Kwikset Corp. v. Superior Court
51 Cal. 4th 310
Cal.2011Background
- James Benson sued Kwikset for false advertising and unfair competition over locksets labeled “Made in U.S.A.” that allegedly used foreign parts or foreign manufacture; bench trial ruled for Benson.
- Prop. 64 (2004) narrowed private UCL standing to persons with injury in fact who have lost money or property; it applied to pending cases.
- Court of Appeal affirmed merits but vacated judgment for lack of standing; remanded to allow Benson to plead standing under Prop. 64.
- Benson added plaintiffs Snook, Grecco, and Wilson; second amended complaint sought injunctive relief only and alleged reliance on mislabeling.
- Kwikset demurred; trial court held plaintiffs adequately alleged standing; Court of Appeal reversed on standing, remanding for further proceedings consistent with Prop. 64, and this Court granted review.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| What is lost money or property under Prop. 64? | Benson argues economic injury includes overpayment due to mislabeling; loss of money suffices. | Kwikset contends no loss of money or property since plaintiffs received usable locksets. | Lost money or property requires economic injury; mislabeling causing overpayment satisfies standing. |
| Is causation/reliance required under 'as a result of'? | Plaintiffs relied on labels in purchasing and were harmed by misrepresentation. | Causation/reliance is not adequately shown or is too attenuated at pleading. | Plaintiff must show actual reliance/causation; misrepresentation must be an immediate cause of injury-producing conduct. |
| Does 'benefit of the bargain' defeat standing under Prop. 64? | Receiving a fully functioning lockset does not negate injury from misrepresentation if purchased under false labeling. | Having the benefit of the bargain means no loss of money or property. | Benefit-of-the-bargain does not automatically bar standing; standing is controlled by injury in fact and lost money or property. |
| Should restitution eligibility determine standing? | Restitution isn’t a prerequisite to standing under Prop. 64. | Standing should track restitution eligibility. | Standing under §17204 is not dependent on §17203 restitution eligibility; injunctions may be available absent restitution. |
Key Cases Cited
- Lujan v. Defenders of Wildlife, 504 U.S. 555 (1992) (injury in fact is concrete and particularized)
- Californians for Disability Rights v. Mervyn’s, LLC, 39 Cal.4th 223 (2006) (Prop. 64 standing and the federal-influenced test)
- Clayworth v. Pfizer, Inc., 49 Cal.4th 758 (2010) (standing and restitution separation; misrepresentation context)
- In re Tobacco II Cases, 46 Cal.4th 298 (2009) (reliance as required in UCL fraud actions)
- Kasky v. Nike, Inc., 27 Cal.4th 939 (2002) (broad reach of UCL; misrepresentation and remedy)
- Hall v. Time Inc., 158 Cal.App.4th 847 (2008) (injury in fact and economic harm concepts in Prop. 64 context)
- Peterson v. Cellco Partnership, 164 Cal.App.4th 1583 (2008) (economic injury requirement under Prop. 64)