Unfair Competition and Business Practice Attorney

Consumer Legal Remedies Act (CLRA)

The Consumer Legal Remedies Act (CLRA) was passed in California to protect consumers from unfair and deceptive practices that may occur during the sale or lease of goods and or/services.

  • Under CLRA, the term “goods” refers to tangible items that are primarily used for personal, family or household purposes. And, the term “services” refers to work, labor and all types of services other than those that are provided for commercial or business use.
  • CLRA defines a “consumer” as any individual who purchases or leases or wants to purchase or lease goods or services for personal, family or household purposes. The CLRA is designed to protect only consumers that are California residents.
  • The CLRA does not apply to the issuance of credit cards, transactions involving real property, insurance contracts, or advertising mediums such as newspapers or television stations unless it is established that they had notice of the proscribed conduct.

Unfair or Deceptive Conduct Must Have Caused Some Type Of Damage

In order to have a claim under the CLRA, a consumer must have sustained some kind of damage due to the unfair or deceptive practice. The prima facie case requires the consumer to establish, among other things, causation and damages. In other words, “in order to bring a CLRA action, not only must a consumer be exposed to an unlawful practice, but some kind of damage must result.” Meyer v. Sprint Spectrum L.P. (2009) 45 Cal.4th at 634.

However, the damages need not be pecuniary in nature. This element is satisfied if the unlawful practice resulted in “some kind of tangible increased cost or burden to the consumer” such as transaction costs “associated with the formation and maintenance of economic relationships, including the costs of enforcing contracts” or loss of opportunity to consummate a business transaction elsewhere.

Learn about CLRA:

Defenses to CLRA Claims
  1. Statute of Limitations:   An action must be brought within three years from the date of the commission or employment of method, act or practice deemed unlawful under CLRA. The time starts to run when a reasonable person in the shoes of the claimant would have discovered the basis for a claim.
  2. 30 Day Demand Letter By Consumer:   Before a claim for money damages can be initiated, a consumer must make a written demand by giving a 30 day notice to the defendant. The written notice must be sent via certified mail to the defendant and must identify the conduct that is deemed actionable under CLRA. The notice must also demand that the defendant “correct, repair or otherwise rectify the goods or services” claimed to be in violation of CLRA. Failure to specifically comply with the 30 day notice requirement precludes a claimant from seeking monetary damages.
  3. Agreement to Rectify the Wrongful Conduct:   Plaintiff cannot maintain an action for money damages if the defendant upon receipt of the written notice agrees within 30 days, to rectify the claimed wrongful conduct within a reasonable time.Furthermore, no action under CLRA can be maintained if the defendant can show that:
    1. All consumers who are similarly affected by defendant’s conduct have been identified or reasonable efforts have been employed to ascertain their identify;
    2. The consumers who have been identified have been advised that, if they desire, the defendant will make the necessary corrections, repairs, replacement or other form of remedy of the goods or services;
    3. The correction, repairs, replacement or other form of remedy requested by the consumers have been provided or will be provided within a reasonable time; and
    4. The defendant no longer engages in conduct, or if the cessation is impossible or unreasonably expensive the defendant will within a reasonable time stop engaging in activity deemed to be unlawful under the CLRA.
    Also, defendant may cure the alleged wrongful conduct by providing additional information to the consumers, increasing the warranty period, replacing the product, etc. It is also important to note that the defendant’s efforts to comply with the demand to correct the wrongful conduct are inadmissible as evidence of liability or admission of guilt. However, the defendant can use this evidence to establish good faith or compliance with CLRA.
  4. Honest Mistake Defense:  Defendant does not have to pay damages if he or she can prove that (1) the wrongful conduct was not intentional and resulted from an honest mistake even though procedures were in place to prevent similar types of mistakes; and (2) defendant implements procedures to fix the wrongful conduct.
  5. Lack of Damages:   As discussed above, if the consumer has not suffered any kind of damages, he or she cannot establish a prima facie case under the CLRA.
Available Remedies Under the CLRA

A successful plaintiff may be entitled to recover attorney’s fees, costs, injunctive relief, punitive damages, restitution and/or actual damages.

Types Of Conduct That Is Prohibited Under CLRA

CLRA lists twenty-four types of unlawful conduct that can be compartmentalized into ten categories.

  1. Knock-off Goods
    1. Passing off goods or services as those of another.
    2. Misrepresenting the source, sponsorship, approval, or certification of goods or services.
    3. Misrepresenting the affiliation, connection, or association with, or certification by, another.
    4. Using deceptive representations or designations of geographic origin in connection with goods or services.
    5. Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities which they do not have or that a person has a sponsorship, approval, status, affiliation, or connection which he or she does not have.
  2. False Statements Regarding Quality of Goods
    1. Representing that goods are original or new if they have deteriorated unreasonably or are altered, reconditioned, reclaimed, used, or secondhand.
    2. Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are not.
    3. Disparaging the goods, services, or business of another by false or misleading representation of fact.
  3. False Statements Regarding Goods Of A Competitor
    1. Disparaging the goods, services, or business of another by false or misleading representation of fact.
  4. False Advertising
    1. Advertising goods or services with intent not to sell them as advertised.
    2. Advertising goods or services with intent not to supply reasonably expectable demand, unless the advertisement discloses a limitation of quantity.
    3. Advertising furniture without clearly indicating that it is unassembled if that is the case.
    4. Advertising the price of unassembled furniture without clearly indicating the assembled price of that furniture if the same furniture is available assembled from the seller.
  5. False Statements Regarding Reduction Of Price
    1. Making false or misleading statements of fact concerning reasons for, existence of, or amounts of price reductions.
  6. Bait And Switch Tactics
    1. Representing that a transaction confers or involves rights, remedies, or obligations which it does not have or involve, or which are prohibited by law.
    2. Representing that a part, replacement, or repair service is needed when it is not.
    3. Representing that the subject of a transaction has been supplied in accordance with a previous representation when it has not.
    4. Representing that the consumer will receive a rebate, discount, or other economic benefit, if the earning of the benefit is contingent on an event to occur subsequent to the consummation of the transaction.
  7. Unfair Contractual Terms or False Statements Made During Negotiations
    1. Misrepresenting the authority of a salesperson, representative, or agent to negotiate the final terms of a transaction with a consumer.
    2. Inserting an unconscionable provision in the contract.
  8. Cost Plus Advertising
    1. Advertising that a product is being offered at a specific price plus a specific percentage of that price unless:
      1. the total price is set forth in the advertisement, which may include, but is not limited to, shelf tags, displays, and media advertising, in a size larger than any other price in that advertisement, and
      2. the specific price plus a specific percentage of that price represents a markup from the seller’s costs or from the wholesale price of the product.
      This subdivision shall not apply to in-store advertising by businesses which are open only to members or cooperative organizations organized pursuant to Division 3 (commencing with Section 12000) of Title 1 of the Corporations Code where more than 50 percent of purchases are made at the specific price set forth in the advertisement.
  9. Selling or Leasing Gray Market Goods
    1. Selling or leasing Gray Market Goods. “The term ‘gray market goods‘ means consumer goods bearing a trademark and normally accompanied by an express written warranty valid in the United States of America which is imported into the United States through channels other than the manufacture’s authorized United States distributor and which are not accompanied by the manufacturer’s express written warranty valid in the United States.”
  10. Selling or Leasing Gray Market Goods
    1. Disseminating an unsolicited prerecorded message by telephone without consent. However, it does not apply to collection calls, calls initiated at the request of the consumer or calls to consumers with established relationship.
    2. The home solicitation, as defined in subdivision (h) of Section 1761, of a consumer who is a senior citizen where a loan is made encumbering the primary residence of that consumer for the purposes of paying for home improvements and where the transaction is part of a pattern or practice in violation of either subsection (h) or (i) of Section 1639 of Title 15 of the United States Code or subsection (e) of Section 226.32 of Title 12 of the Code of Federal Regulations.
    3. It is an unfair or deceptive act or practice for a mortgage broker or lender, directly or indirectly, to use a home improvement contractor to negotiate the terms of any loan that is secured, whether in whole or in part, by the residence of the borrower and which is used to finance a home improvement contract or any portion thereof.