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Date: 01-27-2023
Case Style:
Luis Licea v. Brown Sugar, LLC
Case Number: B310487
Judge: Rothchild
Court: California Court of Appeals, Second District, First Division on appeal from the Superior Court, Los Angeles County
Plaintiff's Attorney:
Defendant's Attorney: Eric S. Fisher, Seth Alan Gold and Kian J. Hudson
Description: Los Angeles, California consumer law lawyers represented Plaintiff, who sued Defendant on a California Automatic Renewal Law.
Brown Sugar "operates an over-the-internet streaming service that provides subscribers access to a large library of films and television shows." Licea "is a blind California consumer," who contends that he "both genuinely wanted to avail himself of [Brown Sugar]'s services and, as a consumer advocate for the blind, also wanted to determine whether [Brown Sugar] would abide by its obligations under California law."
On June 29, 2020, Licea filed a complaint in the superior court against Brown Sugar alleging three causes of action for violation of the ARL. The complaint also asserted a cause of action for violation of the UCL, premised on the alleged ARL violations. Licea alleges that, in 2020, "he accepted a 'free' trial subscription of an online movie/film/TV show streaming service and related product from Brown Sugar." He contends that Brown Sugar's free trial offer violated the ARL by, inter alia, failing to include the automatic renewal and free trial offer terms in a "clear and conspicuous" manner, charging his debit card without first obtaining his "affirmative consent" to the automatic renewal offer terms, and failing to provide an acknowledgment that includes the automatic renewal offer terms and cancellation policy. (Boldface omitted.)
As relevant to this appeal, Licea alleged that he "has standing to pursue th[e UCL] claim because he suffered injury in fact and has lost money or property as a result of [Brown Sugar]'s actions as set forth herein. [Licea] accepted [Brown Sugar]'s free trial offer but was later charged monies in violation of the law, thus causing an actual injury to [Licea]." Licea alleged further, in the portion of the complaint concerning the alleged ARL violations, that he "would like to use [Brown Sugar]'s services again in the future and will likely do so, but would like to ensure that [Brown Sugar] offers such services fairly and in compliance with its obligations under California law."
On July 31, 2020, Brown Sugar removed the action to federal district court[2] and then, on August 14, 2020, filed a motion to dismiss the complaint. Brown Sugar argued, inter alia, that Licea lacked standing to pursue his UCL claim because (1) he admitted in his complaint that, once Brown Sugar makes the required ARL disclosures, he likely will use Brown Sugar's services in the future, and (2) this admission demonstrates that Brown Sugar's alleged failure to make the required ARL disclosures did not cause any injury to Licea. Rather than oppose the motion to dismiss, Licea filed an amended complaint in the district court action on August 26, 2020. The amended complaint revised the ARL causes of action and added more specificity concerning how Brown Sugar allegedly violated the ARL; however, notwithstanding Brown Sugar's arguments challenging Licea's standing to pursue his UCL claim, the amended complaint repeated nearly verbatim the allegations from the original complaint that Licea "would like to use [Brown Sugar]'s services again in the future after [Brown Sugar] complies with California law, and will likely do so in light of the quality of the content of [Brown Sugar]'s product or service, but would like to ensure that [Brown Sugar] offers such services fairly and in compliance with its obligations under California law." Brown Sugar therefore filed a motion to dismiss the amended complaint on September 8, 2020, again arguing, inter alia, that these allegations constituted an admission that Brown Sugar's alleged failure to provide the required ARL disclosures did not cause any injury to Licea, and that Licea thus lacked standing to pursue a claim under the UCL.
On October 5, 2020, without ruling on the pending motion to dismiss, the district court remanded the case to the superior court for lack of subject matter jurisdiction. That same day, Licea filed a first amended complaint in the superior court action-the operative complaint for purposes of this appeal.[3]
Like the original and amended complaints, the FAC asserts three causes of action under the ARL against Brown Sugar: (1) "failure to present automatic renewal offer terms or continuous service offer terms clearly and conspicuously and in visual proximity to the request for the consent to the offer," in violation of section 17602, subdivision (a)(1); (2) "failure to obtain consumer's affirmative consent before subscription charges are imposed," in violation of sections 17602, subdivision (a)(2) and 17603; and (3) "failure to provide acknowledgment with automatic renewal offer terms and cancellation policy," in violation of section 17602, subdivisions (a)(3) and (b). (Boldface and capitalization omitted.) In addition, the FAC alleges a fourth cause of action against Brown Sugar for violation of the UCL, premised on a subset of the alleged ARL violations.
The FAC repeats the allegations in the first two complaints that (1) "[Licea] would like to use [Brown Sugar]'s services again in the future after [Brown Sugar] complies with California law, and will likely do so in light of the quality of the content of [Brown Sugar]'s product or service, but would like to ensure that [Brown Sugar] offers such services fairly and in compliance with its obligations under California law," and (2) "[Licea] accepted [Brown Sugar]'s free trial offer, but was later charged monies in violation of the law, thus causing an actual, economic injury to [Licea]." The FAC, however, includes the following new allegation: "[Licea] would not have consented to the free trial offer if [Brown Sugar] had made the appropriate disclosures required by the ARL."
On October 20, 2020, Brown Sugar filed a demurrer to the entirety of Licea's FAC, along with a supporting request for judicial notice. Brown Sugar argued that Licea's ARL claims should be dismissed because (1) the ARL does not provide a private right of action, and (2) alternatively, Brown Sugar is exempt from the ARL, pursuant to section 17605, subdivision (b). With respect to the UCL cause of action, Brown Sugar argued that Licea failed to state a claim because (1) the UCL claim "is based entirely upon the ARL claim, and the ARL claim fails," and (2) Licea "fails to allege an injury in fact and therefore lacks standing." In support of the latter argument, Brown Sugar filed a motion to strike the new allegation in the FAC that" '[Licea] would not have consented to the free trial offer if [Brown Sugar] had made the appropriate disclosures required by the ARL.'" Brown Sugar argued that this allegation directly contradicts Licea's allegations that he "would like to use [Brown Sugar]'s services again in the future after [Brown Sugar] complies with California law, and will likely do so in light of the quality of the content of [Brown Sugar]'s product or service."
Licea filed an opposition to the demurrer on November 12, 2020, and in support of his opposition, requested that the court take judicial notice of certain legislative history relating to Senate Bill No. 340, the bill that became the ARL. Licea also opposed Brown Sugar's motion to strike. He argued, inter alia, that the new allegation in the FAC was not inconsistent with his earlier allegations: "There is nothing contradictory about [the earlier allegations] .... [ΒΆ] . . . Fairly read, [they are] intended to mean that although [Licea] is interested in using [Brown Sugar]'s services again in the future, such usage is contingent upon [Brown Sugar]'s compliance with the ARL.
In other words, if [Brown Sugar] fails to comply with the ARL, then [Licea] shall definitely not use [Brown Sugar]'s services again in the future." (Boldface and italics omitted.)
At the November 25, 2020 hearing on Brown Sugar's demurrer and motion to strike, the trial court granted the
parties' requests for judicial notice. The court then sustained the demurrer with leave to amend. The court also granted the motion to strike, "[d]ue to the demurrer to each cause of action in the FAC being sustained." Licea represented at the November 25, 2020 hearing that he would not be filing an amended complaint, and on April 8, 2021, the court dismissed the action and entered judgment in favor of Brown Sugar.
On January 22, 2021, Licea filed a notice of appeal from the court's November 25, 2020 minute order sustaining Brown Sugar's demurrer and motion to strike. Although the November 25 order is nonappealable, Licea subsequently provided us with a copy of the April 8, 2021 final judgment. We exercise our discretion to construe Licea's notice of appeal as taken from that appealable judgment. (See, e.g., Groves v. Peterson (2002) 100 Cal.App.4th 659, 666, fn. 2 ["[w]e liberally construe [the] notice of appeal from the order sustaining the demurrer, a nonappealable order, to be from the subsequent judgment of dismissal").
Outcome: Affirmed
Plaintiff's Experts:
Defendant's Experts:
Comments: