In Sarun v. Dignity Health, ___ Cal.App.4th ___ (Dec. 15, 2014; pub. ord. Jan. 6, 2015), the plaintiff's UCL and CLRA causes of action alleged that the defendant hospital failed to disclose that it charged uninsured patients more for emergency medical care than it charges other patients. The plaintiff himself received emergency medical care for which the defendant billed him over $23,000. By the time he filed suit, however, he had paid only a portion of the balance due, and he had not applied for any available discounts from the defendant. Slip op. at 1-4.
Based on the latter facts, the trial court sustained the defendant's demurrer without leave to amend, holding that the plaintiff had not suffered injury in fact or lost money or property, and therefore lacked standing. Id. at 5-6.
The Court of Appeal (Second Appellate District, Division Seven) disagreed, and reversed.
Citing both Kwikset Corporation v. Superior Court, 51 Cal.4th 310 (2011) and Clayworth v. Pfizer, Inc., 49 Cal.4th 758 (2010), the Court of Appeal explained that the plaintiff had adequately alleged an economic injury based on the defendant's assertion against him of an obligation to pay, and on the transaction costs that wold be required to avoid the injury:
To satisfy Proposition 64 a plaintiff “must now establish a loss or deprivation of money or property sufficient to qualify as injury in fact, i.e., economic injury, and (2) show that that economic injury was the result of, i.e. caused by, the unfair practice or false advertising that is the gravamen of the claim.” (Kwikset, at p. 322.)
“Injury in fact” as used in Proposition 64 has the same meaning as under federal law: “‘[A]n invasion of a legally protected interest which is (a) concrete and particularized, [citations]; and (b) “actual or imminent, not ‘conjectural’ or ‘hypothetical,’” [citations].’” (Kwikset, supra, 51 Cal.4th at p. 322.) Proposition 64, however, imposes the additional requirement that the plaintiff have lost money or property. (Ibid.) Indeed, loss of money or property—that is, “economic injury”— “is itself a classic form of injury in fact.” (Id. at p. 323; see id. at p. 325, fn. 8 [“proof of lost money or property will generally satisfy the element of injury in fact”].) Economic injury may be shown in many ways including a plaintiff “surrender[ing] in a transaction more, or acquir[ing] in a transaction less, than he or she otherwise would have”; “hav[ing] a present or future property interest diminished”; and “be[ing] required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.” (Id. at p. 323.)
.... Although Dignity had not begun any collection activity, the existence of an enforceable obligation, without more, ordinarily constitutes actual injury or injury in fact. (See Hale, supra, 183 Cal.App.4th at pp. 1383-1384; see generally Adams v. Paul (1995) 11 Cal.4th 583, 591, fn. 5 [“actual injury . . . may well precede quantifiable financial costs”].)
.... [And, a]lthough a further discount from Dignity’s “full charges”—even a complete elimination of the charges in excess of what Sarun already had paid—may have been available, the invoice as presented to Sarun (which was before the trial court after it granted Dignity’s unopposed motion for judicial notice) stated a $23,487.90 balance was due. Sarun was not merely “exposed” to the allegedly unlawful pricing system—that is, a list price expressly subject to negotiation like the sticker price on an automobile on a dealer’s lot or a shouted offer at the souk—Dignity’s invoice told him to pay the full remaining sum unless he sought relief. Indeed, the form admissions agreement Sarun had signed after arriving by ambulance at the hospital obligated him to pay Dignity’s full charges unless other discounts applied, but did not obligate him to apply for such discounts, and further provided he would be liable for attorney fees and collection expenses if the matter was referred for collection. As in Hale, upon receipt of this bill Sarun faced at least an imminent invasion of a legally protected interest.
Moreover, the Meyer Court, in discussing its earlier decision in Kagan v. Gibraltar Sav. & Loan Assn. (1984) 35 Cal.3d 582, also explained that incurring transaction costs to avoid the consequences of a deceptive practice “falls within the broad meaning of suffering ‘any damage as a result of the use or employment’ of an unlawful practice, whether or not those transaction costs are cognizable as ‘actual damages.’” (Meyer v. Sprint Spectrum, L.P, supra, 45 Cal.4th at p. 643.) Sarun was faced with just such transaction costs: To avoid the consequences of its allegedly unlawful “full charges” pricing structure for uninsured emergency care patients, Dignity required Sarun to apply for financial assistance, including providing tax return information and other personal financial data. The tangible burden of such an application process is far more than the “identifiable trifle” required to confer injury-in-fact standing.
Slip op. at 7-11 (italics in original; bold added).
Also of interest is the Court of Appeal's recognition that mitigation of damages is not an element of a UCL or CLRA claim, nor is it a prerequisite to standing:
Our conclusion is reinforced by Clayworth v. Pfizer, Inc. (2010) 49 Cal.4th 758 in which the Supreme Court held retail pharmacies had standing to assert UCL claims against pharmaceutical companies that had allegedly engaged in price fixing even though the retail pharmacies were able to pass on any overcharges to their customers. (Id. at p. 788 [pharmacies “lost money: the overcharges they paid”].) The Court rejected the pharmaceutical companies’ argument the pharmacies ultimately “suffered no compensable loss because they were able to mitigate fully any injury by passing on the overcharges,” explaining “[t]he doctrine of mitigation, where it applies, is a limitation on liability for damages, not a basis for extinguishing standing. [Citation.] This is so because mitigation, while it might diminish a party’s recovery, does not diminish the party’s interest in proving it is entitled to recovery.” (Id. at p. 789.) Dignity’s argument Sarun was required to apply for financial assistance to perfect his claim (that is, to allege injury in fact) would be akin to requiring Sarun to mitigate his damages as a precondition to suit. As in Clayworth, that is unnecessary here.
Id. at 11 (bold added).