Veronica Gutierrez v. Wells Fargo Bank , 589 F. App'x 824 ( 2014 )

FILED
NOT FOR PUBLICATION OCT 29 2014
MOLLY C. DWYER, CLERK
UNITED STATES COURT OF APPEALS U.S. COURT OF APPEALS
FOR THE NINTH CIRCUIT
VERONICA GUTIERREZ and ERIN No. 13-16195
WALKER, individually and on behalf of
all others similarly situated, D.C. No. 3:07-cv-05923-WHA
Plaintiffs - Appellees,
MEMORANDUM*
v.
WELLS FARGO BANK, NA,
Defendant - Appellant.
VERONICA GUTIERREZ and ERIN No. 13-16598
WALKER, individually and on behalf of
all others similarly situated, D.C. No. 3:07-cv-05923-WHA
Plaintiffs - Appellees,
v.
WELLS FARGO BANK, NA,
Defendant - Appellant.
*
This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
VERONICA GUTIERREZ and ERIN No. 13-16749
WALKER, individually and on behalf of
all others similarly situated, D.C. No. 3:07-cv-05923-WHA
Plaintiffs - Appellants,
v.
WELLS FARGO BANK, NA,
Defendant - Appellee.
Appeal from the United States District Court
for the Northern District of California
William Alsup, District Judge, Presiding
Argued and Submitted October 8, 2014
San Francisco, California
Before: THOMAS, McKEOWN, and W. FLETCHER, Circuit Judges.
In Gutierrez v. Wells Fargo Bank, NA, 704 F.3d 712 (9th Cir. 2012), we held
that the National Bank Act preempts state regulation of the posting order of debit
card transactions. Because the restitution award was predicated on the district
court’s conclusion that state law prohibited Wells Fargo from posting debit
transactions in a high-to-low order, we vacated and remanded for the district court
to determine “what relief, if any,” was owed to the plaintiffs (collectively
“Gutierrez”) on the surviving state law fraud and misrepresentation claims. Id.
at 730.
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On remand, the district court awarded Gutierrez the same amount of
restitution, enjoined Wells Fargo from making certain false or misleading
statements, and denied Gutierrez’s request for prejudgment interest. We affirm the
district court’s award of restitution and denial of prejudgment interest. We vacate
the district court’s injunction and remand for entry of an injunction consistent with
this memorandum disposition.
I. Restitution
Wells Fargo attacks the restitution award on multiple grounds. It first
contends that a pretrial email sent by Gutierrez’s counsel waived any claim to
restitution arising from Wells Fargo’s false or misleading statements. However,
Wells Fargo did not press a waiver argument before trial, and the district court
cited ample record evidence that all parties “understood that restitution was still on
the table in the event an injunction against the practice was entered.” We agree
with the district court that Gutierrez did not waive her claim to restitution.
Wells Fargo further alleges that the district court’s restitution award
penalizes the bank for practices permitted by the National Bank Act. Although the
district court erred in stating that Wells Fargo’s misrepresentations were
“intertwined with the other elements of the scheme and [could not] be
meaningfully separated into discrete causes of harm,” this descriptive error is
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harmless. As the district court clarified on the next page of its ruling, the
restitution award was based on Wells Fargo “affirmatively misleading the class,” a
state law claim, not on a “practice protected by federal preemption.”
Wells Fargo also characterizes the restitution award as an improper award of
expectation damages. It argues that the district court was not empowered to award
class-wide restitution because “there [was] no evidence in the record that all class
members would have behaved differently in the absence of the
misrepresentations.” California courts, however, have “repeatedly and consistently
[held] that relief under the UCL is available without individualized proof of
deception, reliance and injury.” In re Tobacco II Cases, 207 P.3d 20, 35 (Cal.
2009). Rather, California law permits plaintiffs to recover any property that “may
have been acquired by means of” a defendant’s false or misleading statements.
Cal. Bus. & Prof. Code § 17203.
As we noted in our prior opinion, the record is replete with examples of
Wells Fargo’s false and misleading statements. Gutierrez, 704 F.3d at 728-30.
The district court’s calculation of the restitution award was based on factual
findings that are not clearly erroneous; “substantial evidence” supports the
restitution award. Colgan v. Leatherman Tool Grp., Inc., 38 Cal. Rptr. 3d 36, 63
(Ct. App. 2006). We reject Wells Fargo’s additional arguments that restitution is
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barred by the federal Due Process Clause or the Rules Enabling Act.
II. The Injunction
The district court enjoined Wells Fargo from making “any false or
misleading representations relating to the posting order of debit-card purchases,
checks, and ACH transactions in its customer bank accounts.” Wells Fargo urges
us to invalidate the injunction because it does not “‘state its terms specifically’ and
‘describe in reasonable detail . . . the act or acts restrained.’” Del Webb Cmtys.,
Inc. v. Partington, 652 F.3d 1145, 1149-50 (9th Cir. 2011) (quoting Fed. R. Civ. P.
65(d)(1)(B)-(C)). Unlike the injunction in Del Webb, which contained a vague
prohibition on all “illegal, unlicensed and false practices,” id. at 1150, the
injunction here gives the defendant “fair notice” in “plain English” of what conduct
is proscribed, Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1134 (9th
Cir. 2006).
The injunction is overbroad, however, because it encompasses false
statements regarding the posting order of checks and ACH transactions. The
district court made specific factual findings that consumers were not confused by
the posting order of checks and ACH transactions. The injunction is “more
burdensome to the defendant than necessary to provide complete relief to the
plaintiffs.” Califano v. Yamasaki, 442 U.S. 682, 702 (1979). We vacate the
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injunction and direct the district court to enter an injunction that does not reference
false or misleading statements about the posting order of checks and ACH
transactions.
III. Prejudgment Interest
On cross-appeal, Gutierrez asserts that the district court erred by failing to
award prejudgment interest pursuant to California Civil Code Sections 3287 and
3288. Section 3287 requires the award of prejudgment interest when the amount
of a monetary award is “certain, or capable of being made certain by calculation”
before trial. Here, by contrast, the amount of restitution awarded to Gutierrez
“depend[ed] upon a judicial determination based upon conflicting evidence.”
Esgro Cent., Inc. v. Gen. Ins. Co., 98 Cal. Rptr. 153, 158 (Ct. App. 1971). Section
3288 states that prejudgment interest “may be given, in the discretion of” the trier
of fact. The district court did not abuse its discretion with respect to the denial of
prejudgment interest.
AFFIRMED in part, VACATED in part, and REMANDED. Each party
shall pay its own costs on appeal.
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