RONALD M. WHYTE, District Judge.
Following this court's August 6, 2015 order granting defendant P.F. Chang's China Bistro, Inc.'s motion to dismiss, Dkt. No. 23, on August 28, 2015, plaintiff Anna Marie Phillips filed a First Amended Class Action Complaint, Dkt. No. 25 ("FAC"), alleging under California law that defendant discriminated against her and other guests with a gluten intolerance. Before the court is P.F. Chang's motion to dismiss the FAC, Dkt. No. 26.
Plaintiff's First Amended Complaint alleges that P.F. Chang's discriminated against her and other guests with celiac disease or a gluten allergy or intolerance by charging $1.00 more for some gluten-free menu items than for comparable non-gluten-free menu items. Dkt. No. 25 ("FAC") ¶¶ 17-27. Plaintiff claims that P.F. Chang's adds the additional charge to gluten-free items despite the fact that the difference in cost it incurs between providing regular menu items and their gluten-free counterparts is negligible. Id. ¶ 22. P.F. Chang's allegedly accommodates customers' other dietary requests at no additional charge. Id. ¶ 23. Plaintiff proposes to represent a class of "[a]ll persons who (1) have been diagnosed with celiac disease, or an intolerance or allergy to gluten, and (2) who purchased items from P.F. Chang's gluten-free menu in California within four years prior to the filing of the Complaint and continuing to the present." Id. ¶ 28. Plaintiff alleges that she suffers from celiac disease and "must eat a diet of foods not containing gluten and that have not been exposed to gluten" and therefore must order from the gluten-free menu in order to eat at P.F. Chang's. Id. ¶ 10.
Plaintiff alleges that charging an additional $1.00 for items on the gluten-free menu constitutes discrimination under California's Unruh Civil Rights Act (Cal. Civ. Code § 51 et seq.) ("Unruh Act") and the Disabled Persons Act (Cal. Civ. Code § 54 et seq.) ("DPA"). Plaintiff further alleges violation of California's Unfair Competition Law (Cal. Bus. & Prof. Code § 17200 et seq.) ("UCL") and makes a claim for "restitution based on quasi-contract/unjust enrichment." Plaintiff seeks damages, injunctive relief, and an award of attorney's fees.
Under Federal Rule of Civil Procedure 12(b)(6), a party may move to dismiss a complaint for failure to state a claim upon which relief can be granted. Such a motion tests the legal sufficiency of a complaint. Navarro v. Block, 250 F.3d 729, 732 (9th Cir. 2001). In considering whether the complaint is sufficient, the court must accept as true all of the factual allegations contained in the complaint. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). However, the court need not accept as true "allegations that contradict matters properly subject to judicial notice or by exhibit" or "allegations that are merely conclusory, unwarranted deductions of fact, or unreasonable inferences." In re Gilead Scis. Secs. Litig., 536 F.3d 1049, 1055 (9th Cir. 2008) (citation omitted). While a complaint need not contain detailed factual allegations, it "must contain sufficient factual matter, accepted as true, to `state a claim to relief that is plausible on its face.'" Iqbal, 556 U.S. at 678 (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)). "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. The plausibility standard is not akin to a `probability requirement,' but it asks for more than a sheer possibility that a defendant has acted unlawfully." Iqbal, 556 U.S. at 678 (internal citation omitted).
As in her initial complaint, plaintiff's first claim is brought under California's Unruh Civil Rights Act (Cal. Civil Code § 51 et seq.) and is based upon two theories: (1) intentional discrimination and (2) a violation of the Americans with Disabilities Act ("ADA"), which constitutes a violation of the Unruh Act. See Cal. Civ. Code § 51(f).
The Unruh Act provides that: "All persons within the jurisdiction of this state are free and equal, and no matter what their sex, race, color, religion, ancestry, national origin, disability, medical condition, genetic information, marital status, or sexual orientation are entitled to the full and equal accommodations, advantages, facilities, privileges, or services in all business establishments of every kind whatsoever." Cal. Civ. Code § 51(b). It further provides that a violation of the right of any individual under the ADA constitutes a violation of the Unruh Act. Cal. Civ. Code § 51(f).
A threshold issue to plaintiff's claims is whether plaintiff, or anyone who suffers from celiac disease or has been diagnosed with an intolerance or allergy to gluten, has a "disability" or "medical condition" as defined under the Unruh Act. Both terms are specifically defined in California Government Code § 12926, to which the Unruh Act refers.
The definition of a "disability" under the Unruh Act is:
See Cal. Civ. Code § 51(e)(1); Cal. Gov't Code § 12926(m) (emphasis added).
The statute defines "medical condition" as "[a]ny health impairment related to or associated with a diagnosis of cancer or a record or history of cancer" or "genetic characteristics." Cal. Gov't Code § 12926(i) (emphasis added). The statute further clarifies:
Cal. Gov't Code § 12926(i)(2) (emphasis added).
Defendant argues that the FAC has again failed to allege facts that plausibly suggest that plaintiff's celiac disease constitutes a "disability" under the Unruh Act or DPA or a "medical condition" under the Unruh Act. Dkt. No. 26 at 17-21.
The FAC adds detail to plaintiff's previous allegations regarding the symptoms and effects of celiac disease. See FAC ¶¶ 14-16. Plaintiff alleges that she "has been diagnosed with celiac disease and must eat a diet of foods not containing gluten and that have not been exposed to gluten." FAC ¶ 10. Plaintiff further alleges that she "will suffer adverse health consequences if she ingests gluten, including but not limited to abdominal pain and cramping, diarrhea, bloating, impaired motor skills, vomiting, nausea, headaches, pins and needles, and fatigue." Id. Plaintiff states that she "has to pay careful attention to the foods she eats and cannot eat at some restaurants at all because of the risk of cross-contamination." Id. The FAC alleges:
Id. Plaintiff further alleges that celiac disease "is associated with an increased risk of developing cancer, including intestinal lymphoma," id. ¶ 15, and "is an inheritable and hence genetic characteristic." Id. ¶ 16.
A few cases have held that an individual with a severe food allergy does not have a disability because he or she can avoid the consequences of ingestion of the offending food by merely avoiding it. Thus, according to these cases, the allergy has little effect on a major life activity.
Neither party has cited, and the court has not found, any case specifically discussing whether celiac disease constitutes a disability under the ADA or Unruh Act. However, accepting the additional detail in the FAC about the consequences of ingesting or being exposed to gluten, which plaintiff must guard against, plaintiff has pled sufficient facts to support her claim that she has a disability that impacts a major life activity. The court notes that on a more complete factual record, the court might reach a different conclusion.
The plaintiff has also now pled sufficient facts to state a claim that celiac disease meets the definition of a "medical condition" under the Unruh Act. Plaintiff now alleges that "[c]eliac disease is an inheritable and hence genetic characteristic." FAC ¶ 16. Defendant argues that plaintiff "must allege that she actually inherited characteristics known to cause disease" under the second prong of the "medical condition" definition. Dkt. No. 26 at 21. Defendant cites no authority in support of its argument, and defendant's position appears to call for more than the statute requires. Accordingly, plaintiff has plausibly alleged that her celiac disease is an "inherited characteristic[]" and "known to be a cause of a disease or disorder." Cal. Gov't Code §12926(i)(2).
Although plaintiff may have a protected disability or medical condition, to prevail on her claim of discrimination based on a surcharge, plaintiff must show that defendant denied full and equal accommodations to patrons such as plaintiff who have celiac disease. Defendant argues that plaintiff cannot do so because at defendant's restaurants, "[a]ll guests pay the same price for a gluten-free menu item, whether or not the particular guest has celiac disease." Dkt. No. 26 at 6.
As the court's prior order explained, plaintiff's theory of discrimination is that P.F. Chang's alters its menu items for free for certain customers, but not for persons suffering from celiac disease; therefore, P.F. Chang's does not provide "full and equal" accommodations or services to those suffering from celiac disease. Dkt. No. 29 at 3-4. Specifically, plaintiff alleges, among other things, that:
Id. at 4 (citing FAC ¶¶ 3-6, 12, 17-19, 22). In contrast to the way defendant handles requested accommodations for celiac disease, "P.F. Chang's does not impose a surcharge for making dietary accommodations to its regular menu items," such as making items spicier or vegetarian and "ensuring no cross-contamination." FAC ¶ 4. In summary, plaintiff alleges that customers with celiac disease are singled out and charged more for meals that are no different from regular meals for which P.F. Chang's makes adjustments for food preferences for dietary needs without extra charge.
As the court's prior order explained, there is limited authority discussing whether a restaurant, if requested, must accommodate a customer's food allergy by serving a comparable substitute meal that has the offending ingredients omitted, let alone whether the restaurant must provide the substitute meal at the same price. The Ninth Circuit has explained in construing the ADA, which served as a model for the Unruh Act, that:
Arizona ex rel. Goddard v. Harkins Amusement Enterprises, Inc., 603 F.3d 666, 671 (9th Cir. 2010) quoting Weyer v. Twentieth Century Fox Films Corp., 198 F.3d 1104, 1115 (9th Cir. 1990) (emphasis added); see also Doe v. Mutual of Omaha Ins. Co., 179 F.3d 557, 560 (7th Cir. 1999); Ford v. Schering-Plough Corp., 145 F.3d 601, 613 (3d Cir. 1998). Harkins offers some support for defendant's argument that since defendant makes gluten-free meals available to all customers at the same price, it is like the bookstore that offers access to everybody and charges the same price to all customers for their books but does not offer Braille products or at least not at the same price as regular books.
The court's prior order cited an Information Sheet prepared by the Disability Rights Section of the Civil Rights Division of the U.S. Department of Justice for the proposition that a restaurant "does not have to make a fundamental alteration of its operations to accommodate a disability such as alter its menu or provide different foods to meet a patron's particular dietary needs." Dkt. No. 23 at 9 (citing Dkt. No. 13-1 at 67). Defendant submits that the Information Sheet supports defendant's position that P.F. Chang's may offer fundamentally different meus items (gluten-free meals) at the same price to all customers. However, the Information Sheet does suggest that a restaurant may be required to omit or substitute certain ingredients upon request of a patron if the restaurant does this for other customers. That is all that plaintiff contends that P.F. Chang's is required to do to make a menu item gluten free.
Plaintiff has pleaded that making gluten-free meals merely requires substituting for gluten or omitting gluten, which is similar to what P.F. Chang's does for customers who want less spicy or vegetarian dishes. Plaintiff further pleads that offering gluten-free meals involves negligible, if any, additional cost, FAC ¶ 22, but P.F. Chang's has targeted customers with celiac disease and discriminated against them by charging more for gluten-free meals.
Plaintiff's allegations may not be able to be proved. As with plaintiff's prior complaint, plaintiff admits certain facts that seem to contradict plaintiff's assertion that the items on defendant's gluten-free menu are, in essence, the same as those on defendant's regular menu. Gluten-free means that barley, wheat, and rye cannot be used. FAC ¶ 10. Gluten-free meals cannot "have been exposed to gluten." FAC ¶ 2. Thus, according to plaintiff's own allegations, even if two menu items contain the same naturally gluten-free ingredients, they cannot be prepared in the same way. The evidence may establish that gluten-free items are different products for which defendant can charge what it determines is appropriate. That would not be discriminating against a customer with celiac disease because the gluten-free meals are offered to all customers at the same price.
The ultimate question is whether P.F. Chang's, in providing gluten-free meals, is providing different products or whether the price differential with regular meals is a pretext for discrimination against those with celiac disease. Accepting plaintiff's allegations as true, she has stated a plausible claim for relief.
Even assuming that plaintiff has a disability and was discriminated against, plaintiff must also allege that P.F. Chang's intentionally discriminated in order to state a claim for intentional discrimination. To prevail on a disability discrimination claim under the Unruh Civil Rights Act other than one that involves a violation of the ADA, a plaintiff must establish that (1) she was denied the full and equal accommodations, advantages, facilities, privileges, or services in a business establishment; (2) her disability was a motivating factor for this denial; (3) defendants denied plaintiff the full and equal accommodations, advantages, facilities, privileges, or services; and (4) defendants' wrongful conduct caused plaintiff to suffer injury, damage, loss or harm. Wilkins-Jones v. Cnty. of Alameda, 859 F.Supp.2d 1039, 1048 (N.D. Cal. 2012). Intentional discrimination is required for an independent violation of the Unruh Act but not for a violation of the Unruh Act that is based upon a violation of the ADA. See Munson v. Del Taco, Inc., 46 Cal.4th 661, 665 (2009). "[A] plaintiff seeking to establish a case under the Unruh Act must plead and prove intentional discrimination in public accommodations in violation of the terms of the Act." Hankins v. El Torito Rests. Trsts, 63 Cal.App.4th 510, 517-18. "A disparate impact analysis or test does not apply to Unruh Act claims." Koebke v. Bernardo Heights Country Club, 36 Cal.4th 824, 854 (2005). Evidence of disparate impact, however, may be probative of intentional discrimination in some cases. Id.
Plaintiff's central argument is that that the existence of a separate, gluten-free menu is evidence of defendant's discriminatory intent. Dkt. No. 29 at 12. The FAC asserts: "The fact that Defendant created an entirely separate menu of gluten-free items shows that it is targeting a special group of people—persons with celiac disease." FAC ¶ 48. Plaintiff contends that defendant's argument that anyone can order from the gluten-free menu is merely a pretext to discriminate against people with celiac disease. Dkt. No. 29 at 9.
The court's previous order considered and rejected the argument that defendant intentionally discriminates. However, since the court now finds that plaintiff has adequately pled that P.F. Chang's discriminates by charging more for gluten-free meals, one can reasonably infer that P.F. Chang's intentionally discriminates by targeting customers with celiac disease. Accordingly, plaintiff has pled sufficient facts to support a plausible inference that P.F. Chang's intended to discriminate against patrons with celiac disease.
As a separate theory for a violation of the Unruh Act, plaintiff once again alleges a violation of the ADA. A violation of the ADA constitutes a violation of the Unruh Act and does not require a showing of intentional discrimination. Cal. Civ. Code § 51(f); Munson, 46 Cal.4th at 692 (2009). A plaintiff states a cause of action for violation of the ADA where she alleges that (1) she is disabled, (2) defendant is a private entity that owns, leases, or operates a place of public accommodation, and (3) plaintiff was denied public accommodation by the defendant because of her disability. See Dunlap v. Association of Bay Area Governments, 996 F.Supp. 962, 965 (N.D. Cal. 1998). As discussed above, plaintiff's complaint now sufficiently pleads a viable claim that plaintiff suffers from a disability and that she was denied accommodation by the failure of P.F. Chang's to provide her with a gluten-free meal at the same price as a comparable regular meal. Accordingly, the court DENIES the motion to dismiss the Unruh Act claim based on an ADA violation.
Plaintiff's second claim is for a violation of California's Disabled Persons Act, California Civil Code § 54 et seq. The DPA guarantees "[i]ndividuals with disabilities . . . full and equal access, as other members of the general public, to accommodations, advantages, facilities, . . . privileges of all . . . hotels, lodging places, places of public accommodation, amusement, resort, and other places to which the general public is invited[.]" Id. § 54.1(a)(1). A violation of the ADA also constitutes a violation of the DPA. Id. § 54.1(d). Plaintiff's DPA theory is that the surcharge for gluten-free items constitutes a violation of the ADA. FAC ¶ 64-72. Because the court holds that plaintiff has adequately pled an ADA violation, she has also pled a DPA claim.
Accordingly, the court DENIES the motion to dismiss the DPA claim.
Plaintiff's third claim is for a violation of California's Unfair Competition Law. See Cal. Bus. & Prof. Code § 17200 et seq. The UCL prohibits "any unlawful, unfair or fraudulent business act or practice." Id. Under the "unfair" prong, plaintiff alleges that "defendants discriminated against customers with celiac disease and gluten sensitivities by surcharging them for purchasing gluten-free items." FAC ¶ 77. The UCL prohibits unfair business practices, which includes those practices that are "immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers and requires the court to weigh the utility of the defendant's conduct against the gravity of the harm to the alleged victim." Drum v. San Fernando Valley Bar Ass'n., 182 Cal.App.4th 247, 257 (2010).
Plaintiff argues that P.F. Chang's "took advantage of celiac customers, who it knew could not simply forego gluten-free items if they did not wish to incur a surcharge owing to the dire health consequences of consuming gluten." Dkt. No. 29 at 20 (citing FAC ¶¶ 5, 25, 77). Since the court now holds that plaintiff sufficiently alleges discrimination, she adequately states an unfair business practice. The motion to dismiss the unfair business practice claim is DENIED.
Plaintiff's fourth claim is for a violation of California's Unfair Competition Law, California Business & Professions Code § 17200 et seq. Under the "unlawful" prong of the UCL, plaintiff alleges that defendant's surcharge was unlawful because it violated the Unruh Act or the Disabled Persons Act. FAC ¶ 84. As explained above, plaintiff has pleaded a claim for violation of the Unruh Act or Disabled Persons Act. The court therefore DENIES the motion to dismiss the UCL unlawful claim.
Plaintiff's fifth claim is for restitution based on quasi-contract or unjust enrichment. As she did in her initial complaint, plaintiff alleges that "[d]efendant took additional monies from plaintiff and members of the putative class for gluten-free menu items that were substantially identical to non-gluten free menu items except for the presence of gluten based solely on the fact that plaintiff and the putative class cannot consume foods with gluten and had no choice but to pay a surcharge for gluten-free foods." FAC ¶ 87. Plaintiff adds an allegation that "is unjust to provide goods or services to disabled customers at a premium when modifications are provided to non-disabled customers upon request free of charge, as alleged." Id. ¶ 88.
As the court previously explained, the elements of a claim for unjust enrichment or restitution based on quasi-contract are not well settled in California. See, e.g., Astiana v. Hain Celestial Grp., Inc., 783 F.3d 753, 762 (9th Cir. 2015) ("[U]njust enrichment and restitution are not irrelevant in California law. Rather, they describe the theory underlying a claim that a defendant has been unjustly conferred a benefit `through mistake, fraud, coercion, or request.'). Nonetheless, "it is well settled that an action based on an implied-in-fact or quasi-contract cannot lie where there exists between the parties a valid express contract covering the same subject matter." See Lance Camper Mfg. Corp. v. Republic Indem. Co., 44 Cal.App.4th 194, 203 (1996).
P.F. Chang's argues that plaintiff cannot recover under an unjust enrichment theory because plaintiff and defendant entered into a contract regarding the meal. Defendant argues that "[i]n exchange for monetary payment, plaintiff received the gluten-free menu items she ordered." Dkt. No. 26 at 16. The FAC does not dispute the existence of a contract; rather, plaintiff asserts:
FAC ¶ 89.
Plaintiff has not identified any basis for finding that a contract between P.F. Chang's and its customer was procured by fraud or is unenforceable or ineffective for some reason. The FAC merely recites a legal conclusion. "A pleading that offers `labels and conclusions' or `a formulaic recitation of the elements of a cause of action will not do.'" Iqbal, 556 U.S. at 678 (quoting Twombly, 550 U.S. at 555). Thus, to the extent that P.F. Chang's and plaintiff entered into a contract, plaintiff cannot bring an unjust enrichment claim.
However, plaintiff has sufficiently alleged that defendant unjustly retained a benefit from plaintiff. As explained above, plaintiff has pled, and repeatedly argued, that gluten-free foods are not materially different from other foods, in ingredients or difficulty of preparation, yet celiac customers are forced to pay more for gluten-free meals. Accordingly, plaintiff has stated a claim for unjust enrichment, and the court DENIES defendant's motion to dismiss.
