Card v. Ralph Lauren Corporation

Background

Victoria Card brought the case over a business arrangement under which she acted as an approved dealer of Ralph Lauren Home products from 2001 to 2015. The defendants terminated the relationship in 2015. Card’s Third Amended Complaint asserted claims against Ralph Lauren Corporation, Ralph Lauren Company West, LLC, and E.J. Victor Inc.

The defendants moved to dismiss the Third Amended Complaint and separately sought sanctions under Federal Rule of Civil Procedure 11. The court had previously allowed Card to amend some claims and had previously found that her implied-contract and good-faith-and-fair-dealing claims were adequately pleaded.

Motion to Dismiss

The court addressed the claims separately:

- Express and implied contract: Card had added an express-contract claim without the defendants’ consent or prior permission, but the court construed it as an alternative claim based on the same facts as the implied-contract claim. The court found that both contract claims were adequately pleaded and granted Card leave to allege the express-contract claim. The defendants’ motion was denied as to the contract claims. - Promises without intent to perform and misrepresentation: The court held that Card still had not identified the specific promises, who made them, when they were made, or why they were false. The motion to dismiss this claim was granted without leave to amend. - Covenant of good faith and fair dealing: The court denied the motion because it had previously found that Card plausibly alleged a separate agreement requiring the parties to act in good faith. - Intentional interference with prospective economic advantage: The court concluded that Card had not plausibly alleged an independently wrongful act. It also explained that the claim generally concerns interference by a stranger to an economic relationship, while Card alleged a direct relationship with the defendants. The claim was dismissed without leave to amend. - Robinson-Patman Act: Card alleged that competitors, including One King’s Lane, received greater discounts on Ralph Lauren products. The court found that the complaint did not yet allege the required contemporaneous sales of goods of like grade and quality at different prices, but it found that Card might be able to do so. The motion was granted with leave to amend, giving Card one final opportunity to amend this claim. - Racketeer Influenced and Corrupt Organizations Act: The court held that Card had not plausibly alleged a pattern of mail or wire fraud. Listing communications was insufficient, particularly because Card characterized them as not necessarily fraudulent and did not explain how they satisfied the fraud elements. The claim was dismissed without leave to amend. - Unruh Civil Rights Act discrimination: The court held that Card had not alleged facts making it plausible that the defendants acted because of her gender or heterosexuality. The claim was dismissed without leave to amend. - California Business and Professions Code Section 17200: This unfair-competition claim depended on the misrepresentation, Robinson-Patman Act, RICO, and Unruh Act claims. Because those claims had been dismissed, the Section 17200 claim was dismissed with leave to amend only as a derivative of the Robinson-Patman Act claim.

Rule 11 Sanctions

The court declined to award Rule 11 sanctions. It noted that the issue was close, but that the partial denial of the dismissal motion made it difficult to determine what costs should be compensated. The court also cited the additional expense and delay that litigating sanctions would create, its prior permission to amend, and its conclusion that the orders could have been clearer about the scope of permitted amendments. The sanctions motion was denied.

Disposition

The court granted in part and denied in part the defendants’ motion to dismiss. It denied the motion as to Card’s contract claims; granted it with leave to amend as to the Robinson-Patman Act claim and the derivative Section 17200 claim; and granted it with prejudice and without leave to amend as to the remaining claims. Card could not add other claims or parties without the court’s prior permission. Any amended complaint had to be filed within 14 days; otherwise, the case would proceed on the contract claims. Judge Jacqueline Scott Corley also set a case-management conference for February 13, 2020.