CALIFORNIA CONSUMER LEGAL REMEDIES ACT (CLRA)

astrauss@calprivacy.com

The California Consumer Legal Remedies Act, (“CLRA”)[1] is a powerful consumer protection statute with broad application. Enacted in 1970, it is one of the most common statutes relied on by consumers when taking legal action about a wide range of business practices. Class actions under the CLRA are typically brought in conjunction with claims under California’s Unfair Competition Law statute[2] and other state law causes of action such as fraud, negligent misrepresentation, and breach of warranty.

What conduct is proscribed by the CLRA?

Unlike the UCL which describes prohibited business conduct with general sweeping language, the CLRA provides a lengthy list of specifically proscribed practices (29 in all) that are considered “unlawful” under the Act.[3] Most are types of misrepresentations and false advertisements,[4] encompassing everything from false country of origin claims to offering unassembled furniture for sale without disclosing the need for assembly.[5]

However, the majority of CLRA claims brought by consumers are based on just a few provisions that are of much broader application than their brethren, coming closer to the UCL’s language of general applicability. They prohibit:

representing that goods or services have characteristics, uses, or benefits that they do not have,[6]
representing that goods or services are of a particular standard or quality when they are of another,[7]
representing that a transaction confers rights, remedies or obligations that it does not have, or that are prohibited by law,[8] and
inserting an unconscionable provision in a contract.[9]

These few provisions have been used to support a wide variety of claims. For example:

selling cars with defective cooling pumps,[10]
falsely representing that an app’s service remits a 20% gratuity to drivers,[11]
selling products which contained gluten, but were labeled “Gluten Free,”[12]
representing mattresses as “formaldehyde free” when they, in fact, contain formaldehyde,[13]
advertising beer as brewed in the San Francisco Bay Area when some of it is brewed in Minnesota,[14]
omitting material information regarding the security of a gaming network,[15]
advertising items as discounted from a misleading reference price,[16]
sale of under filled cans of tuna,[17] and
marketing high-sugar cereals with health and wellness claims,[18]

The CLRA’s prohibition against inserting an unconscionable contract provision is particularly noteworthy because it provides a basis for a consumer to affirmatively sue over a contract term. Typically, unconscionability is asserted as a defense by a consumer if accused of breaching a contract.[19]

Who must comply with the CLRA?

Any individual or business that sells goods or services to a consumer must comply with the CLRA.[20] Either the business or the consumer must be located in California at the time of the transaction.[21]

Who may sue under the CLRA?

Unlike California’s UCL, only “consumers” who have suffered damages may sue under the CLRA.[22] Competitors may not bring suit under the Act.[23] Consumers are specifically limited to those individuals who seek or acquire “by purchase or lease, any goods or services for personal, family, or household purposes.”[24] Thus, individuals who have purchased goods or services for business purposes are also precluded from initiating litigation under the Act.

What relief is provided for under the Act?

Consumers who prevail in CLRA suits are entitled to actual damages, with a total minimum award in any class action of at least $1,000.[25] The Court can also enjoin violating business practices, order restitution, punitive damages, and any other relief it finds proper.[26] If the damage was done to a senior citizen or disabled person, those individuals may seek an additional award of up to $5,000 each.[27]

The substantial risks to businesses posed by these provisions are further compounded by the Act’s attorney’s fees provision. The CLRA requires that attorney’s fees and court costs be provided to successful consumer plaintiffs.[28] The risk for an unsuccessful plaintiff is much lower, with the Act providing that the court may (not must) award attorney’s fees and costs to a prevailing defendant if it finds the lawsuit was not brought and maintained in “good faith.”[29]

Proof that a CLRA violation was unintentional and “resulted from a bona fide error,” despite having used reasonable measures, will exempt a business from having to pay damages.[30]

The CLRA 30-Day Notice Requirement

Often a business will encounter the CLRA for the first time when it receives a notice letter from an aggrieved consumer demanding relief. The CLRA gives businesses the opportunity to become informed about percolating consumer issues and rectify their actions. The Act requires that a consumer notify a business at least 30 days before commencing an action for damages.[31] However, a lawsuit for injunctive relief (asking that a business change its practices going forward, for example) can be brought without a plaintiff having given notice. In practice, litigants regularly bring suit before sending a notice letter, or before the 30-day period has ended, since the Act specifically permits a consumer to amend a complaint to include a request for damages once the consumer has complied with the notice provisions.[32]

The statute of limitations for a CLRA claim (i.e. the time a consumer has to bring a lawsuit under the CLRA from the date of the complained-of conduct) is typically three years.[33] However, the delayed discovery rule applies to CLRA claims, tolling the statute of limitations for the length of time it should have taken a reasonable consumer to discover the conduct giving rise to the claim.[34]

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[1] California Civil Code §§ 1750 et seq.

[2] California Business and Professions Code §§ 17200 et seq. (“UCL”)

[3] Including the newest prohibition against “drip pricing.” See Cal. Civ. Code § 1770(a)(1)-(29).

[4] See, e.g., Cal. Civil Code §§ 1770(a)(2)-(20).

[5] Cal. Civ. Code §§ 1770(a)(4) & (a)(11).

[6] Cal. Civ. Code § 1770(a)(5).

[7] Cal. Civ. Code § 1770(a)(7).

[8] Cal. Civ. Code § 1770(a)(14).

[9] Cal. Civ. Code § 1770(a)(19).

[10] Daniel v. Ford Motor Co., 806 F.3d 1217 (9th Cir. 2015).

[11] Ehret v. Uber Technologies, Inc., 68 F.Supp.3d 1121 (N.D. Cal. 2014).

[12] Lengen v. General Mills, Inc., 185 F.Supp.3d 1213 (E.D. Cal. 2016).

[13] Dodson v. Tempur-Sealy International, Inc., 2014 WL 1493676, at *1 (N.D. Cal., Apr. 16, 2014, No. 13-CV-04984-JST).

[14] Peacock v. 21st Amendment Brewery Cafe, LLC, 2018 WL 452153, at *1 (N.D. Cal., Jan. 17, 2018, No. 17-CV-01918-JST).

[15] Sony Gaming Networks & Cust. Data Sec. Breach Lit., 996 F.Supp.2d 942, 989 (S.D. Cal. 2014).

[16] Stathakos v. Columbia Sportswear Company, 2016 WL 1730001, at *2 (N.D. Cal., May 2, 2016, No. 15-CV-04543-YGR).

[17] Hendricks v. StarKist Co., 30 F.Supp.3d 917, 922 (N.D. Cal. 2014).

[18] Krommenhock v. Post Foods, LLC, 255 F.Supp.3d 938, 945 (N.D. Cal. 2017).

[19] See California Grocers Ass'n v. Bank of America, 22 Cal.App.4th 205, 217 (1994).

[20] Cal. Civ. Code §§ 1761(c) & 1770(a).

[21] Ehret v. Uber Technologies, Inc., 68 F.Supp. 3d 1121, 1130-32 (N.D. Cal. 2014).

[22] Cal. Civ. Code § 1780(a). See also Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634, 646 (2009).

[23] See Lazar v. Hertz Corp., 143 Cal.App.3d 128, 142 (1983); Mazur v. eBay Inc., 257 F.R.D. 563, 568 (N.D. Cal. 2009).

[24] Cal. Civ. Code § 1761(d).

[25] Cal. Civ. Code § 1780(a)(1).

[26] Cal. Civ. Code §§ 1780(a)(1)-(5).

[27] Cal. Civ. Code § 1780(b).

[28] Cal. Civ. Code § 1780(e).

[29] Id.

[30] Cal. Civ. Code § 1784.

[31] Cal. Civ. Code § 1782(a).

[32] Cal. Civ. Code § 1782(d).

[33] Cal. Civ. Code § 17893.

[34] Massachusetts Mutual Life Ins. Co. v. Superior Court, 97 Cal.App.4th 1282, 1295 (2002).