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Flynn v. Marriott Ownership Resorts, Inc.

United States District Court, D. Hawaii

February 29, 2016

MICHAEL KEVIN FLYNN; MARLA KAY FLYNN; and PATRICK R. FLYNN and MARY KAY FLYNN, Trustees of the Flynn Family Trust, Plaintiffs,
v.
MARRIOTT OWNERSHIP RESORTS, INC., a Delaware corporation; ET AL., Defendants.

ORDER GRANTING IN PART AND DENYING IN PART DEFENDANTS’ MOTION TO DISMISS THE COMPLAINT

LESLIE E. KOBAYASHI UNITED STATES DISTRICT JUDGE.

On December 24, 2015, Defendants Marriott Ownership Resorts, Inc. (“MORI”); Marriott Vacations Worldwide Corporation, doing business as Marriott Vacations Club (“MVC”); Marriott Resorts, Travel Company, Inc., doing business as MVC Exchange Company (“MVC Exchange”); Marriott Resorts Hospitality Corporation (“Marriott Hospitality”); First American Trust, FSB (“the Trustee”); MVC Trust; Kauai Lagoons LLC (“Kauai Lagoons”); and Marriott Kauai Ownership Resorts, Inc., doing business as Marriott Vacation Club International (“MKORI, ” all collectively, “Defendants”), filed their Motion to Dismiss the Complaint (“Motion”). [Dkt. no. 24.] Plaintiffs Michael Kevin Flynn and Marla Kay Flynn; and Plaintiffs Patrick R. Flynn and Mary Kay Flynn, Trustees of the Flynn Family Trust, (all collectively, “Plaintiffs”) filed their memorandum in opposition on January 22, 2016, and Defendants filed their reply on February 5, 2016. [Dkt. nos. 26, 27.] This matter came on for hearing on February 16, 2016. After careful consideration of the Motion, supporting and opposing memoranda, and the arguments of counsel, Defendants’ Motion is HEREBY GRANTED IN PART AND DENIED IN PART for the reasons set forth below.

BACKGROUND

I. The Complaint

Plaintiffs filed their Class Action Complaint (“Complaint”) on October 2, 2015.[1] According to the Complaint, in 2004, Michael and Marla Flynn purchased from MORI “a week ownership interest in an Ocean View Two Bedroom Makai Unit” at Marriott’s Ko Olina Beach Club (“Ko Olina”), and, in 2005, they purchased from MORI “a week ownership interest in an Ocean View Two Bedroom Unit” at Ko Olina. [Complaint at ¶ 19.] In 2013, they purchased from a third party an odd-year week ownership interest at Ko Olina. [Id.] In 2006, they upgraded a week ownership interest at Marriott’s Maui Ocean Club (“Maui Ocean”) to “a Two Bedroom Ocean View Unit” in a newer phase of the resort. In 2007, they purchased from MORI “a Three Bedroom Ocean Front Unit” at the Maui Ocean. [Id. at ¶ 20.]

In 2004, Plaintiffs Patrick R. Flynn and Mary Kay Flynn, Trustees of the Flynn Family Trust (“Patrick and Mary Flynn”), purchased from MORI “a week ownership interest in an Ocean View Two Bedroom Unit” at Ko Olina. In 2006, they purchased from MORI “a week ownership interest in an Ocean View Two Bedroom Unit” at Maui Ocean. In 2007, they purchased “a Platinum season timeshare interest in Marriott’s Newport Coast Villas” (“Newport Coast”). [Id. at ¶ 23.]

According to the Complaint, in 2010, Marriott[2] owned tens of thousands of unsold timeshare interests in various resorts. In part to sell this inventory, Marriott created a points-based timeshare program (“Destination Program” or “Points-Based Program”), in which timeshare owners are allotted points that they use to reserve stays at various Marriott timeshare resorts (“Points Owners”). Marriott transferred its unsold inventory of timeshare interests to the MVC Trust, and the Points Owners buy beneficial interests (“BIs”) in the trust. Plaintiffs allege that the Points-Based Program is radically different from Marriott’s traditional timeshare program (“Weeks-Based Program”), in which the timeshare owners (“Week Owners”) buy weeks during a specific period at a specific resort (“Home Resort”). Marriott has attempted to convince the Week Owners to convert their timeshare interests to BIs, and, if a Week Owner declines, Marriott attempts to sell him points as a supplement to his interest in the Weeks-Based Program. [Id. at ¶¶ 2-3.] Michael and Marla Flynn do not own any interest in the Points-Based Program. [Id. at ¶ 21.] In 2014, during a stay at Newport Coast, Patrick and Mary Flynn purchased from MORI an interest in the Points-Based Program. [Id. at ¶ 24.]

MVC reports that, as of January 2, 2015, it operates fifty-eight properties (“Marriott Timeshare Resorts”) with 12, 866 units, and there are approximately 415, 000 timeshare owners. There are five Hawai`i timeshare resorts (“Hawai`i Marriott Timeshare Resorts”) - including Maui Ocean and Ko Olina - among the fifty-eight. [Id. at ¶ 27.] The Complaint alleges that Marriott Hospitality is a wholly-owned subsidiary of MORI, and it is the managing agent/operator of some of the Marriott Timeshare Resorts, including the Hawai`i Marriott Timeshare Resorts. [Id. at ¶ 33.] MVC Exchange is also a wholly-owned subsidiary of MORI. It “provides exchange and reservation services as the operator of the Marriott Vacation Club Destinations Exchange Program (‘the Exchange Program’).” [Id. at ¶ 31.] The Exchange Program, which was introduced with the Points-Based Program, allows Points Owners to exchange their points-based interests. [Id. at ¶ 61.]

I. Allegations Regarding the Ability to Use Timeshare Units

Plaintiffs argue that: Marriott operates the Weeks-Based Program and the Points-Based Program “in a manner that sacrifices the use right of one set of owners for the betterment of another set”; and this practice “is inequitable and unlawful.” [Id. at ¶ 4.] Plaintiffs argue that Marriott “unfairly gives superior reservation and use rights” to the Points Owners, of whom there is “an exponentially growing number.” [Id. at ¶ 5.] The competition from the Points Owners allegedly prevents the Week Owners - particularly those like Plaintiffs who own multiple weekly interests in premier resorts, such as the Hawai`i Marriott Timeshare Resorts (“Multi-Week Owners”) - from exercising their stay rights. In addition to the increased competition from the Points Owners in general, Marriott allegedly reserves the best units and weeks for the MVC Trust, thereby depriving the Week Owners of the chance to compete fairly for those units and weeks.[3] The Week Owners must compete for the lower quality units and less desirable weeks that remain after the skimming process. [Id.] Plaintiffs argue that Marriott’s practices violate:

(1) [Plaintiffs’] reservation and use rights,
(2) [Plaintiffs’] right to compete on an equitable “first-come, first-served” basis with other owners of weekly timeshare interests, and (3) Marriott’s promise to not compete unfairly with its owners by awarding itself greater reservation rights with respect to its ownership interests.

[Id.] In addition, Plaintiffs argue that Marriott’s practices violate: the statutory prohibition against selling a use week to more than one purchaser, i.e. the “one-to-one use-right to use-night requirement” (“One-to-One Rule”); and the consumer protection laws that prohibit unfair and unlawful conduct. [Id. at ¶ 6.]

Plaintiffs state that, when Marriott sells the BIs in the Points-Based Program, it refers to them as “timeshare estates.” Plaintiffs argue that this misleads the Week Owners into believing that, when they purchase points to supplement their week-based interests, they are purchasing real estate interests. Plaintiffs assert that, when the Week Owners purchase supplemental points, “they become liable for a share of maintenance fees for Marriott’s unsold timeshare interests in all resorts Marriott has included in the MVC Trust.” [Id. at ¶ 7.] Patrick and Mary Flynn pay annual maintenance and enrollment fees for their BIs in the MVC Trust. The amount of the fees in 2015 was approximately $927.50. [Id. at ¶ 24.]

Plaintiffs refer to the declarations of covenants, conditions and restrictions for the Marriott Hawai`i Timeshare Resorts (collectively, “Declarations”) as the governing documents for their timeshare interests. The Declarations are publicly filed with either the State of Hawai`i Office of the Assistant Registrar, Land Court (“Land Court”) or the State of Hawai`i Bureau of Conveyances (“BOC”). [Id. at ¶ 17, Exhs. C-G.[4] The Declarations reserve certain specific rights for MORI, Kauai Lagoons, and MKORI (collectively, “Developer Defendants”). According to Plaintiffs, the Declarations state that “no timeshare owner, including the developer entities, can transfer or mortgage ownership interests in a manner that ‘otherwise affect another Owner’s Ownership Interest, ’ and an Owner can transfer only the Owner’s respective interests.” [Complaint at ¶ 43.] Plaintiffs argue that, “[a]s owners of interests in the Hawaii Timeshare Resorts, absent any specifically reserved rights, MKORI, MORI and Kauai Lagoons are entitled to reserve and have confirmed use periods on the same basis as other owners - the developers have no greater reservation rights than Weeks Owners.” [Id. at ¶ 45.]

According to Plaintiffs, the disclosure statements that they received among their contract documents (“Disclosure Statements”) explain the timeshare program. The Disclosure Statements emphasize that the Week Owners “bargain to compete only with other Weeks Owners ‘on a first come, first served basis’ for accommodations twelve months in advance” - and thirteen months in advance for Multi-Week Owners. [Id. at ¶ 46 & n.17.[5] They also state that “the developer possesses ‘no greater priority with respect to reservation than any other Owner, and the Program Operator will always seek to assign Use Periods on an equitable basis among all Owners, including the Developer.’” [Id. at ¶ 47 & n.18.[6]

Plaintiffs argue that Points Owners are not subject to the restrictions that Week Owners are subject to. According to the MVC website, Points Owners can “‘chose from any location and any size villa, check in on any day they wish and stay as long as they want.’” [Id. at ¶ 66.] In addition, Points Owners with Premier or Premier Plus status[7] have additional benefits, such as booking stays thirteen months in advance, while Week Owners can only book twelve months in advance. [Id. at ¶ 67.] According to the Complaint, Plaintiffs argue that the lack of restrictions on the Points Owners ensures that they are automatically given the best units. [Id. at ¶ 72.]

Plaintiffs allege that, from the inception of the Points-Based Program until April 2015, the only preferred status groups for Points Owners were Premier and Premier Plus, and Marriott limited the number of the total available points that could be owned by each group. However, there are now five status groups - Owner, Select, Executive, Presidential, and Chairman’s Club.[8] Plaintiffs argue that all five groups have greater reservation rights than the Week Owners, and there are no longer any limitations on the number of Points Owners that can belong to each status category. [Id. at ¶¶ 68-69.] Plaintiffs argue that Marriott has “unilateral control of the number of points required to establish such status.” [Id. at ¶ 73.]

According to Plaintiffs, before the creation of the Points-Based Program, their reservation rights were determined by their Home Resorts’ Declarations, and they only competed for units with other Week Owners who owned weeks in similar units at the same Home Resort, during the same period. Multi-Week Owners, such as Michael and Marla Flynn, were entitled to preferential reservation rights. [Id. at ¶ 70.] After the Points-Based Program began, the Week Owners - including the Multi-Week Owners - “began facing increased difficulty in reserving units at their designated times in light of the increasing number of Points Owners competing for reservations of the same categories of units and the advantageous reservation rights given to particularly elite Points Owners.” [Id. at ¶ 71.] Plaintiffs argue, based on information and belief, that Marriott gives the timeshare interests owned by the MVC Trust an unfair reservation preference to ensure the success of the Points-Based Program. Marriott allegedly does this by giving the MVC Trust greater reservation priority and by skimming the best units during the best time periods. [Id. at ¶ 74.]

Plaintiffs argue that Marriott’s practices have “substantially impaired the reservation rights of Plaintiffs . . . by providing Points Owners with rights to reserve units in the Marriott Hawaii Timeshare Resorts that are better than the rights of Plaintiffs.” [Id. at ¶ 73.] Plaintiffs argue that their inability to reserve desirable units and time periods also impairs the trading value of their weeks when they decide either not to use their weeks during a particular year or if they decide they want to try to exchange their weeks at their Home Resorts for weeks at different Marriott Timeshare Resorts. [Id. at ¶ 84.] Plaintiffs also argue that Marriott’s practices violate the Declarations and other contract documents. [Id. at ¶¶ 75-77.]

B. Allegations Regarding the Sale of Points

Plaintiffs allege that, since the creation of the Points-Based Program, Marriott has primarily promoted and marketed the program though sales centers at the Marriott Timeshare Resorts, including the Hawai`i Marriott Timeshare Resorts. [Id. at ¶ 79.] The Week Owners are the primary target of this sales approach. [Id. at ¶ 81.] Plaintiffs allege that, to induce the Week Owners to buy interests in the Points-Based Program, Marriott “specifically and falsely represents in sales presentations that [] beneficial interests in the MVC Trust constitute real estate, ” and it “deliberately and actively devalues the traditional week ownership interests and frustrates Weeks Owners’ abilities to utilize their Use Weeks.” [Id. at ¶ 82.] According to Plaintiffs, Marriott does this by highlighting the advantages of the Points-Based Program compared to the Weeks-Based Program. [Id. at ¶ 83.]

If a Week Owner is unwilling to exchange his interest for a points-based interest, Marriott’s sales representatives tell him that the points-based interests, inter alia: “constitute real property, just as are their weekly timeshare interests; will restore and enhance the trading power and competitive value of their devalued weekly timeshare interests; will allow them to extend their stay; [and] will allow them to upgrade their units.” [Id. at ¶ 85.] Plaintiffs state that Marriott’s sales representative at Newport Coast made these representations to Patrick and Mary Flynn when they purchased 1, 500 points in 2014 “to buttress and protect the value of their weekly timeshare interest.” [Id. at ¶ 87.] Plaintiffs argue that this is the only reason a Week Owner would buy that number of points, which has no independent value and is not real estate. According to Plaintiffs, the maintenance fees that Patrick and Mary Flynn must pay in connection with their 1, 500 points are exorbitant. [Id. at ¶¶ 88-91.]

“By the end of 2013, almost 134, 000 weeks-based owners had enrolled over 233, 000 weeks in the points program, and of these owners who enrolled weeks with one of Marriott’s sales executives, approximately 45 percent also purchased points.” [Id. at ¶ 86 & n.25 (citing Marriott Vacations Worldwide Corp., Annual Report (Form 10-K) (February 27, 2014)).] Plaintiffs argue that Marriott is unjustly enriched by the maintenance fees the Points Owners pay because they reduce the amount of maintenance fees that Marriott must pay for all of the unsold timeshare units throughout the Marriott system which are held in the MVC Trust. [Id. at ¶ 92.]

C. Claims and Relief

Plaintiffs allege the following claims: breach of contract against MVC, MVC Exchange, MORI, MKORI, Kauai Lagoons, and Marriott Hospitality (“Count I”); breach of the implied covenant of good faith and fair dealing against MVC, MVC Exchange, MORI, MKORI, Kauai Lagoons, and Marriott Hospitality (“Count II”); a claim for violations of Hawai`i consumer protection statutes against all Defendants (“Count III”); a claim for violation of the Hawai`i timeshare statutes, Haw. Rev. Stat. § 514E-1, et seq., against the Developer Defendants (“Count IV”); and unfair and deceptive acts and practices (“UDAP”), in violation of Haw. Rev. Stat. Chapters 480 and 514E, against the Developer Defendants (“Count V”).

As to all counts, Plaintiffs pray for attorneys’ fees, costs, and prejudgment interest. [Id. at pg. 56, ¶ A.] As to Counts I and II, Plaintiffs pray for: compensatory, general, and special damages; and any other appropriate relief, including an injunction as to Count I to force Marriott to modify the reservation procedures. [Id. at pg. 57, ¶¶ C-D.] As to Count III, Plaintiffs pray for: actual, compensatory, treble, and punitive damages; an injunction requiring an independent, annual audit of the points and weeks timeshare inventories; an injunction requiring Marriott to create a mechanism which ensures that Plaintiffs and other Week Owners have priority in reserving units at their Home Resort as provided in the timeshare agreements; and any other appropriate relief. [Id. at pgs. 57-58, ¶ E.] As to Count IV, Plaintiffs pray for: actual and special damages; and any other appropriate relief. [Id. at pg. 58, ¶ F.] As to Count V, Plaintiffs pray for: statutory, actual, and special damages pursuant to Chapter 514E; actual, compensatory, treble and punitive damages, and injunctive relief pursuant to Chapter 480; and any other appropriate relief. [Id. at ¶ G.] In addition, Patrick and Mary Flynn pray for rescission of the points purchase contract. [Id. at pg. 57, ¶ B.]

In the instant Motion, Defendants argue that: Plaintiffs’ claims under Haw. Rev. Stat. Chapters 480, 481A, and 514E are time-barred; Plaintiffs lack standing to bring Chapter 480 UDAP claims because they are not “consumers”; each count fails to state a claim upon which relief can be granted; and, to the extent that any of Plaintiffs’ claims remain, the only proper defendant is MORI.

DISCUSSION

I. Defendants’ Reply

At the outset, this Court notes that Defendants did not timely file their reply. Based on the February 16, 2016 hearing date, Defendants’ reply was due by February 2, 2016. See Local Rule LR7.4. When Defendants filed their reply on February 5, 2016, it was three days late, and they did not obtain an extension of the deadline from this Court.

Although this Court has the discretion to disregard or strike Defendants’ reply, see id. (“Any opposition or reply that is untimely filed may be disregarded by the court or stricken from the record.”), it declines to do so because there is no indication that Plaintiffs were prejudiced as a result of the late filing of the reply. However, this Court CAUTIONS Defendants that the filing of late memoranda or other documents in the future may result in sanctions, including, inter alia, striking the untimely filing.

This Court now turns to the merits of the Motion.

II. Counts III and V - Plaintiffs’ Statutory Claims

A. Whether Plaintiffs’ Statutory Claims are Time-Barred

1. Which Limitations Period Applies

Count III alleges that all Defendants violated Hawaii’s consumer protection laws, in particular, Haw. Rev. Stat. § 480-1 through 480-24, and Haw. Rev. Stat. § 481A-3(5), (7), (9), (10), and (12). [Complaint at ¶ 138.] Count V alleges a UDAP claim in violation of Chapters 480 and 514E. [Id. at pg. 55.] Section 480-24(a) states:

Any action to enforce a cause of action arising under this chapter shall be barred unless commenced within four years after the cause of action accrues, except as otherwise provided in subsection (b) and section 480-22. For the purpose of this section, a cause of action for a continuing violation is deemed to accrue at any time during the period of the violation.

Plaintiffs argue that, because neither Chapter 481A nor Chapter 514E has a specific statute of limitations, the six-year catchall limitations period in Haw. Rev. Stat. § 657-1(4) applies.[9] [Mem. in Opp. at 8.] This Court disagrees.

First, even though Count III is based on both Chapter 480 and Chapter 481A, the entire claim is subject to the four-year statute of limitations in § 480-24(a). See, e.g., Martin v. GMAC Mortg. Corp., Civil No. 11-00118 LEK-BMK, 2011 WL 6002617, at *10 (D. Hawai`i Nov. 30, 2011) (concluding that a claim alleging violations of Haw. Rev. Stat. § 480-2(a), Haw. Rev. Stat. § 481A-3, and/or Haw. Rev. Stat. Chapter 454M was barred by the statute of limitations in § 480-24(a)).

Second, although Count V is based on both Chapter 480 and Chapter 514E, an examination of the allegations in Count V reveals that the nature of the claim is ultimately a Chapter 480 UDAP claim. See Au v. Au, 63 Haw. 210, 214, 626 P.2d 173, 177 (1981) (“The proper standard to determine the relevant limitations period is the nature of the claim or right, not the form of the pleading. The nature of the right or claim is determined from the allegations contained in the pleadings.” (citations omitted)). The allegations in Count V are based upon the language in Haw. Rev. Stat. § 514E-11, titled “Prohibited practices, ” and § Haw. Rev. Stat. § 514E-11.1, titled “Deceptive trade practices.” Compare Complaint at ¶ 151 with Haw. Rev. Stat. § 514E-11(4), (6), and Haw. Rev. Stat. § 514E-11.1(8), (10), (11).

Section 514E-11 states: “Any violation of this section shall also constitute an unlawful or deceptive practice within the meaning of section 480-2, ” and the practices listed in § 514E-11.1 “constitute an unfair or deceptive practice, within the meaning of chapter 480.” Plaintiffs allege that, “[a]s a result of Defendants’ unfair and deceptive practices described herein, the Plaintiffs . . . have suffered damages, including but not limited to loss of property and loss of money.” [Complaint at ¶ 152 (emphasis added).] This Court therefore FINDS that the nature of the claim or right alleged in Count V is a Chapter 480 UDAP claim.

Thus, this Court CONCLUDES that the four-year limitations period in § 480-24(a) applies to all claims in Count III and Count V.

2. When Did the Limitations Period Begin to Run

As to when the limitations period begins to run for a UDAP claim, this Court has stated that the period “starts to run upon the occurrence of the defendant’s alleged violation.” Lowther v. U.S. Bank N.A., 971 F.Supp.2d 989, 1008 (D. Hawai`i 2013) (citations, internal quotation marks and brackets omitted). In Lowther, this Court rejected the plaintiff’s argument that the limitations period did not start to run until his injury occurred. Id. Thus, this Court concluded that, “[i]n light of the four-year limitations period under Haw. Rev. Stat. § 480-24(a), [Lowther’s UDAP claim] is time-barred unless the Complaint alleges sufficient facts to support a finding of a ‘continuing violation, ’ or some reason that the statute of limitations may be tolled.” Id. at 1008-09.

In the instant case, Plaintiffs’ Complaint does not include any allegations that would support either equitable tolling or tolling based on the circumstances described in § 480-24(b). This Court also notes that Plaintiffs did not argue in response to the Motion that tolling applies. Plaintiffs contend that the their statutory claims are timely under the continuing violation doctrine. In Lowther, this Court stated:

In Au [v. Republic State Mortgage Co., Civil No. 11-00251 JMS/KSC, 2013 WL 1339738, at *13 n.4 (D. Hawai`i Mar. 29, 2013)], with respect to the “continuing violation” theory, this district court cited Joseph v. J.J. Mac Intyre Cos., LLC, 281 F.Supp.2d 1156 (N.D. Cal. 2003). Au, 2013 WL 1339738, at *13 n.4. In Joseph, the court applied the continuing violation doctrine to the plaintiff’s claim under the federal Fair Debt Collection Practices Act (“FDCPA”), 15 U.S.C. § 1692. The plaintiff’s FDCPA claim alleged that, in attempts to collect on the plaintiff’s debt, the defendant used an automated dialing system with a pre-recorded voice to make repeated calls to the defendant, some on [sic] which occurred within the limitations period, and some of which preceded it. Joseph, 281 F.Supp.2d at 1158-59. The court stated that “[t]he key is whether the conduct complaint of constitutes a continuing pattern and course of conduct as opposed to unrelated discrete acts.” Id. The court focused on the pattern of the defendant’s harassing conduct, and found a continuing violation because “claims of a pattern of debtor harassment consisting of a series of calls cannot be said to occur on any particular day.” Id. at 1161 (internal quotations marks omitted) (quoting Nat’l R.R. Passenger Corp. v. Morgan, 536 U.S. 101, 115, 122 S.Ct. 2061, 2073, 153 L.Ed.2d 106 (2002)). In other words, “[i]t occurs over a series of days or perhaps years and, in direct contrast to discrete acts, a single act of harassment may not be actionable on its own terms.” Morgan, 536 U.S. at 115, 122 S.Ct. at 2073. . . .

Id. at 1009 (some alterations in Lowther).

First, to the extent that Counts III and V assert claims based upon allegedly improper practices that occurred in connection with Patrick and Mary Flynn’s purchase of their shares in the Points-Based Program in 2014, Plaintiffs brought those claims within the four-year limitations period. Those portions of Counts III and V are timely, regardless of whether or not the continuing violation doctrine applies. To the extent that the Motion asks this Court to dismiss as untimely the portions of Counts III and V related to Patrick and Mary Flynn’s interest in the Points-Based Program, the Motion is DENIED.

The remaining portions of Counts III and V arise from Plaintiffs’ ability to use their floating interests in the Weeks-Based Program at the Hawai`i Marriott Timeshare Resorts.[10] Based on the allegations in the Complaint, this Court FINDS that Plaintiffs’ alleged injuries arise from the implementation of the Points-Based Program, which occurred in 2010. [Complaint at ¶ 2.] Plaintiffs have alleged a discrete act, the effect of which Plaintiffs continue to experience, not a continuing pattern and course of conduct. This Court therefore CONCLUDES that: 1) the continuing violation doctrine does not apply; and 2) the portions of Counts III and V arising from Plaintiffs’ ability to use their floating interests in the Weeks-Based Program are time-barred because Plaintiffs filed their Complaint more than four years after the implementation of the Points-Based Program. Thus, those portions of Counts III and V fail to state a claim upon which relief can be granted. See Fed.R.Civ.P. 12(b)(6). This Court GRANTS the Motion, to the extent that those portions of Counts III and V are DISMISSED.

The Ninth Circuit has stated that: “As a general rule, dismissal without leave to amend is improper unless it is clear . . . that the complaint could not be saved by any amendment.” Sonoma Cty. Ass’n of Retired Emps. v. Sonoma Cty., 708 F.3d 1109, 1117-18 (9th Cir. 2013) (citation, internal quotation marks, and brackets omitted). This Court CONCLUDES that it is arguably possible to cure by amendment the defects in the portions of Counts III and V that accrued within the limitations period. Plaintiffs may be able to amend their Complaint to identify other discrete acts - which occurred within four years prior to the filing of the Complaint - that allegedly caused Plaintiffs’ damages. See, e.g., Complaint at ¶¶ 68-69 (discussing the introduction of additional categories of Points Owners in April 2015).

In addition, this Court must consider whether it would be possible for Plaintiffs to cure the defects in the portions of Counts III and V based on the implementation of the Points-Based Program by adding allegations that would justify tolling the statute of limitations. As previously noted, there are currently no allegations in the Complaint addressing tolling, and Plaintiffs did not argue that hearing on the Motion that they could amend the Complaint to assert a basis for tolling. Based on the existing record, it is difficult for this Court to see how Plaintiffs could amend their Complaint to allege a basis for either equitable or statutory tolling. However, case law does not allow this Court to dismiss a claim with prejudice because there is a low likelihood that the plaintiff will be able to cure the defects by amendment. To justify dismissal with prejudice, this Court must conlude that the claim could not be saved by any amendment. Viewing the Complaint with a jaundiced eye, this Court cannot say that the portions of Counts III and V based on the implementation of the Points-Based Program could not be saved by any amendment. To the extent that this Court has dismissed these portions of Counts III and V as time-barred, it is arguably possible for Plaintiffs to cure those defects by amendment.

B. Plaintiffs’ Standing to Pursue Their Statutory Claims

1. Weeks-Based Chapter 480 Violations

Defendants next argue that Plaintiffs do not have standing to pursue claims alleging Chapter 480 violations related to their interests in the Weeks-Based Program because Plaintiffs are not “consumers.” Haw. Rev. Stat. § 480-13(b) states, in pertinent part:

Any consumer who is injured by any unfair or deceptive act or practice forbidden or declared unlawful by section 480-2:

(1) May sue for damages sustained by the consumer . . .; and
(2) May bring proceedings to enjoin the unlawful practices . . . .

(Emphasis added.) In addition, Haw. Rev. Stat. § 480-2(d)states: “No person other than a consumer, the attorney general or the director of the office of consumer protection may bring an action based upon unfair or deceptive acts or practices declared unlawful by this section.” (Emphasis added.) Thus, a plaintiff who is not a “consumer” lacks standing to bring a Chapter 480 UDAP claim.[11]See, e.g., Libert ...


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