In Hansen v. Newegg.com Americas, Inc., ___ Cal.App.4th ___ (July 31, 2018), the Court of Appeal (Second Appellate District, Division Seven) addressed UCL and FAL standing in a case involving false advertising of a product's former price (or the amount by which the product price had been reduced or discounted).
Applying Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (2011) (discussed in this blog post), the Court determined that the plaintiff satisfied the UCL and FAL's standing requirements by alleging that if the former price had not been misrepresented, he would not have purchased the product. He need not also allege that the product was not worth what he paid for it (a "benefit of the bargain" theory of standing advanced by the defendant). Slip op. at 10-21.
In so holding, the Court examined and endorsed the Ninth Circuit's opinion in Hinojos v. Kohl's Corp., 718 F.3d 1098 (9th Cir. 2013), another case involving false former price advertising (discussed in this blog post). Hinojos, the Court held, had correctly applied Kwikset.
The panel also held that the reasoning of two 2008 opinions--Hall v. Time, Inc., 158 Cal.App.4th 847 (2008) and Petersen v. Cellco Partnership, 164 Cal.App.4th 1583 (2008) (discussed in these blog posts)--had been superseded by Kwikset:
These cases, however, were decided before Kwikset, which held that the “benefit of the bargain” theory has no relevance when the misrepresentation underlying the UCL claim is material in nature. (See Kwikset, 51 Cal.4th at pp. 332-333; see also Hinojos, supra, 718 F.3d at p. 1107 [“‘benefit of the bargain’ rationale was explicitly rejected in Kwikset” for UCL claims that allege a material misrepresentation].)
Slip op. at 21. When it comes to former price, "'reasonable people can and do attach importance'" to it "'in their purchasing decisions.'" Id. at 19-20 (quoting Kwikset, 51 Cal.4th at 333). "[E]mpirical research" shows that "the presence of a higher original price affects consumers' perceptions 'about the product's worth,' and increases their willingness to buy the product." Id. at 20 (quoting Hinojos, 718 F.3d at 1106).
