Categories & Search

Must a Plaintiff Choose Between a UCL Claim and a Breach of Warranty Claim? Courts in California Are Split

California has long been considered a hospitable place to bring a class action, and accordingly it’s also been a popular one.  But some class action plaintiffs in the Golden State have encountered an unlikely hurdle:  the unavailability of equitable remedies when there is an adequate remedy at law. 

These plaintiffs have brought putative class action complaints asserting both equitable claims under the state consumer protection statutes— the Unfair Competition Law (“UCL”), False Advertising Law (“FAL”), and Consumer Legal Remedies Act (“CLRA”)—and legal claims such as breach of express warranty, breach of implied warranty, fraud, negligent misrepresentation, and breach of contract.  Although this combination is pretty standard in class action practice, several federal courts in California have now rejected it, dismissing the equitable claims on the basis that they are precluded by the availability of the legal ones.  Others have declined to adopt this reasoning, giving rise to an “intra-circuit split” and a source of uncertainty for class action litigants on both sides. 

Side One:  Plaintiffs Cannot Assert Both Legal and Equitable Claims

As the California Supreme Court has explained, “a UCL action is equitable in nature,” Korea Supply Co. v. Lockheed Martin Corp., 29 Cal. 4th 1134, 1144 (Cal. 2003), and the “remedies available in a UCL or FAL action are limited to injunctive relief and restitution,” both of which are equitable remedies.  In re Vioxx Class Cases, 180 Cal. App. 4th 116, 130 (Cal. Ct. App. 2009).  Meanwhile, most of us probably remember from law school that “it is axiomatic that a court should determine the adequacy of a remedy in law before resorting to equitable relief,” Franklin v. Gwinnett Cty. Pub. Sch., 503 U.S. 60, 75-76 (1992).

Accordingly, a number of federal courts in California have prevented UCL and FAL claims from moving forward in putative class actions after finding that the plaintiffs’ other sufficiently pled claims provide adequate remedies at law.  As one court explained, a “plaintiff seeking equitable relief in California must establish that there is no adequate remedy at law available,” and “relief under the UCL is subject to fundamental equitable principles, including inadequacy of the legal remedy.”  Philips v. Ford Motor Co., 2015 U.S. Dist. LEXIS 88937, at *52 (N.D. Cal. July 7, 2015) (internal quotation marks and citation omitted).  In Philips, because the plaintiffs had “an adequate remedy at law in the form of their claim for fraudulent concealment,” the court dismissed the UCL claim.  Id.

Several other courts have followed this reasoning.  In Duttweiler v. Triumph Motorcycles (America) Ltd., 2015 U.S. Dist. LEXIS 109805 (N.D. Cal. Aug. 19, 2015), the court dismissed the putative class’s UCL and FAL claims for failure to explain “why legal damages under the CLRA (or [plaintiff’s] common law causes of action) are inadequate,” given that the plaintiff sought “damages under the CLRA for the exact same conduct that forms the basis of his UCL and FAL claims.  Id. at *26.  Similarly, in Munning v. Gap, Inc., 238 F. Supp. 3d 1195, 1203 (N.D. Cal. 2017), the court joined the “several courts in this district [that] have barred claims for equitable relief – including claims for violations of California consumer protection statutes – at the motion to dismiss stage where plaintiffs have alleged other claims presenting an adequate remedy at law.”  Because the court “found Plaintiff has sufficiently pleaded claims for breach of contract and breach of express warranty,” the court concluded that the plaintiff could not “seek restitution or injunctive relief under the UCL or FAL.”  Id. at 1204.  Significantly, the court in Munning further held that it “matters not that a plaintiff may have no remedy if her other claims fail,” because “where the claims pleaded by a plaintiff may entitle her to an adequate remedy at law, equitable relief is unavailable.”  Id. at 1203 (quoting Rhynes v. Stryker Corp., 2011 U.S. Dist. LEXIS 58286, at *10 (N.D. Cal. May 21, 2011)); see also Fonseca v. Goya Foods. Inc., 2016 U.S. Dist. LEXIS 121716, at *21 (N.D. Cal. Sep. 8, 2016) (dismissing plaintiffs’ equitable UCL and FAL claims because they “rely on the same factual predicates as plaintiffs’ legal causes of action,” each of which “provide Plaintiff a remedy at law.”); Durkee v. Ford Motor Co., 2014 U.S. Dist. LEXIS 122857, at *6 (N.D. Cal. Sep. 2, 2014) (same).

Side Two:  Pleading in the Alternative is Permitted

Other courts, however, have rejected this reasoning and declined to dismiss UCL and FAL claims seeking equitable relief at the pleading stage, notwithstanding the viability of plaintiffs’ legal claims.  In Wildin v. FCA US LLC, 2018 U.S. Dist. LEXIS 102583 (S.D. Cal. June 19, 2018), the court recognized that “several district courts in this circuit have found it appropriate to dismiss UCL claims at the pleading stage when they are based on identical facts as other claims providing the legal remedy of damages,” but instead aligned itself with other courts that had rejected this practice “on the ground that no controlling authority prohibits a federal court plaintiff from pleading alternative remedies.”  Id. at *20.  Explaining that dismissal would be “premature, as there is no procedural bar to a federal court plaintiff pleading alternative remedies” and that “the time to sort out alternatively pled remedial requests is at the end of a case, not the very beginning,” the court held that “in the absence of controlling authority compelling dismissal under these circumstances, the Court follows that normal rule that the appropriate form of relief is not to be decided [on] a motion to dismiss.”

Notably, the court in Wildin did not dispute that equitable relief is unavailable where there is an adequate remedy at law.  It merely held that it need not reach that issue until a later procedural posture, when there is more certainty as to whether the legal relief sought would, in fact, be “adequate.”  A number of other courts have declined to dismiss UCL or FAL claims brought by a plaintiff representative a putative class for this same reason: there is “no bar to the pursuit of alternative remedies at the pleadings stage.”  Aberin v. Am. Honda Motor Co., Inc., 2018 U.S. Dist. LEXIS 49731, at *26 (N.D. Cal. Mar. 26, 2018).  In Adkins v. Comcast Corp., 2017 U.S. Dist. LEXIS 137881 (N.D. Cal. Aug. 1, 2017), for example, the court noted that a “few federal courts seem to have decided that claims for equitable relief should be dismissed at the pleading stage if the plaintiff manages to state a claim for relief that carries a remedy at law,” but declined to follow suit because the court was “aware of no basis in California or federal law for prohibiting the plaintiffs from pursuing their equitable claims in the alternative to legal remedies at the pleadings stage.”  Id. at *7; see also Vicuña v. Alexia Foods, Inc., 2012 U.S. Dist. LEXIS 59408 (N.D. Cal. April 27, 2012) (observing that while a “claim for restitution is inconsistent and incompatible with a related claim for breach of contract or a claim in tort, at the pleading stage, a plaintiff is allowed to assert inconsistent theories of recovery.”); Deras v. Volkswagen Grp. of Am., Inc., 2018 U.S. Dist. LEXIS 83553, at *19 (N.D. Cal. May 17, 2018) (declining to dismiss UCL claim because plaintiff has adequate remedy at law on ground that there is “no bar to the pursuit of alternative remedies at the pleading stage.”).

Although district courts have recognized this issue has given rise to an “intra-circuit split” within the Ninth Circuit, Wildin v. FCA US LLC, 2018 U.S. Dist. LEXIS 102583, at *21, the Ninth Circuit has yet to take up the issue directly.  Until then, it seems likely that courts will continue to go both ways on the issue.