Wexler Wallace LLP Defeats Extended Stay’s Motion to Dismiss
On February 8, 2011, the Hon. William B. Shubb of the United States District Court for the Eastern District of the California denied the defendants’ motion to dismiss Plaintiff’s First Amended Class Action Complaint. To view a copy of the opinion, click here.
Representing a significant victory for Plaintiff and the proposed class, the Court held that the Plaintiff alleged a plausible violation of Cal. Civ. Code § 1940.1 where Extended Stay’s “Long-Term Lodging Agreement” requires its occupants to check out and re-register after a 29 day and 20 hour term to deny them status as tenants, which arises after 30 days of occupancy. Section 1940.1 prohibits a person from requiring occupants to move or check out and re-register before the expiration of 30 days occupancy for purposes of preventing those occupants from accessing tenant rights and protections.
The Court also held that Plaintiff properly plead a claim under California’s Unfair Competition Law, Cal. Bus. & Prof. Code § 17200, et seq., alleged “sufficient facts from which to plausibly infer that the parties objectively intended that the [Long-Term Lodging Agreement] constitute a lease” (Order at 14), and that Extended Stay engaged in improper self-help by locking tenants out of their rooms by electronically disabling their door locks after failing to timely pay rent or re-enter into the Long-Term Lodging Agreement.