Acknowledging that Medrazo v. Honda of North Hollywood (2012) 205 Cal.App.4th 1 went too far in stating that reliance was not a necessary element of causation of economic loss required to prove standing in a UCL case based on a fraud theory, the majority in this 2-1 decision hold that the plaintiff presented sufficient evidence to raise a triable issue of fact as to reliance and resulting economic injury. Defendant allegedly advertised a 40% off sale without stating that the discount applied only to certain items. Plaintiff was lured into the store by the promised discount, selected some items for purchase, stood in a long line at the cashier, and only then was told the selected items were not discounted. Feeling pressured and embarrassed plaintiff paid full price for some of the selected items. Reliance on the advertised discount was a partial cause of the loss incurred through paying the undiscounted price. That was enough, reliance on the false advertising need not be the sole cause of the loss. Also, the opinion points out that a contrary decision would allow bait-and-switch artists to go free. Those who didn’t buy wouldn’t have standing because they spent (lost) no money. Those who did buy would lack standing because they bought even after the switch was revealed.
California Court of Appeal, Second District, Division 4 (Willhite, Acting P.J.; Bigelow, P.J., sitting by assignment, dissenting); December 15, 2016; 6 Cal. App. 5th 907