 and obligations of the parties in obtaining the cash equivalent of the stored value of the gift card 21 sold by Defendant in an amount less than $10.00. By and through Defendant’s ongoing policies 22 and practices, Plaintiff and all others similarly situated have suffered an actual invasion of their 23 legally protected interests and continue to suffer an actual invasion of their legally protected 24 interests. 25 64. Further, Plaintiff, along with those similarly situated, have lost, and will continue 26 to lose money and/or property as a result of such practices and unfair competition, in that these 27 consumers are denied the cash value of any gift cards sold by Defendant containing a balance 28 less than $10.00. Through Defendant’s policy and/or practices, Plaintiff and all others similarly 13 COMPLAINT 1 situated have suffered – and will continue to suffer – damages as a result, to wit, Plaintiff and the 2 members of the class Plaintiff purports to represent, have been denied and will be denied money 3 to which Plaintiff and the putative class have a cognizable claim. 4 65. Plaintiff does not want items sold by Defendant and Defendant’s conduct has 5 caused Plaintiff to have a gift card that can only be used for items Plaintiff does not wish to 6 purchase. Plaintiff and all others similarly situated have lost and will continue to lose the cash 7 value of the gift cards sold by Defendant by Defendant’s perpetual refusal to allow gift card 8 holders to obtain the cash value of gift cards containing a balance of less than $10.00. 9 66. The unlawful, unfair, and fraudulent business practices of Defendant, as described 10 above, present a continuing threat to members of the general public in that the public will be and 11 is deceived into thinking Defendant has the right to refuse to redeem for cash the cash value of 12 Defendant’s gift cards which have a balance of less than $10.00. Defendant continues to engage 13 in these practices and will not cease doing so unless and until an injunction is issued. 14 67. As a direct and proximate result of the aforementioned unlawful, unfair, or 15 fraudulent acts and/or practices, Defendant received and continues to hold monies paid by 16 Plaintiff and other California consumers, including interest and other revenues generated from 17 Defendant’s practices within California. 18 19 FOURTH CAUSE OF ACTION 20 VIOLATION OF BUSINESS AND PROFESSIONS CODE § 17500 ET SEQ. 21 [FALSE ADVERTISING LAW] 22 (As Against All Defendant) 23 68. Plaintiff refers to and incorporates by reference each and every paragraph above 24 as though set forth fully herein. 25 69. At all times relevant herein, Defendant has committed acts of untrue and 26 misleading advertising, as defined by Business and Professions Code section 17500 et seq., by 27 engaging in the acts and practices alleged above which were committed with the intent to induce 28 the public to enter into transactions which would profit Defendant. 14 COMPLAINT 1 70. Specifically, Defendant advertised to the general public that its gift cards could 2 not be redeemed for cash, when in fact and by law, any gift card with a cash value less than 3 ten dollars ($10.00) is redeemable in cash for its cash value in California. 4 71. Plaintiff has suffered an injury in fact; Plaintiff, along with those similarly 5 situated, suffered an invasion of a legally protected interest that is (a) concrete and particularized, 6 and (b) actual or imminent, not conjectural or hypothetical. Plaintiff, along with those similarly 7 situated, has a legally protected interest (as evinced by Civil Code sections 1749.5 and 8 1770(a)(14)) in obtaining the cash for the value of any gift card sold by Defendant with a stored 9 value of less than $10.00, and in not being misled as to rights and obligations of the parties in 10 obtaining the cash equivalent of the stored value of the gift card sold by Defendant in an amount 11 less than $10.00. By and through Defendant’s policies and practices, Plaintiff and all others 12 similarly situated suffered an actual invasion of their legally protected interests. 13 72. Further, Plaintiff, along with those similarly situated, lost money and/or property 14 as a result of such practices and unfair competition, in that these consumers are denied the cash 15 value of any gift cards sold by Defendant containing a balance less than $10.00. Through 16 Defendant’s policy and/or practices, Plaintiff and all others similarly situated have suffered 17 damages as a result, to wit, Plaintiff and the members of the class Plaintiff purports to represent, 18 have been denied money to which Plaintiff and the putative class have a cognizable claim. 19 Defendant’s conduct has caused Plaintiff to have a gift card that can only be used for items 20 Plaintiff does not wish to purchase. Plaintiff and all others similarly situated have lost the cash 21 value of the gift cards sold by Defendant by Defendant’s refusal to comply with Civil Code 22 section 1749.5 and honor consumers’ requests to obtain the cash value of gift cards containing a 23 balance of less than $10.00. 24 73. Defendant violated and continues to violate Business and Professions Code 25 section 17500 in that Defendant intended directly or indirectly to misrepresent the right of 26 California consumers to obtain the cash value of gift cards containing a balance of less than 27 $10.00. Defendant knew, or which by the exercise of reasonable care should have known, that 28 such statements claiming that its gift cards cannot be redeemed for cash is untrue or misleading 15 COMPLAINT 1 and in violation of State law. 2 74. The acts of untrue and misleading advertising