Russell v. Walmart Inc.

Background

Deborah Russell alleged that Walmart customers perform tasks similar to those performed by Walmart cashiers when they use self-checkout. She claimed Walmart benefits from this unpaid customer labor by lowering payroll costs. Russell brought the case on behalf of a proposed class and initially sought unpaid wages. The court dismissed her initial complaint with permission to amend, concluding that her self-checkout efforts did not qualify as “work” under California law.

Russell’s amended complaint asserted one claim for restitution under theories of quasi-contract and unjust enrichment. She alleged that customers confer a benefit on Walmart by providing uncompensated labor as a substitute for the work of Walmart-employed cashiers. Walmart moved to dismiss the amended complaint.

Court’s Analysis

The court rejected Walmart’s argument that California law does not recognize unjust enrichment as a cause of action. It explained that California law permits an unjust-enrichment claim as an independent claim or as a quasi-contract claim for restitution.

The court nevertheless held that Russell had not adequately pleaded the claim’s elements. A defendant’s receipt of a benefit at a plaintiff’s expense is not, by itself, enough to require restitution. The plaintiff must generally allege that the benefit was obtained through qualifying conduct such as mistake, fraud, coercion, or a direct request.

Russell alleged that Walmart invited, encouraged, and requested customers to use self-checkout. But she did not allege that she encountered Walmart employees encouraging self-checkout or that such conduct induced her to use it. The court also held that general encouragement would not qualify as the required direct request. Russell expressly alleged that customers had a choice between self-checkout and cashier-operated lanes.

Russell separately argued that Walmart’s failure to warn customers that self-checkout could expose them to criminal liability was a material nondisclosure supporting restitution. The court found that she cited no supporting authority, did not plausibly allege that any nondisclosure was material, and did not plausibly allege that Walmart received a benefit because of the nondisclosure. The court declined to accept what it described as overly indirect inferences as a sufficient basis for the claim.

Disposition

Judge Jon S. Tigar granted Walmart’s motion to dismiss in full. The court dismissed the complaint because further amendment would be futile and denied leave to amend. The clerk was directed to enter judgment and close the file.