Wells Fargo ordered to repay an estimated $203 million in overdraft fees to customers

United Stated District Court Judge William Alsup (Northern District of California) issued a number of Orders, including injunctive relief and an order requiring refunds in the estimated amount of $203 million, after finding defendant Wells Fargo guilty of "gouging and profiteering" when it reordered bank charges from highest to lowest so as to maximize the number of overdrafts that could occur in an account.  Gutierrez v. Wells Fargo & Co.  See this previous post for more on the case.

Civil Code section 3345 cannot be used to treble restitutionary remedy under UCL

In Clark v. Superior Court, the California Supreme Court examined the interplay between the UCL and Civil Code section 3345, which provides that in an action brought by senior citizens to redress unfair competition, a trier of fact may award up to three times the amount imposed as “a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter.”  Without belaboring the extensive analysis of the legislative histories of the two statutes, the unanimous Court held:

We conclude that because Civil Code section 3345 authorizes the trebling of a remedy only when it is in the nature of a penalty, and because restitution under the unfair competition law is not a penalty, an award of restitution under the unfair competition law — which plaintiffs seek here — is not subject to section 3345's trebling provision.

Slip op., at 2.  You can find more analysis of the reversed decision from the Court of Appeal at The UCL Practitioner.

District Court grants unopposed motion to strike nationwide class allegations; denies attempt to impose actual reliance on California class members at pleading stage

United States District Court Judge Thelton E. Henderson (Northern District of California) granted in part and denied in part a motion to strike class allegations.  Collins v. Gamestop Corp., 2010 WL 3077671 (N.D.Cal. Aug. 6, 2010).  The case concerns the sale of used video games that promote additional, online features that are not available with the used game.  The discussion is short, so I quote the majority of the opinion here:

As GameStop correctly observes, Collins failed to oppose GameStop's motion to strike the nationwide class claims as to the first and second causes of action for violation of the CLRA and UCL, respectively, and also failed to oppose the motion to strike the third claim for violation of consumer protection laws in non-California jurisdictions. In particular, Collins does not contest that he does not have standing to pursue claims based on laws in jurisdictions besides California; that a class action based on laws of fifty-two jurisdictions would be unmanageable; or that a nationwide UCL or CLRA class would be improper because those statutes do not reach conduct lacking any connection to California. Accordingly, the Court GRANTS GameStop's motion to strike these class allegations from the complaint without leave to amend.

GameStop's motion to strike the remaining class allegations relies on its argument that Article III requires all members of the class to have standing, which in turn, according to GameStop, requires a showing of actual reliance. As a result, GameStop argues, a nationwide fraud claim would require individualized inquiries making class treatment inappropriate, and the UCL and CLRA putative classes cannot be certified because they include individuals who did not rely on the allegedly concealed facts and therefore lack standing.  

The Court finds GameStop's motion as to these claims to be premature and is not prepared to find, based on the pleadings alone, that Collins cannot state valid class claims. For example, although GameStop relies heavily on Sanders for the proposition that a nationwide fraud claim cannot be certified because individualized issues as to reliance would predominate, the Sanders court did not state that no such class could be certified; instead, the court granted leave to amend and “urge[d] Plaintiffs to consider whether a more narrowly defined class might be appropriate.” Sanders, 672 F.Supp.2d at 991 (emphasis added). Moreover, in a later case, the same court rejected an argument similar to GameStop's here:

Defendants argue that Plaintiffs cannot sustain classwide claims on their fraud-based claims because they must demonstrate individual reliance on the alleged concealment. However, “courts have recognized that this element, which is often phrased in terms of reliance or causation, may be presumed in the case of a material fraudulent omission.”

Tietsworth v. Sears, Roebuck & Co., Case No. C09-0288 JF (HRL), ---F.Supp.2d ----, 2010 WL 1268093, at *20 (N.D.Cal. Mar. 31, 2010) (quoting Plascensia v. Lending 1st Mortg., 259 F.R.D. 437, 447 (N.D.Cal.2009)).

More recently, another court in this district certified a nationwide class for UCL, CLRA, and common law fraud claims based on the defendants' alleged omissions. Chavez v. Blue Sky Natural Beverage Co., Case No. C06-6609 VRW, --- F.R.D. ----, 2010 WL 2528525 (N.D. Cal. June 18, 2010).FN1 The Chavez court specifically rejected defendants' arguments that the class could not be certified because no unnamed class members established Article III standing and that plaintiffs' UCL, CLRA, and common law fraud claims required individualized proof of reliance. Id. at *9-11, 13.

FN1. The court allowed nationwide UCL and CLRA claims because, unlike here, “Defendants are headquartered in California and their misconduct allegedly originated in California”; thus, “application of the California consumer protection laws would not be arbitrary or unfair to defendants.” Chavez, 2010 WL 2528525, at *14.

Another court in this district has similarly certified a class action that raised a UCL fraud claim among other causes of action. Estrella v. Freedom Fin. Network, LLC, Case No. C09-3156 SI, 2010 WL 2231790 (N.D. Cal. June 2, 2010). The defendant “argue[d] that neither plaintiff can show typicality under [the UCL fraud] claim because reliance is an individualized inquiry.” Id. at *10. The court rejected that argument, concluding that “[i]ndividualized reliance may be presumed ... where the alleged misrepresentation is material,” and that, “[f]or purposes of the class certification inquiry, plaintiffs have sufficiently alleged that the misrepresentations they have identified were material.” Id.

In light of the above case law, the Court does not find it clear from the complaint's allegations that a class action cannot be maintained. GameStop's motion to strike is therefore DENIED as to the fraud class allegations for the nationwide and California classes, and as to the UCL and CLRA class allegations for the California class.

Collins, slip op., at 2-3.

District Court certifies a class of newspaper carriers classified as independent contractors

United States District Court Judge Barry Ted Moskowitz (Southern District of California) certified a class of newspaper home delivery carriers classified as independent contractors by Lee Publications, Inc. but alleging their status as employees of Lee Publications.  Dalton, et al. v. Lee Publications, Inc., ___ F.R.D. ___, 2010 WL 2985130 (July 27, 2010).  As is usually the case, commonality was the primary area of dispute.  The Court succinctly stated California's approach to identifying the employer-employee relationship:

Under California law, the most important aspect of the employee-employer relationship is the “right to control the manner and means of accomplishing the result desired.” Cristler v. Express Messenger Sys., Inc., 171 Cal.App.4th 72, 77, 89 Cal.Rptr.3d 34 (2009) (citing Empire Star Mines Co. v. Cal. Employment Comm'n, 28 Cal.2d 33, 43-44, 168 P.2d 686 (1946), overruled on other grounds by People v. Sims, 32 Cal.3d 468, 479 n. 8, 186 Cal.Rptr. 77, 651 P.2d 321 (1982)).

Although control is the primary factor, California courts also consider several secondary factors. “Strong evidence in support of an employment relationship is the right to discharge at will, without cause.” Empire Star Mines, 28 Cal.2d at 43, 168 P.2d 686. Other secondary factors include (1) whether the one performing services is engaged in a distinct occupation; (2) the kind of occupation and whether, in the locality, the work is usually done under the direction of the principal or by a specialist without supervision; (3) the skill required; (4) whether the principal or the worker supplies the tools and the place of work; (5) the length of time for which the services are to be performed; (6) the method of payment, by time or by job; (7) whether the work is a part of the regular business of the principal; (8) whether the parties believe they are creating an employer-employee relationship; (9) the hiree's degree of investment in his business and whether the hiree holds himself or herself out to be in business with an independent business license; (10) whether the hiree has employees; (11) the hiree's opportunity for profit or loss depending on his or her managerial skill; and (12) whether the service rendered is an integral part of the alleged employer's business. JKH Enterprises, Inc. v. Dep't of Indus. Relations, 142 Cal.App.4th 1046, 1064 n. 14, 48 Cal.Rptr.3d 563 (2006) (citing S.G. Borello & Sons, Inc. v. Dep't of Indus. Relations, 48 Cal.3d 341, 350-55, 256 Cal.Rptr. 543, 769 P.2d 399 (1989)).

Slip op., at 5.

District Court certifies class of borrowers allegedly subjected to discrimination based on race

United States District Court Judge Thelton E. Henderson (Northern District of California) certified a class of African-American and Hispanic borrowers allegedly charged higher rates on mortgage loans compared to whites as a result of Defendant GreenPoint Mortgage Funding, Inc.'s practice of allowing its brokers to mark up the price of wholesale loans.  Ramirez v. Greenpoint Mortg. Funding, Inc., ___ F.R.D. ___, 2010 WL 2867068 (July 20, 2010).  The suit alleges violation of federal fair lending and housing laws.  The alleged conduct presents an interesting theory:

The pricing of GreenPoint's mortgage loans consisted of an objective and a subjective component. GreenPoint relied on objective risk factors-such as FICO score, property value, and loan-to-value ratio-to determine credit parameters and set prices for its loan products. This information was communicated to brokers on a rate sheet listing GreenPoint's “par” interest rate, which did not result in any broker compensation. That objective component of loan pricing is not at issue here.

Plaintiffs' allegations relate to GreenPoint's discretionary pricing policy, which governed brokers' compensation for their services. GreenPoint paid brokers a “yield spread premium” or “rebate” when they set the interest rate higher than par; brokers were also permitted to charge loan origination and processing fees. GreenPoint did not set any objective criteria for the imposition of these higher rates and fees, which were set by the brokers according to their discretion. Brokers were paid more for loans that cost more to the borrower, but their compensation was capped at 5 percent of the loan amount. GreenPoint monitored the fees charged by its brokers to ensure they complied with its policies.

Slip op., at 1-2.

Cellphone Fee Termination Cases affirms class action settlement with several instructive holdings

This initially unpublished opinion in Cellphone Fee Termination Cases (July 27, 2010) follows from a consolidated appeal in one of several coordinated class actions that challenged wireless telephone carriers' practice of charging early termination fees (ETF's) on customers seeking to cancel cellular telephone contracts. The defendant in this particular case is Cellco Partnership (doing business as Verizon Wireless ("Verizon")).  The class action case against Verizon went to a jury trial on June 16, 2008, in the Alameda County Superior Court. On July 8, 2008, after plaintiffs had rested their case and the defense presentation had commenced, the parties announced that they had signed a memorandum of understanding outlining the terms of a settlement. The settlement also encompassed claims of nationwide certified class claimants (excluding California class members) in a proceeding then pending before the American Arbitration Association (AAA), as well as two actions filed in federal district courts.

Objectors challenged the settlement at final approval, contending that the notice of the settlement was inadequate,  that the settlement terms were not fair, reasonable and adequate, and that incentive payments awarded to four named class representatives were improper.  The trial court overruled the objections and approved the settlement.  The objectors appealed, but the Court of Appeal (First Appellate District, Division Five) affirmed.

In an otherwise standard, but lengthy, discussion of appellate review standards, the Court offered some useful holdings:

• The appellants argued that the statement in the short-form publication notice was misleading in that it gave the impression that members of the Subscriber Class would share in a portion of the $21 million settlement fund.  The Court disagreed:  "That publication notice, however, (as well as the mail notice) directed potential settlement class members to the settlement Web site to learn more about the settlement, and the publication notice specifically referenced the ― detailed notice and claim form package which subscribers would need to submit to ― qualify for a payment."  Slip op., at 11.  Thus, the short form notice need not contain all information about the settlement, so long as it directs class members to a source of full information about the settlement.
• The appellants also argued that notice was defective in failing to disclose the enormous size of the class to the EFT Assessed Class, asserting that this interfered with an informed decision about whether to participate, object, or opt out.  The Court quickly disposed of that argument: "[Appellant] cites no authority for her position that information as to the size of the potential class, or the contingencies of recovery in any particular amount, is required. Courts which have considered such objections in the context of class settlement have rejected the claim."  Slip op., at 13.
• The appellants also contended that $10,000 incentive awards to the representatives constituted a breach of their fiduciary duty to the class. Specifically, appellant alleged that "Schroer and White received amounts grossly disproportionate to the average recovery to the ETF Assessed Class", and asserted that "Nguyen and Brown (members of the Subscriber Class) received 'pay-offs to induce them to sell out the Subscriber Class.'" Slip op., at 20. The Court commented: "While there has been scholarly debate about the propriety of individual awards to named plaintiffs, '[i]ncentive awards are fairly typical in class action cases.'"  Slip op., at 20. The Court went on, observing: "There is a surprising dearth of California authority directly addressing this question. The threshold question of whether a class representative is entitled to a fee in a California class action was recently answered in the affirmative in Clark v. American Residential Services LLC (2009) 175 Cal.App.4th 785 (Clark)." Slip op., at 21. After discussing the policies behind incentive awards and the evidence of representatives' efforts in this case, the Court concluded: "In contrast to the more detailed analysis given by the trial court to other aspects of the settlement, the discussion of the incentive awards was sparse. There is no 'presumption of fairness' in review of an incentive fee award. (Clark, supra, 175 Cal.App.4th at p. 806.) The court, however, found the awards justified in light of the total settlement on the 'substantial benefit/common fund approach' and the 'material support' provided by the named plaintiffs to the prosecution of the case. Given the familiarity of the trial court with the history of the lengthy litigation and the evidence before the court that the representatives had, over the course of the litigation, assisted with investigation, responded to discovery requests, reviewed documents and pleadings, and testified either in deposition or at trial, we find no abuse of discretion in these awards. Slip op., at 23.

Trial court, in Avalos v. La Salsa, Inc., offers early glimpse of how California courts may reconcile Stolt-Nielsen and Gentry

Earlier today, in Avalos v. La Salsa, Inc., JCCP 4488, the Santa Barbara Superior Court, Judge Denise deBellefeuille presiding, granted the defendants’ motion for reconsideration of a class certification order in to consider the impact of the recent United States Supreme Court decision in Stolt-Nielsen S. A. v. AnimalFeeds International Corp., 130 S.Ct. 1758 (2010) on the coordinated proceedings before the Court.  After an extensive analysis of Stolt-Nielsen, including its interaction with Gentry v. Superior Court, 42 Cal. 4th 443 (2007), the Court affirmed the certification order previously entered.  While the certification aspect is mildly interesting, the Court's extensive discussion of the interplay between arbitration clauses and class actions in California is the pot of gold in this unusually thorough trial court order.  While the attached opinion is a tentative ruling, the Court adopted its tentative without modification.

You can view the embedded opinion in the acrobat.com flash viewer below:

If the viewer isn't working for you (say, if you are viewing this on an iPad or iPhone), you can download the opinion here.

Kirby v. Immoos Fire Protection, Inc. examines fee shifting triggers in wage & hour litigation

After a very brief trip to the Windy City (aka, the Humid City in Need of a Breeze and my apologies to JB for not visiting), I bring you the first of yesterday's opinions related to class actions.  In Kirby v. Immoos Fire Protection, Inc. (July 27, 2010), the Court of Appeal (Third Appellate District) examined an award of attorney fees to the defendant following a dismissal by the plaintiff when certification was denied.  Fees were awarded by the trial court on causes of action for UCL violations (first cause of action), rest period violations (sixth cause of action) and section 2810 violation for entering into contracts while knowing them to be insufficient to pay all wages owed (seventh cause of action).

The plaintiff argued that bilateral attorney fee awards are precluded in any "action" where a claim arising under section 1194 is included as one of the claims.  The Court explained why it rejected that construction:

Although Kirby advances a plausible reading of the legislative history, we reject it in favor of construing the section 1194 exception as applying only to causes of action for unpaid minimum and overtime wages. (Accord Earley, supra, 79 Cal.App.4th at p. 1430.) To adopt Kirby‟s statutory construction would allow the exception of section 1194's unilateral fee shifting to eviscerate the rule of section 218.5.

We harmonize sections 218.5 and 1194 by holding that section 218.5 applies to causes of action alleging nonpayment of wages, fringe benefits, or contributions to health, welfare and pension funds. If, in the same case, a plaintiff adds a cause of action for nonpayment of minimum wages or overtime, a defendant cannot recover attorney's fees for work in defending against the minimum wage or overtime claims. Nonetheless, the addition of a claim for unpaid minimum wages or overtime does not preclude recovery by a prevailing defendant for a cause of action unrelated to the minimum wage or overtime claim so long as a statute or contract provides for fee shifting in favor of the defendant.

Slip op., at 16-17.

More interesting is the Court's conclusion that section 218.5 applies to rest break claims:

Kirby's sixth cause of action alleged that Kirby was “owed an additional one hour of wages per day per missed rest period.”  As a claim seeking additional wages, the sixth cause of action was subject to section 218.5's provision of attorney's fees for “any action brought for the nonpayment of wages, fringe benefits, or health and welfare or pension fund contributions . . . .” (Italics added.)

Slip op., at 19 (footnotes omitted).  The Court explained why the plaintiff was incorrect that section 1194 controlled the fee issue:

Kirby's claim was not based on a failure to pay the statutory minimum wage for hours he actually worked. Instead, the cause of action was one for failure to provide rest periods. If his claim had succeeded, Kirby would have been entitled to an additional wage “at the employee's rate of compensation.” (See fn. 25, ante.) The “employee's rate of compensation” refers to the contractual rate of compensation, not the legal minimum wage. Consequently, the claim is not one premised on failure to pay the minimum wage.

Slip op., at 19.  The Court relied, in part, on Murphy, which, oddly enough, seems to provide the answer to virtually all wage & hour mysteries.  It wouldn't be surprising to see an increase in minimum wage claims and a concurrent reduction in contractual wage payment claims.

The Court had less difficulty analyzing the arguments related to the UCL claim and the section 2810 claim for underfunded contracts.  Regarding the UCL, the Court observed that it was a settled issue that attorney's fees were not specified as available under the UCL.  As for the last claim, the Court found that the fee provision in the statute was a unilateral fee-shifting statute.

Efforts to prune Labor Code section 203 are relegated to compost status in Baker v. American Horticulture Supply, Inc.

An ever astute reader has directed my attention to the fact that the Court of Appeal (Second Appellate District, Division Six) today issued a modification of its June 23, 2010 Opinion in Baker v. American Horticulture Supply, Inc. (June 23, 2010) as mod. (July 21, 2010).  The modification, which is focused entirely on the "willful" definition used in Labor Code section 203, appears to respond to contentions raised in a petition for rehearing.  The majority of the text of the modification is as follows:

The application here of the ordinary definition of "willful" is supported by the judicial construction of Labor Code section 203, subdivision (a), which provides in relevant part: "If an employer willfully fails to pay . . . any wages of an employee who is discharged or who quits, the wages of the employee shall continue as a penalty from the due date thereof at the same rate until paid or until an action therefor is commenced; but the wages shall not continue for more than 30 days." (Italics added.) "The settled meaning of 'willful,' as used in section 203, is that an employer has intentionally failed or refused to perform an act which was required to be done. [Citations.] '[T]he employer's refusal to pay need not be based on a deliberate evil purpose to defraud workmen of wages which the employer knows to be due.' [Citations.]" (Amaral v. Cintas Corp. No. 2 (2008) 163 Cal.App.4th 1157, 1201.)

Slip op. (mod.), at 1-2.

We reject respondent's contention in its petition for rehearing that "conduct violating the Act is willful only if the manufacturer, jobber or distributor knows of its obligations but intentionally declines to fulfill them." The knowledge requirement would be difficult to prove and would encourage manufacturers to remain ignorant of their obligations under the Act. This would frustrate the legislative intent to provide "unique protection" to independent wholesale sales representatives. (§ 1738.10.) But a manufacturer's failure to comply with the Act would not be willful if the manufacturer proved that its failure was "the result of a good faith and reasonable belief the facts imposing the statutory obligation were not present." (Kwan v. Mercedes-Benz of North America, Inc. (1994) 23 Cal.App.4th 174, 185.) For example, a failure to comply would not be willful if the manufacturer reasonably and in good faith believed that a person did not qualify as a "wholesale sales representative" within the meaning of the Act. This interpretation "will not vitiate the intended deterrent effect of the [treble damages provision]." (Ibid.)

Slip op. (mod.), at 2.

The courts, however, have recognized that a finding of "willfulness" within the meaning of Labor Code section 203 may be negated by a reasonable, good faith belief in a legal defense to a wage claim. (Amaral v. Cintas Corp. No. 2, supra, 163 Cal.App.4th at p. 1201; Armenta v. Osmose, Inc. (2005) 135 Cal.App.4th 314, 325; Barnhill v. Robert Saunders & Co. (1981) 125 Cal.App.3d 1, 8-9; see also Cal. Code Regs., tit. 8, § 13520.) Accordingly, we conclude that a finding of a willful failure "to pay commissions as provided in the written contract" (§ 1738.15) may be negated by a reasonable, good faith belief in a legal defense to a commissions claim.

Slip op. (mod.), at 2, n. 7.  The key here is the Court's rejection of a standard that would allow willfulness only when an employer "knows of its obligations but intentionally declines to fulfill them."  An employee does not have to show that the employer had any awareness of is actual obligations; it is enough to show that the employer acted but should have acted otherwise.

Courts draw lines on scope of statutory rights protected by Labor Code section 226

On one end of the Labor Code section 226 spectrum are the defendants who assert that the "injury" requirement of section 226 is met only when an employee suffers a broken leg as a result of the defective wage statement (this would occur when the statement is printed on stone and delivered by dropping it from a substantial height above the employee, whose legs are restrained in a horizontal position to ensure impact).  On the other end of the spectrum are the few optimistic plaintiff-side firms that argue that any violation of Labor Code section 226(a) requirements is an infringement of a legal right sufficient to entitle the employee to, at minimum, statutory penalty damages.

Jaimez v. DAIOHS USA, Inc., et al., 181 Cal. App. 4th 1286 (February 8, 2010), which is the current standard in California, splits the difference at the very minimal injury level.  Specifically, Jaimez holds: "While there must be some injury in order to recover damages, a very modest showing will suffice."  Jaimez went on to state that '''this lawsuit, and the difficulty and expense [Jaimez has] encountered in attempting to reconstruct time and pay records,' may well be 'further evidence of the injury' he has suffered."  In other words, it takes something, but not much.

Today, in Morgan v. United Retail (July 19, 2010), the Court of Appeal (Second Appellate District, Division Seven) added guidance as to what constitutes valid construction of section 226 requirements, or at least one small part of section 226.  Quickly summarizing the entire opinion, the Court said:

On behalf of a class of current and former non-exempt employees, Morgan alleged that United Retail's wage statements failed to comply with section 226, subdivision (a) because they listed the total number of regular hours and the total number of overtime hours worked by the employee, but did not list the sum of the regular and overtime hours worked in a separate line. The trial court granted summary adjudication in favor of United Retail on the section 226 claim. We conclude that the trial court properly granted summary adjudication because United Retail's wage statements complied with the statutory requirements of section 226 by “showing . . . total hours worked.” (§ 226, subd. (a)(2).) We accordingly affirm.

Slip op., at 2.  The Court of Appeal actually went out of its way to analyze the obligations imposed by section 226(a)(2):

Apart from the summary conclusion in Rubin, however, none of the published cases or DLSE opinion letters directly address whether the “total hours worked” component of section 226 may be satisfied by separately listing the total regular hours and the total overtime hours worked during the pay period. (§ 226, subd. (a)(2).) Section 226 itself does not define the terms “showing” or “total hours worked” anywhere in the statute. Yet in construing statutes, we must be mindful that “words are to be given their plain and commonsense meaning.” (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1103.) In other words, we are not free to “give the words an effect different from the plain and direct import of the terms used.” (California Fed. Savings & Loan Assn. v. City of Los Angeles (1995) 11 Cal.4th 342, 349.)

Slip op., at 11.  After much analysis, the Court concluded that summary judgment was correctly granted:  "Consistent with the language of section 226 and the DLSE's May 17, 2002 opinion letter, United Retail's wage statements listed 'the precise, actual number of hours worked' by the employee at each hourly rate of pay in effect during the pay period."  Slip op., at 12.  You can't fault this panel for the work they did, construing statutory language, examining DLSE materials, looking at a wage statement exemplar on the DLSE's website, and analyzing the import of 1984 and 2000 legislation affecting section 226.

Other courts have been drawing their own lines around section 226 claims.  In an unpublished opinion, the Ninth Circuit, in Villacres v. ABM Industries Incorporated (June 17, 2010) (D.C. Case No. 2:07-cv-05327-VAP-OP), while not tackling the extent of injury required to satisfy section 226, was clear that the "intrusion upon the legally protected right" is not, in its view, sufficient to state a claim:

Villacres argued that violations of section 226(a) in and of themselves are injuries sufficient to make section 226(e) relief available to him and his proposed class. This is not how California courts typically have defined “injury.” See Steketee v. Lintz, Williams & Rothberg, 38 Cal. 3d 46, 54 (1985) (“‘Wrongful act’ and ‘injury’ are not synonymous.  The word ‘injury’ signifies both the negligent cause and the damaging effect of the alleged wrongful act and not the act itself.”)(citations omitted); Lueter v. California, 115 Cal. Rptr. 2d 68, 81 (Cal. Ct. App. 2002) (“Although the words ‘injury’ and ‘damage’ often are used interchangeably, a distinction may be made.  ‘Injury’ refers to the fact of harm suffered by the plaintiff due to the defendant’s conduct.  ‘Damages’ refers to the monetary sum that the plaintiff may be awarded as compensation for injury.”). We have no reason to believe that the California Supreme Court would interpret section 226(e) differently. The district court did not err when it held that section 226(e) relief was unavailable to Villacres and his proposed class.

Memorandum, at 3.  It is interesting to note, however, that this panel's construction of the term "injury" is at odds with another Ninth Circuit panel's view on injury, expressed days later.  In Edwards v. First American Title Insurance (9th Cir. June 21, 2010), the Ninth Circuit, in a published opinion, found that "injury" existed in a RESPA case, despite the absence of an overcharge:  "Because the statutory text does not limit liability to instances in which a plaintiff is overcharged, we hold that Plaintiff has established an injury sufficient to satisfy Article III.  Slip op., at 9095.  Applying that same analysis to a 226 claim, once could see that same Edwards panel concluding that the violation of a protected right under 226 causes the necessary "injury" and the alternative damage clause (greater of actual damage or statutory damages) is triggered when no "actual" damage exists.

So the Ninth Circuit has figured out what it thinks the California Supreme Court would do were it faced with the injury issue raised by section 226.

Until the California Supreme Court decides to tell us what it thinks about any of this, we'll have to settle for Jaimez, Morgan, and the Ninth Circuit's prognostications.