The UCL Practitioner

McGill v. Citibank re-set for argument in December

The Supreme Court just posted its December argument calendar.  On Wednesday, December 7, 2016 at 1:30 p.m., the Court will hear argument in McGill v. Citibank, No. S224086.  The argument will take place at the Ronald Reagan State Office Building in Los Angeles.

In this case, the Court will consider whether the Federal Arbitration Act, as construed in Concepcion, preempts the Broughton-Cruz rule.  See this blog post for more. 

Complex Court Symposium, November 9, 2016 in Los Angeles

The 2016 Complex Court Symposium, organized by Litigation Section of the Los Angeles County Bar Association, will take place on November 9, 2016 from 3:30 to 6:30 p.m. at the Millenium Biltmore in Los Angeles. 

This looks like a really great event. All of the judges listed below are slated as speakers.  For more information and to register, click here.

Speakers:
Hon. Elihu M. Berle (Los Angeles)
Hon. William D. Claster (Orange County)
Hon. Kenneth R. Freeman (Los Angeles)
Hon. Barry P. Goode (Contra Costa County)
Hon. George Hernandez, Jr. (Alameda)
Hon. William F. Highberger (Los Angeles)
Hon. Curtis E. A. Karnow (San Francisco)
Hon. Peter H. Kirwan (Santa Clara)
Hon. Steven J. Kleifield (Los Angeles)
Hon. John J. Kralik (Los Angeles)
Hon. Carolyn B. Kuhl (Los Angeles)
Hon. Brad Seligman (Alameda)
Hon. Winifred Y. Smith (Alameda)
Hon. Sharon J. Waters (Riverside) 
Hon. Marie Weiner (San Mateo)
Hon. Mary E. Wiss (San Francisco)
Hon. John S. Wiley, Jr. (Los Angeles)

Pending U.S. Supreme Court case of interest: Microsoft Corp. v. Baker

In January, the U.S. Supreme Court granted cert. in Microsoft Corp. v. Baker, No. 15-457.  The case is now fully briefed and awaiting oral argument. 

In Baker v. Microsoft Corp., 797 F.3d 607 (9th Cir. 2015), the district court granted the defendant's motion to strike the class allegations, and the plaintiffs filed a Rule 23(f) petition, which was denied.  Thereafter, the parties stipulated to dismiss the action with prejudice, and the plaintiffs filed an ordinary appeal from the ensuing judgment.  The Ninth Circuit rejected the defendant's argument that the judgment was not appealable:

As this case did not involve a settlement, Berger establishes that “[w]e have jurisdiction under 28 U.S.C. § 1291 because a dismissal of an action with prejudice, even when such dismissal is the product of a stipulation, is a sufficiently adverse—and thus appealable—final decision.”

Id. at 512 (quoting Berger v. Home Depot USA, 741 F.3d 1061 (9th Cir. 2014)) (discussed in this blog post). 

On the merits, the Court reversed the order striking the class allegations, holding that individualized issues of causation did not preclude class certification in a product defect action for breach of express and implied warranty.  Id. at 612-15. 

[I]n this case, although individual factors may affect the timing and extent of the disc scratching, they do not affect whether the Xboxes were sold with a defective disc system. Plaintiffs contend that (1) whether the Xbox is defectively designed and (2) whether such design defect breaches an express or an implied warranty are both issues capable of common proof. We agree that, as in Wolin, these issues are susceptible to proof by generalized evidence and do not require proof of individual causation.

....

Similarly, proof that the allegedly defective disc system caused individual damages is not necessary to determine whether the existence of the alleged design defect breaches Microsoft's express warranty. Rather, plaintiffs' breach of express warranty claim presents a common factual question—is there a defect?—and a common mixed question of law and fact—does that defect breach the express warranty? We conclude, as we did in Wolin, that the district court erred in finding that individual issues of causation predominate over these common questions.

Id. at 613 (citing Wolin v. Jaguar Land Rover N. Am., LLC, 617 F.3d 1168, 1172-74, 1176 (9th Cir. 2010)) (see this blog post). 

In its cert. petition, Microsoft challenged only the appealability ruling.  When the Supreme Court granted cert., it framed the issue as follows: 

Whether a federal court of appeals has jurisdiction under both Article III and 28 U. S. C. §1291 to review an order denying class certification after the named plaintiffs voluntarily dismiss their individual claims with prejudice.

The SCOTUSblog case page, with links to all the briefs, is here.  Nine amicus curiae briefs have been filed, including briefs by Public Justice and Public Citizen, as well as a number of defense-side organizations.

New attorneys' fees opinion: Goglin v. BMW of North America, Inc.

In Goglin v. BMW of North America, Inc., ___ Cal.App.5th ___ (Oct. 21, 2016), the Court of Appeal (Fourth Appellate District, Division One) affirmed an attorneys' fees award under the Song-Beverly Consumer Warranty Act.  (The case also included CLRA claims, but fees were awarded only under the Song-Beverly Act.)  Slip op. at 11-17. 

The part of the opinion I thought most worthy of note involved the defendant's argument that it paid its own lawyers a "much lower" hourly rate than claimed by plaintiff's counsel in the fee motion.  According to the defendant, plaintiff's counsel's rate should be capped at the rate set by defendant's agreement with its lawyers.  The Court of Appeal rejected this argument, holding that defense counsel rates were "not conclusive" and that the trial court need not accept them as evidence of the appropriate hourly rate to be awarded.  Id. at 16-17. 

Instead:

[T]he trial court, who considered all of the evidence before it and observed [plaintiff]'s counsel's lawyering skills firsthand, determined $575 was an appropriate hourly rate.  As the record does not show this determination was clearly wrong, we cannot conclude the trial court abused its discretion in basing its fee award on this hourly rate.

Id. at 17.

Ninth Circuit hands down UCL "unlawful" prong and CLRA decision: Gonzales v. CarMax Auto Superstores, LLC

In Gonzales v. CarMax Auto Superstores, LLC, ___ F.3d ___ (9th Cir. Oct. 20, 2016), the Ninth Circuit considered a UCL "unlawful" prong claim and a CLRA claim predicated on alleged violations of Vehicle Code section 11713.18, which is part of the "Car Buyer's Bill of Rights," enacted in 2005.  That section prohibits a car dealer from describing a used car as "certified" unless the dealer provides the buyer with a "completed inspection report" prior to sale, and expressly makes any violation actionable under both the UCL and the CLRA: 

A violation of this section is actionable under the Consumers Legal Remedies Act (Title 1.5 (commencing with Section 1750) of Part 4 of Division 3 of the Civil Code), the Unfair Competition Law (Chapter 5 (commencing with Section 17200) of Part 2 of Division 7 of the Business and Professions Code), Section 17500 of the Business and Professions Code, or any other applicable state or federal law. The rights and remedies provided by this section are cumulative and shall not be construed as restricting any right or remedy that is otherwise available.

Veh. Code § 11713.18(b).  In other words, it adds an item to the CLRA's laundry list of deceptive conduct. 

The panel reversed the district court's grant of summary judgment in the dealer's favor, and remanded with directions to enter summary judgment for the plaintiff instead.  Slip op. at 9-22.  The opinion delves deeply into the purpose and legislative history of the Car Buyer's Bill of Rights, and is worth a read for anyone handling litigation involving that Act. 

Supreme Court now publishes a "Pending Issues Summary"

Sometime earlier this year, the California Supreme Court started publishing a Pending Issues Summary for civil cases (and one for criminal cases).  This useful document serves as a list of all cases accepted for review and summarizes the issues presented in those cases.

The current civil case list is available at this link. 

Another new opinion on UCL injunctive relief: Robinson v. U-Haul Company

In Robinson v. U-Haul Company, ___ Cal.App.5th ___ (Oct. 18, 2016), the Court of Appeal (First Appellate District, Division Four) affirmed the trial court's issuance of a permanent injunction under the UCL, plus attorneys' fees under the private attorney general doctrine (Code Civ. Proc. § 1021.5).  The injunction required the defendant, U-Haul, to stop attempting "to enforce against any former or current dealers the non-competition covenant in its dealer contracts," which the court had determined was void and unenforceable.  Slip op. at 8.  

On appeal, U-Haul argued that it had voluntarily stopped enforcing the covenant, and absent evidence of a continuing violation, no injunction may issue.  The Court of Appeal disagreed,  noting that "there is no hard-and-fast rule that a party’s discontinuance of illegal behavior makes injunctive relief against him or her unavailable."  Id. at 11 (citing cases).  This is especially true, the Court thought, when "there may be reason to doubt the bona fides of [the defendant's] newly established law-abiding policy" and where the injunction is directed to past recurring misconduct, rather than an "isolated" incident.  Id.  Other circumstances supporting the trial court's exercise of discretion included evidence that the defendant "had acted in knowing violation of the law over a period of many years" and that it "changed its policy only when threatened with an injunction."  Id. at 11-12.  In summary:

As we read [the trial court's] orders and judgment, the injunction was a response in part to U-Haul’s resistance to amending its policies, and its persistence in pursuing its anticompetitive litigation strategy over the years ....  The injunction eliminates a practice that is now shrouded in uncertainty and plagued by a troubling past.  We have no reason to overturn the trial court’s decision to issue an injunction, as it did not result from lack of evidence, legal error, or an abuse of discretion.

Id. at 12 (emphasis in original).

Next, U-Haul argued that the plaintiff lacked Prop. 64 standing, and therefore could not obtain an injunction, because he had not "suffered injury in fact or lost money or property" as a result of any UCL violation.  The Court of Appeal, again, disagreed, pointing out that the plaintiff lost money (in the form of attorneys' fees and costs) when U-Haul sued him to enforce the covenant.   Id. at 14.  The opinion explains:

The alleged unfair business practice in this case was not just the inclusion of the noncompetition covenant in [U-Haul]’s dealer contracts, but the strategic use of litigation and threatened litigation to achieve its anticompetitive purpose. ....  This is not a case where an unscrupulous attorney teamed up with a stick figure plaintiff to shake down a completely unrelated business.  (See fn. 6, ante.)  As one of the victims of [U-Haul]’s anticompetitive business practice, Robinson has standing.

Id.

The opinion goes on to address arguments raised by U-Haul concerning mootness, collateral estoppel, and an order excluding certain trial testimony.  Id. at 14-20.  The final section of the opinion (at pp. 21-26) addresses procedural questions concerning the timing of plaintiff's motion for attorneys' fees. 

One other aspect of this opinion is worthy of note.  The trial court issued, and the Court of Appeal affirmed, a broad-ranging injunction (stop the wrongful conduct, as opposed to stop harming the plaintiff) even though class certification of the UCL claim had been denied.  See slip op. at 6 n.4.  After Prop. 64, some questioned whether such an injunction could be issued without class certification, given this amended language in Business & Professions Code section 17204:

Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 and complies with Section 382 of the Code of Civil Procedure ....

(Emphasis added.)  These two blog posts touch on this issue.  I am not aware of any published opinions squarely addressing the question, but this opinion certainly provides support for such injunctive relief.  The Court of Appeal took pains to observe that the injunction benefited not only other dealers, but also U-Haul's competitors and the rental market in general:

T]he court found the anticompetitive impact of the covenant spread to more than just dealers.  The trial court found the threat to competition extended to the dealers’ customers and to the truck rental market in general.  UHC’s enforcement and threats to enforce the covenant in California negatively affected its competitors by denying them rental outlets for their trucks and hurt the rental market customers by limiting their access to rental trucks and restricting price competition.  For the protection of UHC’s dealers, past dealers and prospective dealers, UHC’s competitors, and the members of the general public who participate in the truck and trailer rental market, an injunction was warranted.

Slip op. at 17.  The Court of Appeal appears to have seen no procedural impediment to the issuance of this injunction under the UCL -- even though the Court was well aware of the concerns that led to the enactment of Prop. 64 in the first place.  See id. at 13 n.6. 

New class arbitration opinion: Ngyuen v. Applied Medical Resources Corp.

In Nguyen v. Applied Medical Resources Corp., ___ Cal.App.5th ___ (Oct. 4, 2016; pub. ord. Oct. 14, 2016), the Court of Appeal (Fourth Appellate District, Division Three) declined to disturb an order compelling arbitration of certain wage and hour claims.  Slip op. at 9-24.

However, applying Sandquist v. Lebo Automotive Inc., 1 Cal.5th 233 (2016), the Court reversed the portion of the order striking the class allegations from the complaint, holding that the arbitrator should decide in the first instance whether the arbitration clause contemplates classwide arbitration.  Slip op. at 24-29.

New UCL opinion considers injunctive relief remedy: Verio Healthcare, Inc. v. Superior Court

In Verio Healthcare, Inc. v. Superior Court, ___ Cal.App.5th ___ (Oct. 12, 2016), the defendants sought a nine-month stay of litigation under Code of Civil Procedure sections 595 and 1054.1, which provide for mandatory continuances of court proceedings if a party is represented by an attorney who is also a member of the California State Assembly -- unless the continuance "would defeat or abridge the other party's right to provisional or pendente lite relief."  Slip op. at 2-3.

The Court of Appeal (Fourth Appellate District, Division Three) held that because the action sought the "provisional remedy" of preliminary injunctive relief under the UCL, the trial court properly declined to issue the requested stay:  

The operative first amended complaint alleges an entitlement to preliminary and permanent injunctive relief as remedies for the alleged trade secret misappropriation and unfair competition under Business and Professions Code section 17200.  In cases such as these, it is common that plaintiffs would invoke the provisional remedy of a preliminary injunction. And as plaintiffs' counsel suggested at oral argument, some discovery may be necessary before filing such a motion. A stay would effectively abridge the right to invoke provisional relief by denying discovery, thereby preventing the filing of a preliminary injunction motion.

Id. at 15 (footnote omitted). 

Public prosecutor obtains preliminary injunction under the UCL: People ex rel. Feuer v. Nestdrop, LLC

In another opinion from earlier this year (March), the Court of Appeal affirmed the trial court's issuance of a preliminary injunction under the UCL, holding that the City of Los Angeles had shown that it was likely to prevail on the merits of its "unlawful" prong claim. People ex rel. Feuer v. Nestdrop, LLC, 245 Cal.App.4th 664 (2016). 

The claim asserted that the defendants had aided and abetted violations of a municipal code provision banning most medical marijuana businesses from operating in Los Angeles (Proposition D).  Id. at 667-71. The defendants' mobile app violated the ordinance, the City argued, by allowing people to order medical marijuana and have it delivered to their homes within city limits.  See id. The opinion's conclusion reads:

The City established a likelihood of proving defendants' Nestdrop app caused, aided, or abetted the violation of Proposition D because, outside of the narrow exception for designated primary caregivers, it prohibits the vehicular delivery of medical marijuana to qualified participants, identification card holders, or primary caregivers in the City. Because the City has demonstrated a likelihood of success on its claim that defendants facilitated a violation of Proposition D, defendants' opposition to the City's unfair competition allegations necessarily fails. Defendants made no showing at all concerning the balance of hardships, much less that the balance tipped sharply in their favor. The trial court was right to enter a preliminary injunction.

Id. at 678.  I mention this case mainly because it demonstrates the power of the UCL in the hands of public prosecutors when an underlying statute (or ordinance) does not expressly provide a civil remedy. 

Court of Appeal construes UCL's "as a result of" standing requirement: Orcilla v. Big Sur, Inc.

This is another case from earlier in the year. 

In Orcilla v. Big Sur, Inc., 244 Cal.App.4th 982 (Feb. 11, 2016), the plaintiffs sued their bank (and other defendants) for wrongful foreclosure, asserting UCL and other claims.  Id. at 990-93.   The bank raised a standing challenge to the UCL claim, arguing that the plaintiffs had not adequately alleged that they "lost money or property as a result of" any wrongdoing by the bank, as required by Prop. 64 (Bus. & Prof. Code § 17204 (emphasis added)).  According to the bank, the plaintiffs lost their home because they defaulted on their loan, not because of anything the bank did later. Id. at 1012-13.

The Court of Appeal disagreed with this supervening-cause-style argument:

Liberally construed, count 12 and the allegations it incorporates allege that the Bank Defendants engaged in an unlawful or unfair business practice by enforcing the underlying loan and the loan modification agreement, both of which were unconscionable. (Shadoan v. World Savings & Loan Assn. (1990) 219 Cal.App.3d 97, 101-102 [“that a contractual provision is unconscionable may be relevant to the question of whether a party who drafted—and seeks to enforce—the provision, has committed an unfair business practice”].) We have already concluded that the complaint adequately alleges that both agreements were unconscionable. With respect to causation, we can reasonably infer from the allegations that the Orcillas would not have lost the Property if the Bank Defendants had not enforced the unconscionable agreements by way of foreclosure proceedings.

Id. at 1013.  Orcilla thus stands for the proposition that for UCL standing purposes, the defendant's conduct must be a cause of the plaintiff's loss, but it need not be the only cause, or even the primary cause.  This is consistent with ordinary principles of causation in other contexts.

UCL preemption opinion from earlier this year: People ex rel. Harris v. Delta Air Lines, Inc.

This is another opinion from earlier in the year (May) that I haven't yet reported on.

In People ex rel. Harris v. Delta Air Lines, Inc., 247 Cal.App.4th 884 (2016), the Attorney General brought a UCL "unlawful" prong action against Delta Air Lines, alleging that Delta's mobile app violated the Online Privacy Protection Act (Cal. Bus. & Prof. Code §§22575-79).  The Court of Appeal (First Appellate District, Division Three) affirmed the trial court's holding that this claim was expressly preempted by the federal Airline Deregulation Act of 1978. 

Of interest is the Court's conclusion that the claim "related to" Delta's air transportation services:  

We also reject the Attorney General's argument that the complaint does not relate to Delta's services. By its complaint, the State seeks to compel Delta to maintain its Fly Delta mobile application in compliance with the OPPA's privacy policy requirements. The Fly Delta mobile application, selected and designed to facilitate access to the airline's services, is a marketing mechanism "appropriate to the furnishing of air transportation services." (Wolens, supra, at p. 228.) As alleged in the complaint, the Fly Delta mobile application, at a minimum, "may be used to check-in online for an airplane flight, view reservations for air travel, rebook cancelled or missed flights, pay for checked baggage, track checked baggage, and access a user's frequent flyer account." Thus, it is clear, beyond cavil, that the complaint does "relate to" Delta's services in that the allegations have a "connection with, or reference to" Delta's services.

Id. at 901.

The UCL and secondary liability: Daniels v. Select Portfolio Services, Inc.

In an opinion handed down in April of this year, the Court of Appeal (Sixth Appellate District) reconfirmed the rule that UCL liability can be predicated on an agency or conspiracy theory.  Daniels v. Select Portfolio Services, Inc., 246 Cal.App.4th 1150, 1188 (2016) (citing People v. JTH Tax, Inc., 212 Cal.App.4th 1219, 1242 (2013); People v. Bestline Products, Inc., 61 Cal.App.3d 879, 918-19 (1976)). 

This blog's discussion of People v. JTH Tax, Inc. is available at this link.  People v. Bestline Products was a little before the blog's time, but see this post for a discussion of more recent decisions on aiding and abetting liability under UCL. 

"Dole Buyers Get Mixed Win In 9th Circ. Natural Label Ruling"

Last week, I was quoted in an article in Competition Law360 (subscription) on the Ninth Circuit's unpublished opinion in Brazil v. Dole Packaged Foods, LLC, 2016 WL 5539863 (9th Cir. Sept. 30, 2016).

The article begins:

Consumers won a major false advertising battle Friday when the Ninth Circuit ruled the label on Dole's "all natural" frozen berry products may be misleading, but the panel's finding that the decertified class hadn't shown it could prove classwide damages greatly limits what the buyers can recover if they ultimately prevail, attorneys say.

As I told the reporter, I think the opinion mistakenly assumes that there are only two ways to measure UCL restitution, which is not the law in California.  Also, the class certification portion of the opinion seems to me inconsistent with Pulaski & Middleman, LLC v. Google, Inc., 802 F.3d 979 (9th Cir. 2015) (discussed in this blog post).  The analysis assumes that every unnamed class member would have to show that they were misled, which is inconsistent with both Pulaski and In re Tobacco II Cases, 46 Cal.4th 298 (2009), which this opinion does not cite (it cites only the more recent Tobacco II opinion on remand, discussed here).  This non-precedential opinion should be limited to its facts.

New UCL class certification opinion: Nicodemus v. Saint Francis Memorial Hospital

In Nicodemus v. Saint Francis Memorial Hospital, ___ Cal.App.5th ___ (Sept. 14, 2016; pub. ord. Oct. 6, 2016), the plaintiff asserted a UCL "unlawful" prong claim based on the defendants' violations of Evidence Code section 1158, which limits the amount a medical provider can charge for producing copies of medical records when requested by an attorney.  The Court of Appeal (First Appellate District, Division Four) reversed the trial court's order denying class certification of this claim. 

The opinion reconfirmed the rule that a class is ascertainable even if it includes some members that might have been uninjured by the defendant's unlawful conduct.  Slip op. at 10-17.  Notably, in so holding, the opinion distinguished Hale v. Sharp Healthcare, 232 Cal.App.4th 50 (2014), in which a class was decertified "after nearly three years of litigation" because "it was indisputably demonstrated that there was simply no way to avoid a complicated individualized inquiry to determine not just eligibility for damages but to prove liability."  Nicodemus, slip op. at 15 (citing Hale, 232 Cal.App.4th at 54, 63-64).  In contrast, if "[t]he potential class members may be readily identified by reference to" the defendant's records, "speculation" that some may not have been harmed "goes to the merits of each class member's recovery" and would be "an inappropriate focus for the ascertainability inquiry."  Id. at 16.  

The opinion also held that "[t]he predominance of common questions requirement is patently satisfied here"  Id. at 18.  After setting forth the relevant law, the Court explained: "The common question here is the application of section 1158 to HealthPort's uniform practices in response to attorney requests for medical records.  The fact that each class member ultimately may be required to establish his or her records request was submitted before or in contemplation of litigation does not overwhelm the common question regarding those uniform copying practices.  The trial court erred in ruling otherwise."  Id. at 20 (footnote omitted).  Put another way, just as the Supreme Court held in Brinker, the “community of interest” element of class certification is “patently satisfied” if the evidence shows that the defendant has a uniform policy or practice and that policy or practice is alleged to violate California law.  See id. at 18-20. 

Finally, the opinion considered the argument that the class was overbroad because one of the defendants, Saint Francis, would be liable only to a portion of it.  The class was defined to include all patients whose medical records requests were fulfilled by HealthPort, and Saint Francis was only one of many medical providers who contracted with HealthPort for this purpose.  The Court of Appeal disagreed with the trial court's conclusion that this presented an impediment to class certification.  Slip op. at 20-22. The Court held that certification is proper even if some class members may have a claim against one, but not all, named defendants, noting that these were the facts of one of the Supreme Court's leading class certification precedents, Vasquez v. Superior Court, 4 Cal.3d 800 (1971).  Nicodemus, slip op. at 21 (citing Vasquez, 4 Cal.3d at 805, 810-11, 815).  The Court also rejected the argument that the plaintiff was obligated to join all the other medical providers who used HealthPort, as well as the argument that Saint Francis risked being held responsible for the wrongdoing of those other providers.  Id. at 22.

(I filed a publication request on behalf of CAOC in this case.)

New UCL opinion considers all three prongs: Moran v. Prime Healthcare Management, Inc.

In Moran v. Prime Healthcare Management, Inc., ___ Cal.App.5th ___ (Sept. 14, 2016; pub. ord. Oct. 5, 2016), the Court of Appeal (Fourth Appellate District, Division Three) considered UCL and CLRA claims involving the cost of emergency room medical care for uninsured ("self-pay") patients.  Essentially, the lawsuit alleges that the defendant unfairly charges uninsured patients more than it charges insurers (or other third-party payors) for insured patients.  Slip op. at 2-4. 

The trial court dismissed the entire action, but the Court of Appeal held that parts of the case survived:

• Plaintiff's discriminatory pricing theory enjoyed a Cel-Tech "safe harbor," but his theory that the self-pay patients are charged "artificial and grossly excessive rates" did not.  Slip op. at 7-8.
  
  
• The UCL "unlawful" prong claim, which was predicated on CLRA violations, largely failed for lack of standing.  Id. at 8-15.  However, the claim survived to the extent it asserted unconscionability in violation of the CLRA (Civil Code section 1770(a)(19)).  Id. at 15-18.
  
  
• The UCL "fraudulent" prong claim failed for lack of standing because the plaintiff did not adequately allege his reliance on specific misrepresentations.  Id. at 18-19.
  
  
• The UCL "unfair" prong claim survived, again to the extent based on the theory that "biling the full amount to self-pay patients is unconscionable."  Id. at 19-21.  This section of the opinion discussed the three-way split in authority on the proper formulation of "unfair" in consumer actions, but the Court concluded that it did not have to resolve the split in order to decide the appeal.  Id. at 20.
  
  
• The CLRA claim survived as to the unconscionability theory only.  Id. at 21-22.
  
  
• The declaratory relief claim survived.  Id. at 23-24.

UCL injunctive relief opinion from earlier this year: Davis v. Farmers Insurance Exchange

This opinion was handed down in March, but I have not previously discussed it. 

In Davis v. Farmers Insurance Exchange, 245 Cal.App.4th 1302 (2016), the plaintiff brought an individual UCL claim as part of his action for wrongful termination. The jury found that the plaintiff's age was a "motivating factor" in his termination, but no damages were awarded because the jury also found that the plaintiff would have been terminated for other, legitimate reasons.  After affirming this point (see id. at 1319-25), the Court of Appeal found no basis under the UCL for enjoining the defendant from engaging in future age discrimination.   The plaintiff was no longer an employee,"and there is no reasonable likelihood he will be at any time in the future or will otherwise be in a position to be harmed by [the defendant's] actions."  Id. at 1327.  Moreover, the record contained no evidence of any ongoing discrimination against any current employees.  Id.

However, the Court of Appeal reversed the judgment on the plaintiff's individual wage claims (id. at 1330-38), as well as the UCL claim to the extent predicated on the wage violations: 

Our conclusion with respect to the wage claim necessarily revives appellant's UCL claim to the extent it is based on failure to pay wages and seeks restitution to recover such wages. (See Cortez v. Perolator Air Flitration Products Co., supra, 23 Cal.4th at pp. 177-178.) 

Id. at 1338 (footnote omitted). 

New class/PAGA arbitration opinion: Perez v. U-Haul Co.

In Perez v. U-Haul Co., ___ Cal.App.5th ___ (Sept. 16, 2016), the Court of Appeal (Second Appellate District, Division Seven) applied Iskanian in holding that the defendant's arbitration clause, which barred class and representative actions, was unenforceable as to plaintiffs' PAGA claims. 

Specifically, the court held that the plaintiffs could not be compelled to arbitrate the threshold question of whether they are "aggrieved employees" with standing to sue under PAGA.  Slip op. at 10-11.  Nor can they be compelled to "split" their PAGA claim into "individual" and "representative aspects" and to arbitrate the former, because Iskanian holds that all PAGA actions are deemed "representative" actions.  Id. at 11-14. 

New Ninth Circuit UCL, FAL and CLRA opinion: Ebner v. Fresh, Inc.

In Ebner v. Fresh, Inc., ___ F.3d ___ (9th Cir. Sept. 27, 2016), the plaintiff asserted UCL, FAL and CLRA claims based on the defendant's labeling and marketing of its "Sugar" lip balm.  According to the plaintiff, the statements of "net weight" are wrong and the "oversize" tubes and boxes in which the lip balm is sold "create the misleading impression that each unit has a larger quantity of lip product than it actually contains." Slip op. at 6.  The district court dismissed the action in its entirety.  Id. at 4-5. 

The Ninth Circuit held that claims based on misstatements of "net weight" were properly dismissed because the federal Food, Drug and Cosmetic Act created a Cel-Tech safe harbor for such statements.  Slip op. at 8-9.  However, plaintiff also argued that the defendant omitted any "supplemental or clarifying statement" explaining that part of the next weight would be inaccessible to the consumer because of the tube design.  Claims based on this omission theory enjoyed no safe harbor, nor were they expressly or impliedly preempted.  Id. at 9-12.

Nevertheless, the omission claim failed, the Court held, because "Plaintiff cannot plausibly allege that the omission of supplemental disclosures about product weight rendered Sugar’s label 'false or misleading' to the reasonable consumer."  Id. at 12.  Basically, the Court held that reasonable consumers know how lip balm tubes with screw mechanisms work, and that they know the tubes can end up leaving some product behind at the bottom.  See id. at 13-15.  In this portion of the opinion, the Court distinguished Williams v. Gerber Products Co., 552 F.3d 934 (9th Cir. 2008) (discussed in these blog posts).

The Court then held that claims based on misleading packaging (as opposed to labeling) also failed "for largely the same reasons that the label-based claims fail."  Id. at 16.  In "the high-end cosmetics market, Sugar's elaborate packaging and the weighty feel of the tub is commonplace and even expected by a significant portion of Fresh's 'targeted consumers.'"  Id. (citing Lavie v. Procter & Gamble Co., 105 Cal.App.4th 486 (2003) (discussed in this blog post)). 

This opinion accompanies an order denying the plaintiff's petition for panel rehearing or en banc rehearing, which challenged an earlier opinion handed down in March.   The main difference between the current opinion and the earlier opinion (which has been superseded) is that the current opinion spends more time distinguishing Williams. 

(Hat tip: The Complex Litigator.)