More coverage of Meyer v. Sprint Spectrum

In Meyer v. Sprint Spectrum L.P. (January 29, 2009), the California Supreme Court considered a matter, arising under the California Consumer Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.), in which plaintiffs sued the defendant cellular telephone company, alleging that its arbitration agreement and other remedial provisions were unconscionable. In Meyer, the plaintiffs did not allege that these provisions had been enforced against them or caused them damage. The primary issue considered by Meyer was whether, under these circumstances, a plaintiff may obtain injunctive relief to compel the removal of the allegedly unconscionable provisions under the CLRA. The ancillary issue was whether a plaintiff may obtain declaratory relief pursuant to Code of Civil Procedure section 1060 to declare these provisions unlawful and unenforceable. The Supreme Court concluded that neither form of relief was available to plaintiffs, affirming the decision below.

The Meyer decision has all the hallmarks of a case that will be misused and misunderstood for years to come.  Its holding regarding "damages" will be grist for the deceptive briefing mill. One significant point made in the decision, and likely to be ignored when inconvenient for some defendant's demurrer, is that “any damages” can be something other than “actual” or “pecuniary damages”:

“As to the first argument, plaintiffs contend that the phrase “any damage” is not synonymous with “actual damages,” which generally refers to pecuniary damages. The language of section 1780(a) indicates that plaintiffs are correct. If “any damage” and “actual damages” were synonymous, then it seems likely only the latter phrase would have been used in the first part of subdivision (a). The juxtaposition of the two phrases so close together indicates that the phrases have different meanings. Moreover, the breadth of the phrase “any damage” indicates a category that includes, but is greater than, “actual damages,” i.e. those who are eligible for the remedy of “actual damages” are a subset of those who have suffered “any damage.” Sprint does not dispute this point. It concedes that “any damage” may encompass harms other than pecuniary damages, such as certain types of transaction costs and opportunity costs.

(Slip op., at p. 5, footnote omitted.) Construing Kagan v. Gibraltar Sav. & Loan Assn. (1984) 35 Cal.3d 582 to fit this rubric, the Meyer Court noted that in Kagan, the plaintiff wasn’t charged an improper fee, but did expend time and resources resisting the fee after the financial institution announced its intention to assess the fee. (Slip op., at pp. 8-9.)

The opinion has other interesting holdings. For example, the Meyer Court explicitly declares that the statute of limitation applicable to a CLRA claim is subject to a delayed discovery rule, based on an objective reasonable consumer standard. (Slip op., at p. 12, citing Chamberlain v. Ford Motor Co. (N.D.Cal. 2005) 369 F.Supp.2d 1138, 1148.) The decision also confirms that settling with a plaintiff individually does not undermine a plaintiff’s status as a legitimate class representative.

From the consumer standpoint, Meyer is mixed bag of holdings. But on the damage issue, the UCL Practitioner likely has the right of it when noting that this looks suspiciously like Proposition 64 creep.