Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—C.D. Cal.: Consumer fails to redeem original complaint over Albertsons gift cards, (Mar 17, 2026)

By Justin Marcus Smith, J.D.

The consumer may have been concerned about third party draining of gift card balances, but the second amended complaint did not make that clear, nor did it plead legal implications, if any, for Albertsons.

A California consumer failed to correct previously noted pleading deficiencies in a dispute with the Albertsons grocery chain about the dollar value of gift cards after purchase. The federal district court in Los Angeles dismissed the complaint with prejudice for failure to plead an actionable misrepresentation or omission pursuant to the California Consumer Legal Remedies Act (CLRA). The court dismissed the consumer’s second amended complaint (SAC) with prejudice because it found amendment would be futile (Arroyo v. Albertsons Companies, Inc., No. 2:24-cv-08935-ODW-E (C.D. Cal. Mar. 12, 2026)).

Background. A California consumer brought a putative class action against the Albertsons Companies, Inc. (Albertsons) for allegedly selling gift cards with no monetary value. The court previously dismissed the first amended complaint (FAC) for failure to state a claim.

The second amended complaint (SAC) alleged that Albertsons failed to warn the consumer that the full monetary value he added to the gift cards might not be available on the cards after purchase. The consumer asserted one cause of action for violation of the CLRA.

Albertsons now moved again to dismiss under Fed. R. Civ. P. 12(b)(6) for failure to state a claim. Albertsons argued the consumer again failed to plead an actionable misrepresentation or omission. The court noted the heightened pleading requirements of R. 9(b) would apply because the CLRA claim sounded in fraud.

No misrepresentation. The court found the consumer still failed to plead actionable misrepresentation. The consumer did not mention “how” a misrepresentation, if any, was misleading. The consumer only pleaded that the disputed gift card packaging said cards bought for between $20 and $500 would involve a “5.95 purchase charge.”

The court said it previously explained how that statement was not misleading. In the SAC, the consumer only added that Albertsons failed to warn that the value paid might not be available on the cards after purchase and to check the balance before leaving the store. On the instant motion to dismiss, the court reasoned that even if Albertsons knew the cards might lose value after purchase, that did not change the fact that the gift cards could be bought in any amount between $20 and $500 at the time of purchase.

No omission. As was the case on the last motion to dismiss, the consumer still failed to plead an actionable omission. Under the CLRA, an actionable omission must be contrary to a representation actually made. The only statement the consumer alleged was that cards could be bought for between $20 and $500 with a “5.95 purchase charge.” The consumer did not identify any conflicting omission. The additional allegation now that Albertsons failed to warn the card might lose value after purchase did not cure that deficiency.

The consumer also failed to allege a duty to disclose. The parties did not have any kind of fiduciary or other special relationship. The consumer also failed to create a plausible suggestion that Albertsons had exclusive knowledge of undisclosed material facts. The consumer only added more news articles about third parties draining gift cards after purchase. The news articles precluded an inference that Albertsons had exclusive knowledge about third party draining of gift card balances.

The consumer also failed to allege anything suggesting active concealment. The pleading here was conclusory and speculative. Last, the consumer failed to explain how the desired disclosure about loss of value would have caused a reasonable consumer to behave differently. Nothing in the SAC suggested that third parties drain card values before consumers leave the store such as might call for a warning to check the card balance before leaving the store.

Amendment futile. The court said it did not need to reach Albertson’s additional arguments for dismissal inasmuch as the consumer failed to plead a misrepresentation or omission. The court noted it had previously explained how to cure pleading deficiencies. The court therefore dismissed the complaint with prejudice for futility of amendment.

The Case is No. 2:24-cv-08935-ODW-E.

Judge: Wright, II, O.

Attorneys: Helen I. Zeldes (Schonbrun Seplow Harris Hoffman and Zeldes, LLP) for David Ferrer Arroyo. Sascha V. M Henry (Sheppard, Mullin, Richter and Hampton LLP) for Albertsons Companies, Inc.

Companies: Albertsons Companies, Inc.

Cases: StateUnfairTradePractices Advertising CaliforniaNews