Crowder v. The Shade Store, LLC

Background

Sharon Crowder, Joel Lumian, Robert Smith, Amanda Goldwasser, and Mark Elkins brought a proposed class action against The Shade Store. They allege that the company deceptively advertised window-covering products through two practices: purportedly time-limited discounts that were actually continuous, and reference or strikethrough prices that were not the products’ prevailing prices. The plaintiffs allege that these practices caused consumers to pay more than they otherwise would have paid.

The third amended complaint asserts claims under California’s False Advertising Law, Consumer Legal Remedies Act, and Unfair Competition Law, along with a quasi-contract or unjust-enrichment claim. The plaintiffs seek legal damages and equitable remedies, including restitution, disgorgement, and an injunction. The Shade Store moved to dismiss for lack of equitable jurisdiction and failure to state a claim.

Equitable jurisdiction

Equitable jurisdiction is the court’s authority to consider claims seeking equitable remedies when the plaintiff lacks an adequate remedy through damages or other legal relief. The court held that, at the pleading stage, the plaintiffs plausibly alleged that legal damages were inadequate to address their past harms because restitution could be more certain, prompt, or efficient. The court therefore denied the motion to dismiss the claims for restitution for past harms.

The court also held that the plaintiffs plausibly alleged an ongoing or imminent future harm. They alleged that, without an injunction, they could not rely on The Shade Store’s advertising and therefore could not purchase products they would otherwise want to buy. The court found these allegations sufficient at this stage to support equitable jurisdiction over the requested injunctive relief and denied the motion to dismiss those claims.

Quasi-contract and unjust enrichment

The Shade Store argued that the plaintiffs had not adequately alleged that the company received an unjust benefit at their expense. The plaintiffs alleged that the challenged advertising induced purchases consumers otherwise would not have made, increased demand, allowed The Shade Store to charge price premiums, and caused the plaintiffs and proposed class members to pay more than they otherwise would have paid.

The court concluded that, taken as a whole, these allegations adequately connected the alleged false advertising and pricing practices to the alleged price premium. The court declined to evaluate the accuracy of the plaintiffs’ economic theory at the motion-to-dismiss stage because doing so would require factual development.

Disposition

The court denied The Shade Store’s motion to dismiss the plaintiffs’ False Advertising Law, Consumer Legal Remedies Act, Unfair Competition Law, and quasi-contract or unjust-enrichment claims in the third amended complaint. The Shade Store must file an answer by March 24, 2025. The plaintiffs must seek the court’s permission if they want to amend the complaint again.