On September 23, 2009, the California Court of Appeal in Morgan v. AT&T Mobility reversed a state trial court and upheld as sufficient allegations against AT&T Mobility based on its selling a phone that soon became obsolete after sale, for violations of the state’s Unfair Competition Law, fraud and the Consumers Legal Remedies Act
The trial court had thrown out these claims on the grounds the complaint was not specific enough and only involved “puffing”, and that the CLRA damages claim had been improperly included in the complaint. In reversing the decision the Court of Appeal made several significant findings:
1. The CLRA is not the exclusive remedy for consumers based on legislative amendments that overruled prior case law, and requests for damages under the CLRA can be added in an amended complaint — even if the demand for such relief is first in the original version of the Complaint.
2. Claims for “fraudulent” business practices under the UCL do not need to prove reliance or meet any specifity requirement for absent class members, and reliance for standing purposes is properly plead if plaintiffs can allege material facts were not disclosed or that certain advertising was a substantial factor in their decision to purchase a product.
3. “Puffing” is typically a question of fact that should not be resolved on a motion to dismiss unless it can be shown no reasonable person would have considered such a statement as a matter of law.
This decision is presently available at http://www.courtinfo.ca.gov/opinions/documents/B206788.PDF