In Sateriale v. R.J. Reynolds Tobacco Co., ___ F.3d ___ (9th Cir. Jul. 13, 2012), the Ninth Circuit affirmed dismissal, for lack of standing, of UCL and CLRA claims based on alleged misrepresentations surrounding R.J. Reynolds' termination of its "Camel Cash" customer rewards program.
Before addressing the UCL and CLRA claims, the court held that plaintiffs' complaint did adequately allege breach of contract and promissory estoppel. Slip op. at 8090-8105.
The opinion's detailed discussion of those claims is quite interesting and brings back many pleasant memories of first-year contracts class. Who could forget that the doctrine of mutuality of obligation, while fully applicable to bilateral contracts, does not apply to unilateral contracts? Id. at 8102. Or that "an enforceable termination clause that gives a promisor an unrestricted power to terminate a contract at any time" renders that contract illusory and unenforceable, at least so long as the contract remains wholly executory? Id. at 8103.
The court then turned to the UCL and CLRA claims:
Because the plaintiffs’ UCL claim sounds in fraud, they are required to prove “actual reliance on the allegedly deceptive or misleading statements,” Kwikset Corp. v. Superior Court, 246 P.3d 877, 888 (Cal. 2011) (quoting In re Tobacco II Cases, 207 P.3d 20, 26 (Cal. 2009)) (internal quotation marks omitted), and that “the misrepresentation was an immediate cause of [their] injury-producing conduct,” In re Tobacco II Cases, 207 P.3d at 39. The complaint does not satisfy these requirements.
In particular, the plaintiffs do not allege reliance. They do not allege that they purchased additional Camel cigarettes in reliance on the October 1 announcement [that the rewards program would terminate six months later]. They also do not allege that they delayed redeeming their saved Camel Cash certificates in reliance on the announcement. Even if they had alleged delay, they do not explain how this delay could have caused their injury: under the allegations of the complaint, RJR ceased accepting C-Notes for redemption as soon as it delivered the October 1 announcement, so delay could not have caused the plaintiffs’ loss. Given the absence of an alleged causal connection between the alleged misrepresentations
and the plaintiffs’ injuries, the district court properly dismissed the UCL claim.
As with the UCL, consumers seeking to recover damages under the CLRA based on a fraud theory must prove “actual reliance on the misrepresentation and harm.” Nelson v. Pearson Ford Co., 112 Cal. Rptr. 3d 607, 638 (Ct. App. 2010); accord Durell v. Sharp Healthcare, 108 Cal. Rptr. 3d 682, 697 (Ct. App. 2010); In re Vioxx Class Cases, 103 Cal. Rptr. 3d 83, 94 (Ct. App. 2009).
The plaintiffs have not satisfied these requirements here ... as we explained in connection with the plaintiffs’ UCL claim. We therefore affirm dismissal of the plaintiffs’ CLRA claim as well.
Slip op. at 8105-06, 8107 (footnote omitted).