Holt v. Noble House Hotels & Resort, LTD
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Opinion of the Court
(1) DENYING PLAINTIFF'S MOTION FOR PARTIAL SUMMARY JUDGMENT; AND
(2) GRANTING DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff Kathleen Holt ("Plaintiff") individually and on behalf of all others similarly situated, filed this class action against Defendant Noble House Hotels & Resort, LTD ("Noble House") alleging causes of action for violations of California's False Advertising Law ("FAL"),
MATERIAL FACTS
Noble House operates four restaurants located in the Hilton San Diego Resort & Spa in San Diego, California: (1) Acqua California Bistro ("Acqua"); (2) Olive Bar; (3) Fresco's; and (4) Aroma Coffee Shop ("Aroma"). Doc. No. 75-37, Defendant's Statement of Facts ("DSOF") at 2; Doc. No. 75-38, Defendant's Objections to Plaintiff's Statement of Facts ("D Obj.") at 2; Doc. No. 81-1, Plaintiff's Response to Defendant's Statement of Facts ("PRDSOF"); see Doc. No. 69-2, Plaintiff's Statement of Facts ("PSOF") at 2. In February 2017, Noble House began adding a 3.5% surcharge to all bills at the four restaurants. DSOF at 2; PSOF at 2; PRDSOF at 2. Noble House displays a surcharge disclosure on signs, on menus for Acqua, Olive Bar, and Fresco's, and bills. DSOF at 2-3; PSOF at 3, 5; PRDSOF at 3. Aroma does not use a menu. DSOF at 3; PSOF at 3. The surcharge disclosure reads: "A 3.5% surcharge will be added to all guest checks to help cover increasing labor costs and in our support of the recent increases in minimum wage and benefits for our dedicated team members." DSOF at 2-3; PSOF at 3-4; PRDSOF at 6. Signs with this disclosure are placed at the entry host stand, in lounge and bar areas, and around dining areas. DSOF at 2-3; PRDSOF at 6. On the menus, the disclosure is the same size font as the menu items and appears in red text on the Acqua and Olive Bar menus and in black text on the Fresco's menus. DSOF at 3; PSOF at 5. The same surcharge disclosure is also included on the restaurant bills. DSOF at 3-4; PSOF at 4; PRDSOF at 7. The bills contain a line item showing the exact amount of the surcharge, indicating that the surcharge is added after the subtotal is calculated but before taxes are applied. DSOF at 3-4; PRDSOF at 7-8. The surcharge disclosure appears in offset text and in the same size font as is used to list the other items on the bills. DSOF at 3-4; PRDSOF at 7-8. The surcharge practice is the same at Acqua, Olive Bar, and Fresco's. DSOF at 4; PSOF at 5; PRDSOF at 11.
LEGAL STANDARD
A. Motion for Summary Judgment
"A party may move for summary judgment, identifying each claim or defense-or the part of each claim or defense-on which summary judgment is sought. The Court shall grant summary judgment if the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The party seeking summary judgment bears the initial burden of establishing the basis of its motion and of identifying the portions of the declarations, pleadings, and discovery that demonstrate absence of a genuine issue of material fact. Celotex Corp. v. Catrett ,
B. The CLRA, UCL, and FAL
The underlying purpose of the CLRA is "to protect consumers against unfair and deceptive business practices and to provide efficient and economical procedures to secure such protection."
California's FAL broadly proscribes "untrue and misleading statements in advertising." Anunziato v. eMachines, Inc. ,
California's UCL permits civil recovery for "any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising...."
EVIDENTIARY OBJECTIONS
The parties each raise a variety of evidentiary objections to the evidence presented by the opposing party. Doc. No. 75-38 ("D Obj."); Doc. No. 82-2 ("P Reply Obj."); Doc. No. 81-2 ("P Oppo. Obj."). Most of these objections are raised on the grounds that the evidence is argumentative, speculative, prejudicial, irrelevant, or that the form of the evidence is inadmissible because there is a lack of personal knowledge, or it constitutes inadmissible lay opinion or hearsay. The parties' also object on the ground that the statements of fact mischaracterize the evidence.
"A trial court can only consider admissible evidence in ruling on a motion for summary judgment." Orr v. Bank of Am., NT & SA ,
This leaves only two matters for the Court to decide. While not evidentiary objections, Plaintiff objects to Noble House's response to Plaintiff's statement of undisputed material facts and to Noble House's reference and citation to unpublished *1165California state court decisions. P Reply Obj. at 2-3. First, Plaintiff argues that Noble House's response to her statement of undisputed material facts is improper, and the Court should therefore deem all of Plaintiff's facts undisputed.
Second, Plaintiff argues the Court should disregard any citation or reference to unpublished state court opinions. P Reply Obj. at 3. California Rule of Court 8.1115(a) states that "an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action." However, federal courts "may consider unpublished state decisions, even though such opinions have no precedential value." Emp'rs Ins. of Wausau v. Granite St. Ins. Co. ,
DISCUSSION
Plaintiff seeks summary judgment as to liability only and on a class basis for Noble House's alleged violations of section 1770(a)(20) of the CLRA. PMSJ at 12. Noble House seeks summary judgment on all of Plaintiff's claims. See generally , DMSJ. Plaintiff asserts two theories of liability to prove that Noble House's surcharge practice is unlawful: (1) it is a per se violation of § 1770(a)(20) of the CLRA; and (2) it is misleading and deceiving under the CLRA, UCL, and FAL. See id. at 12-13; FAC.
A. Per Se Violation of § 1770(a)(20) of the CLRA
Plaintiff specifically contends that Noble House's surcharge practice is a per se violation of § 1770(a)(20) of the CLRA because "the advertised menu items do not indicate the total price of the items when the 3.5% surcharge is taken into account." PMSJ at 18. To get to this conclusion, Plaintiff argues Noble House's surcharge practice is within the scope of § 1770(a)(20) because menus are advertisements and food and beverage items are products under the CLRA. Id. at 18-25. Noble House counters that the surcharge is outside the scope of § 1770(a)(20).
*1166DMSJ at 13-14. As a result, the Court must first determine whether Noble House's surcharge practice is within the scope of § 1770(a)(20).
Section 1770(a)(20) provides that sellers cannot "[a]dvertis[e] that a product is being offered at a specific price plus a specific percentage of that price unless (A) the total price is set forth in the advertisement, which may include, but is not limited to, shelf tags, displays, and media advertising, in a size larger than any other price in the advertisement, and (B) the specific price plus a specific percentage of that price represents a markup from the seller's costs or from the wholesale price of the product."
The scope of the CLRA turns on its express terms, including how it defines those terms. Neither the California Supreme Court nor the intermediate appellate courts have spoken on the issue of whether menus are advertisements under § 1770(a)(20). Because no published California decision directly addresses this issue, the Court must construe the CLRA's provisions to determine whether the statute applies to the transactions in this case. "In statutory construction, courts must, if possible, place significance upon every word, phrase, sentence and part of an act to achieve the underlying legislative purpose for a particular statute or legislative scheme." Ceja v. J.R. Wood, Inc. ,
Here, the CLRA does not define "advertising." See
Menus also do not fit well within the plain dictionary meaning of advertisements. According to Merriam-Webster Dictionary, "advertising" is defined as "the action of calling something to the attention of the public especially by paid announcements." MERRIAM-WEBSTER (2019), available at https://www.merriam-webster.com/dictionary/advertising. The term "advertisement" is defined as "a public notice" especially "one published in the press or broadcast over the air."
*1167Accordingly, the Court finds as a matter of law that Noble House's surcharge practice does not constitute a per se violation of § 1770(a)(20) of the CLRA because menus are not advertisements under the plain language of the statute. Based on the foregoing, the Court DENIES Plaintiff's motion for partial summary judgment and GRANTS Noble House's motion for summary judgment on this claim.
B. Misleading and Deceiving Practice under the CLRA, UCL, and FAL
Noble House moves for summary judgment in its favor on Plaintiff's remaining claims, which include a violation of § 1770(a)(9) of the CLRA and violations of the UCL and FAL. DMSJ at 22-23. To succeed on each of these claims, Noble House's surcharge practice must be unfair, deceptive, or misleading. See generally ,
Under the UCL, FAL, and CLRA, conduct is deceptive or misleading if it is likely to deceive a "reasonable consumer." Williams ,
"In determining whether a statement is misleading under the statute, the primary evidence in a false advertising case is the advertising itself." Colgan ,
Plaintiff contends that reasonable consumers would be "misled by the advertised menu pricing where [Noble House] did not raise prices but rather imposes a 3.5% surcharge after failing to provide conspicuous notice." P Oppo. at 24-25. Noble House asserts that a reasonable consumer would not be misled by its surcharge practice because of the surcharge disclosure, which can be found on the menus, the bill, and on signage throughout the property. See DMSJ at 24-30.
Under Ninth Circuit precedent, district courts have found that a reasonable consumer would not be misled when "statements, *1168in context, are not misleading," or where "[a]ny ambiguity that [reasonable consumers] would read into any particular statement is dispelled by the promotion as a whole." Freeman ,
California case law supports this conclusion, and the Court finds four cases to be particularly illustrative. In Schnall v. Hertz Corp. ,
In Freeman v. Priceline.com, Inc. , No. B242653,
Finally, in Murray, Stok & Co. v. Recall Secure Destruction Servs., Inc. , No. A123666,
*1169Here, it is undisputed that Noble House displays the surcharge disclosure on signs, menus, and bills. PRDSOF at 3. With respect to the menus, it is undisputed that the disclosure is at the bottom of some, but not all, of the pages of the menus in the same size font as menu pricing and in red text, and black text on Fresco's menu. Id. at 4, 6. It is also undisputed that signs containing nothing but the surcharge disclosure are located at entry host stands, in lounge and bar areas, and around dining areas. Id. at 6. Finally, it is undisputed that every bill contains the surcharge disclosure, with a line item showing the exact amount of the surcharge. Id. at 7-8.
Based on the foregoing, the Court finds that Noble House's surcharge practice does not violate the CLRA, FAL, or UCL. As in Shvarts , the surcharge disclosure is not buried, but is instead displayed on menus, on signs throughout the property, and on each patron's bill. Analogous to Freeman , while the menu price of an item on its own may be "limited" in that it does not include the cost of the surcharge, a patron may not avoid the multiple disclosures on menus, signs, and the bill regarding the surcharge. Finally, as noted by the court in Murray , even if the surcharge is merely a method to raise revenue without raising baseline menu prices, as Plaintiff alleges, the surcharge would not be unfair or deceptive because of the numerous disclosures.
Thus, the Court concludes as a matter of law that a reasonable consumer would not be misled by Noble House's practice of listing menu prices exclusive of the surcharge where several signs throughout the property, the menus, and each patron's bill indicated that "[a] 3.5% surcharge will be added to all guest checks to help cover increasing labor costs and in our support of the recent increases in minimum wage and benefits for our dedicated team members." Accordingly, Noble House is entitled to judgment as a matter of law on Plaintiff's claims that Noble House's surcharge practice is unfair or deceptive under the CLRA, FAL, and UCL, and the Court GRANTS Noble House's motion for summary judgment.
CONCLUSION
For the reasons set forth above, the Court finds that there is no genuine dispute as to any material fact and that Noble House is entitled to judgment as a matter of law as to all of Plaintiff's claims. As such, the Court DENIES Plaintiff's motion for partial summary judgment [Doc. No. 69] and GRANTS Noble House's motion for summary judgment [Doc. No. 75]. This order disposes of all claims. Accordingly, the Court ORDERS the Clerk of Court to enter judgment in favor of Noble House and to terminate the case.
IT IS SO ORDERED .
The FAL claim is raised by Plaintiff in her individual capacity only. See Doc. No. 63 at 1.
These material facts are taken from the parties' separate statements of undisputed facts and pertinent cited exhibits. Disputed material facts are discussed in further detail where relevant to the Court's analysis. Facts that are immaterial for purposes of resolving the current motion are not included in this recitation.
Noble House and Plaintiff each request the Court judicially notice several documents. See Doc. Nos. 75-24; 69-30. However, judicial notice of these documents is unnecessary for the instant purposes, as the Court finds the disposition of the instant motions are proper without reference to those documents. See Ruiz v. City of Santa Maria ,
Case-law data current through December 31, 2025. Source: CourtListener bulk data.