Hansen v. Newegg.com Ams., Inc.
236 Cal. Rptr. 3d 61
Cal. Ct. App. 5th2018Background
- Hansen sued Newegg alleging its website displayed fictitious "former" prices and "savings" (false discount labels) that induced purchases in violation of the UCL, FAL (§17501) and CLRA.
- Hansen alleged he relied on the false former prices when buying two computer components and would not have purchased them but for those representations.
- Newegg demurred for lack of standing, arguing Hansen suffered no loss of money or property because he received the products he wanted at the price paid (i.e., he got the "benefit of the bargain").
- The trial court sustained the demurrer without leave to amend and dismissed the case.
- On appeal the court considered whether Kwikset permits standing where the alleged misrepresentation is a false former price/discount rather than a product-attribute label.
- The Court of Appeal reversed, holding Hansen alleged sufficient economic injury to satisfy standing under the UCL, FAL and CLRA.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Standing under UCL/FAL (lost money or property) | Hansen relied on false former-price discounts and would not have purchased but for that reliance, so he lost money. | Newegg: receiving the product at the advertised price means no economic injury; benefit-of-the-bargain defeats standing. | Reversed trial court: Kwikset covers false former-price claims; alleging reliance and but-for purchase suffices for standing. |
| Scope of Kwikset (material misrepresentation) | Kwikset's rule that a buyer who relied on a misrepresentation and would not have bought has standing applies to price/discount misrepresentations. | Newegg: Kwikset should be limited to product-attribute/origin misrepresentations; false discounts do not change product value. | Court: Kwikset is not so limited; former-price representations can be material and thus give standing. |
| CLRA standing ("any damage") | If Hansen has UCL/FAL standing, he has CLRA standing because he alleged economic injury. | Newegg argued no injury so no CLRA standing either. | Court: CLRA standing met if UCL/FAL standing met; Hansen adequately alleged "damage." |
| Legislative intent/statutory context | Hansen: statutes (e.g., §17501 and Civ. Code §1770(a)(13)) show Legislature treats false former-price claims as material. | Newegg: consumer should show overpayment relative to actual value or ability to buy elsewhere cheaper. | Court: statutory prohibitions support recognizing price-label misrepresentations as material; further market-comparison proof not required at pleading stage. |
Key Cases Cited
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (holding a consumer who relied on a misrepresentation and would not have purchased otherwise has lost money or property for UCL standing)
- Hinojos v. Kohl's Corp., 718 F.3d 1098 (9th Cir. 2013) (applying Kwikset to hold false former-price/discount allegations satisfy UCL/FAL standing)
- Meyer v. Sprint Spectrum L.P., 45 Cal.4th 634 (Cal. 2009) (interpreting CLRA's "any damage" requirement broadly)