Williamson bought tires from RT’s store, and complained that
he was charged an undisclosed service fee to dispose of his old tires, $2.50
per tire. He was quoted a per-tire
price, and he also bought insurance at a stated price per tire. The clerk told him that the total cost was
$216.54. He alleged that he wasn’t aware
of the additional fee and simply assumed that the total was the proper
mathematical calculation of the tires and insurance plus taxes and installation. He didn’t get a receipt until after
installation, and it was inside an envelope. The fee was a line item on the
receipt. Several months later, he
discovered the fee and sued on behalf of a class. (I understand why this case is going to go
badly for Williamson, but the fact of the matter is that we can’t run a modern
economy without trust; little things like this—and much worse, for example
charges on phone bills for unwanted services that provide no benefit at
all—take millions of dollars from consumers each year. Just as reading all the privacy policies for
the services you use would take weeks out of each year, checking every line
item on every bill would be an unreasonable burden. That’s not to say that this particular case
should come out differently, but I don’t think that the burden should be on
each individual consumer to do the math if there’s a systematic practice of
adding undisclosed fees for worthless services bundled in an overall,
hard-to-calculate price.)
First, the court kicked out the conversion claim. Williamson didn’t allege a special
relationship between him and RT, nor how RT otherwise misppropriated specific
funds held for his benefit. Thus, he
didn’t overcome the general California rule that money isn’t the proper object
of a conversion claim. Also, he failed
to properly allege that he had the ownership or right to possession of the
property at the time of the conversion.
He paid the amount he was quoted, at which point title to the funds
passed to the defendants.
Next, unjust enrichment and restitution: not valid causes of
action in California, just theories of recovery.
Williamson argued that there was a breach of an oral
contract, one of the terms of which was that RT agreed to perform a correct
mathematical calculation, and not to include a tire disposal fee. This was not a reasonable interpretation based
on the factual allegations.
The FAL, CLRA, and UCL claims were also doomed. Williamson alleged that he actually relied on
the misrepresentation because he simply assumed that what the clerk told him
was true: that the total was the proper calculation for the tires, insurance,
taxes and installation. He alleged that
he could have purchased the tires cheaper elsewhere or disposed of the tires
himself, and that he therefore suffered injury. The court found that these
“hypothetical” allegations didn’t suffice to plead reliance on the omission of
the fee when he actually decided where to buy.
Moreover, the allegations didn’t support a plausible inference that the
omission was an immediate cause of the purchase, or that he paid more than he
was willing to pay. “The terms that
Plaintiff relied on were price and quality, not on a tire disposal fee that was
subsumed into the overall price.” He
didn’t ask for his tires back or look at the receipt for a while, undercutting
the plausibility of the allegations that the fee was an important term on which
he relied (must mean whose omission was something on which he relied). Also, since he paid the amount quoted, RT
didn’t falsely advertise the total cost.
This failed to meet the plaintiff’s burden to state facts giving rise to
a plausible inference that a significant portion of the general consuming
public, acting reasonably, could be misled. “Under the circumstances, the
reasonable consumer, who has no further need for his old tires, would expect
tire installation to include the disposal of these unwanted tires.” (And a fee for same?) This understanding was confirmed by the
receipt, which clearly disclosed the disposal fee.
In addition, Williamson failed to state a claim under the
“unfair” prong of the UCL. No matter what test was applied (a balancing test or
a showing that some specific public policy was violated), there was still no
harm. The fact that he didn’t even
inspect the receipt indicated that the disposal fee was immaterial. So long as
he got what he paid for, at a price he was willing to pay, there was no claim.
For similar reasons, the fraudulent/negligent
misrepresentation and negligence claims failed.
1 comment:
but see
Operating Local 649 Annuity Trust Fund v. Smith Barney Fund Mgmt. LLC, 595 F.3d 86 (2d Cir. 2010)
- ann
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