Friday, June 19, 2020

restitution unavailable in fed ct if damages are adequate, even for Cal. state law claims

Sonner v. Premier Nutrition Corporation, --- F.3d ----, 2020 WL 3263043, No. 18-15890 (9th Cir. Jun. 17, 2020) 

The court explains: 

On the brink of trial after more than four years of litigation [over allegedly false advertising of “Joint Juice”], Plaintiff-Appellant Kathleen Sonner voluntarily dismissed her sole state law damages claim and chose to proceed with only state law equitable claims for restitution and injunctive relief. A singular and strategic purpose drove this maneuver: to try the class action as a bench trial rather than to a jury. Indeed, Sonner continued to seek $32,000,000 on behalf of the consumers she represented, but as equitable restitution rather than as damages. But, to Sonner’s dismay, the plan backfired when, relying on its interpretation of California law, the district court dismissed her claims for restitution because an adequate remedy at law, i.e., damages, was available.

Affirmed, because federal courts have to apply equitable principles derived from federal common law, even to state law UCL/CLRA claims for equitable restitution. It doesn’t matter that state courts might do otherwise and that this creates state/federal divergence in results.  In modern times, the Supreme Court “has never held or suggested that state law can expand a federal court’s equitable powers, even if allowing such expansion would ensure a similar outcome between state and federal tribunals.”

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