Justia Consumer Law Opinion SummariesArticles Posted in Supreme Court of California
Kirzhner v. Mercedes-Benz USA, LLC
In this case where Plaintiff selected the remedy of restitution under the Song-Beverly Consumer Warranty Act, Cal. Civ. Code 1790 et seq. after Mercedes-Benz USA LLC (Mercedes) was unable to repair defects in the vehicle Plaintiff leased from Mercedes the Supreme Court held that Mercedes was required to reimburse vehicle registration renewal and nonoperation fees Plaintiff paid if the fees were incurred as a result of Mercedes' breach of its duty to promptly provide a replacement vehicle or restitution.At issue was whether the Act required Mercedes to reimburse the vehicle registration renewal and nonoperation fees Plaintiff paid after the initial lease of his vehicle either as collateral charges or as incidental damages. The trial court excluded the vehicle registration renewal fees and the nonoperation fee from the restitution award. The court of appeals affirmed. The Supreme Court reversed and remanded the case for further proceedings, holding (1) the fees at issue were not recoverable as collateral charges because they were not auxiliary to and did not supplement the price paid for the vehicle; but (2) the fees were recoverable as incidental damages if they were incurred as a result of the manufacturer's breach of its duty to promptly provide a replacement vehicle or restitution under the Act. View "Kirzhner v. Mercedes-Benz USA, LLC" on Justia Law
Abbott Laboratories v. Superior Court of Orange County
The Supreme Court held that the unfair competition law (UCL), Cal. Bus. & Prof. Code 17200 et seq., is not limited to the geographic boundaries of Orange County and therefore does not preclude a district attorney from including allegations of violations occurring outside as well as within the borders of her or his county.The Orange County District Attorney brought this action against several pharmaceutical companies, alleging that Defendants had intentionally delayed the sale of a generic version of a popular pharmaceutical drug to maximize their profits. The District Attorney sought statewide monetary relief. Defendants moved to strike references to "California" in their complaint, arguing that the district attorney's authority to enforce California's consumer protection laws is limited to Orange County's borders. The trial court denied the motion to strike. The court of appeals directed the trial court to vacate its order and granted the motion to strike. The Supreme Court reversed, holding that the trial court did not err in denying the motion to strike because the UCL did not preclude the District Attorney from including allegations of violations occurring outside the borders of Orange County. View "Abbott Laboratories v. Superior Court of Orange County" on Justia Law
Nationwide Biweekly Administration, Inc. v. Superior Court of Alameda County
The Supreme Court decided in this case that when the government seeks civil penalties as well as an injunction or other equitable remedies under the unfair competition law (UCL), Cal. Bus. & Prof. Code 17200 et seq., or the false advertising law (FAL), Cal. Bus. & Prof. Code 17500 et seq., the causes of action are to be tried by the court rather than a jury.In the current writ proceeding in this case, the court of appeal concluded that the jury trial provision of the California Constitution should be interpreted to require a jury trial in any action brought under the UCL or FAL in which the government seeks civil penalties in addition to injunctive or other equitable relief. The Supreme Court disagreed, holding (1) the causes of action established by the UCL and FAL at issue in this case are equitable in nature and are properly tried by the court rather than by a jury; and (2) the United States Supreme Court decision in Tull v. United States, 481 U.S. 412 (1987), relied upon by the court of appeal below, does not govern this case. View "Nationwide Biweekly Administration, Inc. v. Superior Court of Alameda County" on Justia Law
Noel v. Thrifty Payless, Inc.
In this putative class action brought on behalf of retail purchasers of an inflatable outdoor pool the Supreme Court reversed the judgment of the court of appeal upholding the ruling of the trial court denying the representative plaintiff's motion for class certification, holding that the trial court erred in determining that the class proposed by the plaintiff was not ascertainable.The claims in this case arose out of the plaintiff's purchase out of an inflatable pool sold in packaging that allegedly misled buyers about the pool's size. The trial court denied the plaintiff's motion for class certification in its entirety on ascertainability grounds. The court of appeal found no abuse of discretion in the denial of class certification. The Supreme Court reversed, holding that the trial court erred in demanding that the plaintiff offer evidence showing how class members might be individually identified when that identification became necessary. Specifically, the Court held (1) an ascertainable class is one defined in objective terms that make the eventual identification of class members possible; and (2) the trial court abused its discretion when it found no ascertainable class existed. View "Noel v. Thrifty Payless, Inc." on Justia Law
Connor v. First Student, Inc.
The Supreme Court affirmed the judgment of the Court of Appeal concluding that some overlap between the Investigative Consumer Reporting Agencies Act (ICRAA), Cal. Civ. Code 1786 et seq. and the Consumer Credit Reporting Agencies Act (CCRAA), Cal. Civ. Code 1785.1 et seq., does not render ICRAA unconstitutionally vague as applied to employer background checks when the statutes are otherwise unambiguous.In this class action, Plaintiff sued Defendants, investigative consumer reporting agencies, for violating ICRAA because Defendants did not obtain her written authorization to conduct a background check. Defendants moved for summary judgment, claiming (1) ICRAA was unconstitutionally vague as applied to Plaintiff’s claim because it overlapped with CCRAA, and (2) Defendants satisfied CCRAA. The trial court granted the motion. The Court of Appeal reversed. The Supreme Court affirmed and remanded, holding (1) the background check that Defendants conducted was an investigative consumer report under ICRAA; and (2) although the CCRAA also applied here, Defendants were not exempted from the requirement that they obtain Plaintiff’s written authorization under ICRAA before conducting or procuring a background investigation. View "Connor v. First Student, Inc." on Justia Law
De La Torre v. CashCall, Inc.
The Supreme Court held that the interest rate on consumer loans of $2,500 or more may render the loans unconscionable under section 22302 of the Financial Code.Defendant, a lender of consumer loans to high-risk borrowers, had as one of its signature products an unsecured $2,600 loan carrying an annual percentage rate (APR) of either ninety-six percent or, later in the class period, 135 percent. Plaintiffs alleged that CashCall violated California’s Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 because its lending practice was unlawful where it violated section 22302, the section that applies the unconscionability doctrine to consumer loans. The district court certified Plaintiffs’ lawsuit as a class action and then granted CashCall’s motion for summary judgment. On appeal, the federal court of appeals certified to the Supreme Court a question of law. The Supreme Court answered in the positive, holding that an interest rate on consumer loans of $2,500 or more may be deemed unconscionable under section 22302. View "De La Torre v. CashCall, Inc." on Justia Law
Solus Industrial Innovations, LLC v. Superior Court of Orange County
The federal Occupational Safety and Health Act of 1970 (OSH Act), 29 U.S.C. 651 et seq., does not preempt unfair competition and consumer protection claims based on workplace safety and health violations when, as in California, there is a state plan approved by the federal Secretary of Labor.The Division of Occupational Safety and Health charged Solus Industrial Innovations, LLC with five violations of state occupational safety and health regulations. The District Attorney of Orange County subsequently filed this action for civil penalties under the state’s unfair competition law (UCL), Cal. Bus. & Prof. Code 17200, and fair advertising law (FAL), Cal. Bus. & Prof. Code 17500. The court of appeal concluded that the federal OSH Act preempted the district attorney’s UCL and FAL claims. The Supreme Court reversed, holding that there was no implied or express preemption of the district attorney’s UCL and FAL claims. View "Solus Industrial Innovations, LLC v. Superior Court of Orange County" on Justia Law
Hernandez v. Restoration Hardware, Inc.
In this class action lawsuit, the court of appeal correctly relied on Eggert v. Pacific States S. & L. Co., 20 Cal. 2d, 199 (Cal. 1942) in ruling that unnamed class members may not appeal a class judgment, settlement, or attorney fees award unless they intervene in the action.In the instant case, Class Representatives alleged that Restoration Hardware, Inc. (RHI) committed violations of the Song-Beverly Credit Card Act. The trial court found RHI liable for violations of the Act and awarded Representatives attorney fees. Appellant, an unnamed class member who never exercised her right to intervene during the class action by filing a complaint in intervention, filed a notice of appeal, challenging the award of attorney fees. The court of appeal dismissing Muller’s appeal for lack of standing, concluding that it was bound to follow Eggert. The Supreme Court affirmed, holding that, where Muller failed to intervene in the class action or file a motion to vacate the judgment and offered no persuasive reason why the court should create an exception to its long-standing rule, or overrule or distinguish Eggert, Muller was not entitled to relief. View "Hernandez v. Restoration Hardware, Inc." on Justia Law
McGill v. Citibank, N.A.
Plaintiff opened a credit card account with Defendant Citibank, N.A. and purchased a credit protector plan. Defendant later amended the original agreement by adding an arbitration provision. The provision waived the right to seek public injunctive relief in any forum. The arbitration provision became effective in 2001. In 2011, Plaintiff filed this class action based on Defendant’s marketing of the Plan and the handling of a claim she made under it when she lost her job, alleging claims under the Consumers Legal Remedies Act (CLRA), the unfair competition law (UCL), and the false advertising law. Defendant petitioned to compel Plaintiff to arbitrate her claims on an individual basis pursuant to the arbitration provision. Based on the Broughton-Cruz rule, the trial court ordered Plaintiff to arbitrate all claims other than those for injunctive relief under the UCL, the CLRA, and the false advertising law. The Court of Appeal reversed and remanded for the trial court to order all of Plaintiff’s claims to arbitration, concluding that the Federal Arbitration Act preempts the Broughton-Cruz rule. The Supreme Court reversed, holding that the arbitration provision was invalid and unenforceable because it waived Plaintiff’s right to seek public injunctive relief in any forum. Remanded. View "McGill v. Citibank, N.A." on Justia Law
People ex rel. Owen v. Miami Nation Enterprises
This case involved the practice of short-term deferred deposit lending, often referred to as “payday” or “cash advance” lending. After the Legislature enacted the California Deferred Deposit Transaction Law (the Law), which limits the size of each loan and the fees that lenders may charge, some deferred deposit lenders sought affiliation with federal recognized Indian tribes, which are generally immune from suit on the basis of tribal sovereign immunity. In this case, a pair of federally recognized tribes created affiliated business entities, which provide deferred deposit loans through the internet to borrowers in California under terms that allegedly violated the Law. At issue in this case was whether these tribally affiliated entities were immune from suit as “arms of the tribe.” The Supreme Court clarified the legal standard and burden of proof for establishing arm-of-the-tribe immunity and held that the entities in this case failed to show by a preponderance of the evidence that they were entitled to tribal immunity as an arm of its affiliated tribe. Remanded for the trial court to address the issue of whether the parties had the opportunity to fully litigate their claims under that standard. View "People ex rel. Owen v. Miami Nation Enterprises" on Justia Law