In Shuts v. Covenant Holdco LLC, ___ Cal.App.4th ___ (Aug. 15, 2012), the Court of Appeal (First Appellate District, Division Four) held that the trial court erred by holding plaintiffs' UCL and CLRA claims barred by the economic abstention doctrine (sometimes referred to as the equitable abstention doctrine).
Notably, the Court held that the economic abstention doctrine does not apply to CLRA claims for damages, which are not equitable in nature:
Having satisfied the 30-day CLRA notice requirement, plaintiffs specifically sought to amend their complaint to seek damages for the alleged CLRA violation. Instead, the trial court dismissed the complaint in its entirety without leave to amend. As we have held, equitable abstention permits the court, under appropriate circumstances, to decline to adjudicate only equitable claims. (See Alvarado, 153 Cal.App.4th at p. 1297 [noting that “courts have the discretion to abstain from employing” remedies that “are equitable in nature”].) For that reason alone, the trial court abused its discretion when it dismissed plaintiffs’ claim under the CLRA without leave to amend based on the equitable abstention doctrine.
Slip op. at 19 (emphasis in original).