Antonio Hinojos v. Kohl's Corporation , 718 F.3d 1098 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
ANTONIO S. HINOJOS, individually No. 11-55793
and on behalf of all others similarly
situated, D.C. No.
Plaintiff-Appellant, 2:10-cv-07590-
ODW-AGR
v.
KOHL’S CORPORATION , a Wisconsin OPINION
corporation; KOHL’S DEPARTMENT
STORES, INC., a Delaware
corporation,
Defendants-Appellees.
Appeal from the United States District Court
for the Central District of California
Otis D. Wright, II, District Judge, Presiding
Argued and Submitted
January 10, 2013—Pasadena, California
Filed May 21, 2013
Before: Stephen Reinhardt, Kim McLane Wardlaw,
and Richard A. Paez, Circuit Judges.
Opinion by Judge Reinhardt;
Concurrence by Judge Wardlaw
2 HINOJOS V . KOHL’S CORP .
SUMMARY*
California Law / Standing
The panel reversed the district court’s dismissal of claims
under California’s Unfair Competition Law, Fair Advertising
Law, and Consumer Legal Remedies Act brought by a
plaintiff in a putative class action against Kohl’s Department
Stores alleging false advertising.
The panel applied the California Supreme Court’s holding
in Kwikset Corp. v. Superior Court, 246 P.3d 877 (Cal. 2011),
and held that when a consumer purchases merchandise on the
basis of false price information, and when the consumer
alleges that he would not have made the purchase but for the
misrepresentation, he has standing to sue under the Unfair
Competition Law and Fair Advertising Law because he has
suffered an economic injury. The panel also reversed the
district court’s dismissal of plaintiff’s Consumer Legal
Remedies Act claims. Finally, the panel denied defendant’s
motion to certify the issues to the California Supreme Court
both on the merits and because of the circumstances attendant
to its filing (where defendant only requested certification for
the first time after oral argument).
Judge Wardlaw concurred in the majority opinion, except
that she concurred only as to the result in Part III, which
denied Kohl’s request to certify the state law standing
requirements for review by the California Supreme Court.
Judge Wardlaw would simply deny the request as untimely.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
HINOJOS V . KOHL’S CORP . 3
COUNSEL
Matthew J. Zevin (argued), Stanley • Iola, LLP, and Derek J.
Emge, Emge & Assoc., San Diego, California, for Plaintiffs-
Appellants.
James F. Speyer (argued), Arnold & Porter LLP, Los
Angeles, California, for Defendants-Appellees.
OPINION
REINHARDT, Circuit Judge:
Most consumers have, at some point, purchased
merchandise that was marketed as being “on sale” because
the proffered discount seemed too good to pass up. Retailers,
well aware of consumers’ susceptibility to a bargain,
therefore have an incentive to lie to their customers by falsely
claiming that their products have previously sold at a far
higher “original” price in order to induce customers to
purchase merchandise at a purportedly marked-down “sale”
price. Because such practices are misleading—and
effective—the California legislature has prohibited them.
The Plaintiff here, Antonio Hinojos, alleges that he was
a victim of such a practice and bought merchandise from a
Kohl’s Department Store that he would not have purchased
had he not been misled by advertisements stating that the
merchandise was marked down from a fictitious “original” or
“regular” price. The only question before us on this appeal is
whether Hinojos alleges that he “lost money or property” and,
therefore, has statutory standing under California law to sue
Kohl’s to enforce California’s prohibition on this deceptive
4 HINOJOS V . KOHL’S CORP .
marketing practice. Kohl’s argues, and the district court
agreed, that Hinojos lost neither money nor property because
he acquired the merchandise he wanted at the price that was
advertised, even if the advertised price was falsely
represented as a “sale.” Because the California Supreme
Court has previously rejected a similar argument, holding that
a consumer has “lost money or property” so long as false
advertisements induced him to buy a product he would not
have purchased or to spend more than he otherwise would
have spent, we reverse. For similar reasons, we also reverse
the district court’s dismissal of Hinojos’s nearly identical
claims under California’s Consumer Legal Remedies Act.
FACTUAL BACKGROUND
Kohl’s Corporation and its wholly owned subsidiary
Kohl’s Department Stores, Inc. (collectively, “Kohl’s” or “the
Defendants”), are retailers that operate a chain of general
department stores selling clothing, footwear, home products
and accessories. Hinojos purchased several items of apparel
and luggage at a Kohl’s department store. Hinojos alleges
that he relied upon deceptive advertisements in deciding to
purchase these items from Kohl’s. Specifically, he alleges
that he purchased several items1 that were advertised as being
substantially reduced from their “original” or “regular” prices
but that were, in reality, routinely sold by Kohl’s at the
1
Specifically, Hinojos purchased Samsonite luggage that was
advertised as 50% off its “original” price of $299.99, Chaps Solid Pique
polo shirts that were marked down 39% from their “original” price of
$36.00, Chaps Solid Pique polo shirts that were marked down 32% from
their “original” price of $39.50, Chaps t-shirts that were marked down
40% from their “original” price of $26.00, and Sonoma Life & Style
Henley Tops that were marked down 40% from their “original” price of
$22.00.
HINOJOS V . KOHL’S CORP . 5
advertised “sale” prices rather than the purported “original”
or “regular” prices. Hinojos further alleges that the
advertised “original” or “regular” prices did not reflect
prevailing retail market prices during the three months
immediately preceding the publication of the advertisements
in question. Finally, Hinojos alleges that he “would not have
purchased [these] products at Kohl’s in the absence of Kohl’s
misrepresentations.”
PROCEDURAL BACKGROUND
Hinojos filed a putative class action complaint in
California Superior Court asserting causes of action under
California’s Unfair Competition Law (UCL), Cal. Bus. &
Prof. Code §§ 17200, et seq.; Fair Advertising Law (FAL),
Cal. Bus. & Prof. Code §§ 17500, et seq.; and Consumer
Legal Remedies Act (CLRA), Cal. Civ. Code §§ 1750, et seq.
Kohl’s removed the action to the federal district court
pursuant to the Class Action Fairness Act, 28 U.S.C.
§1332(d)(2). On December 1, 2010, the district court
dismissed Hinojos’s UCL and FAL claims, determining that
Hinojos did not have standing under the UCL or the FAL,
which require a plaintiff to have “lost money or property” as
a result of the defendant’s false advertising in order bring a
claim, because Hinojos had acquired the merchandise he
wanted at the price advertised.
Shortly thereafter, the California Supreme Court
published its opinion in Kwikset Corp. v. Superior Court,
246 P.3d 877 (Cal. 2011), which held that the purchasers of
goods falsely labeled “made in U.S.A.” had standing under
the UCL and FAL when the purchasers alleged that the false
labeling induced them to purchase the goods and they would
not have purchased them otherwise. Hinojos filed a motion
6 HINOJOS V . KOHL’S CORP .
for reconsideration based on Kwikset, which the district court
denied after concluding that Kwikset applied only to false
advertisements regarding a product’s “composition, effects,
origin, and substance.”
On April 25, 2010, the district court granted the
Defendants’ FRCP 12(c) motion for judgment on the
pleadings and dismissed Hinojos’s only remaining claim, i.e.,
his CLRA claim. The district court concluded that Hinojos
did not have standing under the CLRA because he was unable
to show he suffered “any damage” as a result of Kohl’s false
advertising. Hinojos timely appealed the dismissal of his
UCL, FAL, and CLRA claims.
JURISDICTION AND STANDARD OF REVIEW
The district court had jurisdiction over this putative class
action under 28 U.S.C. § 1332(d)(2) because Hinojos is a
citizen of California, the Defendants are citizens of another
state and the amount in controversy exceeds $5,000,000. We
have jurisdiction under 28 U.S.C. § 1291.
We review de novo the district court’s dismissal of
Hinojos’s claims. See Berg v. Popham, 412 F.3d 1122, 1125
(9th Cir. 2005) (holding that a district court’s grant of both
FRCP 12(b) and 12(c) motions are reviewed de novo). As a
federal court sitting in diversity, we “must apply the
substantive law of California, as interpreted by the California
Supreme Court,” Karen Kane Inc. v. Reliance Ins. Co.,
202 F.3d 1180, 1183 (9th Cir. 2000), even if that law changes
after judgment is entered below. See Nelson v. Brunswick
Corp., 503 F.2d 376, 381 (9th Cir. 1974).
HINOJOS V . KOHL’S CORP . 7
ANALYSIS
I
The UCL is a broad California statute that prohibits
business practices that constitute “unfair competition,” which
is defined as
any unlawful, unfair or fraudulent business act
or practice and unfair, deceptive, untrue or
misleading advertising and any act prohibited
by Chapter 1 (commencing with Section
17500) of Part 3 of Division 7 of the Business
and Professions Code.
Cal. Bus. & Prof. Code § 17200. The UCL expressly
incorporates the FAL’s prohibition on unfair advertising as
one form of unfair competition. The FAL, in turn, provides
in relevant part:
No price shall be advertised as a former price
of any advertised thing, unless the alleged
former price was the prevailing market price
. . . within three months next immediately
preceding the publication of the advertisement
or unless the date when the alleged former
price did prevail is clearly, exactly and
conspicuously stated in the advertisement.
Cal. Bus. & Prof. Code § 17501. Thus, the FAL expressly
prohibits the type of false advertising that Kohl’s allegedly
8 HINOJOS V . KOHL’S CORP .
engaged in and the UCL provides individual consumers with
a cause of action to enforce that prohibition.2
In 2004, however, the voters of California passed
Proposition 64, which restricts standing for individuals
alleging UCL and FAL claims to persons who “ha[ve]
suffered injury in fact and ha[ve] lost money or property as a
result of the unfair competition.” Cal. Bus. & Prof. Code
§§ 17204 (UCL), 17535 (materially identical standard under
the FAL); see Kwikset, 246 P.3d at 884 (holding that the UCL
and FAL standing requirements are identical). The California
Supreme Court has held that the purpose of Proposition 64
was to “curtail the prior practice of filing suits on behalf of
clients who have not used the defendant’s product or service,
viewed the defendant’s advertising, or had any other business
dealings with the defendant.” Clayworth v. Pfizer, Inc.,
233 P.3d 1066, 1086–87 (Cal. 2010) (internal quotation
marks omitted). However, Proposition 64 “just as plainly
preserved standing for those who had had business dealings
with a defendant and had lost money or property as a result of
the defendant’s unfair business practices.” Id. at 1087.
The “lost money or property” requirement therefore
requires a plaintiff to demonstrate “some form of economic
injury” as a result of his transactions with the defendant,
Kwikset, 246 P.3d at 885, although “the quantum of lost
money or property necessary to show standing is only so
2
The UCL is designed to function this way. It “borrows violations
from other laws by making them independently actionable as unfair
competitive practices” although “a practice may be deemed unfair even if
not specifically proscribed by some other law.” Korea Supply Co. v.
Lockheed Martin Corp., 63 P.3d 937, 943 (Cal. 2003) (quotation marks
and citations omitted).
HINOJOS V . KOHL’S CORP . 9
much as would suffice to establish [Article III] injury in fact,”
id. at 886.3 There are “innumerable ways” that a consumer
can show economic injury from unfair competition.4 Id. at
885.
The Kwikset Court explained precisely what a plaintiff
must allege when he wishes to satisfy the economic injury
requirement in a case involving false advertising: “[a]
consumer who relies on a product label and challenges a
misrepresentation contained therein can satisfy the standing
requirement of section 17204 by alleging . . . that he or she
would not have bought the product but for the
misrepresentation.” Id. at 890. Kwikset also explained why
such allegations are sufficient to establish economic injury
within the meaning of Proposition 64:
From the original purchasing decision we
know the consumer valued the product as
3
There is no difficulty in this case regarding Article III injury in fact,
and neither party suggests otherwise. W e have explained that when, as
here, “Plaintiffs contend that class members paid more for [a product] than
they otherwise would have paid, or bought it when they otherwise would
not have done so” they have suffered an Article III injury in fact. Mazza
v. Am. Honda Motor Co., 666 F.3d 581, 595 (9th Cir. 2012). The only
issue before us, therefore, is whether this “injury in fact” is an economic
injury sufficient for purposes of statutory standing under the UCL and
FAL.
4
At the pleading stage, of course, allegations of economic injury
suffice. Id. at 888–89 (citing Lujan v. Defenders of Wildlife, 504 U.S.
555, 561(1992)).
10 HINOJOS V . KOHL’S CORP .
labeled more than the money he or she parted
with; from the complaint’s allegations we
know the consumer valued the money he or
she parted with more than the product as it
actually is; and from the combination we
know that because of the misrepresentation
the consumer (allegedly) was made to part
with more money than he or she otherwise
would have been willing to expend, i.e., that
the consumer paid more than he or she
actually valued the product. That increment,
the extra money paid, is economic injury and
affords the consumer standing to sue.[5]
Id. at 890–91.
Hinojos has done everything Kwikset requires to allege an
economic injury under the UCL and FAL. He alleges that the
advertised discounts conveyed false information about the
goods he purchased, i.e., that the goods he purchased sold at
a substantially higher price at Kohl’s in the recent past and/or
in the prevailing market. He also alleges that he would not
have purchased the goods in question absent this
misrepresentation. This is sufficient under Kwikset.
Kohl’s attempts to distinguish Kwikset on the ground that
Hinojos’s complaint does not state at what price (if any) he
5
Pleading that one would not have otherwise purchased the product but
for the misleading advertising also satisfies the consumer’s obligation to
plead a causal link between the advertising and the alleged economic
injury. Id. at 890. Therefore, as a practical matter, in cases such as these,
Proposition 64’s causation requirement (which is not at issue in this
appeal) and the economic injury requirement are coextensive.
HINOJOS V . KOHL’S CORP . 11
would have purchased the merchandise in question had its
“original” or “regular” price not been misrepresented. There
is no requirement, however, that Hinojos separately plead
how much he would have paid for the merchandise had he
known its true market value. Kwikset explicitly rejected that
argument. Id. at 891 n.15 (“Because the issue here is only the
threshold matter of standing, not whether and how much to
award in restitution, a specific measure of the amount of [the
alleged] loss is not required.”); see id. at 894–95.6
In denying Hinojos’s motion for reconsideration, the
district court limited Kwikset on the alternative ground that it
addresses UCL and FAL standing only in cases involving
“factual misrepresentations about the composition, effects,
origin, and substance of advertised products.” Kohl’s
advances a similar argument in slightly different form when
it argues that Kwikset does not apply because there was “no
difference in value between the product ‘as labeled’ and the
product ‘as it actually is,’ because the products . . . are one
and the same.” In other words, according to Kohl’s and the
6
W e note, however, that Kwikset explained that the difference between
what a plaintiff actually paid and what he would have paid had the product
been truthfully advertised represents the appropriate measure of restitution
to which Hinojos may be entitled under the UCL. Id. Therefore, even
though it need not be pled in order to afford him standing, the price that
Hinojos would have otherwise paid, if any, will certainly be relevant to the
calculation of restitution, assuming Hinojos is able to prove his false
advertising allegations. See Korea Supply Co., 63 P.3d at 946–47
(reiterating that disgorgement is only available under the UCL for
damages actually suffered by the plaintiff). In any event, Hinojos need
not be able to prove the quantum of damages he suffered in order to be
entitled to injunctive relief given that he alleges sufficient facts to prove
that he suffered some economic injury. See Kwikset, 246 P.3d at 894–95
(noting that a UCL plaintiff may obtain an injunction even when he cannot
prove his entitlement to restitution).
12 HINOJOS V . KOHL’S CORP .
district court, when a merchant misrepresents the “regular”
price of his wares, it does not misrepresent the innate value of
those wares so the misled consumer has suffered no economic
injury; he gets the product he expected at the price he
expected.
Kwikset cannot be so easily limited. It is true that Kwikset
itself involved misrepresentations regarding how the
merchandise in question was produced; the defendant in
Kwikset was a manufacturer of locksets, which it falsely
labeled as having been “Made in [the] U.S.A.” It is also true
that Kwikset described a number of other examples of
misrepresentations concerning a product’s origin or
composition that would be actionable under the UCL and
FAL: meat falsely labeled as kosher or halal, wine labeled
with the wrong region or year, blood diamonds mislabeled as
conflict-free, and goods falsely suggesting they were
produced by union labor. Kwikset, 216 P.3d at 889–90.
Nothing in Kwikset, however, suggests that these examples
were intended to be exhaustive instead of illustrative. To the
contrary, these examples were offered to explain why the
particular misrepresentation at issue in Kwikset, which did
involve how the product was manufactured, was significant.
That is why they were introduced in a paragraph beginning
with the sentence: “To some consumers, processes and places
of origin matter.” Id. at 889.
The district court’s “composition, effects, origin, and
substance” test ignores the fact that, to other consumers, a
product’s “regular” or “original” price matters; it provides
important information about the product’s worth and the
prestige that ownership of that product conveys. See Dhruv
Grewal & Larry D. Compeau, Comparative Price
Advertising: Informative or Deceptive?, 11 J. of Pub. Pol’y &
HINOJOS V . KOHL’S CORP . 13
Mktg. 52, 55 (Spring 1992) (“By creating an impression of
savings, the presence of a higher reference price enhances
subjects’ perceived value and willingness to buy the
product.”); id. at 56 (“[E]mpirical studies indicate that as
discount size increases, consumers’ perceptions of value and
their willingness to buy the product increase, while their
intention to search for a lower price decreases.”).7
Misinformation about a product’s “normal” price is,
therefore, significant to many consumers in the same way as
a false product label would be. See Kwikset, 246 P.3d at 890
(recognizing that falsely labeling a watch as a Rolex would be
an actionable misrepresentation even if the watch was a
“functional[] equivalent” of a Rolex). That, of course, is why
retailers like Kohl’s have an incentive to advertise false
“sales.” It is also why the California legislature has
prohibited them from doing so. In fact, the deceived bargain
hunter suffers a more obvious economic injury as a result of
false advertising than the Kwikset consumer who was duped
into buying foreign-made goods, because the bargain hunter’s
expectations about the product he just purchased is precisely
that it has a higher perceived value and therefore has a higher
resale value.
The district court’s test would also eliminate consumers’
ability to bring UCL and FAL claims for a vast array of other
7
W e see no merit to the Defendants’ objection that we may not rely on
articles from a marketing journal at the motion to dismiss stage. W e do
not rely on the cited article to establish facts about Hinojos’s case that are
not contained in the pleadings, but rather in support of the conclusion that
false advertisements about a product’s true market price are significant to
consumers. See Rubio v. Capital One Bank, 613 F.3d 1195, 1200–01 (9th
Cir. 2010) (referring, at the motion to dismiss stage, to published empirical
research about consumer behavior to determine whether an advertisement
was potentially misleading).
14 HINOJOS V . KOHL’S CORP .
misleading marketing practices that have little or nothing to
do with a product’s “composition, effects, origin, and
substance.” For example, none of the following
advertisements deal with the “composition, effect, origin, and
substance” of the product: “not available in stores,”
“available for a limited time only,” “the same model of shoe
worn by LeBron James,” “50% of customers who purchased
product X also purchased our product,” and “more doctors
recommend our product than any other brand.” Yet all of
these examples represent effective marketing techniques that,
if false, can be used to deceive consumers into making
purchases they would not otherwise make. Kwikset gives no
indication that Proposition 64 meant to silently close the door
on consumers’ ability to bring UCL and FAL claims based on
such false advertising.
To the contrary, Kwikset emphasized that Proposition 64
was enacted not to eliminate individual consumer suits when
the consumer was actually deceived by a misleading
advertisement, but rather to stop “fishing expeditions” by
consumers and attorneys who may have never even intended
to purchase a product that was being falsely advertised.
Kwikset, 246 P.3d at 884; see also id. at 894. If Proposition
64 were interpreted to require more than that a consumer have
purchased a product that he would not have purchased absent
the misleading advertisement, then it “would bring to an end
private consumer enforcement of bans on many label
misrepresentations, contrary to [its] apparent intent . . . .” Id.
at 891. This is precisely what would happen to private
consumer enforcement of California’s prohibition on
advertising false “sales,” Cal. Bus. & Prof. Code § 17501,
under the district court’s approach.
HINOJOS V . KOHL’S CORP . 15
The district court alternatively described its holding as
stemming from the fact that Hinojos got the “benefit of the
bargain” because he kept the goods that he purchased and
they were not defective. This “benefit of the bargain”
rationale was explicitly rejected in Kwikset. 246 P.3d at
892–93. Kwikset held that the “benefit of the bargain”
defense is permissible only if the misrepresentation that the
consumer alleges was not “material.” A representation is
“material,” however, if a reasonable consumer would attach
importance to it or if “the maker of the representation knows
or has reason to know that its recipient regards or is likely to
regard the matter as important in determining his choice of
action.”8 Id. at 892 (quoting Restatement (Second) of Torts,
§ 538, subd. (2)(b) (1977)). Moreover, the legislature’s
decision to prohibit a particular misleading advertising
practice is evidence that the legislature has deemed that the
practice constitutes a “material” misrepresentation, and courts
must defer to that determination. See id. Here, Hinojos
specifically and plausibly alleges that Kohl’s falsely markets
its products at reduced prices precisely because consumers
such as himself reasonably regard price reductions as material
information when making purchasing decisions.
Furthermore, both state and federal law specifically prohibit
retailers from advertising false “sales.” See Cal. Bus. & Prof.
Code § 17501 (FAL); Cal. Civil Code § 1770(a)(13) (CLRA);
16 C.F.R. § 233.1(a) (Federal Trade Commission
regulations). Therefore, the district court’s determination that
Hinojos has suffered no economic injury because he received
the “benefit of the bargain” is contrary to Kwikset because
8
Furthermore, the materiality of a misrepresentation is typically an
issue of fact, and therefore should not be decided at the motion to dismiss
stage. See In re Steroid Hormone Product Cases, 104 Cal. Rptr. 3d 329,
338–39 (Cal. Ct. App. 2010).
16 HINOJOS V . KOHL’S CORP .
Hinojos alleges that Kohl’s made material misrepresentations
that induced him to buy products he would not otherwise
have purchased.
In sum, price advertisements matter. Applying Kwikset
in a straightforward manner, we hold that when a consumer
purchases merchandise on the basis of false price
information, and when the consumer alleges that he would
not have made the purchase but for the misrepresentation, he
has standing to sue under the UCL and FAL because he has
suffered an economic injury.
II
The CLRA provides a second, overlapping prohibition on
advertising non-existent sales. Specifically, it forbids
“[m]aking false or misleading statements of fact concerning
reasons for, existence of, or amounts of price reductions.”
Cal. Civil Code § 1770(a)(13). In turn, Cal. Civil Code
§ 1780(a) provides a cause of action to “[a]ny consumer who
suffers any damage as a result of the use or employment by
any person of a method, act, or practice declared to be
unlawful by Section 1770.” Cal. Civil Code § 1780(a)
(emphasis added). The district court’s conclusion that
Hinojos failed to establish standing under the CLRA because
he did not suffer “any damage” is erroneous for the same
reasons that its determinations regarding UCL and FAL
standing were wrong.
In Meyer v. Sprint Spectrum L.P., 200 P.3d 295, 299,
302–03 (Cal. 2009), the California Supreme Court made clear
that the CLRA’s “any damage” requirement is a capacious
one that includes any pecuniary damage as well as
opportunity costs and transaction costs that result when a
HINOJOS V . KOHL’S CORP . 17
consumer is misled by deceptive marketing practices.
Because the “any damage” standard includes even minor
pecuniary damage, we conclude that any plaintiff who has
standing under the UCL’s and FAL’s “lost money or
property” requirement will, a fortiori, have suffered “any
damage” for purposes of establishing CLRA standing. See,
e.g., Klein v. Chevron U.S.A., Inc., 137 Cal. Rptr. 3d 293, 320
(Cal. Ct. App. 2012) (noting that where a plaintiff alleged an
“economic injury” under the UCL he also adequately alleged
injury under the CLRA); Mlejnecky v. Olympus Imaging Am.
Inc., 2011 WL 1497096, at *4 (E.D. Cal. 2011) (unpublished)
(same). Accordingly, Hinojos adequately alleges that he
suffered “any damage” for purposes of the CLRA. We
therefore reverse and hold that Hinojos adequately alleges an
injury under the CLRA.
III
Finally, because Kwikset provides more than sufficient
guidance with regard to the state-law statutory standing
questions presented in this case, we deny the Defendants’
motion to certify this matter to the California Supreme Court.
Although we deny the motion on its merits, an additional
comment is required in light of the circumstances under
which the motion was made.
Kohl’s removed this lawsuit to federal court, denying
Hinojos the state forum in which he sought to have his case
heard. Although Kwikset was discussed extensively in the
parties’ appellate briefs, Kohl’s did not suggest that
certification was necessary, or appropriate, either in its
answering brief or at oral argument. More important, any
objective witness to the oral argument would have concluded
that the chances that Kohl’s would prevail on the merits were
18 HINOJOS V . KOHL’S CORP .
slim at best. Then, a month and a day after oral argument,
Kohl’s filed a motion to certify, suggesting for the first time
that certification would be appropriate and strongly urging
that we certify this case to the California Supreme Court
rather than decide it. The motion to certify did not rely on
any intervening authority or on any case decided after Kohl’s
filed its appellate brief, nor did it make any new substantive
arguments. Furthermore, Kohl’s offered no reason for failing
to mention certification prior to or during oral argument or
for urging certification only after we expressed profound
skepticism at oral argument regarding the merits of its
position.
We have long looked with disfavor upon motions to
certify that are filed after the moving party has failed to avail
itself of a prior opportunity to seek certification. See, e.g.,
Thompson v. Paul, 547 F.3d 1055, 1065 (9th Cir. 2008). For
example, in states that accept certification from federal
district courts (unlike California), we have a held that there is
a “presumption against certifying a question to a state
supreme court after the federal district court has issued a
decision” when the party that lost below did not mention the
possibility of certification until after the district court entered
summary judgment against it. Such requests for certification
are generally inappropriate, we have held, because “[a] party
should not be allowed ‘a second chance at victory’ through
certification.” Id. (quoting In re Complaint of McLinn,
744 F.2d 677, 681 (9th Cir. 1984)).
Here, Kohl’s had an opportunity to suggest certification
in its pre-argument brief or even at oral argument. It could
have urged that, in the event that this court was not persuaded
that California law clearly favored its position, the
appropriate course of action would be certification to the
HINOJOS V . KOHL’S CORP . 19
California Supreme Court. Yet it chose at that point not to
urge certification as an alternate course of action, presumably
for tactical reasons—possibly because having prevailed
below it greatly preferred to have the case decided by a
federal court. Only after (correctly) perceiving at oral
argument that we were not inclined to rule in its favor on the
merits did Kohl’s file its motion for certification. For reasons
similar to those expressed in Thompson, we strongly disfavor
a party that prevailed below requesting certification for the
first time after it becomes apparent at oral argument that it is
not likely to prevail in federal court.
Our court has also developed rules to ensure that a party
may not manipulate the appellate system by seeking to avoid
a panel it views as unlikely to accept its legal position. It is
for that reason that we do not make panels public until the
first working day of the week preceding oral argument and
permit motions for continuances after the panel has been
announced only “under exceptional circumstances.” See
General Order 3.5. Here, Kohl’s urged certification for the
first time only after it had the opportunity both to learn which
members of this court would hear its appeal and to assess
those judges’ actual views of its case, based upon the
concerns the judges expressed at oral argument. Having
gained that knowledge, Kohl’s sought to send this case back
to state court whence it came, in light of its perception that
the federal court was unlikely to rule in its favor. Kohl’s
conduct regarding certification violated both our rule against
belated certification requests and our long-standing
prohibition against a party’s use of procedural motions to
avoid having its appeal decided by a panel it perceives as
unfavorable. Moreover, here Kohl’s request would not only
affect the operation of the federal court, but would
20 HINOJOS V . KOHL’S CORP .
unnecessarily embroil the Supreme Court of the State of
California in Kohl’s attempt to find a more favorable forum.
CONCLUSION
In Kwikset, the California Supreme Court held that all a
consumer need allege to establish standing to bring a UCL or
FAL claim is that (1) the defendant made a false
representation about a product, (2) the consumer purchased
the product in reliance on the misrepresentation, and (3) he
would not have purchased the product otherwise. We reject
the Defendants’ argument that Kwikset is distinguishable
because it involved a different type of unlawful
misrepresentation than the one at issue here. We therefore
reverse the district court’s dismissal of Hinojos’s UCL and
FAL claims. For nearly identical reasons, we also reverse the
district court’s dismissal of Hinojos’s CLRA claims. We also
deny the Defendant’s motion to certify both on the merits and
because of the circumstances attendant to its filing.
REVERSED and REMANDED; Motion to Certify
DENIED.
WARDLAW, Circuit Judge, concurring in part and
concurring in the result:
I am pleased to concur in the majority opinion, except that
I concur only as to the result of Part III, which denies Kohl’s’
request to certify the state law standing requirements for
review by the California Supreme Court. Although I agree
that Kohl’s’ first removing the action from state to federal
court, and then seeking to have the matter on appeal certified
HINOJOS V . KOHL’S CORP . 21
to the state court, raises suspicion as to Kohl’s’ motivations,
on this record and without providing an opportunity to Kohl’s
to respond, it is somewhat unfair to conclude that Kohl’s had
only a nefarious motive. I would simply deny the request as
untimely.