Court of Appeal:
Justice Moor Says Action Is Not Barred by Proposition 64 Which Limits Standing Under Statute to Person Who Has Personally Suffered an Injury in Form of Loss of Money or Property
By a MetNews Staff Writer
A woman who bought an electric water flosser from CVS which the package said had a three-year warranty, and who found later from an insert in the package that the warranty was limited to a replacement of the parts, had a cause of action against the pharmacy chain under the Unfair Competition Law even though the manufacturer provided a new flosser to her, Div. Five of the Court of Appeal for this district held Friday.
The opinion, by Justice Carl H. Moor, reverses a summary judgment granted to CVS by Los Angeles Superior Court Judge Daniel Buckley, a former presiding judge.
At issue was the applicability of Proposition 64, enacted by voters in 2004 to limit standing in UCL actions to “a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.” The measure came in response to shakedown efforts by the Trevor Law Group and other attorneys who threatened small businesses with litigation over trifling transgressions if they did not pay some money—generally a few thousand dollars—in settlement.
(The three attorneys who comprised the Trevor Law Group, facing disciplinary actions, relinquished their law licenses.)
Plaintiff Osiris Zamora brought a putative class action against CVS under the UCL, claiming it violated the federal Magnuson-Moss Warranty Act by not making the actual warranty available to her before she made her purchase from its store in Palmdale.
CVS claimed that Zamora lacked standing because she suffered no injury and lost no money inasmuch as the manufacturer, WaterPik, gave her a new flosser. Buckley agreed.
Div. Five didn’t, declaring in an unpublished opinion that Proposition 64, which amended the standing requirement under Business & Professions Code §17204, is no bar to the action. Moor wrote:
“In this case, Zamora declared that she would not have purchased the WaterPik product if she had known the warranty featured on the front of the package was limited to replacement parts. Her evidence, if found to be credible by a trier of fact, establishes a loss of money sufficient to constitute injury in fact. She believed that she was purchasing a product with a full replacement warranty, when in fact, the product she got had a limited warranty. A consumer who paid money to buy a product from the defendant and subsequently made a warranty claim to the manufacturer is not the type of plaintiff that the UCL standing requirements were designed to bar, who did not view the defendant’s advertising or have business dealings with the defendant.”
The jurist labeled as a “red herring” CVS’s argument that Zamora incurred no economic injury because she received just what she expected to get when she read the package: a full replacement if the device failed to operate within the three-year period. He explained:
“Zamora’s loss did not depend on whether she made a warranty claim or the outcome of the claim. Even if Zamora had not made any warranty claim, she lost money spent on a product that she would not have purchased if she had been given an opportunity to read the warranty terms before making her purchase and discovered the warranty was limited. Although WaterPik chose to provide a full replacement when she made a claim, there is no evidence that WaterPik changed its warranty terms or that the replacement product came with a full warranty. Zamora still received a product with a limited warranty, and if she had made a second claim, WaterPik could elect to provide parts only.
“The amount that Zamora paid for a product that she would not have purchased if she had known the limited warranty terms was an economic injury sufficient to establish injury in fact.”
He said there is a triable issue of fact as to whether CVS’s failure to make the warranty available prior to the purchase of the water flosser caused Zamora to buy something she would otherwise not have purchased.
The case is Zamora v. CVS Pharmacy, B299375
Palmdale attorney James S. Kostas represented Zamora. Todd B. Benoff and Lisa L. Garcia of the Bunker Hill law firm of Alston & Bird were attorneys on appeal for CVS.
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