CAREY v. PUPPIES INC (2025)

ORDER RE MOTION TO TRANSFER [157], MOTION TO DISMISS [172], REQUEST FOR JUDICIAL NOTICE [173], SUPPLEMENTAL REQUEST FOR JUDICIAL NOTICE [181-1], and MOTION TO STRIKE [174]

Before the Court are the following:

(1) a motion to transfer (“Motion to Transfer” or “MTT”) by Defendants Ray Rothman, Alysia Rothman, and Pet Connect Rescue, Inc., (collectively, “Rothman Defendants”);

(2) a motion to dismiss (“Motion to Dismiss” or “MTD”) by the following thirteen (13) Defendants: J.A.K.’s Puppies, Inc., Jolyn Noethe, and Kimberly Dolphin (collectively, “JAK's Defendants”); TBHF LLC dba The Pet X Change, Rescue Pets Iowa Corp., and Russell Kirk (collectively, “TBHF Defendants”); Micada, Inc. dba Animal Kingdom (“Animal Kingdom”) and Adam Tipton (collectively, “Tipton Defendants”); Pet Connect Rescue, Inc., Ray Rothman, and Alysia Rothman (collectively, “Rothman Defendants”); and Subject Enterprise, Inc. (“Subject Enterprise”) and Coda Subject (collectively, “Subject Defendants”) (all together, “Defendants”);¹

(3) a request for judicial notice (“RJN”) and a supplemental request for judicial notice (“Supp. RJN”) (collectively, “Requests for Judicial Notice”), by Defendants; and

(4) a Motion to Strike (“Motion to Strike” or “MTS”) by Defendants.

For the reasons set forth below, the Motion to Transfer is DENIED; the Request for Judicial Notice is DENIED in part and GRANTED in part; the Supplemental Request for Judicial Notice is DENIED in part and GRANTED in part; the Motion to Strike is DENIED; the Motion to Dismiss under Rule 12(b)(1) is DENIED in part and GRANTED in part with leave to amend; and the Motion to Dismiss under Rule 12(b)(6) is DENIED in part and GRANTED in part with leave to amend.

I. BACKGROUND

A. Procedural History

On December 16, 2021, Plaintiffs Rebecca Carey and Cody Latzer (collectively, “Plaintiffs”) brought this purported class action on behalf of themselves and other similarly situated California consumers against Defendants whom Plaintiffs allege were involved in the unlawful and unfair sale of puppies in California pet stores sourced from puppy mills and misrepresented to be “rescue” dogs. (Compl. ¶ 4, Docket No. 1). From May 4, 2022, to March 29, 2024, the Court stayed proceedings while the parties engaged in settlement negotiations, but the parties failed to reach a resolution. (Order Granting Stipulation and Joint Motion to Stay Proceedings, Docket No. 95; Order to Lift Stay, Docket No. 134).

On May 16, 2024, Plaintiffs filed a First Amended Complaint (“FAC”). (FAC, Docket No. 164). In the FAC, Plaintiffs allege five causes of action against all sixteen named Defendants: (1) violation of RICO under 18 U.S.C. § 1962(c); (2) violation of RICO under 18 U.S.C. § 1962(d); (3) violation of UCL under California Business & Professional Code § 17200 et seq.; (4) violation of CLRA under California Civil Code § 1770 et seq.; and (5) unjust enrichment. (See generally FAC).

On April 30, 2024, Rothman Defendants filed a Motion to Transfer the case to the Northern District of Iowa. (MTT, Docket No. 157.) On August 2, 2024, Plaintiffs and Tipton Defendants each filed oppositions to the Motion to Transfer. (“Plaintiffs’ Opposition to Transfer Motion” or “Plf. Opp'n to MTT,” Docket No. 175; “Tipton Opposition to Transfer Motion” or “Tipton Opp'n to MTT,” Docket No. 176). On August 8, 2024, the Court took the Motion to Transfer under submission. (Docket No. 177).

On June 27, 2024, Defendants filed a Motion to Dismiss pursuant to Federal Rule of Civil Procedure (“Rule”) 12(b)(1) and 12(b)(6). (MTD, Docket No. 172). That same day, Defendants also filed a RJN. (RJN, Docket No. 173). On August 8, 2024, Plaintiffs opposed the Motion to Dismiss (“Opposition to Motion to Dismiss” or “Opp'n to MTD”) and opposed the RJN (“Opposition to Request for Judicial Notice” or “Opp'n to RJN”). (Opp'n to MTD, Docket No. 179; Opp'n to RJN, Docket No. 178). On August 29, 2024, Defendants replied to Plaintiffs’ Opposition to the Motion to Dismiss (“Reply re MTD”) and concurrently filed a Supplemental Request for Judicial Notice in Support of the Motion to Dismiss (“Supp. RJN”). (Reply, Docket No. 181; Supp. RJN, Docket No. 181-1). On September 10, 2024, Plaintiffs and Defendants filed a Joint Stipulation for Leave for Plaintiffs to file a Surreply. (Docket No. 183). On September 11, 2024, Plaintiffs filed a Surreply to Defendant's Reply. (Surreply re MTD, Docket No. 185). On September 20, 2024, Defendants filed a Surresponse to Plaintiffs’ Surreply. (Surresponse re MTD, Docket No. 186). On September 26, 2024, the Court granted the Joint Stipulation, allowing Plaintiffs to file a surreply and Defendants to file surresponse. (Docket No. 187). On October 1, 2024, the Court took Defendant's Motion to Dismiss under submission. (Docket No. 194).

On June 27, 2024, Defendants moved to strike portions of the FAC pursuant to Rule 12(f) (“Motion to Strike” or “MTS”). (MTS, Docket No. 174). On August 8, 2024, Plaintiffs opposed the Motion to Strike (“Opp'n to MTS”). (Opp'n to MTS, Docket No. 180). On August 29, 2024, Defendant replied to Plaintiff's Opposition to Defendant's Motion to Strike (“Reply re MTS”). (Reply re MTS, Docket No. 182). On October 1, 2024, the Court took Defendant's Motion to Strike under submission. (Docket No. 194).

B. Factual Background

i. The 2019 Pet Store Law

On January 1, 2019, Cal. Health & Safety Code § 122354.5 (the “2019 Pet Store Law”) took effect, banning the retail sale of non-rescue dogs, cats, and rabbits in California pet stores. (See FAC ¶¶ 47–50). The 2019 Pet Store Law provided in relevant part:

A pet store operator shall not sell a live dog, cat, or rabbit in a pet store unless the animal was obtained from a public animal control agency or shelter, society for the prevention of cruelty to animals shelter, humane society shelter, or rescue group that is in a cooperative agreement with at least one private or public shelter pursuant to Section 31108, 31752, or 31753 of the Food and Agricultural Code.

Cal. Health & Safety Code § 122354.5(a) (2019). The 2019 Pet Store Law further defined a “rescue group” as “an organization that is tax exempt under Section 501(c)(3) of the Internal Revenue Code, and that does not obtain animals from breeders or brokers for compensation.” Id. § 122354.5(j).

In 2020, Governor Gavin Newsom signed Assembly Bill 2152, which repealed and replaced the 2019 Pet Store Law. A.B. 2152 (2020). Health & Safety Code § 122354.5 (effective January 1, 2021) (“the 2021 Pet Store Law”) continues to prohibit the sale of non-rescue animals in California and includes additional restrictions to prevent pet stores from selling dogs, cats, or rabbits. In part, the revised section provides: “A pet store shall not adopt out, sell, or offer for sale a dog, cat, or rabbit. This section does not prevent a pet store from providing space to display animals for adoption ․” Cal. Health & Safety Code § 122354.5(a).

ii. The Alleged Enterprise

Plaintiffs allege that Defendants, to conceal their violations of the 2019 Pet Store Law, created a scheme to defraud California consumers as follows: JAK's transferred title, but not physical possession, of puppies it obtained from puppy mills to Rescue Pets Iowa. (FAC ¶¶ 71–73). Rescue Pets Iowa then arranged for the transport of the puppies to Bark Adoptions through Subject Enterprise, which puppies were ultimately delivered to pet stores in California, including Animal Kingdom. (Id. ¶¶ 90–92). Alternatively, Plaintiffs allege Rescue Pets Iowa arranged for transfer of title, but not possession, of the dogs to Pet Connect Rescue, a nonprofit organization in Missouri, which then arranged for transportation of dogs to California pet stores through Subject Enterprise. (Id. ¶¶ 103–111). Though Plaintiffs identify multiple California pet stores that participated in the alleged scheme by selling the puppies sourced from puppy mills, the only named pet store defendant in the FAC is Animal Kingdom. (See generally, Id. ¶¶ 133–160.)

Plaintiffs further allege TBHF Defendants created documents to facilitate the scheme of transferring and transporting the dogs. (Id. ¶¶ 86–87). Bark Adoptions and Pet Connect Rescue allegedly made money by collecting fees directly from California pet stores. (Id. ¶¶ 182–184, 205). Plaintiffs allege Subject Enterprise was paid a larger “transportation cost” from the pet stores than prior to the 2019 Pet Store Law, and that Subject Enterprise then transferred the bulk of the “transportation cost” to JAK's. (Id. ¶¶ 190–192.)

Plaintiffs allege that Animal Kingdom and other California pet stores then defrauded customers by misrepresenting that the puppies were “rescue” dogs, specifically by displaying on their puppy cage cards and/or stating on the pet dealer disclosures that the puppies they were selling had come from “Bark Adoptions Rescue” or “Pet Connect Rescue.” (Id. ¶¶ 207–208). The pet store employees allegedly told certain customers that the dogs were “rescues.” (Id. ¶ 217). Plaintiffs further allege Animal Kingdom's Facebook page stated its dogs were “2019 compliant” because they came from “rescue groups.” (Id. ¶ 219).

Plaintiffs allege that as a condition of settlement in a different lawsuit, Animal Kingdom agreed it would cease acquiring animals from Bark Adoptions, Rescue Pets Iowa, and JAK's. (Id. ¶ 137). The FAC also alleges Kirk, the principal of Rescue Pets Iowa, agreed “to refrain from organizing Rescue Pets Iowa or any other nonprofit animal rescue organization and agreed with Rescue Pets Iowa to refrain from acquiring, selling, or supplying any dogs to Bark Adoptions, non-profits, animal rescue organizations, or pet stores in California.” (Id. ¶ 83). The FAC does not allege any of the Defendants continue engaging in their alleged conduct. (See generally FAC).

iii. The Named Plaintiffs

Plaintiffs Rebecca Carey (“Carey”) and Cody Latzer (“Latzer”) are the two representative plaintiffs of the purported class action. Carey purchased a Cockapoo from the Animal Kingdom pet store in Santa Barbara County, California on January 15, 2019, for $1,800.00. (Id. ¶ 205). Plaintiffs allege the cage card stated the dog was “ACQUIRED THROUGH BARK ADOPTION RESCUE.” (Id. ¶ 231). Plaintiffs allege that based on the cage card and the purchase documents that “indicated the puppy's source was ‘Bark Adoption Rescue,’ ” Carey believed the dog was a “rescue.” (Id.). Plaintiffs allege Carey “would not have purchased [her dog] if she knew she was sold in violation of California law” and that she “would not have knowingly supported Defendants’ black market puppy trade.” (Id. ¶ 232). Plaintiffs allege Carey's dog “came from a puppy mill, which is likely why she now suffers from permanent back and spine problems.” (Id. ¶ 11). Plaintiffs allege Carey has no plans to leave California and has plans to purchase another dog in California but is “concerned” that she will mistakenly purchase a “puppy mill” dog. (Id.).

Latzer allegedly purchased an Australian cattle dog from a different Animal Kingdom pet store in San Luis Obispo County, California, on March 5, 2019, for $1,763.99. (Id. ¶¶ 236, 240). Plaintiffs allege Latzer believed his dog was a “rescue” because the cage card stated the dog was acquired through “Pet Connect Rescue” and purchase documents listed the dog's source as “Pet Connect Rescue.” (Id. ¶ 241). Plaintiffs allege Latzer “would not have purchased [his dog] if he knew she was sold in violation of California law” and that he “would not have knowingly supported Defendants’ black market puppy trade.” (Id. ¶ 242). Plaintiffs allege Latzer has no plans to leave California and is more likely than not to purchase another dog in California but is “concerned” that he will mistakenly purchase a “puppy mill” dog. (Id. ¶ 12).

II. MOTION TO TRANSFER

Rothman Defendants move the Court to transfer this entire action to the Northern District of Iowa pursuant to 28 U.S.C. § 1404(a). (Notice of Motion to Transfer, at 1, Docket No. 157). Under 28 U.S.C. § 1404(a), district courts have discretion, “in the interest of justice,” to transfer a civil action to “any other district or division where it might have been brought” for “the convenience of parties and witnesses.” 28 U.S.C. § 1404(a). “Analysis under § 1404 is two-fold. First, the defendant must establish that the matter ‘might have been brought’ in the district to which transfer is sought.” Metz v. U.S. Life Ins. Co. in City of New York, 674 F. Supp. 2d 1141, 1145 (C.D. Cal. 2009) (quoting 28 U.S.C. § 1404(a)). “This includes demonstrating that subject matter jurisdiction, personal jurisdiction, and venue would have been proper if the plaintiff had filed the action in the district to which transfer is sought.” Id.; accord E. & J. Gallo Winery v. F. & P. S.p.A., 899 F. Supp. 465, 466 (E.D. Cal. 1994); see Hoffman v. Blaski, 363 U.S. 335, 343–44, 80 S.Ct. 1084, 4 L.Ed.2d 1254 (1960). For a district to exercise personal jurisdiction over a defendant who is not present within the forum's territory, that defendant must have certain minimum contacts with the forum. International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S.Ct. 154, 90 L.Ed. 95 (1945). “Second, courts must consider the following three factors: (1) the convenience of the parties; (2) the convenience of the witnesses; and (3) the interests of justice.” Metz v. U.S. Life Ins. Co. in City of New York, 674 F. Supp. 2d at 1145 (citing 28 U.S.C. § 1404(a)).

Rothman Defendants fail to establish the first requirement for transfer—that the action “might have been brought” in the Northern District of Iowa, because they do not show that the Northern District of Iowa could exercise personal jurisdiction over all named Defendants. (See Tipton Opp'n to MTT, at 1–2).

Specifically, Rothman Defendants fail to show the Northern District of Iowa could exercise personal jurisdiction over Tipton Defendants. In their Motion to Transfer, Rothman Defendants do no more than repeat what Plaintiffs allege in the FAC—that Defendant Micada, Inc., dba Animal Kindgdom, is located in the Central District of California and is owned by Adam Tipton, “a resident of California.” (MTT at 3; see FAC ¶ 44–45). Rothman Defendants do not assert anywhere in their Motion to Transfer that Tipton or Animal Kingdom have minimum contacts with Iowa as required to establish personal jurisdiction, nor do Rothman Defendants provide evidence suggesting as much. See International Shoe, 326 U.S. at 316, 66 S.Ct. 154.

Just as with the Tipton Defendants, Rothman Defendants also fail to establish that the Northern District of Iowa could exercise personal jurisdiction over Defendant Bark Adoptions, Defendant Stephanie Vaughn, and Defendant Ana Diaz.² In the FAC, Plaintiffs allege Bark Adoptions is a California corporation and that Stephanie Vaughn and Defendant Ana Diaz are both California residents. (FAC ¶¶ 32–34). Nowhere in the Motion to Transfer to Rothman Defendants attempt to demonstrate that the Northern District of Iowa could exercise personal jurisdiction over the Bark Adoption Defendants.

Because Rothman Defendants have not established that the Northern District of Iowa would have personal jurisdiction over Adam Tipton, Micada, Inc., dba Animal Kingdom, Ana Diaz, Stephanie Vaughn, or Bark Adoptions, Rothman Defendants have not met their burden of establishing the action “might have been brought” in the Northern District of Iowa. See Camasso v. Dorado Beach Hotel Corp., 689 F. Supp. 384, 386–87 (D. Del. 1988) (finding an action could not be transferred to the District of Puerto Rico because that district lacked personal jurisdiction over one of the three corporate defendants). The Court therefore need not address the second inquiry—whether private and public factors support transferring this action.

Accordingly, the Court DENIES Rothman Defendants’ Motion to Transfer.

III. REQUESTS FOR JUDICIAL NOTICE

In support of the Motion to Dismiss, Defendants request that the Court take judicial notice of nine documents:

(1) Concurrence in Senate Amendments of Assembly Bill No. 2152, as amended August 20, 2020 (Exhibit A to RJN, Docket No. 173-1);

(2) Animal law update article published by Animal Legal Defense Fund on October 23, 2020, entitled “New California Laws Aim to Save More Companion Animals in Shelters” (Exhibit B to RJN, Docket No. 173-2);

(3) “Adoption Process & Fees” page on Woods Humane Society's website (Exhibit C to RJN, Docket No. 173-3);

(4) Complaint for Injunctive Relief filed March 5, 2019, in Volar Society for the Cruelty of Animals v. Bark Adoptions, et al., San Luis Obispo County Superior Court Case No. 19CV-0124 (Exhibit D to RJN, Docket No. 173-4);

(5) Notice of Settlement and Application for Determination of Good Faith Settlement; Memorandum of Points and Authorities and Declaration of Sue N. Carrasco in Support of Application, filed February 19, 2020, in Volar Society for the Cruelty of Animals v. Bark Adoptions, et al., San Luis Obispo County Superior Court Case No. 19CV-0124 (Exhibit E to RJN, Docket No. 173-5);

(6) Order issued June 12, 2020, on Defendant Micada, Inc., dba Animal Kingdom Pet Shop's Notice of Settlement and Application for Determination of Good Faith Settlement, filed in Volar Society for the Cruelty of Animals v. Bark Adoptions, et al., San Luis Obispo County Superior Court Case No. 19CV-0124 (Exhibit F to RJN, Docket No. 173-6).

(7) Fourth Amended Complaint for Damages and Profit Disgorgement, filed on May 15, 2024, in Heather Taft, et al. v. David Salinas, et al., U.S. District Court for the Southern District of California, Case No. 3:22-cv-00697-RSH-DEB (Exhibit G to Supp. RJN, Docket No. 181-2).

(8) Order on Defendants’ Motions to Dismiss and Motions to Strike, filed August 14, 2024, in Heather Taft, et al. v. David Salinas, et al., U.S. District Court for the Southern District of California, Case No. 3:22-cv-00697-RSH-DEB (Exhibit H to Supp. RJN, Docket No. 181-3).

(9) Final Judgment issued August 2, 2024, in PetConnect Rescue, Inc., et al. v. David Salinas, et al., U.S. District Court for the Southern District of California, Case No. 3:20-cv-00527-RSH-DEB (Exhibit I to Supp. RJN, Docket No. 181-4).

On a motion to dismiss, the Court may “consider only allegations contained in the pleadings, exhibits attached to the complaint, and matters properly subject to judicial notice.” Akhtar v. Mesa, 698 F.3d 1202, 1212 (9th Cir. 2012) (citing Swartz v. KPMG LLP, 476 F.3d 756, 763 (9th Cir. 2007)) (per curiam). A court “must take judicial notice if a party requests it and the court is supplied with the necessary information.” Fed. R. Evid. 201(c). That is, the party requesting judicial notice must show that the fact “is not subject to reasonable dispute” because it “(1) is generally known within the court's territorial jurisdiction; or (2) can be accurately and readily determined from sources whose accuracy cannot reasonably be questioned.” Fed. R. Evid. 201(b); Harris v. Cnty. of Orange, 682 F.3d 1126, 1131–32 (9th Cir. 2012).

A. Exhibit A

The Court finds Exhibit A (Concurrence in Senate Amendments of Assembly Bill No. 2152, as amended August 20, 2020) is not appropriate for judicial notice.

Federal Rule of Evidence 201 (“Rule 201”) “governs judicial notice of an adjudicative fact only, not a legislative fact.” Fed. R. Evid. 201(a).³ Though Rule 201 does not prevent courts from taking notice of legislative facts, see Chaker v. Crogan, 428 F.3d 1215, 1223 n. 8 (9th Cir. 2005) (taking judicial notice of legislative history), the Ninth Circuit has noted that taking judicial notice of legislative facts is unnecessary, Von Saher v. Norton Simon Museum of Art at Pasadena, 592 F.3d 954, 960 (9th Cir. 2010) (declining to take judicial notice of “two Presidential Commission reports, a military order ․ and a memorandum prepared by a State Department Committee” because “[j]udicial notice of legislative facts such as these is unnecessary.”) (citing Fed. R. Evid. 201(a), advisory comm. note to 1972 amendments). This is because courts are free to consult legislative facts “to the extent [they] find them useful.” Blumenthal Distrib., Inc. v. Herman Miller, Inc., 811 F. App'x 421, 422 (9th Cir. 2020) (“We deny HM's motion for judicial notice as moot, as it concerns only legislative facts for which judicial notice is unnecessary ․ Since the associated exhibits contain only legislative facts, we are free to consult them to the extent we find them useful.” (cleaned up)).

As a document from the lawmaking process of AB 2152, Exhibit A does not contain adjudicative facts of this “particular case” (i.e., facts concerning “the immediate parties—who did what, where, when, how and with what motive or intent.”). Fed. R. Evid. 201(a), advisory comm. note to 1972 amendments (internal quotation marks omitted). The Court thus denies Defendants’ RJN for Exhibit A “as moot, as it concerns only legislative facts for which judicial notice is unnecessary.” Blumenthal Distrib., Inc. v. Herman Miller, Inc., 811 F. App'x at 422 (“Since the associated exhibits contain only legislative facts, we are free to consult them to the extent we find them useful.” (cleaned up)). Accordingly, Defendants’ request for judicial notice of Exhibit A is DENIED, but the Court may rely on the legislative facts contained therein.

B. Exhibit B

The Court finds Exhibit B (Animal law update article published by Animal Legal Defense Fund on October 23, 2020, entitled “New California Laws Aim to Save More Companion Animals in Shelters”) is not appropriate for judicial notice.

District courts “have found that non-governmental website printouts are not judicially noticeable, even if they come from the non-movant's website.” ThermoLife Int'l LLC v. NeoGenis Labs Inc., 2021 WL 1400818, at *2 (D. Ariz. Apr. 14, 2021) (declining to take judicial notice of the non-moving party's webpages containing statements purportedly contradicting its theory of liability); see Victaulic Co. v. Tieman, 499 F.3d 227, 237 (3d Cir. 2007), (finding the district court erred by taking judicial notice of content on non-movant's website when ruling on motion to dismiss because “[t]aking a bare ‘fact’ that is reflected not in the pleadings, but on a corporate website, and then drawing inferences against the non-moving party so as to dismiss its well-pleaded claims on the basis of an affirmative defense, takes us, as a matter of process, far too afield from the adversarial context of litigation”).

In support of their request, Defendants cite to Multi Time Mach., Inc. v. Amazon.com, Inc., 792 F.3d 1070, 1072 (9th Cir.), opinion withdrawn and superseded on reh'g on other grounds, 804 F.3d 930 (9th Cir. 2015). (RJN at 3). In that case the Ninth Circuit, in reviewing the district court's grant of summary judgment, took judicial notice of the contents of an Amazon website page naming plaintiff's trademarked product to advertise other similar products that Amazon offered to consumers. The contents of Amazon's webpage were directly at issue because the plaintiff's trademark violation claim arose from Amazon's unauthorized use of plaintiff's trademark.

Here, ALDF's website is not a government entity website, and the contents of ALDF's website article are not directly at issue in the instant MTD. See Okyn Holdings Inc. v. Hori (U.S.A.) Inc., 2022 WL 21805919, at *3 (C.D. Cal. Feb. 24, 2022) (declining moving party's request for judicial notice of the nonmoving party's webpage containing product information that was not at issue in the instant motion). Accordingly, Defendants’ request for judicial notice of Exhibit B is DENIED.

C. Exhibit C

Defendants also request that the Court take judicial notice of Exhibit C (“Adoption Process & Fees” page from Woods Humane Society's website), which lists the adoption fees for adopting animals through the Woods Humane Society. The Court fails to see how the contents of this webpage are relevant to resolving the instant motion, and Defendants do not attempt to explain its purpose. The Court therefore declines to take judicial notice of Exhibit C. See Ecological Rts. Found. v. PacifiCorp, 738 F.Supp.3d 1239, 1248–49 (N.D. Cal. 2024) (declining to take judicial notice on document unnecessary to resolve the instant motion).

Defendants’ request for judicial notice of Exhibit C is DENIED.

D. Exhibits D–I

Defendants request that the Court take judicial notice of Exhibits D–F (filings from the matter the matter captioned Volar Society for the Cruelty of Animals v. Bark Adoptions, et al., San Luis Obispo County Superior Court, Case No. 19CV-0124) for the truth of their contents as evidence “that Animal Kingdom and Tipton ceased all activities and closed their stores in March 2019.” (MTD at 5). Defendants also request that the Court take judicial notice of Exhibits G, H (filings from Taft v. Salinas, U.S District Court for the Southern District of California, Case No. 3:22-cv-00697) and Exhibit I (final judgment filed in PetConnect Rescue, Inc., et al. v. David Salinas, et al., U.S. District Court for the Southern District of California, Case No. 3:20-cv-00527), as persuasive legal authority. (Supplemental Request for Judicial Notice (“Supp. RJN”), Docket No. 181-1).

Federal courts “ ‘may take notice of proceedings in other courts, both within and without the federal judicial system, if those proceedings have a direct relation to matters at issue.’ ” Kipp v. Davis, 971 F.3d 939, 945 n. 2 (9th Cir. 2020) (quoting U.S. ex rel. Robinson Rancheria Citizens Council v. Borneo, Inc., 971 F.2d 244, 248 (9th Cir. 1992)). While, “[a]s a general rule, a court may not take judicial notice of proceedings or records in another cause so as to supply, without formal introduction of evidence, facts essential to support a contention in a cause then before it,” M/V Am. Queen v. San Diego Marine Const. Corp., 708 F.2d 1483, 1491 (9th Cir. 1983), “a court can properly notice a doctrine or rule of law from such prior case and apply that principle under the theory of stare decisis.” Id.

Exhibits D–F are filings from Volar Society for the Cruelty of Animals v. Bark Adoptions, et al., San Luis Obispo County Superior Court Case No. 19CV-0124, a separate action initiated by different plaintiffs in California state court, but involving similar claims alleging the sale of puppy mill puppies misrepresented as “rescue dogs,” and against some of the same Defendants named in this case.⁴ Exhibits D–F therefore concern proceedings that directly relate to the matters before this Court. Their authenticity is not in question. Though the Court may not take judicial notice of the truth of any facts asserted in Exhibits D–F (i.e., whether Defendants “Animal Kingdom and Tipton ceased all activities and closed their stores in March 2019”), it may take judicial notice of the filings for “the purposes of noticing the existence of [that separate] lawsuit and the claims made therein.” Stone v. Sysco Corp., 2016 WL 6582598, at *4 (E.D. Cal. Nov. 7, 2016); accord Est. of Rideout by & through Woods v. United States, 677 F. Supp. 3d 1112, 1119 (S.D. Cal. 2023) (taking judicial notice of the existence of court documents, but not for the truth of the matters asserted in those documents).

Exhibits G–H are filings from Taft v. Salinas (S.D. Cal. 2023), a separate class action brought by different plaintiffs against some of the same defendants named in the present case, stemming from the defendants’ alleged business of fraudulently selling puppy mill puppies as “rescue” dogs to California consumers in violation of the 2019 Pet Store Law.⁵ Exhibit G is a fourth amended complaint, and Exhibit H is an order granting in part and denying in part multiple motions to dismiss and denying a motion to strike the fourth amended complaint. Because the filings directly relate to arguments Defendants make in the instant motion and their authenticity is not in question, the Court may take judicial notice of the existence of these documents but will regard them as persuasive authority only.⁶

Exhibit I is a final judgment issued in Pet Connect Rescue, Inc. v. Salinas (S.D. Cal. 2023), a separate action brought by a different plaintiff against Rothman Defendants and other parties who are not involved in the present case. The final judgment concerns plaintiff's claims brought under the Lanham Act against the defendants. Apart from one sentence noting that “[t]he jury entered a verdict ․ against [Rothman Defendants] on the theory of false advertising on defendant Pet Connect's website,” the judgment suggests no relation to the issues in the present case. The Court therefore declines to take judicial notice of Exhibit I.

Accordingly, Defendants’ requests for judicial notice of Exhibits D–H are GRANTED, though the Court does not judicially notice the truth of any facts asserted therein, and Defendants’ request for judicial notice of Exhibit I is DENIED.

IV. MOTION TO STRIKE

Defendants bring the Motion to Strike pursuant to Rule 12(f), requesting that the Court strike various allegations from FAC on the grounds that they present redundant, immaterial, impertinent, and/or scandalous matter. (MTS at 2). First, Defendants seek to strike FAC paragraphs 247–259 containing class allegations, on the grounds that Plaintiffs have not met their burden to satisfy Federal Rule of Civil Procedure 23(a) and 23(b). (Id.) Second, Defendants seek to strike FAC paragraphs 20, 54–65, 229 in which Plaintiffs allege facts pertaining to a lawsuit that the Iowa State Attorney General filed against several Defendants, and similarly seek to strike allegations from the FAC paragraphs 21, 22, 24, and 27 stating “[She/Kirk/Rescue Pets Iowa] was a defendant in the Iowa AG lawsuit.” (Id.). Defendants also request that the Court strike FAC paragraphs 52 and 69–70, in which Plaintiffs describe general breeding conditions of “puppy mills” and FAC paragraphs 358 and 359 in which Plaintiffs request “profits of profits” as equitable relief. (Id.)

A. Legal Standard

Under Rule 12(f), a district court “may strike from a pleading an insufficient defense or any redundant, immaterial, impertinent, or scandalous matter.” Fed. R. Civ. P. 12. Courts, however, generally regard motions to strike “with disfavor because of the limited importance of pleading in federal practice, and because they are often used as a delaying tactic.” California Dep't of Toxic Substances Control v. Alco Pac., Inc., 217 F. Supp. 2d 1028, 1033 (C.D. Cal. 2002). “Ultimately, whether to grant a motion to strike lies within the sound discretion of the district court.” Id. “ ‘Immaterial’ matter is that which has no essential or important relationship to the claim for relief or the defenses being pleaded,” while “ ‘[i]mpertinent’ matter consists of statements that do not pertain, and are not necessary, to the issues in question.” Fantasy, Inc. v. Fogerty, 984 F.2d 1524, 1527 (9th Cir. 1993), rev'd on other grounds, 510 U.S. 517, 114 S.Ct. 1023, 127 L.Ed.2d 455 (1994) (citations omitted). “Scandalous matter is that which improperly casts a derogatory light on someone, most typically on a party to the action.” Claiborne v. Water of Life Cmty. Church, 2017 WL 9565337, at *13 (C.D. Cal. Aug. 25, 2017) (internal quotation marks omitted).

B. Analysis

For the following reasons, Defendants’ Motion to Strike is DENIED.

i. Class Allegations

Defendants argue Plaintiffs’ class allegations should be stricken at the pleading stage on the grounds that they fail the requirements set by Rules 23(a) and 23(b) for class certification. (MTS at 11–12). Defendants primarily contend that Plaintiffs’ defined class is overly broad because it does not limit the class to individuals who purchased a dog from one of the Defendant pet stores and were exposed to and relied on the same types of misrepresentations as to the source of dog (e.g., in the form of cage cards, pet dealer disclosures, oral misrepresentations, and/or online advertisements). (MTS at 11). By requesting that the Court strike Plaintiffs’ class allegations, it effectively asks the Court to rule on a non-existent motion for class certification. See Samet v. Proctor & Gamble Co., No. 12-CV-01891-RS, 2019 WL 13167115, at *2 (N.D. Cal. Jan. 15, 2019) (“Rule 23 of the Federal Rules of Civil Procedure ․ represents much more than a mere pleading standard.”).

Although Defendants argue Plaintiffs’ proposed class cannot be certified under Rule 23, they make no argument that the FAC's class allegations are “redundant,” immaterial,” “impertinent,” or “scandalous” and thus eligible to be struck pursuant to Rule 12(f). See Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d 970, 973–74 (9th Cir. 2010). Furthermore, though a district court “can strike class allegations for insufficiency, it does so when Plaintiff's allegations fail from a pleading perspective, not from a class competency perspective.” Caplan v. Budget Van Lines, Inc., 2020 WL 4430966, at *4–5 (D. Nev. July 31, 2020) (“A motion to strike class allegations at the pleading stage is not the proper procedural vehicle to eliminate those claims” that “cannot be certified under Rule 23.”); see Thorpe v. Abbott Labs., Inc., 534 F. Supp. 2d 1120, 1125 (N.D. Cal. 2008) (“[A] motion for class certification is a more appropriate vehicle.”). The Court therefore declines to exercise its discretion to strike the class allegations. See Caplan v. Budget Van Lines, Inc., 2020 WL 4430966, at *4 (denying defendant's motion to strike class allegations from the complaint “on the grounds of overbreadth and [the plaintiff's] inadequacy as a class representative”).

ii. Iowa State Attorney General Lawsuit

Defendants additionally request that the Court strike FAC paragraphs 20, 54–65, and 229 discussing a 2019 Iowa Attorney General Lawsuit brought against Kirk and JAK's, and also strike the following phrase from FAC paragraphs 21, 22, 24, and 27: “[She/Kirk/Rescue Pets Iowa] was a defendant in the Iowa AG lawsuit.” (MTD at ECF 37).

In the FAC Plaintiffs refer to an Iowa Attorney General Lawsuit filed in 2019, which implicated JAK's, Noethe, Dolphin, and Kirk. (See FAC ¶¶ 20–22, 24, 27, 54–65, 229). At issue in that lawsuit was a Chicago ordinance that precluded pet store operators from selling dogs unless they were from a “rescue organization” among others. A “rescue organization” under the Chicago pet store ordinance, at all relevant times, was defined as “any not-for-profit organization that has tax-exempt status under Section 501(c)(3) of the United States Internal Revenue Code, whose mission and practice is, in whole or in significant part, the rescue and placement of dogs, cats, or rabbits.” (See FAC ¶ 54). Defendants argue the allegations referencing that lawsuit are irrelevant to the present action, are prejudicial, and “attempt to smear Defendants’ reputations” (MTS at 37).

The Iowa Attorney General lawsuit is relevant to the present matter because Plaintiff alleges that multiple Defendants are located in and operated a puppy laundering business in the Midwest, including in Iowa, and their alleged misconduct in that lawsuit is pertinent to Plaintiffs’ allegations that Defendants were also involved in a puppy laundering scheme targeting California consumers. The Court therefore denies Defendants’ request to strike language from paragraphs 20–22, 24, 27, 54–65, and 229 from the FAC regarding the Iowa Attorney General lawsuit.

iii. Descriptions and Photographs of Puppy Mills

Defendants next request that the Court strike Plaintiffs’ allegations regarding the stigma and conditions of puppy mills in FAC paragraphs 52 and 69–70 because they are “irrelevant,” “prejudicial” and “scandalous.” (MTS at 38). Defendants further argue the allegations and photographs in FAC paragraphs 69–70 are irrelevant because Plaintiffs describe the conduct of and include photographs taken at puppy mills that (1) are not named parties in the action, and (2) are not alleged to have provided any puppies to be sold in California pet stores. (MTS at 38). The Court declines to exercise its discretion to strike these allegations.

First, the Court disagrees with Defendants that Plaintiffs’ allegations in FAC paragraph 52 describing the stigma and general conditions of puppy mills are “irrelevant,” “prejudicial” or “scandalous” within the meaning of Rule 12(f). Although no named Defendants are alleged to be puppy mills, the business practices and societal stigma of puppy mills are highly relevant to the basis of Plaintiffs’ claims. The gist of Plaintiffs’ claims is that they were defrauded by Defendants into believing that they were purchasing “rescue” dogs instead of supporting the commercial breeding industry and, had they known the puppies they purchased were from puppy mills, Plaintiffs never would have purchased the puppies. Nor does the Court view the allegations as using repulsive language or reflecting on the moral character of Defendants beyond illustrating why Plaintiffs allege they would not have purchased the puppies if they had known what industry they were supporting, which is directly relevant to their alleged economic injury. See PetConnect Rescue, Inc. v. Salinas, No. 20-CV-00527-H-KSC, 2020 WL 2832468, at *8 (S.D. Cal. June 1, 2020).

Second, the Court disagrees that FAC paragraphs 69–70 should be stricken under Rule 12(f). Plaintiffs allege that the two puppy mills named and pictured in paragraphs 69–70, Amos Schwartz and AJ's Angels Inc., are commercial breeders from which J.A.K.’s purchased puppies as part of its alleged scheme to obtain puppy mill dogs to then transfer to California pet stores. (FAC ¶¶ 69–70). The fact that these identified puppy mills are not named Defendants does not bar Plaintiffs from describing the roles that each actor played in Defendants’ overall scheme outlined in the FAC.

Accordingly, the Court DENIES Defendants’ Motion to Strike paragraphs 52 and 69–70 of the FAC.

iv. Profits of Profits Allegations

Defendants finally request that the Court to strike FAC paragraphs 358 and 359 in which Plaintiffs seek “profits that Defendants have made from investment of their ill-gotten gains” on the basis that Plaintiffs are not legally entitled to profits of profits. (MTS at 38). Specifically, Defendants assert that Plaintiffs are not entitled to seek profits of profits because that would “lead to an inappropriate windfall for the Plaintiffs.” (MTS at 38–39).

“Rule 12(f) is not a vehicle to challenge the legal sufficiency of claims or allegations.” Abboud v. Circle K Stores Inc., 731 F. Supp. 3d 1094, 1106 (D. Ariz. 2024). It follows that “Rule 12(f) of the Federal Rules of Civil Procedure does not authorize a district court to dismiss a claim for damages on the basis it is precluded as a matter of law.” Whittlestone, Inc. v. Handi-Craft Co., 618 F.3d at 976. Here, Defendants ask the Court to strike allegations from the FAC under Rule 12(f) that seek a certain type of monetary relief—profits of profits—on the basis that they are legally precluded. A Rule 12(f) motion to strike is not the appropriate vehicle to ask the Court to strike such allegations so the Court denies Defendants’ request. Additionally, the Court observes that neither of the cases Defendants rely on in their argument—Samet v. Proctor & Gamble Co., 2019 WL 13167115 or Lanovaz v. Twinings N. Am., Inc., 2015 WL 729705 (N.D. Cal. Feb. 19, 2015)—rule on motions to strike, and are therefore inapposite to Defendants’ Motion to Strike. (MTS at 38–39).

Accordingly, the Court DENIES Defendants’ Motion to Strike paragraphs 358 and 359 of the FAC. For the foregoing reasons, the Court DENIES Defendants’ Motion to Strike in its entirety.

V. MOTION TO DISMISS UNDER RULE 12(B)(1)

A. Rule 12(b)(1) Legal Standard

Under Federal Rule of Civil Procedure (“Rule”) 12(b)(1), a party may move for dismissal on the grounds that the court lacks subject matter jurisdiction. “A Rule 12(b)(1) jurisdictional attack may be facial or factual.” Safe Air for Everyone v. Meyer, 373 F.3d 1035, 1039 (9th Cir. 2004). “In a facial attack, the challenger asserts that the allegations contained in the complaint are insufficient on their face to invoke federal jurisdiction.” Id. In a facial attack, the court “assume[s] [plaintiff's factual] allegations to be true and draw[s] all reasonable inferences in his favor.” Wolfe v. Strankman, 392 F.3d 358, 362 (9th Cir. 2004). But, as with a Rule 12(b)(6) motion, courts do not accept the truth of any legal conclusions contained in the complaint. Warren v. Fox Family Worldwide, Inc., 328 F.3d 1136, 1139 (9th Cir. 2003).

Article III, § 2, of the Constitution restricts federal courts’ jurisdiction to a “case” or “controversy.” Murthy v. Missouri, 603 U.S. 43, 144 S. Ct. 1972, 1985, 219 L.Ed.2d 604 (2024). An element of the “case-or-controversy requirement is that [Plaintiffs], based on their complaint, must establish that they have standing to sue.” Raines v. Byrd, 521 U.S. 811, 818, 117 S.Ct. 2312, 138 L.Ed.2d 849 (1997). “In a class action, standing is satisfied if at least one named plaintiff meets the requirements.” Bates v. United Parcel Serv., Inc., 511 F.3d 974, 985 (9th Cir. 2007).

B. Analysis

i. Standing to Seek Injunctive Relief

“A plaintiff must demonstrate constitutional standing separately for each form of relief requested.” Davidson v. Kimberly-Clark Corp., 889 F.3d 956, 967 (9th Cir. 2018). To have standing to seek injunctive relief, a plaintiff must show she “has suffered or is threatened with a concrete and particularized legal harm ․ coupled with a sufficient likelihood that [she] will again be wronged in a similar way.” Bates v. United Parcel Serv., Inc., 511 F.3d at 985 (internal quotation marks omitted). This requires a plaintiff to show she is under threat of suffering a future similar harm that is “actual and imminent, not conjectural or hypothetical.” Summers v. Earth Island Inst., 555 U.S. 488, 493, 129 S.Ct. 1142, 173 L.Ed.2d 1 (2009).

Here, Plaintiffs seek an order “enjoining Defendants from selling in California dogs sourced from puppy mills or commercial breeders and from transferring such dogs into California for sale.” (FAC ¶ 360(c)). In support of their injunction request Plaintiffs allege facts demonstrating they have suffered a concrete and particularized harm in the past due to Defendants’ conduct, including that “Defendants intentionally and knowingly misrepresented material facts about the provenance of the puppy mill dogs with an intent to mislead regulators, Plaintiffs, and the Class.” (FAC ¶ 328). “Absent the misrepresentations and concealment of material facts enabled by their illegal puppy laundering scheme, Defendants would not have openly sold the puppy mill dogs in California and would not have been able to collect the premium prices they did.” (Id.) Plaintiffs further allege that they “reasonably relied on Defendants’ false misrepresentations about the dogs’ provenance and the legitimacy of the sales” and “[i]f [they] had known the truth about the dogs’ provenance and the illegality of their sale, they would not have purchased the dogs or paid the premium prices they did.” (Id. ¶ 329).

Defendants argue Plaintiffs have not demonstrated standing to seek injunctive relief because Plaintiffs fail to allege facts showing “a sufficient likelihood that [they] will again be wronged in a similar way.” Bates v. United Parcel Serv., Inc., 511 F.3d at 985. Specifically, Defendants assert that, under the amended Pet Store Law, no Defendant can legally continue selling puppies in California pet stores, and Plaintiffs do not allege any Defendants continue to do so in violation of the law. (MTD at 10).

Defendants argue that the 2021 Pet Store Law currently prohibits pet stores in California from selling dogs in pet stores, which defeats Plaintiffs’ allegations that they face the threat of future similar harm. (MTD at 10). As Plaintiffs correctly note this mischaracterizes the law's restrictions. While the 2021 Pet Store Law continues to prohibit the sale of non-rescue dogs, it still allows California pet stores to provide display areas for rescue dogs, the adoption fee for which must not exceed $500. (Opp'n to MTD at 44 (citing to Cal. Health & Safety Code § 122354.5)). Indeed, the crux of Plaintiffs’ legal claims arise from the theory that Defendants previously attempted to abuse a similar allowance that California pet stores carry rescue puppies subject to various restrictions. The Court therefore disagrees with Defendants that a change to the law by itself assures Plaintiffs are not likely to be wronged again in a similar way.

Defendants next argue that Plaintiffs’ failure to allege that any Defendant continues engaging in the behavior which Plaintiffs challenge in the FAC precludes Plaintiffs from showing a threat of future similar harm as required to seek injunctive relief. Plaintiffs do not allege in the FAC that any Defendant continues to sell puppies in California pet stores. (See generally, FAC). To the contrary, Plaintiffs’ allegations suggest several named Defendants have agreed to cease their involvement in puppy sales. (See FAC ¶ 82 (“In ․ 2021, Kirk agreed to refrain from organizing Rescue Pets Iowa or any other non-profit animal rescue organization and agreed ․ to refrain from acquiring, selling, or supplying any dogs to Bark Adoptions, non-profits, animal rescue organizations, or pet stores in California.”); ¶ 137 (“Animal Kingdom agreed to cease acquiring animals from Bark Adoptions, Rescue Pets Iowa, and JAK's ․”)).

Plaintiffs assert that they do not need to allege Defendants are still engaged in the conduct challenged in the FAC, given the Ninth Circuit's holding in Davidson v. Kimberly-Clark Corp., 889 F.3d at 969–70. In Davidson, the court determined that a plaintiff who had purchased wipes from defendant that were inaccurately labeled as “flushable” could demonstrate a threat of future harm by alleging that (1) “she will be unable to rely on the product's advertising or labeling in the future” or (2) “she might purchase the product in the future” and “reasonably, but incorrectly, assume the product was improved.” Id. at 966–67. Plaintiffs reason that by alleging they will likely purchase dogs in California again and are concerned they will once again unknowingly purchase a puppy sourced from a puppy mill that is falsely labeled as a “rescue,” (See FAC ¶¶ 11–12), Plaintiffs demonstrate a threat of future harm under the Davidson holding.

The Court does not view Davidson as instructive on demonstrating a likelihood of future harm where Defendants are not alleged to still be working in the business of selling puppies. Nowhere in the Davidson opinion does the Ninth Circuit raise the question of whether the defendant company was still in business or continued selling the challenged product. This factual distinction is important because the U.S. Supreme Court has maintained that “[p]ast exposure to illegal conduct does not in itself show a present case or controversy regarding injunctive relief ․ if unaccompanied by any continuing, present adverse effects.” O'Shea v. Littleton, 414 U.S. 488, 495–96, 94 S.Ct. 669, 38 L.Ed.2d 674, (1974) (emphasis added); City of Los Angeles v. Lyons, 461 U.S. 95, 102, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983). Here, Plaintiffs fail to allege facts from which the Court may infer “continuing, present adverse effects” from Defendants’ conduct and thus have not shown Plaintiffs are “under threat of suffering a future similar harm that is “actual and imminent, not conjectural or hypothetical.” Summers, 555 U.S. at 493, 129 S.Ct. 1142; see Opperman v. Path, Inc., 84 F. Supp. 3d 962, 987–88 (N.D. Cal. 2015) (denying plaintiffs request for injunctive relief against Apple because “[p]laintiffs have alleged that Apple has remedied the alleged gaps in its privacy protection” and thus “no realistic threat exists that the complained-of conduct is ongoing or will be repeated”).

Further, the Court disagrees with Plaintiffs that the holding SEC v. Murphy, in which the Ninth Circuit found injunctive relief was warranted against defendant investors who had already come under compliance with the Securities Exchange Act, is applicable to the present facts. See U.S. Sec. & Exch. Comm'n v. Murphy, 50 F.4th 832, 851 (9th Cir. 2022), cert. denied sub nom. Murphy v. Sec. & Exch. Comm'n, ––– U.S. ––––, 144 S. Ct. 344, 217 L.Ed.2d 183 (2023) (finding a defendant's “current compliance with the law does not render injunctive relief unavailable” because “violators generally stop their illegal activities when under judicial scrutiny”). In Murphy, the Court held the defendants were likely to commit future violations despite having ceased their illegal conduct because “they remain engaged in the securities industry and the district court found that they have failed to fully appreciate the wrongfulness of their conduct.” Id. (emphasis added). Plaintiffs do not allege in the FAC that any Defendants in the present action remain engaged in the industry of obtaining, transporting, or selling puppies. (See generally, FAC). While Plaintiffs do assert in their Opposition to Defendants’ Motion to Dismiss that Defendants refuse to acknowledge the wrongfulness of their conduct (Opp'n to MTD at 44), this alone does not demonstrate Plaintiffs are under threat of suffering a future similar harm that is “actual and imminent, not conjectural or hypothetical.” Summers, 555 U.S. at 493, 129 S.Ct. 1142. Accordingly, the Court GRANTS Defendants’ Motion to Dismiss Plaintiffs’ requests for injunctive relief pursuant to Rule 12(b)(1) with leave to amend.

ii. Standing to Assert a RICO Claim

Defendants also argue Plaintiffs fail to allege they have suffered an injury as is required to assert a RICO claim. (MTD at 20–21 (“Plaintiffs have not alleged any facts which demonstrate their harm is anything more than their disappointment that the dog they purchased ․ was not really a ‘rescue’ ․”)). Although Defendants construe the failure to allege an injury under RICO as a missing element, the Court perceives it as a standing challenge. The Court, therefore, considers Defendants’ arguments regarding Plaintiffs’ RICO injury part of Defendants’ Motion to Dismiss under Fed. R. Civ. P. 12(b)(1).

“To demonstrate RICO standing, a plaintiff must allege that it suffered an injury to its ‘business or property’ ․ as a proximate result of the alleged racketeering activity,” Newcal Indus., Inc. v. Ikon Off. Sol., 513 F.3d 1038, 1055 (9th Cir. 2008), and that the injury resulted in “a concrete financial loss.” Canyon Cnty. v. Syngenta Seeds, Inc., 519 F.3d 969, 975 (9th Cir. 2008). In the RICO context, “[a]t the pleading stage, general factual allegations of injury resulting from the defendant's conduct may suffice, for on a motion to dismiss we presume that general allegations embrace those specific facts that are necessary to support the claim.” Mendoza v. Zirkle Fruit Co., 301 F.3d 1163, 1168 (9th Cir. 2002).

The theory behind Plaintiffs’ alleged injury is that Defendants falsely represented puppies to be “rescue” dogs because the puppies were instead obtained from puppy mills. Plaintiffs’ claim is thus for an injury to a cognizable “property interest”—the puppies they purchased. See Reiter v. Sonotone Corp., 442 U.S. 330, 338, 99 S.Ct. 2326, 60 L.Ed.2d 931 (1979) (noting that the word “ ‘property’ comprehends anything of material value owned or possessed”). Plaintiffs also allege that they would not have paid as much as they did for puppies that they knew came from puppy mills, which demonstrates a concrete financial loss. See Glob. Master Int'l Grp., Inc. v. Esmond Nat., Inc., 76 F.4th 1266, 1274 (9th Cir. 2023) (finding plaintiff sufficiently alleged an injury under RICO by claiming it overpaid for the “fraudulently non-conforming supplements” that it received from defendant). Plaintiffs therefore adequately allege injuries to property sufficient to establish standing to pursue their RICO claim and the Court DENIES the 12(b)(1) Motion as to the RICO allegations.

VI. MOTION TO DISMISS PURSUANT TO RULE 12(B)(6)

A. Rule 12(b)(6) Legal Standard

Under Rule 12(b)(6) a defendant may move to dismiss for failure to state a claim upon which relief can be granted. A complaint may be dismissed for failure to state a claim for one of two reasons: (1) lack of a cognizable legal theory; or (2) insufficient facts under a cognizable legal theory. Bell Atlantic Corp. v. Twombly, 550 U.S. 544, 555, 127 S.Ct. 1955, 167 L.Ed.2d 929 (2007); see also Mendiondo v. Centinela Hosp. Med. Ctr., 521 F.3d 1097, 1104 (9th Cir. 2008).

“To survive a motion to dismiss, a complaint must contain sufficient factual matter, accepted as true, to ‘state a claim to relief that is plausible on its face.’ ” Ashcroft v. Iqbal, 556 U.S. 662, 678, 129 S.Ct. 1937, 173 L.Ed.2d 868 (2009) (citing Twombly, 550 U.S. at 570, 127 S.Ct. 1955); see Fed. R. Civ. P. 8(a) (“a “pleading that states a claim for relief must contain ․ a short and plain statement of the claim showing that the pleader is entitled to relief.”). “A claim has facial plausibility when the plaintiff pleads factual content that allows the court to draw the reasonable inference that the defendant is liable for the misconduct alleged.” Iqbal, 556 U.S. at 678, 129 S.Ct. 1937. The complaint need not include detailed factual allegations but must provide more than just a “formulaic recitation of the elements of a cause of action.” Twombly, 550 U.S. at 555, 127 S.Ct. 1955.

The court must construe the complaint in the light most favorable to the plaintiff, accept all allegations of material fact as true, and draw all reasonable inferences from well-pleaded factual allegations. Gompper v. VISX, Inc., 298 F.3d 893, 896 (9th Cir. 2002). The court is not required, however, to accept as true legal conclusions couched as factual allegations. See Iqbal, 556 U.S. at 678, 129 S.Ct. 1937.

Where a district court grants a motion to dismiss, it should generally provide leave to amend unless it is clear the complaint could not be saved by any amendment. See Fed. R. Civ. P. 15(a); Manzarek v. St. Paul Fire & Marine Ins. Co., 519 F.3d 1025, 1031 (9th Cir. 2008). Leave to amend may be denied when “the court determines that the allegation of other facts consistent with the challenged pleading could not possibly cure the deficiency.” Schreiber Distrib. Co. v. Serv-Well Furniture Co., 806 F.2d 1393, 1401 (9th Cir. 1986). Thus, leave to amend “is properly denied ․ if amendment would be futile.” Carrico v. City & County of San Francisco, 656 F.3d 1002, 1008 (9th Cir. 2011).

B. Violation of RICO under 18 U.S.C. § 1962(c)

Under RICO it is “unlawful for any person employed by or associated with any enterprise engaged in, or the activities of which affect, interstate or foreign commerce, to conduct or participate, directly or indirectly, in the conduct of such enterprise's affairs through a pattern of racketeering activity or collection of unlawful debt.” 18 U.S.C. § 1962(c). To plead a violation of RICO under 18 U.S.C. § 1962(c), a plaintiff “must allege “ ‘(1) conduct (2) of an enterprise (3) through a pattern (4) of racketeering activity (known as ‘predicate acts’) (5) causing injury to plaintiff's business or property.’ ” Coronavirus Rep. v. Apple, Inc., 85 F.4th 948, 958 (9th Cir. 2023), cert. denied, ––– U.S. ––––, 144 S. Ct. 2526, 219 L.Ed.2d 1204 (2024) (quoting Living Designs, Inc. v. E.I. Dupont de Nemours & Co., 431 F.3d 353, 361 (9th Cir. 2005)). Defendants only dispute the adequacy of Plaintiffs’ allegations demonstrating the final three elements—“racketeering activity,” “pattern” and “injury.” (See MTD at 11).

i. Racketeering Activity

“Section 1961(1) contains an exhaustive list of acts of ‘racketeering,’ commonly referred to as ‘predicate acts.’ ” Beck v. Prupis, 529 U.S. 494, 497 n.2, 120 S.Ct. 1608, 146 L.Ed.2d 561 (2000). Plaintiffs allege that Defendants engaged in six predicate acts listed in 18 U.S.C. § 1961: (1) mail and wire fraud, under 18 U.S.C. §§ 1341 and 1343; (2) promotional money laundering, under 18 U.S.C. § 1956(a)(1)(A)(i); (3) money laundering by concealment, under 18 U.S.C. § 1956(a)(1)(B)(i); (4) money transactions in property derived from unlawful activity, under 18 U.S.C. § 1957; (5) interstate transfer and receipt of money obtained through fraud, under 18 U.S.C. §§ 2314–2315; and (6) violation of the Travel Act, 18 U.S.C. §§ 1952(a)(1) or 1952(a)(3). (FAC ¶ 268). Defendants argue that Plaintiffs fail to adequately allege any predicate act.

a. Mail and Wire Fraud, under 18 U.S.C. §§ 1341 and 1343

Defendants first dispute the sufficiency of Plaintiffs allegations showing Defendants engaged in mail and wire fraud, as defined under 18 U.S.C. §§ 1341 and 1343. (See FAC ¶¶ 268–82). Mail and wire fraud contain the following elements: (1) formation of a scheme to defraud; (2) use of the United States mails or wires in furtherance of the scheme; and (3) specific intent to deceive or defraud. Sanford v. MemberWorks, Inc., 625 F.3d 550, 557 (9th Cir. 2010). “Federal Rule of Civil Procedure 9(b) provides that in alleging fraud, a party must state with particularity the circumstances constituting fraud, while ․ intent, knowledge, and other conditions of a person's mind may be averred generally.” Id. at 557–58 (cleaned up). “Consequently, the only aspects of wire or mail fraud that require particularized allegations are the factual circumstances of the fraud itself.” Id. at 558 (cleaned up). In other words, “[t]o avoid dismissal for inadequacy under Rule 9(b),” a plaintiff must “state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation.” Edwards v. Marin Park, Inc., 356 F.3d 1058, 1066 (9th Cir. 2004). “In the context of a fraud suit involving multiple defendants, a plaintiff must, at a minimum, identify the role of each defendant in the alleged fraudulent scheme.” Swartz v. KPMG LLP, 476 F.3d at 765 (cleaned up).

Defendants first dispute the adequacy of Plaintiffs’ allegations showing any Defendant acted with specific intent to defraud. (MTD at 11–12). “To act with the ‘intent to defraud’ means to act willfully, and with the specific intent to deceive or cheat for the purpose of ․ bringing about some financial gain to oneself.” United States v. Cloud, 872 F.2d 846, 852 n.6 (9th Cir. 1989). At the motion to dismiss stage, a plaintiff does not need to expressly allege that defendants “harbored a specific intent to deceive or defraud”; rather, a plaintiff may establish the intent element of mail or wire fraud by alleging “the existence of a scheme which was ‘reasonably calculated to deceive persons of ordinary prudence and comprehension’ [which] is shown by examining the scheme itself.” Sun Sav. & Loan Ass'n v. Dierdorff, 825 F.2d 187, 195–96 (9th Cir. 1987); see United States v. Jones, 425 F.2d 1048, 1058 (9th Cir. 1970).

Here, Plaintiffs establish the element of intent by alleging the existence of a scheme reasonably calculated to deceive persons into believing they were purchasing legitimate “rescue” puppies instead of puppies obtained from puppy mills to be sold in California pet stores. (See, e.g., FAC ¶ 271 (describing each step taken by the various Defendants to obtain, coordinate the placement and delivery of, transport, and sell commercially bred puppies as “rescue” puppies to consumers in California)). In addition, Plaintiffs allege that Defendants charged and paid fees to one another that were falsely labeled as “adoption” fees, “sterilization deposits,” “donations,” and “transport costs.” (FAC ¶¶ 173–176, 183–195). The Court may also infer Defendants’ intent to defraud from these alleged misrepresentations of payments. See United States v. Rogers, 321 F.3d 1226, 1230 (9th Cir. 2003) (inferring intent to defraud from defendant's after-the-fact misrepresentations designed to cover up his mail fraud scheme); Sun Sav. & Loan Ass'n v. Dierdorff, 825 F.2d at 196 (holding “the specific intent necessary for mail fraud” was “clearly convey[ed] by implication” because “[t]he scheme in which [defendant] allegedly was engaged, involving quiet kickbacks, secret bank accounts, and cover-up letters, seems designed to deceive or defraud”).

Defendants additionally contend that they did comply with the 2019 Pet Store Law, and that such compliance negates Plaintiffs’ allegations that Defendants intended to defraud California consumers. The Court rejects this argument because “[w]hether a scheme to defraud exists does not depend on an underlying violation of state law.” Shinde v. Nithyananda Found., 2015 WL 12732434, at *9 (C.D. Cal. Feb. 23, 2015); see United States v. Green, 592 F.3d 1057, 1064 (9th Cir. 2010) (“[W]e believe it is settled that wire fraud does not require proof that the defendant's conduct violated a separate law or regulation, be it federal or state law.”).

Defendants also argue that Plaintiffs fail to allege fraud with the required particularity under Rule 9(b). (MTD at 12 (citing to FAC ¶ 280)). A plaintiff alleging fraud against multiple defendants must “identify the role of each defendant in the alleged fraudulent scheme.” Swartz v. KPMG LLP, 476 F.3d at 765 (cleaned up). Each “defendant need not personally have mailed the letter or made the telephone call; the offense may be established where one acts with the knowledge that the prohibited actions will follow in the ordinary course of business or where the prohibited acts can reasonably be foreseen.” United States v. Stapleton, 293 F.3d 1111, 1116–17 (9th Cir. 2002)

To allege mail and wire fraud against Defendants with the required particularity of Rule 9(b), Plaintiffs must “state the time, place, and specific content of the false representations as well as the identities of the parties to the misrepresentation,” Edwards v. Marin Park, Inc., 356 F.3d at 1066, and allege the role each defendant performed in the alleged fraudulent scheme involving U.S. mail and/or wire. Swartz v. KPMG LLP, 476 F.3d at 765. The Court finds Plaintiffs adequately allege these details as follows.

First, Plaintiffs allege specific dates and locations where they were exposed to misrepresentations regarding the puppies’ sources. (See, e.g. FAC ¶¶ 230–231 (Carey purchased a puppy from Defendant Animal Kingdom's Grover Beach location on January 15, 2019, and relied on a card attached to the puppy's cage stating it came from “Bark Adoption Rescue.” Plaintiffs allege Animal Kingdom staff also told Carey that the puppy came from a rescue)). Second, Plaintiffs allege the roles that each Defendant played in purchasing and obtaining the puppies from puppy mills, coordinating and arranging for the placement the puppies in the California pet stores, transporting the puppies from J.A.K.’s to the pet stores, and accepting and distributing payment derived from consumers. (See FAC ¶¶ 66–131, 161–168).

The Court finds Plaintiff allege mail and wire fraud with the required particularity under Rule 9(b). See Odom v. Microsoft Corp., 486 F.3d 541, 554–55 (9th Cir. 2007) (finding plaintiff pleaded wire fraud with particularity by alleging each plaintiff's experience being defrauded by the alleged racketeering activity, including locations, dates, misrepresentations, the use of the wires, and the role of each defendant in the conduct). Further, because Plaintiffs allege all Defendants were knowing participants in the scheme to defraud consumers purchasing the “rescue” puppies, they plausibly allege all are liable for the misrepresentations made through that scheme. See Stapleton, 293 F.3d at 1117 (“[K]nowing participants in the scheme are legally liable for their co-schemers’ use of the mails or wires.” (internal quotation marks omitted)).

b. Promotional Money Laundering, under 18 U.S.C. § 1956(a)(1)(A)(i)

Defendants argue Plaintiffs inadequately allege that Defendants engaged in the predicate act of promotional money laundering under 18 U.S.C. § 1956(a)(1)(A)(i). To plead a claim under § 1956(a)(1), Plaintiffs must establish that Defendants (1) engaged in a financial transaction which involved proceeds from specified illegal activity; (2) knew the proceeds were from illegal activity; and (3) intended the transaction to either promote the same illegal activity (§ 1956(a)(1)(A)(i)), or “conceal or disguise the nature, the location, the source, the ownership, of the control of the proceeds of specified unlawful activity” (§ 1956(a)(1)(B)(i)). 18 U.S.C. § 1956(a)(1);⁷ United States v. Marbella, 73 F.3d 1508, 1514 (9th Cir. 1996). For the following reasons, the Court finds Plaintiffs have adequately alleged each of the required elements for promotional money laundering pursuant to 18 U.S.C. § 1956(a)(1)(A)(i).

Plaintiffs adequately allege the first element—that Defendants engaged in a financial transaction involving proceeds obtained through the specified illegal activities. (See FAC ¶¶ 283–88). 18 U.S.C. § 1956(c)(9) defines “proceeds” as “any property derived from or obtained or retained, directly or indirectly, through some form of unlawful activity, including the gross receipts of such activity.” Plaintiffs allege that Defendants obtained proceeds through the specified unlawful activities of mail fraud and wire fraud in violation of 18 U.S.C. §§ 1341 and 1343,⁸ 18 U.S.C. § 1956(c)(7)(A), and Defendants used these proceeds to engage in the financial transactions of dispersing payments among Defendants and making payments to puppy mills to acquire more puppies to repeat the scheme. (See FAC ¶ 287 (Defendants “used such proceeds to continue to make payments for puppies ․ to promote the continuation of the puppy laundering scheme.”)).

Second, Plaintiffs sufficiently allege that Defendants knew the proceeds were unlawfully obtained. (FAC ¶¶ 283, 285). Plaintiffs allege, for example, that Defendants took steps to disguise their payments made to and from various Defendants and created sham “rescue” organizations further supports this element. See United States v. $1,546,076.35 In Bank Funds Seized from Republic Bank of Ariz. Acct. 1889, 2020 WL 8172984, at *13 (C.D. Cal. Dec. 1, 2020) (finding plaintiff demonstrated defendant's knowledge by alleging that defendants disguised the scheme and its corresponding payments by “instructing customers to send checks and money orders to a Post Office box, funneling those funds into bank accounts held in the names of entities with no apparent connection to Backpage, and then giving customers a corresponding ‘credit’ to purchase Backpage ads”).

Plaintiffs also adequately allege the third element—that Defendants intended the financial transaction to promote the same illegal activity. (See, e.g., FAC ¶ 206 (“On information and belief, J.A.K.’s used the proceeds deposited by Subject Enterprise and generated through the illegal puppy laundering scheme to acquire additional puppies from puppy mills.”)). Plaintiffs allege Defendants committed at least twenty-four separate and completed wire fraud offenses in January 2019 alone (see FAC ¶ 273), which generated proceeds that Defendants then used to continue promoting the continuation of the mail and wire fraud scheme. from the fraudulent sale of puppies to consumers. (Id. ¶¶ 113–24, 131).

In the Motion to Dismiss, Defendants incorrectly state that a claim for promotional money laundering requires Plaintiffs to allege that Defendants took “steps to disguise or conceal the source or destination of [allegedly laundered funds].” (MTD at 15) (quoting Metaxas v. Lee, 503 F.Supp.3d 923, 939 (N.D. Cal. 2020)). In the FAC, Plaintiffs specifically bring a money laundering claim under § 1956(a)(1)(A)(i) which only requires that they demonstrate Defendants acted under § 1956(a)(1) “with the intent to promote the carrying on of specified unlawful activity.” 18 U.S.C.A. § 1956(a)(1)(A)(i). Only a money laundering claim under § 1956(a)(1)(B)(i) requires showing that Defendants intended the financial transaction “to conceal or disguise.” The Court thus rejects Defendants’ argument.

Defendants also contend that Plaintiffs’ promotional money laundering claim under § 1956(a)(1)(A)(i) fails because Plaintiffs “merge[ ] the alleged mail fraud scheme's conduct with the alleged money laundering conduct.” (MTD at 14). The Ninth Circuit has held that mail fraud cannot serve as the underlying “illegal activity” for promotional money laundering when the mail fraud scheme requires the very financial transaction used to demonstrate a money laundering claim. United States v. Van Alstyne, 584 F.3d 803 (9th Cir. 2009); see United States v. Santos, 553 U.S. 507, 526, 128 S.Ct. 2020, 170 L.Ed.2d 912 (2008) (Stevens, J., concurring) (“Allowing the Government to treat the mere payment of the expense of operating an illegal gambling business as a separate offense is in practical effect tantamount to double jeopardy ․”).

Defendants insist a “merger problem” exists because Plaintiffs rely on the same alleged facts to support both their mail and wire fraud claim and their money laundering claim. In support of their position, Defendants cite to United States v. Van Alstyne, 584 F.3d 803 (9th Cir. 2009), in which the defendant's mail fraud scheme consisted of issuing distribution checks to his investors “that supposedly represented generous returns on [their] investment” which “directly inspired [said investors] to send more money to Van Alstyne's funds,” which he then “used to pay returns to other investors,” thereby triggering another instance of the same scheme. Id. at 815 (“The very nature of the scheme ․ required some payments to investors for it to be at all successful.”). The Ninth Circuit explained that because the final act of the defendant's scheme was also the alleged financial transaction intended to promote the same legal activity, holding the defendant liable for both mail fraud and promotional money laundering would improperly convict him under two criminal statutes for a single crime. Id. at 815.

Here, the alleged mail fraud scheme does not necessarily create the “merger problem” discussed in Van Alstyne. “[N]ot all mail fraud schemes will involve payments that could implicate the ‘merger’ problem,” such as when “[t]he scheme itself require[s] no payments.” Van Alstyne, 584 F.3d at 815 (noting the court's “analysis of the ‘merger’ problem in the mail fraud context must focus on the concrete details of the particular ‘scheme to defraud’ ”). Plaintiffs allege dozens of instances of mail and wire fraud committed by Defendants by the time consumers were induced to part with their money based on Defendants’ alleged misrepresentations, (FAC ¶¶ 271–74), after which Defendants redistributed the proceeds among themselves and used the proceeds to acquire additional puppies to sell. Such alleged financial transactions were not inherent to all of Defendants’ alleged acts of mail fraud and therefore plausibly avoid the merger issue. See United States v. Kalfsbeek, 470 F. App'x 656, 659 (9th Cir. 2012) (confirming money laundering conviction where the alleged “money transfers were ‘receipts’ of the scheme, and were not inherent to it”). The Court thus rejects Defendants’ arguments that Plaintiffs insufficiently allege the predicate act of promotional money laundering under 18 U.S.C. § 1956(a)(1)(A)(i).

c. Money Laundering by Concealment, under 18 U.S.C. § 1956(a)(1)(B)(i)

Defendants argue that Plaintiffs fail to allege facts showing Defendants engaged in money laundering by concealment under 18 U.S.C.A. § 1956(a)(1)(B)(i). To plead a claim under § 1956(a)(1)(B)(i), Plaintiffs must allege facts showing that Defendants (1) engaged in a financial transaction which involved proceeds from specified illegal activity, (2) knew the proceeds were from illegal activity, and (3) knew the transaction was designed in whole or in part “to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity.” United States v. Singh, 995 F.3d 1069, 1075 (9th Cir. 2021). The first two elements of money laundering by concealment are identical to the first two elements of promotional money laundering, which the Court has already found Plaintiffs adequately allege.

In support of the third element—that Defendants “knew the transaction was designed in whole or in part” to conceal the nature of the proceeds—Plaintiffs allege Defendants took various steps to structure the initial payment and distribution of the proceeds the proceeds to avoid detection and tracing:

[f]or example, the pet stores disguised their payments to J.A.K.’s for the purchase of puppies as “transport costs” which were paid to Subject Enterprise. Once Subject Enterprise deposited the fake transport costs into its bank account, it transmitted the payments by wire transfer between financial institutions to J.A.K.’s. The pet stores would make additional payments to the Sham Rescue Defendants disguised as donations, adoption fees, and/or sterilization deposits.

(FAC ¶ 293). These allegations sufficiently support the concealment element of a money laundering claim under 18 U.S.C. § 1956(a)(1)(B)(i). See United States v. Ayvazyan, 2023 WL 5013366, at *2 (9th Cir. Aug. 7, 2023) (unpublished) (finding that funneling proceeds through intermediaries under false pretense of payments for “art” and “payroll” was sufficient to demonstrate defendant “intended to conceal the source of fraudulently obtained funds”).

d. Money Transactions in Property Derived from Unlawful Activity, under 18 U.S.C. § 1957

To plead a violation of 18 U.S.C.A. § 1957, a plaintiff must show that “(1) the defendant knowingly engaged in a monetary transaction; (2) he knew the transaction involved criminal property; (3) the property's value exceeded $10,000; and (4) the property was derived from a specified unlawful activity.” United States v. Rogers, 321 F.3d at 1229. The Court rejects Defendants’ argument that Plaintiffs do not adequately allege “the requisite amount and nature of the financial transaction” to support Plaintiffs’ § 1957 claim.

Though Plaintiffs do allege generally that “[e]ach Defendant used those proceeds to knowingly engage or attempt to engage in monetary transactions of a value greater than $10,000” (FAC ¶ 297), Plaintiffs additionally allege the dates and amounts of at least eight payments from Animal Kingdom to Subject Enterprise exceeding $10,000 “derived entirely from proceeds the pet stores had earned through their sales of the puppies to California consumers.” (See FAC ¶¶ 195–203). For example, Plaintiffs allege that on January 11, 2019, Subject Enterprise deposited checks it received from Defendant Animal Kingdom totaling $27,285 and that on January 28, 2019, “Subject Enterprise transferred, by a check signed by Coda Subject, $27,195 to J.A.K.’s.” (FAC ¶ 200). Plaintiffs further allege that “[o]n information and belief, the entirety of the $27,195 transferred by Subject Enterprise to J.A.K.’s derived from proceeds the pet stores earned as a part of their participation in the Enterprise's illegal funneling of puppies into California for sale as “rescues” following the effective date of the [2019 Pet Store Law].” (Id.). The Court therefore rejects Defendants’ argument that Plaintiffs inadequately allege the amount and nature of the financial transactions needed to support a claim under 18 U.S.C. § 1957.

e. Interstate Transfer and Receipt of Money Obtained Through Fraud, under 18 U.S.C. §§ 2314 and 2315

Defendants next argue that Plaintiffs fail to allege violations of 18 U.S.C. §§ 2314 and 2315 because Plaintiffs do not sufficiently allege that Defendants transported or received money “with fraudulent intent.” (MTD at 17–18). The Court disagrees.

First, Defendants are incorrect that claims arising under §§ 2314 and 2315 require showing a defendant acted “with fraudulent intent.” (MTD at 17). Neither statute's text identifies fraudulent intent as a requirement for liability; a defendant's knowledge that money was taken by fraud is sufficient. See 18 U.S.C.A. § 2314 (prohibiting persons from “transport[ing], transmit[ting], or transfer[ing] in interstate or foreign commerce any ․ money, of the value of $5,000 or more, knowing the same to have been ․ taken by fraud”) and § 2315 (prohibiting persons from “receiv[ing] ․ money of the value of $5,000 or more ․ which [has] crossed a State ․ boundary after being ․ taken, knowing the same to have been ․ taken.”). The Court therefore rejects Defendants’ argument.

Defendants are also incorrect that a claim under violation of the National Stolen Property Act requires alleging that the transported money is stolen money, and that Plaintiffs’ allegations fail because they do not allege Defendants moved stolen funds. (Reply re MTD at 17). For example, a claim under 18 U.S.C. § 2314 prohibits a Defendant from “transport[ing] ․ in interstate or foreign commerce any ․ money, of the value of $5,000 or more, knowing the same to have been stolen, converted or taken by fraud.” Allegations that transported funds have been “taken by fraud,” which Plaintiffs sufficiently allege throughout the FAC, is thus adequate to establish a violation of 18 U.S.C. § 2314.

Defendants further assert in their Reply that Plaintiffs insufficiently allege that Defendants transported money across state lines as required to allege a violation of the National Stolen Property Act. (Reply re MTD at 17–18). The Court disagrees. Plaintiffs allege, for example, that “[o]n January 17, 2019 and January 25, 2019, Defendant Subject Enterprise deposited $42,915 received in California from California pet stores, including $21,735 from Defendant Animal Kingdom into its Iowa bank account.” (FAC ¶ 301(ii)). By identifying California and Iowa as the states between which Defendants transported the funds Plaintiffs sufficiently allege the funds crossed state boundaries.

f. Violation of the Travel Act, 18 U.S.C. §§ 1952(a)(1) or 1952(a)(3)

Defendants next maintain Plaintiffs fail to establish violations of the Travel Act under either 18 U.S.C. §§ 1952(a)(1) or 1952(a)(3) because Plaintiffs insufficiently allege that Defendants engaged in “unlawful activity” as defined under the Travel Act. (MTD at 18). 18 U.S.C.A. § 1952(a) provides

Whoever travels in interstate or foreign commerce or uses the mail or any facility in interstate or foreign commerce, with intent to--

(1) distribute the proceeds of any unlawful activity; or

․

(3) otherwise promote, manage, establish, carry on, or facilitate the promotion, management, establishment, or carrying on, of any unlawful activity,

and thereafter performs or attempts to perform—

(A) an act described in paragraph (1) or (3) shall be fined under this title, imprisoned not more than 5 years, or both ․

“Unlawful activity” under the § 1952(a) includes a violation of 18 U.S.C. §§ 1956 or 1957. 18 U.S.C.A. § 1952(b).

Defendants’ argument relies on their prior assertion that Plaintiffs fail to adequately allege Defendants violated 18 U.S.C. §§ 1956 or 1957. Because the Court has Plaintiffs adequately plead their claims under both §§ 1956 and 1957, the Court rejects Defendants’ argument.

ii. Pattern

Defendants next argue Plaintiffs do not demonstrate that Defendants engaged in a “pattern” of racketeering activity. A “pattern of racketeering activity”—defined by 18 U.S.C. § 1961(5) as “at least two acts of racketeering activity” within a ten-year period—exists when defendants engage in “multiple predicates within a single scheme that [are] related and that amount[ ] to, or threaten[ ] the likelihood of, continued criminal activity.” H. J. Inc. v. Nw. Bell Tel. Co., 492 U.S. 229, 237, 109 S.Ct. 2893, 106 L.Ed.2d 195 (1989). Whether a pattern of predicate acts amounts to or poses a threat of related and continuous criminal activity is a fact-intensive inquiry. See id. at 243, 109 S.Ct. 2893. Continuity refers “either to a closed period of repeated conduct, or to past conduct that by its nature projects into the future with a threat of repetition.” Id. at 241, 109 S.Ct. 2893.

Plaintiffs have sufficiently pleaded closed-ended continuity by alleging Defendants engaged in related predicate acts demonstrating a long-term scheme to defraud Plaintiffs into believing that puppies being sold in California pet stores were “rescue” dogs rather than sourced from puppy mills. Plaintiffs allege that Defendant J.A.K.’s engaged in the scheme for twenty-two months (July 2018 through May 2020, FAC ¶¶ 66, 81, 86, 113, 116–17, 131, 142, 163, 201–04, 273, 301), Defendants Kirk, TBHF, and Subject Enterprise, Inc. for seventeen months (July 2018 through December 2019, Id. ¶¶ 24–31, 66, 74–75, 84–91, 111, 113, 120–22, 164, 175, 193, 226, 273); Rescue Pets Iowa for eleven months (November 2018 to October 2019, Id. ¶¶ 71–89, 96, 113, 273), and Defendant Pet Connect Rescue for fifteen months (February 2019 through May 2020, Id. ¶¶ 103–06, 114–15, 131). The Court deems these alleged time periods sufficient to establish closed-ended continuity at the pleading stage. See Allwaste Inc. v. Hecht, 65 F.3d 1523, 1526 (9th Cir. 1995) (finding that predicate acts spanning thirteen months was sufficient to show closed-ended continuity). The Court thus finds Plaintiffs have adequately alleged a “pattern” for purposes of their RICO claim.

iii. Availability of Injunctive Relief under RICO

Defendants finally request that the Court to dismiss Plaintiffs’ request for injunctive relief under RICO because the Ninth Circuit has found injunctive relief to be an unavailable remedy for private RICO plaintiffs. (MTD at 21). As analyzed above, the Court has found Plaintiffs inadequately allege standing to pursue injunctive relief against Defendants and on that ground grants Defendants’ 12(b)(1) Motion to Dismiss Plaintiff's request for injunctive relief, with leave to amend. Should Plaintiffs file a second amended complaint remedying the defects of their FAC's standing allegations for injunctive relief, the issue of whether Plaintiffs are entitled to injunctive relief under RICO may come before the Court again.

In support of their argument that Plaintiffs may not request injunctive relief under RICO, Defendants cite to Natomas Gardens Inv. Grp., LLC v. Sinadinos, 710 F. Supp. 2d 1008, 1018 (E.D. Cal. 2010) (“The only remedy for a civil RICO violation brought by an individual, rather than the Attorney General, is treble damages, costs, and attorneys’ fees.”) and Religious Tech. Ctr. v. Wollersheim, 796 F.2d 1076, 1088 (9th Cir. 1986) (concluding that “Congress did not intend to give private RICO plaintiffs any right to injunctive relief”). In Plaintiffs’ Opposition to the Motion to Dismiss, Plaintiffs appear to concede that the Ninth Circuit does not permit injunctive relief for private RICO plaintiffs where they assert in a footnote that the availability of injunctive relief to private RICO litigants is “subject to a circuit split” and “wish to preserve this issue for appeal.” (Opposition to MTD at 43 n. 8 (citing to Nat'l Org. For Women, Inc. v. Scheidler, 267 F.3d 687, 695 (7th Cir. 2001), rev'd on other grounds, 537 U.S. 393, 123 S.Ct. 1057, 154 L.Ed.2d 991 (2003))). In Nat'l Org. For Women, Inc. v. Scheidler, the Seventh Circuit expressly rejected the Ninth Circuit's decision in Religious Technology Center v. Wollerscheim and instead found that “the text of the RICO statute, understood in the proper light, itself authorizes private parties to seek injunctive relief.” Nat'l Org. For Women, Inc. v. Scheidler, 267 F.3d at 695. Because Ninth Circuit decisions are binding as precedent for the Central District of California, the Court agrees with Defendants that, under current law, Plaintiffs are precluded from obtaining injunctive relief under RICO. Plaintiffs’ inability to obtain injunctive relief under RICO, however, does not bar Plaintiffs from seeking other forms of relief for Defendants’ alleged RICO violation, including damages, costs, and attorney's fees. (See e.g. FAC ¶ 312).

C. Violation of RICO under 18 U.S.C. § 1962(d)

Defendants next argue that Plaintiffs’ conspiracy to violate RICO claim under § 1962(d) fails because it is based on Plaintiffs’ flawed RICO claim under § 1962(c). The Court has already analyzed and rejected Defendants’ arguments that Plaintiffs’ § 1962(c) claim fails. Accordingly, the Court likewise rejects Defendants’ argument that Plaintiffs inadequately plead a RICO claim under 18 U.S.C. § 1962(d).

D. Violation of California Unfair Competition Law, California Business & Professional Code § 17200 et seq.

California's Unfair Competition Law (the “UCL”) prohibits unfair competition, which it defines as any “unlawful, unfair or fraudulent business act or practice.” Cal. Bus. & Prof. Code § 17200, et seq. “Its coverage is sweeping, embracing anything that can properly be called a business practice and that at the same time is forbidden by law.” Cel-Tech Commc'ns, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal. 4th 163, 180, 83 Cal.Rptr.2d 548, 973 P.2d 527 (1999) (internal quotation marks omitted). Its purpose is “to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.” Kasky v. Nike, Inc., 27 Cal. 4th 939, 949, 119 Cal.Rptr.2d 296, 45 P.3d 243 (2002), as modified (May 22, 2002).

“Rule 9(b)’s heightened pleading standards apply to claims for violations of the CLRA and UCL.” Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009); Fed. R. Civ. P. 9(b) (a party alleging fraud “must state with particularity the circumstances constituting fraud or mistake”). To meet Rule 9(b)’s heightened pleading standards, the allegations “must be specific enough to give defendants notice of the particular misconduct which is alleged to constitute the fraud charged.” Becerra v. Dr Pepper/Seven Up, Inc., 945 F.3d 1225, 1228 (9th Cir. 2019) (quoting Swartz v. KPMG LLP, 476 F.3d at 764). In other words, a plaintiff “must set forth more than the neutral facts necessary to identify the transaction. The plaintiff must set forth what is false or misleading about a statement, and why it is false.” Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003) (internal citation omitted).

i. Injury in Fact

As an initial matter, Defendants argue Plaintiffs do not sufficiently allege standing under the UCL because they do not show they “suffered injury in fact” and “lost money or property” as the result of the unfair practice. Johnson v. GlaxoSmithKline, Inc., 166 Cal. App. 4th 1497, 1513, 83 Cal.Rptr.3d 607 (2008) (citing Cal. Bus. & Prof. Code § 17204). “A consumer who relies on a product label and challenges a misrepresentation contained therein can satisfy the standing requirement of [the UCL] by alleging, as plaintiffs have here, that he or she would not have bought the product but for the misrepresentation.” Kwikset Corp. v. Superior Ct., 51 Cal. 4th 310, 330, 120 Cal.Rptr.3d 741, 246 P.3d 877 (2011). Further, “[t]his economic harm—the loss of real dollars from a consumer's pocket—is the same whether or not a court might objectively view the products as functionally equivalent.” Id. at 329, 120 Cal.Rptr.3d 741, 246 P.3d 877. Here, Plaintiffs allege that if they “had known the truth about the dogs’ provenance and the illegality of their sale, they would not have purchased the dogs or paid the premium prices they did.” (FAC ¶¶ 329, 332). This sufficiently establishes that Plaintiffs suffered an economic harm satisfying the “injury in fact” requirement for standing under the UCL.

ii. “Unlawful” Practice

Defendants next challenge Plaintiffs’ UCL claim on the grounds that Plaintiffs insufficiently allege Defendants engaged in “unlawful,” “unfair” or “fraudulent” conduct. (MTD at 22). Each prong of the UCL provides a separate and distinct theory of liability. S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th 861, 878, 85 Cal.Rptr.2d 301 (1999).

“Unlawful” practices under the UCL encompass “any practices forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made.” Id. at 880, 85 Cal.Rptr.2d 301. Plaintiffs allege that Defendants violated the 2019 Pet Store Law, Cal. Health & Safety Code § 122354.5, by working together to sell dogs through sham “rescue groups” that obtained the dogs from commercial breeders and brokers for compensation in violation of the law. (See FAC ¶¶ 47–50; ¶¶ 101, 120, 172–88, 276 (Bark Adoptions), ¶¶ 37, 110, 205 (Pet Connect Rescue), ¶¶ 119–22 (Rescue Pets Iowa)). Plaintiffs’ allegations include enough specifics to state a claim and place Defendants on notice.

Because the Court finds Plaintiffs adequately allege in the FAC that Defendants engaged in an “unlawful” business practice, it likewise finds Plaintiffs sufficiently plead a UCL violation. The Court need not analyze whether Plaintiffs also adequately allege “unfair” and/or “fraudulent” practices which are alternative routes to establishing a UCL claim.

iii. Aiding and Abetting

Defendants finally argue Plaintiffs’ aiding and abetting allegations are not pleaded with particularity and thus do not demonstrate that UCL liability, based on Animal Kingdom's alleged sale of non-rescue puppies in violation of the 2019 Pet Store Law, extends to the non-pet store Defendants. (See MTD at 26–27; Reply re MTD at 1–6; Surresponse re MTD at 2–3). For the following reasons, the Court disagrees and finds Plaintiffs adequately allege facts that support extending liability for the alleged fraudulent scheme to all Defendants.

“Aiding and abetting a [UCL] violation is actionable and assessed using the same standard for aiding and abetting an intentional tort.” Kilgore v. KeyBank, 712 F. Supp. 2d 939, 949 (N.D. Cal. 2010), vacated on other grounds by 718 F.3d 1052 (9th Cir. 2013). “California has adopted the common law rule that liability may be imposed on one who aids and abets the commission of an intentional tort if the person knows the other's conduct constitutes a breach of a duty and gives substantial assistance or encouragement to the other to so act.” In re First All. Mortg. Co., 471 F.3d 977, 993 (9th Cir. 2006) (cleaned up) (emphasis in original). Further, under Rule 9, “knowledge, and other conditions of a person's mind may be alleged generally.” Fed. R. Civ. P. 9.

In the FAC, Plaintiffs adequately allege that the non-pet store Defendants knew the pet stores’ conduct violated the 2019 Pet Store Law by fraudulently selling commercially bred puppies as fake “rescue” puppies. (See FAC ¶¶ 66–131, 161–68) (detailing how each Defendant obtained, coordinated the placement and delivery of, or transported commercially bred puppies from J.A.K.’s to the California pet stores to be sold in violation of the 2019 Pet Store Law); ¶¶ 94, 110, 113, 130, 191 208 (alleging the individual Defendants “knew” the puppies were sent to California to be sold deceptively as “rescues”).

Further, contrary to Defendants’ arguments that Plaintiffs’ allegations fail Rule 9(b)’s heightened pleading standard, Plaintiffs factually allege with specificity how each of the non-pet store Defendants substantially assisted or encouraged Tipton Defendants in misrepresenting to Plaintiffs that the puppies sold through Animal Kingdom were “rescue” dogs. (See Surresponse re MTD at 1–4 (discussing Taft v. Salinas)). For example, Plaintiffs allege that Jolyn Noethe and Kimberly Dolphin, through J.A.K.’s: obtained puppies from puppy mills for resale to California pet stores as purported “rescues”; devised and coordinated a scheme consisting of “sham rescue organizations, a transport company, and a new payment and documentation system for the purpose of funneling puppy mill dogs disguised as rescues into California” to “defraud consumers and circumvent the [2019 Pet Store Law]”; signed the Certificates of Veterinary Inspection that transmitted the dogs’ fake “rescue” status to the pet stores; and exchanged electronic mail with Rescue Pets Iowa's owner, Russell Kirk, to coordinate the puppy laundering scheme and provided Rescue Pets Iowa money for its involvement. (FAC ¶¶ 17, 66–68, 80–81). Regarding Russell Kirk, Plaintiffs allege that Kirk purportedly organized Rescue Pets Iowa Corp. “to rescue pets” but that its “only purpose was to serve as a conduit through which J.A.K.’s funneled the legal title of commercially bred dogs so that they could be labeled as “rescues” before reaching consumers in California.” (Id. ¶¶ 25–26). Plaintiffs further allege that Kirk operated TBHF LLC which created “documents tracking which dogs from what commercial breeders would be transferred to Defendant Rescue Pets Iowa; documents noting the breed and sex of dogs to enable the California pet stores to select which to order; and documents facilitating the transport of the dogs into California.” (Id. ¶¶ 85, 87). As to Rescue Pets Iowa, Plaintiffs allege, for example, that it “functioned solely as a rescue on paper,” “never took physical custody of an animal it purported to rescue” or “otherwise interact[ed] with the puppies it was ‘rescuing;’ ” received “ownership” of puppies from J.A.K.’s so it could then transfer the puppies under J.A.K.’s direction; and assisted J.A.K.’s with arranging the puppies’ veterinary inspections to transport them as “rescues.” (Id. ¶¶ 72–73, 77, 80). Plaintiffs allege that TBHF LLC, for example, paid for the Certificates of Veterinary Inspection, which Plaintiffs allege TBHF knew conveyed the dogs’ misrepresented “rescue” status to the California pet stores. (Id. ¶ 87). With regard to Pet Connect Rescue, Plaintiffs allege it was not a legitimate rescue organization because it “did not host adoption events or provide any other rescue services,” never took physical custody of the puppies it “received” from J.A.K.’s, and had no physical location. (Id. ¶¶ 108–09 ).

Plaintiffs also allege Pet Connect Rescue only sold puppies as “rescues” to California pet stores once it received legal title to the puppies from J.A.K.’s. (Id. ¶ 110). Plaintiffs also allege, for example, that Subject Enterprise “used vehicles it acquired from J.A.K.’s weeks after incorporating” to transport puppies from puppy mills to J.A.K.’s, from J.A.K.’s to the sham rescue organizations, and from those sham rescues to California pet stores, all under the direction of J.A.K.’s. (Id. ¶¶ 79, 91–93, 95). Plaintiffs allege Subject Enterprise knew the dogs they transported “would be sold as ‘rescues’ to unwitting California consumers”; that on information and belief they “transported the Certificates of Veterinary Inspection required for interstate transport of the puppies” that Rescue Pets Iowa had sent, but J.A.K.’s had signed, to California”; and collected, concealed, and distributed funds among Defendants. (Id. ¶¶ 92–94). These allegations lead the Court to disagree with Defendants that “there are no allegations that the non-pet store defendants facilitated the pet stores’ alleged misrepresentations” made to Plaintiffs. (Surresponse re MTD at 3).

The Court additionally rejects Defendants’ argument that Plaintiffs must allege that each named Defendant made misrepresentations directly to Plaintiffs to be liable for the alleged fraudulent scheme. (See Surresponse re MTD at 5). “[T]here is no absolute requirement that where several defendants are sued in connection with an alleged fraudulent scheme, the complaint must identify false statements made by each and every defendant”; rather, a plaintiff must “identify the role of each defendant in the alleged fraudulent scheme.” Swartz v. KPMG LLP, 476 F.3d 756, 764 (9th Cir. 2007) (cleaned up). Plaintiffs sufficiently allege the different roles that each Defendant played in the alleged fraudulent scheme as required by Rule 9(b) to “inform each defendant separately of the allegations surrounding his alleged participation in the fraud.” Id. at 764–65.

Because the Court finds Plaintiffs adequately allege that Defendants engaged in an “unlawful” practice, Plaintiffs sufficiently plead a UCL violation in the FAC. See S. Bay Chevrolet v. Gen. Motors Acceptance Corp., 72 Cal. App. 4th at 878, 85 Cal.Rptr.2d 301 (observing that each of the UCL's three prongs provides a separate and distinct theory of liability). The Court therefore need not analyze whether Plaintiffs also adequately allege “unfair” and/or “fraudulent” practices which are alternative routes to establishing a UCL claim.

iv. Adequate Remedy at Law

Defendants also assert that Plaintiffs fail to “allege that they lack an adequate remedy at law” and thus fail to maintain a claim under the UCL or CLRA. “While the scope of conduct covered by the UCL is broad, its remedies are limited. A UCL action is equitable in nature; damages cannot be recovered․ We have stated that under the UCL, ‘[p]revailing plaintiffs are generally limited to injunctive relief and restitution.’ ” Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144, 131 Cal.Rptr.2d 29, 63 P.3d 937 (2003) (internal citations omitted). In Plaintiffs’ allegations supporting their UCL claim, they request restitution, an equitable remedy for past harm, and injunctive relief, an equitable remedy to address and prevent future harm. (See FAC ¶ 340) (seeking “restitution for Defendants’ UCL violations, to be accomplished exclusively by a judgment for money that is satisfied from the assets of Defendants by the ordinary procedures of execution” and “injunctive relief for Defendants’ UCL violations”). Defendants are incorrect that Plaintiffs do not allege they lack an adequate remedy at law. Although the Court finds Plaintiffs inadequately allege that they have standing to seek injunctive relief, Plaintiffs specifically allege they lack an adequate remedy at law and thus seek restitution as a remedy for Defendants’ alleged UCL violation: “If the Court considers restitution and disgorgement of profits to be equitable remedies, then Plaintiffs have no adequate remedy at law.” (Id. ¶ 359).

Defendants further assert that Plaintiffs are not entitled to punitive damages under the UCL. “Indeed, it is settled law that punitive damages are not available under section 17200.” In re Wal-Mart Stores, Inc. Wage & Hour Litig., 505 F. Supp. 2d 609, 620 (N.D. Cal. 2007). Whether a plaintiff has stated a claim to survive a Rule 12(b)(6) motion to dismiss, however, “turns not on whether he has asked for the proper remedy but whether he is entitled to any remedy.” Oppenheimer v. Sw. Airlines Co., No. 13-CV-260-IEG BGS, 2013 WL 3149483, at *3 (S.D. Cal. June 17, 2013) (quoting City of Los Angeles v. Lyons, 461 U.S. 95, 131, 103 S.Ct. 1660, 75 L.Ed.2d 675 (1983)). The Court concludes that Plaintiffs’ inability to receive punitive damages under their UCL claim is irrelevant to Defendants’ Motion to Dismiss Plaintiffs’ UCL claim, under which Plaintiffs have adequately alleged they are entitled to seek restitution. Accordingly, the Court rejects Defendants’ challenges to Plaintiffs’ UCL claim.

E. Violations of California Consumer Legal Remedies Act, Cal. Civil Code § 1770 et seq.

The CLRA prohibits “unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods or services to any consumer.” Cal. Civ. Code § 1770(a); Wilson v. Hewlett–Packard Co., 668 F.3d 1136, 1140 (9th Cir. 2012). This prohibition bars representations that “goods ․ have characteristics which they do not have” or “are of a particular standard, quality, or grade ․ if they are of another.” Cal. Civ. Code §§ 1770(a)(5), (7). It likewise bars the omission of any material fact relating to those goods. See LiMandri v. Judkins, 52 Cal. App. 4th 326, 337, 60 Cal.Rptr.2d 539 (1997). “To state a claim under [Section 1770(a)(5) of the CLRA], a plaintiff must allege: (1) a misrepresentation; (2) reliance on that misrepresentation; and (3) damages caused by that misrepresentation.” In re Sony PS3 Other OS Litig., 551 Fed. App'x 916, 920 (9th Cir. 2014). Section 1770(a)(5) includes “both representations, per the explicit text of the statute, as well as omissions.” Mui Ho v. Toyota Motor Corp., 931 F. Supp. 2d 987, 996 (N.D. Cal. 2013).

Defendants contend that Plaintiffs’ CLRA claim fails because Plaintiffs fail to plead actual reliance on Defendants’ misrepresentation. (See MTD at 28). The Court disagrees.

Plaintiffs allege in the FAC that Defendants “falsely represented to consumers that the dogs they sold were from ‘rescue organizations’ ” compliant with the [2019 Pet Store Law], Cal. Health and Safety Code § 122354.5, when, in reality, the dogs were sourced from puppy mills.” (FAC ¶ 344). Plaintiffs further allege the puppies they purchased from Animal Kingdom were displayed in cages with cards identifying the puppies as coming from “rescue” groups and that Animal Kingdom staff represented to Plaintiffs that the puppies they purchased were rescue dogs. (See FAC ¶¶ 11–12). Plaintiffs further demonstrate that they relied on the misrepresentation by alleging that Carey and Latzer would not have purchased the puppies had they known they were not legitimate “rescue” dogs. (Id. ¶¶ 11–12, 353). The Court finds these allegations demonstrate that Plaintiffs relied on Defendants’ alleged misrepresentations sufficiently to support a CLRA claim.

Defendants also assert the same argument they raise to challenge Plaintiffs’ UCL claim—that Plaintiffs’ “aiding and abetting” allegations fail the heightened pleading standard of Rule 9(b) as required to extend liability under the CLRA to the non-pet store Defendants because “Plaintiffs group Defendants without particularity.” (MTD at 28). As the Court has ruled regarding Plaintiffs’ UCL claim, Plaintiffs adequately allege facts demonstrating that each of the non-pet store Defendants aided and abetted the California pet store in misrepresenting to California consumers that the puppies they sold were “rescue” dogs. The Court therefore rejects Defendants’ argument that Plaintiffs’ aiding and abetting allegations fall short of the Rule 9(b) pleading standard.

Defendants further assert Plaintiffs fail to allege that Defendants’ alleged misrepresentation resulted in damages. (See MTD at 27). As discussed above, Plaintiffs have plausibly alleged damage to personal property—the puppies they purchased—which they allege they would not have purchased had they known the puppies were not legitimate “rescue” dogs and were instead sourced from puppy mills. Accordingly, the Court denies Defendants’ motion to dismiss Plaintiffs’ CLRA claim.

F. Unjust Enrichment

Defendants argue Plaintiff's unjust enrichment claim fails because it is based on the same alleged fraudulent conduct underlying Plaintiffs’ RICO, UCL, and CLRA claims, which Defendants claim are inadequately pled. (MTD at 29 (citing to FAC ¶ 322)). The Court has found Plaintiffs’ RICO, UCL, and CLRA claims are sufficiently pled to survive Defendants’ 12(b)(6) Motion to Dismiss, and therefore rejects this argument for dismissal of Plaintiff's unjust enrichment claim.

Defendants also argue that Plaintiffs’ unjust enrichment claim must be dismissed to the extent that Plaintiffs seek nonrestitutionary disgorgement because nonrestitutionary disgorgement is not a permitted remedy under the UCL or CLRA. (MTD at 28–29 (citing to Samet v. Proctor & Gamble Co., 2019 WL 13167115, at *8 (observing that California courts do not permit nonrestitutionary disgorgement of profits as a remedy under the UCL or the CLRA) and Lanovaz v. Twinings N. Am., Inc., 2015 WL 729705, at *2 (“[A]llowing plaintiffs to recover disgorgement remedies would appear to conflict with the comprehensive consumer protection scheme laid out in the UCL ․ and CLRA.”))).

“When a plaintiff alleges unjust enrichment, a court may ‘construe the cause of action as a quasi-contract claim seeking restitution.’ ” Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015) (quoting Rutherford Holdings, LLC v. Plaza Del Rey, 223 Cal. App. 4th 221, 231, 166 Cal.Rptr.3d 864 (2014)). Several district courts, however, “have specifically held that nonrestitutionary disgorgement is not an available remedy for an unjust enrichment/quasi-contract claim based on the alleged mislabeling of a consumer product.” Bruton v. Gerber Prods. Co., No. 12-CV-02412-LHK, 2018 WL 4181903, at *9 (N.D. Cal. Aug. 31, 2018) (collecting cases); c.f. Lanovaz v. Twinings N. Am., Inc., 2015 WL 729705, at *1–2 (observing that nonrestitutionary disgorgement is a possible remedy under a standalone claim for unjust enrichment only in cases involving alleged breaches of fiduciary duties). Plaintiffs do not cite to any caselaw supporting their position that nonrestitutionary disgorgement is an available remedy for an unjust enrichment claim raised in a consumer case. Therefore, to the extent Plaintiffs’ unjust enrichment claim requests the remedy of nonrestitutionary disgorgement, the Court GRANTS Defendants’ Motion to Dismiss with prejudice.

For all of the foregoing reasons, the Court GRANTS Defendants’ Motion to Dismiss under Rule 12(b)(1) with leave to amend, and DENIES in part and GRANTS in part Defendants’ Motion to Dismiss under Rule 12(b)(6) without leave to amend.

VII. CONCLUSION

For the reasons set forth above, the Court DENIES the Motion to Transfer; DENIES the Motion to Strike; GRANTS in part and DENIES in part Defendants’ Request for Judicial Notice; GRANTS in part and DENIES in part the Supplemental Request for Judicial Notice; DENIES in part and GRANTS in part the Motion to Dismiss under Rule 12(b)(1) with leave to amend; and DENIES in part and GRANTS in part Defendants’ Motion to Dismiss under Rules 12(b)(6) without leave to amend. Plaintiff must file an amended complaint consistent with this Order within twenty-one days of its issuance.

IT IS SO ORDERED.

FOOTNOTES

1.   Three of the sixteen named Defendants in this action have not appeared: Bark Adoptions, Inc., Susan Vaughn, and Ana Diaz (collectively, “Non-Appearing Defendants”).

2.   Though Diaz, Vaughn and Bark Adoptions have not appeared in this case, they have not been dismissed from this action. Cf. In re Fine Paper Antitrust Litig., 685 F.2d 810, 819 (3d Cir. 1982) (affirming a district court's transfer because certain original defendants over whom the transferee court lacked proper venue had already settled by the time the transfer occurred and were thus no longer subject to the action's judgment).

3.   “Adjudicative facts are simply the facts of the particular case” and concern “the immediate parties—who did what, where, when, how and with what motive or intent.” Fed. R. Evid. 201(a), advisory comm. note to 1972 amendments (internal quotation marks omitted). “Legislative facts, on the other hand, are those which have relevance to legal reasoning and the lawmaking process, whether in the formulation of a legal principle or ruling by a judge or court or in the enactment of a legislative body.” Id.

4.   The Volar action was brought against some of the same Defendants named in this case: Bark Adoptions, Ana Diaz, Rescue Pets Iowa Corp., Russel Kirk, and Micada, Inc., dba Animal Kingdom Pet Shop. (See generally Exh. D to RJN).

5.   The Taft plaintiffs list the following defendants who are also involved in this case: Ray Rothman, Alysia Rothman, Pet Connect Rescue, Inc., TBHF, Inc., Russell Kirk. (Exh. G to RJN, at 1–2).

6.   The Court notes that moving forward, the parties need not request that the Court take judicial notice of orders from other cases to cite those orders as persuasive legal authority. See Andersen v. Stability AI Ltd., ––– F. Supp. 3d ––––, ––––, 2024 WL 3823234, at *10 (N.D. Cal. Aug. 12, 2024) (“Notifying [the court] of the existence of opinions from the judges in other cases may be accomplished by a far simpler method, citing them as persuasive authority. Judicial notice is not an appropriate method to suggest that [the court] should follow the analysis of other courts addressing different cases with different facts.”)

7.   In pertinent part, 18 U.S.C. § 1956(a)(1) provides:Whoever, knowing that the property involved in a financial transaction represents the proceeds of some form of unlawful activity, conducts or attempts to conduct such a financial transaction which in fact involves the proceeds of specified unlawful activity—(A)(i) with the intent to promote the carrying on of specified unlawful activity; or․(B) knowing that the transaction is designed in whole or in part—(i) to conceal or disguise the nature, the location, the source, the ownership, or the control of the proceeds of specified unlawful activity; ․․shall be sentenced ․

8.   As the Court has already discussed, Plaintiffs satisfactorily allege the illegal activity of mail and wire fraud under 18 U.S.C. §§ 1341 and 1343.

WESLEY L. HSU, UNITED STATES DISTRICT JUDGE