Bower v. AT&T Mobility, LLC
196 Cal. App. 4th 1545
Cal. Ct. App.2011Background
- Bower sued AT&T for misrepresentation and related claims over paying $15.50 tax on the undiscounted price of a discounted cell phone tied to a service agreement.
- Regulation 1585 allows retailers to report tax on the unbundled price and may collect tax reimbursement from customers.
- Bower alleged AT&T falsely claimed the tax was mandatory and that the retailer must pass on the full tax.
- AT&T demurred on grounds including tax collection barred by constitutional provisions, safe harbor immunity, lack of reliance, and standing.
- The trial court sustained the demurrers to the first and second amended complaints, then judgment was entered for AT&T.
- Appellant appeals challenging these rulings and seeks damages, restitution, and declaratory relief.
- The appellate court affirmed the judgment, ruling the second amended complaint failed to plead injuries in fact and other required elements.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Bower's second amended complaint states a section 17200 claim | Bower alleges discretionary tax reimbursement and misrepresentation caused injury | AT&T argues no injury in fact and misrepresentation insufficient | No; injury in fact missing; demurrer upheld |
| Whether Bower's CLRA claim is viable without tangible injury | Misrepresentation about mandatory taxes caused harm | No tangible increased cost; CLRA requires injury | No; CLRA claim fail for lack of injury in fact |
| Whether Bower's section 17500 false advertising claim survives | AT&T falsely advertised mandatory taxes | No economic injury shown tied to advertising | No; injury in fact not pleaded |
| Whether common law fraud claim can be sustained without pleaded damages | Fraudulent misrepresentation caused reliance and harm | Damages not pled; reliance insufficient | No; failure to plead injury/damages defeats fraud claim |
| Whether constitutional tax-prohibition precludes the suit (Art. XIII, §32) | Action not about refunds; seeks damages for misrepresentation | Prohibition applies to tax refund actions against retailers | Not resolved as decisive ground; court sustains demurrer on pleading grounds; issue acknowledged as pending elsewhere |
Key Cases Cited
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (standing requires injury in fact and causal link to unfair practice)
- Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634 (Cal. 2009) (CLRA injury must be tangible; not just opportunity costs)
- Peterson v. Cellco Partnership, 164 Cal.App.4th 1583 (Cal. App. 2008) (economic injury required for standing under §17200)
- Buckland v. Threshold Enterprises, Ltd., 155 Cal.App.4th 798 (Cal. App. 2007) (provision of CLRA requires actual damages; deception alone not enough)
- City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 68 Cal.App.4th 445 (Cal. App. 1998) (fraud elements and need for justifiable reliance and damages)