Kathleen Sonner v. Premier Nutrition Corp.
971 F.3d 834
| 9th Cir. | 2020Background
- This is a certified California consumer class action alleging false advertising of Premier Nutrition’s product “Joint Juice.”
- Plaintiff Kathleen Sonner amended her complaint on the eve of trial to drop her CLRA damages claim and seek $32,000,000 as equitable restitution under California’s UCL and CLRA, intending a bench (non-jury) recovery.
- Premier moved to dismiss the restitution claims, arguing federal equitable principles and California’s inadequate-remedy-at-law doctrine bar equitable restitution when damages are available; the district court granted dismissal and refused leave to replead the dropped damages claim.
- The district court found Sonner had an adequate legal remedy (damages identical to the restitution sought) and that she failed to plead inadequacy of legal remedies required for equitable relief.
- The Ninth Circuit affirmed, holding federal courts in diversity must apply traditional federal equitable principles (including the requirement that legal remedies be inadequate) when awarding restitution under state statutes like the UCL and CLRA, and it upheld the denial of leave to amend.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether federal courts sitting in diversity must apply federal equitable principles (including the inadequacy-of-legal-remedy requirement) when awarding restitution under state statutes (UCL/CLRA) | Sonner: State law governs; California has effectively abrogated the inadequate-remedy-at-law requirement for UCL/CLRA restitution | Premier: Federal courts must apply traditional federal equitable principles, which require absence of an adequate legal remedy | Federal equitable principles govern; a plaintiff must show lack of an adequate legal remedy before equitable restitution is available in federal court in diversity |
| Whether Sonner adequately alleged lack of an adequate legal remedy to support equitable restitution | Sonner: Equitable restitution under UCL/CLRA is proper and she seeks the same relief (refund) in equity | Premier: Sonner seeks the same monetary recovery available at law (damages); she did not plead inadequacy | Held for Premier: Sonner failed to plead or show inadequacy; identical damages make legal remedy adequate, so restitution claims properly dismissed |
| Whether the district court abused its discretion in denying leave to amend to replead CLRA damages after Sonner voluntarily dropped it pretrial | Sonner: Should be allowed to amend to restore damages claim | Premier: Repleading would be unfair and prejudicial given strategic pretrial dismissal and prior warning | No abuse of discretion: district court permissibly denied leave given Sonner’s strategic choice and court’s prior admonition |
| Whether allowing state law to expand equitable remedies would conflict with federal policies (e.g., Seventh Amendment jury right) | Sonner: California’s policy streamlines UCL/CLRA remedies; state intent should control | Premier: Federal policy protecting jury trial and traditional equitable boundaries counsels applying federal equitable limits | Held for Premier: Federal policy (including jury-trial protection) supports applying federal equitable limits despite state statutory authorization |
Key Cases Cited
- Erie R.R. Co. v. Tompkins, 304 U.S. 64 (establishes that federal courts in diversity apply state substantive law and federal procedure)
- Guaranty Trust Co. v. York, 326 U.S. 99 (federal courts’ equitable powers remain governed by traditional equity principles; state law cannot expand or contract federal equity)
- Hanna v. Plumer, 380 U.S. 460 (distinguishes substantive vs. procedural rules under Erie analysis)
- Byrd v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525 (balance of federal and state policies in Erie analysis)
- Dairy Queen, Inc. v. Wood, 369 U.S. 469 (equitable relief is inappropriate where adequate remedy at law exists)
- Grupo Mexicano de Desarrollo S.A. v. Alliance Bond Fund, Inc., 527 U.S. 308 (fusion of law and equity does not alter substantive equitable principles)
- Mort v. United States, 86 F.3d 890 (9th Cir.) (reiterating basic doctrine that equity should not act when adequate legal remedy exists)
- Sims Snowboards, Inc. v. Kelly, 863 F.2d 643 (9th Cir.) (district court must consider state law in some equitable contexts, but York’s limits remain applicable)