Consumer products companies that face class action litigation in California most often see two causes of action: (i) claims that the company violated California’s infamous Unfair Competition Law (UCL); and (ii) claims that the company has violated the Consumer Legal Remedies Act (CLRA).
These statutes are similar in some ways, but they have an important difference. A UCL claim is equitable, providing only for restitution and injunctive relief. Gardner v. Safeco Ins. Co. of Am., No. 14-CV-02024-JCS, 2014 WL 2568895, at *7 (N.D. Cal. June 6, 2014) (“The remedies available under the UCL are generally limited to the equitable remedies of restitution and injunctive relief.”) In contrast, the CLRA allows for damages.
This important difference often provides consumer products companies with a strategic argument that can be made at the pleading stage. Because the UCL is equitable, relief under the UCL “is subject to fundamental equitable principles, including inadequacy of the legal remedy.” Prudential Home Mortgage Co. v. Superior Court, 66 Cal. App. 4th 1236, 1249 (1998). Ignoring this rule, plaintiffs often assert a UCL claim, seeking restitution and an injunction, as well as a claim for damages under the CLRA.
But by asserting a claim for damages, plaintiffs are, in effect, conceding that they have an adequate remedy at law. Consumer products companies often can defeat a UCL claim simply by pointing to the plaintiff’s damages allegations and arguing that they preclude any showing that the plaintiff lacks an adequate remedy at law. See Durkee v. Ford Motor Co., No. C 14-0617 PJH, 2014 WL 4352184, at *2 (N.D. Cal. Sept. 2, 2014) (“A plaintiff seeking equitable relief must establish that there is no adequate remedy at law available.”); Gardner v. Safeco Ins. Co. of Am., No. 14-CV-02024-JCS, 2014 WL 2568895, at *8 (N.D. Cal. June 6, 2014) (“Gardner contends he has no adequate remedy at law, but fails to explain how his alleged injury cannot be remedied by the payment of damages. Accordingly, the UCL claim will be dismissed ….); Adams v. I-Flow Corp., No. CV09-09550 R SSX, 2010 WL 1339948, at *7 (C.D. Cal. Mar. 30, 2010) (“Injunctive relief under the Unfair Competition Law, however, is available only to plaintiffs who can establish that they have no adequate remedy at law for damages available to them. Should plaintiffs ultimately prevail on their claims, they will be adequately compensated for their alleged injuries by an award of damages.”).