Monday, September 14, 2020
Court of Appeal:
By a MetNews Staff Writer
A statute that bars automatic renewals of agreements for the purchase of goods or services does not create a private cause of action and a violation of that law does not create an automatic cause of action under the Unfair Competition Law, the Sixth District Court of Appeal held Friday.
In rejecting plaintiff Eric Mayron’s contention that Google LLC’s violation of the Automatic Renewal Law (“ARL”) conferred on him standing under the Unfair Competition Law (“UCL”) the state appeals court repudiated the view expressed by the Ninth U.S. Circuit Court of Appeals in a 2018 memorandum opinion.
Judgment of Dismissal
Justice Adrienne Grover wrote Friday’s opinion, which affirms a judgment of dismissal following a sustaining of a demurrer without leave to amend by Santa Clara Superior Court Judge Peter H. Kirwan, who found that Mayron had no standing to maintain a putative class action against Google.
Business & Professions Code §17600 provides:
“It is the intent of the Legislature to end the practice of ongoing charging of consumer credit or debit cards or third party payment accounts without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service.”
Mayron alleged in his complaint that Google automatically renewed his subscription to a data-storage service ($1.99 per month for storage of up to 100 gigabytes) without his consent and without the required conspicuous notice of how to cancel.
He argued that he has standing under the ARL in light of the pronouncement in §17604 that “all available civil remedies that apply to a violation of this article may be employed.”
“Plaintiff reads the reference to ‘all available civil remedies’ to mean that a private party can sue for any remedies available under the civil law, such as damages or an injunction. Plaintiff’s interpretation is not unreasonable. While a remedy is not the same thing as a cause of action, a statute that says all available remedies can be employed for a violation suggests a right of action exists, since one cannot obtain a remedy without a viable cause of action.
“At the same time, we are mindful there must be a ‘clear, understandable, unmistakable’ indication of intent to allow a private right of action. It is not enough that the statutory text suggests such a right….A clear indication means the text cannot be reasonably susceptible of competing interpretations. The language here is susceptible of more than one meaning.”
The jurist declared that in light of the statute’s “somewhat imprecise phrasing,” no private cause of action is conferred.
She also said Mayron has no cause of action under the UCL (Business & Professions Code §17200 et seq.). A UCL action may be based on violation of a statute.”
Mayron sought to tie his UCL action to §17603, which provides:
“In any case in which a business sends any goods, wares, merchandise, or products to a consumer, under a continuous service agreement or automatic renewal of a purchase, without first obtaining the consumer s affirmative consent as described in Section 17602, the goods, wares, merchandise, or products shall for all purposes be deemed an unconditional gift to the consumer….”
He reasoned that Google’s violation of the ARL meant the storage that was provided to him must be deemed a gift, and charging him for what should have been free violated the UCL.
Grover said that Mayron, in order to have standing based on having incurred a loss, would have to have alleged that he would not have subscribed to Google’s service if it had been told him at the outset the $1.99 fee would be imposed each subsequent month, or that he would have cancelled the service “had it been easier to do so.” She explained:
“Plaintiff’s standing argument misses the crucial requirement of causation. The unconditional gift provision of the automatic renewal law creates a right to retain a product already received. That right is a consequence of violating the statute. But a consequence imposed on a defendant for violating a statute is not the same thing as a loss caused by the defendant’s conduct.”
Two U.S. District Court opinions, as well as a Ninth Circuit decision, recognized an action lies under §17200 based on §17603, Grover noted.
“But we are not persuaded by the reasoning in those cases,” she said.
The Ninth Circuit’s decision, in Johnson v. Pluralsight, LLC, came in 2018. Signing the majority opinion were Circuit Judge Richard A. Paez and District Court Judge Lynn S. Adelman of the Eastern District of Wisconsin, sitting by designation.
Circuit Judge Sandra S. Ikuta dissented.
There, plaintiff Kyle Johnson, like Mayron, contended that there had been a violation of the ARL; that moneys paid for a subscription to a service were retained by the provider unlawfully, in light of §17602; and that the conduct violated §17200. The majority agreed with him, saying:
“We agree with Johnson that, for the same reasons he has satisfied Article III’s injury-in-fact requirement, he has alleged an injury in fact sufficient to support statutory standing under the UCL….Johnson has sufficiently alleged that Pluralsight unlawfully charged him for a subscription that should have been treated as an unconditional gift pursuant to section 17603.”
Grover pointed out:
“But federal Article III standing is far broader than the standing requirement contained in section 17200, which expressly requires a financial loss caused by the defendant’s conduct….The Johnson court’s conclusion that the plaintiff had section 17200 standing rests on a faulty premise.”
The case is Mayron v. Google LLC, H044592.
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