F OR P UB LIC AT ION


### U N I TED STA TES C O U R T O F A PPEA LS F O R T H E N IN T H C IR C U IT

ANTONI O S. H I NOJ OS , in div idu a lly
and on be ha lf of a ll o the rs sim ila

rl y situated, Plaintif

f-Appellant ,

v.
K OHL ’ S C OR PO R ATI ON , a Wisc on sin
c or po ratio n; K OHL ’ S D EP AR TMENT S TO RE S , I

NC ., a De lawar e corpor ation, Defendants-A ppellees

. No. 11-55793

D.C. No. 2:10-cv-07590- ODW-AGR

OPI NI ON

Appea l from the United States District Court fo r t he Ce ntr a l D istri c t of

Ca lif or nia Otis D. Wright, I I , District J udg e, Presiding

Argued and Submitted Janu ary 10 , 2 01 3—Pa sa de na , Ca lif or nia
Filed Ma y 21, 2013
Be fore : Stephen Reinhardt, Kim McL ane War dlaw,
and Ric ha rd A. Pa e z, Ci rc uit

Judg e s. Op ini on by Judg e Re inh ard

t; Concurre nce by

J udg e WardlawH I N O JOS V

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T hi s s ummary cons t i t ut es n o part of t he op i ni on of

t he cour t

. I t ha s * b een p repa red b y co urt s t af f f o r t he co nveni ence o f

t he read er. SUMMAR

Y *

Ca lifo r nia Law / St andi ng
Th e pa ne l r e ve rs e d the dis tr ic t court ’s dis mis sa l of c la ims under Califor

nia’s Unf air Competition L aw, Fair A dvertising L aw , an d C o n s u m e r

L e g a l R e m e d i e s A c tb r o u g h tb y a plaintiff in a putative c lass action aga inst Kohl’s Depa rtment S t o re s al l egi n g fa l s e a dv ert i s i n g. The pa nel applied the Ca li f

o r n ia Supreme Court’s holding inKwik se t Co rp . v . S

up e rio r Co ur t , 246 P.3d 877 (Cal. 2011), and held that when a consume r purc hases mer chandise on the basis of fa lse price informati o n, and whe n the consumer alleg es that he would not ha ve made the purcha se but for the mis re pr e se ntatio n, he ha s st and ingto s ue un de r t he Un fa ir Competiti on L aw a

nd Fa ir Adver

tising L aw be cause he has suffe red a

n economic injury . The pa nel also r ev er s ed the district court’s dismissal of plaintiff’s Consumer L eg al Remedies Ac t claims. Finally , the pane l denied def endant’ s motion to cer

tify the issues to the California Supre me Court both on the merits and beca use of the circ umstances attendant to its filing (wher e defenda nt only reque sted ce rtification for the first time afte r ora l argument).
J udg e W ardla

w concurre d in the m ajority opinion, ex cept that she conc urre d onl y as t o the re sult in P art I I I , which denied Kohl’s reque st to cer tify the state l aw standing
re qu ir e me nts fo r r e vie w by the Ca lif or nia Sup re me Court

. J u d g e W ar d l aww o u l d

s i mp l y d e n y th e r e qu e s ta s un t i m e l y.H I N O JOS V

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CO UN SEL
M a t th e w J. Z e v i n ( ar g u e d ) , S t an l e y • I o l a , L L P , an d D e r e k J. Em g e , E mg e & As so c ., San D ie g o, Ca lif or nia , f or Pla int if fs

Ap pe lla nts

. J ames F. Spey er ( argued), A rnold & Porter L L P, L os An g e le s, Ca lif

or nia , f or De fe nd ants -A

pp e lle e s.

OP IN ION
REI NHARDT, Circuit Judge:
Most consumers have , at some point, purcha sed
me rc ha nd ise tha t w a s ma rk e te d a s b e ing “ on

sa le ” be c a

us e the pr of fe re d d isc ount s e e me d too g oo d to pa ss u p. Re ta ile rs , wel l a w ar e o f c o n s u me r s ’ s u s c e p ti b il it y to a b ar g a in, the re fo re have an in c e nti ve to l ie to t he ir c us tom e rs by

fa lse ly claiming that their produc ts have pre viously s o l dat a f ar higher “ or ig ina l” pr ic e in o rd e r t o in du c e c us tom e rs to purc h a s e me r c h an d is e at a p ur p o rte d ly ma r k e d

- d o w n“ s a le ” price . Be cause such pra ctices are mislea ding—a nd
e ff e c tiv e —th e Ca lif

or nia le g isl atur e ha s p ro hib ite d th e m.
The Plainti ff here, Antonio Hinojos, allege s that he wa s a vic timof

su c h a pr a c tic e and

bo ug ht m e rc ha

nd ise from a Kohl’s Depa

rtment Store that he would not have purcha sed ha d h e n o t b e e nmi s le d

b y a dv e rti s e me n ts s tati n g th a t the
merc handise wa s marked down from a fictitious “orig inal” or

“ re g ula r” pr ic e . T he on ly

qu e sti on be fo re us on thi s a

pp e a l is whether Hinojos alleg es that he “ lost money or prope rty” and, there fore , has statutory s tanding under Califor nia law to sue Kohl’s to enfor ce Ca lifornia’s pr ohibition on t his dece ptiveH I N O JOS V

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Spe c i f

i c a l l y , Hi n oj os pu r c h a s e d S a ms on i t e l u g g a g e t h a t was 1 ad vert i sed as 50 % o f

f it s “ori gi nal ” p ri ce o f

$ 2 9 9

. 9 9 , C hap s S o l i d P i q ue pol o s h i r t s t h at w er e mar k ed down 39% f r om t h ei r “o ri gi n al ” pr i ce of $36. 00, Cha ps Sol i d Pi qu e pol o s h i r t s t h at w er e mar k ed down 32% f r om t hei r “ ori gi nal ” pr i ce of $39

. 50 , Ch ap s t- shi r t s t hat wer e mar ked down 4 0 % fro m t h e ir “o rig ina l” p ric e o f $ 2 6 .0 0 , an d S o n o m a L ife & S tyle H en l ey T ops t h at w er e m arked dow n 40% f r om t h ei r “ or i g i n al ” pr i ce of $ 2 2 .0 0

. marke tin g p r a c ti c e
. K o h l’ s ar g u e s , an d th e d is tr ic t c o urt a g re e d, that Hino

jos los t ne ith e r m on e y

no r p ro pe rt

y be c a us e he ac quired the me rcha

ndise he wanted at the pric e that wa s a dv e rt ise d, e ve n if

the a dv e rt ise d p ri c e wa s f a lse ly
re p r e s e n t e d

a s a “ s a l e
. ” B e c a

u s e th e C a l i f

o r n i a S u p re me Court has previously reje cted a simil ar argument, holding that
a con su mer ha s “ los t mo ne y or pr op e rt y ” so lon g a s f

a lse adver t i s ements i nduced him to buy a produc t he would not h av e p ur c h a s e d o r t o s p e n d m o r e th an h e o th e r w ise wo uld have sp e nt, we re ve rs e
. F or sim ila r re a so ns , w e a lso re ve rs e the district court’s dismis sal of Hinojos’s nea rly identical
c la ims un de r C a lif

or nia ’s Con sume r L e g a l Re me die s A c t.
F A C TUA L B ACKG ROUND Kohl’s Corporation and its wholly owned subsidi ary Kohl’s Depa

rtment St o res, Inc. (c ollectively , “Kohl’s” or “the Def endants” ), ar e re tailers that oper ate a cha i n of g ener al de pa rtme nt s tor e s se lli ngc lot

hin g , fo otw e ar, ho me pr od uc ts and ac cessor ies. Hinojos pur chase d sever al items of appar el and lug g ag e at a

Kohl’s depa

rtment st o re
. Hinojos alleg es that he re lie d u

po n d e c e pti ve a dve rt ise me nts in d e c idi ngto purcha se these items fr om Kohl’s. Specifica lly , he alleg es that he purc ha se d s e ve ra l it e ms that wer e adve rtised as be ing 1 substantially reduc ed from their “ orig inal” or “ regular” price s but that were , in rea lity , routi nely sold by Kohl’s at theH I N O JOS V

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a dv e rt ise d “ sa le ” pr ic e s r athe r t ha n th e purp or

te d “ or ig inal ” or “r egular” price s. Hinojos further al leg es that the adver tised “orig inal” or “ regular” price s did not reflec t preva iling re tail market prices duringthe three months imm e diate ly

pr e c e din g the pu

bli c atio n of the a dv e rt ise me nts in question. Finally , Hinojos a lleg es that he “ would not have purcha sed [these] products at Kohl’s i n the absence of Kohl’s misrepre sentations.”

P R OC EDU R A L B ACKG ROUND
Hi no jos fi le d a

putativ e c la ss actio n co mpl a int in California Superior

Court assertingcause s of action under California’s Un fair Competition L aw ( UCL ), Cal. B us. & Prof. Code §§ 17200, et seq. ; Fair Ad v ertisi ng L aw ( FAL ), Cal. Bus. & Prof. Code §§ 1 7 500, et seq. ; and Consumer L eg al Remedies Ac t (CL RA), Cal. Civ. Code §§ 1750, et seq

. Kohl’s re moved the ac tion to the feder al d istrict court purs ua nt t o th e Cla ss A c tio n F a ir ne ss A c t, 2 8 U .S. C. §1332(d)( 2 ). On De cembe r 1, 2010, the district cour t dismiss ed Hinojos ’s UC Land F AL claims, deter

mining that H i n o j o s d i d n o th av e s t an d i n g un d e r th e U C L o r

th e F A L, which re quire a

plaintiff to have “ lost money or prope rty” as
a r es u l to f t h e d e fe n d an t ’s fa l s e a dv ert i s i n g i no rd er b ri n g a claim, bec ause H inojos had acquire d t h e merc handise he wanted a t the price adver

tised.
Sh o rtly there afte r, the California Supreme Court published its opini on in Kwik se t Co rp . v . S

up e rior Cour t , 246 P.3d 8 7 7 (C al. 2011), whic h held that the purc haser s of g oods falsely labeled “made in U .S.A.” had standin g u n der the UC L and

F AL wh e n th e purc ha se rs a lle g e d th a t th e fa lse la be lin g ind

uc e d the m to purc ha se the g oo ds and the y wo uld not have pur chase d them o t h erwise. Hinojos filed a motionH I N O JOS V

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for rec onsideration base d on Kwikset , which the district cour t den ie d a ft e r c on c lud ingtha t Kwikset a p p l i e d o n l y t o f a lse
a dv e rt ise me nts re g ard inga pr oduc t’ s “ c omp os iti on , e ff e c ts, orig in, and substance .” On April 25, 2010, the distri ct court gra nted the D e f e n d an ts ’ F RC P 1 2 ( c ) mo ti o n f o r ju d g me n t o n the pleading s and dis missed Hinojos’s only rema ining c laim, i.e., his CL RA claim. The district c ourt conclude d that Hi nojos did no t have sta

nd ing un de r the CL RA be c a us e he wa s una

ble to s ho w he su ff

e re d “ any dama g e ” a s a

re su lt o f K oh l’ s f

a lse
a dv e rt isi ng . H ino

jos tim e ly

a pp e a le d th e dis missa l of his UC L , F AL , a

nd CL RAc la ims

. J URI S DI CT I ON A ND S TA N D A R D O F REVIEW
Th e dis tr ic t c ourt

ha d ju ri sd ic tio n o ve r t

his putativ e c la ss a c tio n und e r 2 8 U .S. C. § 13 32 (d )( 2) be c a us e Hi no jos is a citizen of California, the Def endants are citizens of anot her
s tate an d th e amo un t i n c o n tr o v e r s y e xc e e d s $ 5 , 0 0 0 , 0 0 0

. We have jur isdiction under 28 U.S.C. § 1291.
We review de novo the di s t rict cour t’s dismiss al of Hinojos’s claims. See B erg v. Popham , 412 F.3d 1122, 1125 (9 th C ir . 200 5) (h old ingthat a dis tr ic t c ourt ’s g ra

nt o f b oth FRCP 12(b) and 12( c) motions are revie wed de novo ). As a fede ral court sitti ng in dive rsity , we “must apply the
su bs tanti ve law of Ca lif

or nia , a s int e rp re te d by the Ca lif or nia Su p r e me Court,” Karen Kane Inc. v . RelianceIns. Co. , 202 F.3d 1180, 1183 ( 9th Cir. 2000), even if that law cha ng es after judg ment is entere d below. S e e Ne ls o n v

. B runswick Corp. , 503 F.2d 376, 381 ( 9th Cir. 1974).H I N O JOS V

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A N A L Y SIS
I
Th e UC Lis a broad

Ca lif or nia statut e that pr oh ibi ts business prac tices that constitute “unfa ir competition,” which is defined a s
any unlawful, unfair or fr audulent business ac t o r prac tice and unf

air, de ceptive, untr

ue or misleading adver

tising and any act pr ohibited by Chap ter 1 (c ommencingwith Section 17 50 0) of Part 3 of Div isi on 7 of t

he B us ine ss and Profe ssions Code.
C a l

. B u s
. & P r o f

. C o d e § 1 7 2 0 0

. T h e U C Le xpre ssl y incorpora tes the F AL ’s prohibition on unfair a dv ertising as one for m of unfair

competition. The F AL , in t u rn, provides in r e le va nt p art : No price shall be adve rtised as a former price of any adver tised t hing, unle ss the alleg ed forme r p r ic e w a s th e p r e v a il in g ma r k e t p r ic e

. . . withi n thre e months ne xt imme diate ly preced i n g th e p u

b l i ca t i o no f t h e a dv ert i s em ent or unless the date when t h e alleg ed for mer pr ic e d id p r e v a il is c le ar ly , e xa c tl y and
c on sp ic uo us ly

state d in the a dv e rt ise me nt.
Ca l. B us . & Pr of. Co de § 1 75 01 . T hu s, the F AL e xpre ssl y pr oh ibi ts the ty

pe of fa lse a dvert is ing that K oh l’ s a lle g e dlyH I N O JOS V

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T h e U CL i s des i g n ed t o f u n ct i on t h i s wa y
. I t “ bor r ows vi o l at i o ns 2 fro m o the r la w s b y m a k in g t h e m ind e p e n d e n tly a c tio n a b le a s u n fair
c o m p e tit ive p ra c tice s” a ltho u g h “a p ra c tice m a y b e d e e m e d un fair e v e n if not s peci f

i cal l y pros cr i bed b y s om e ot her l aw. ” Kor e a Su pp l y Co. v. Loc khe ed M ar t i n Cor

p. , 6 3 P

. 3 d 93 7 , 94 3 (Ca l

. 20 0 3 ) ( q uo t at i o n m arks and ci t at i o ns o m i t t ed ). e ng a g e d in and the UC Lpr ov ide s in div idu a l c on sume rs wi th
a ca use of a ction to enforc e that prohibition. 2

In 2004, howeve r, the voters of California pa ssed Pr op os iti on

64 , w hic h r e str ic ts s tand ingfo r i nd ivi du a ls alleg ing UCL and FAL claims to pe rsons who “ h a[ve] su ff e re d in jur y in f a c t and ha [ve ] los t mo ne y

or pr op e rt y a s a re s u lt o f th e un f

a ir c o mp e ti ti o n
. ” Ca l. B u s
. & Pr of. Code §§ 17204 (UCL ), 17535 (mate rially identical standa

rd under the F AL ); see Kwikset , 2 46 P.3 d at 884 (h old ingtha t th e UC L and F AL sta nd ingre qu ir e me nts are ide nti c a l) . T he Ca lif or nia Supreme Court has he ld that the purpose of Proposition 64 was to “c urtail the prior pr actice of filingsuits on behalf of clients who have not use d the def endant’ s product or se rvice , vie we d th e de fe nd ant’ s a dv e rt isi ng , o r h a d a ny oth e r b us ine ss dealing s with the defe ndant.” Clay w o r t h v. Pfizer, Inc

. , 233 P.3d 1066, 1086–87 (Cal. 2010 ) (i nterna l quotation
mark s o mitte d) . H ow e ve r, Pr op os iti on 64 “ jus t a s p la inl y prese rved standingfor those who had h a d b u s i n es s d ea l i n gs with a defenda

nt and had lost money

or prope rty

as a r esult of the def endant’ s unfair business pr actice s.” Id. at 1087.
Th e “ lo s t m o n e y

o r p r o p e rty” r e qu ir e me n t t h e r e fore
re qu ir e s a pla int if f t o d e mon str ate “ so me fo rm of e c on omi c inj ur y ” a s a re su lt o f his tr ansa c tio ns wi th t he de fe nd ant, Kwikset , 2 46 P.3 d at 88 5, a lth ou g h “ the qu antum of los t mon e y or pr op e rt y ne c e ssa ry to s ho w s tand ingis o nly soH I N O JOS V

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T h e re is no d iff

ic u lty in th is c a se re g a rd ing A rtic le III inj u ry in fac t, 3 and n eit he r p art y s ug ges t s ot her wi s e. W e h ave ex pl ai ned t hat wh en, as her e, “ P l ai nt i f

f s cont end t hat cl as s mem bers pai d more f or [ a pr od uct ] t han the y o the rw ise w o u ld ha v e p a id , o r b o u g h t i t wh e n the y o the rw ise w o u ld
n o t ha v e d o n e so ” the y ha v e su ff e re d a n A rtic le III in

ju ry in fa c t. M a zza v

. Am. Hon d a M o t or Co. , 6 6 6 F .3 d 5 8 1 , 5 9 5 (9 th C ir. 2 0 1 2 ). T h e o n ly issu e b e fo re us , t h e re fo re , i s w h e the r th is “ inj u ry in fac t” is an e c o n o m ic i njury s uf

f i ci ent fo r p u rpo ses of st at ut o ry s t and i ng unde r t he U C L and FAL.

At t he p l ead i ng s t age, of co urs e , a lleg a t i o ns o f eco no m i c i njury 4
s u ff ic e
. Id

. at 88 8

– 8 9 (ci t i ng L u ja n v . D e

fe n d e rs o

f W ild lif e , 5 0 4 U

. S. 5 5 5 , 56 1 (19 9 2 ))

. much as would suffice to establish [Article I I I ] i njury in fac t,” id. at 886. T here are “innumera ble way s” that a c onsumer 3 can show economic injury from unfa ir competition. Id. at 4 885.
The Kw ik s et C o u rt explained prec isely what a pla intiff must alleg e whe n he wishes t o s ati sfy the ec onomic injury require ment in a ca se involving f alse a dvertising : “[a] c on sume r who re lie s o n a pr od uc t la be l and c ha ll eng e s a misrepre sentation containe d therein can satisfy the standing require ment of sec tion 17204 by alleg ing . . . tha t he or she would n o t have bought the product but for the misrepre sentation.” Id. at 890. Kwikset also explained why such alleg ati o n s are sufficie nt to establish economic injury within the meaningof Proposition 64:

Fr om the orig inal purcha sing de cision we k n o w t he consume r value d the produc t asH I N O JOS V

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P l ead i ng that o ne wo ul d no t ha ve o t herwi se p urchased t he p rod uct but 5 fo r th e m islea d ing a d v e rtising a lso sa tisf ie s the c o n su m e r’s o b liga tio n to p le a d a c a u sa l l ink b e tw e e n the a d v e rtising a n d the a lleg e d e c o n o m ic inj u ry. I d. at 89 0. T her ef

ore, as a prac t i cal mat t er , i n cas es s uch as t hes e, P ro p o sitio n 6 4 ’s ca u sa tio n re q u ire m e n t (w h ic h is no t at issu e in this
a p p e a l) a n d the e c o n o m ic inj u ry re q u ire m e n t ar e c o e x te n siv e
. labeled mor e than the money he or she parte d with; from the complaint’s alleg at i ons we know the consume r value d th e money he or sh e pa rt e d w ith mo re tha

n th e pr od

uc t a s it actua lly is; and fr o m the combination we know that bec ause of

the misrepre s en tation the consumer

(alleg edly

) wa s made to par

t with more mon e y

tha n h e or sh e oth e rw ise would h av e b een w illing to expend, i.e., that the c o n s u me r

p a id mo r e th anh e o r

s he
a c tua lly va lue d th e pr od

uc t. T hat in c re me nt, the extra money paid, i s economic injury and aff ords the consume r standingto sue.[ ] 5
Id. at 890–91.
Hi n o j o s h as d o n e e v ery

th i n g Kwikset

require s to alleg e an economic injury

under the UCLand F AL . He a lleg es that the adver tised discounts convey ed fa lse in formation about the g oods he purcha sed, i.e., that the g oods he purc hased sold at a substantially

highe r price at Kohl’s in the rec ent past and/or in the preva iling mar

ket. He a lso alleg es that he w ould not have p ur c ha se d th e g oo ds in q ue sti on a bs e nt t his misrepre sentation. This is sufficient under Kwik se t. Kohl’s attempts to distinguish Kwikset on the g round that Hinojos’s complaint does not state at what price ( if any ) heH I N O JOS V

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W e n o te , h o w e v e r, tha t K w i ks etex pl ai ned t hat t he di f f er enc e bet ween 6 wha t a pl ai nt i f

f ac t ual l y pai d and wha t he woul d hav e pai d had t he product bee n t r u t h f

u l l y a dv er t i s ed r epr es en t s t h e appr opr i at e mea s u r e o f r es t i t u t i on to w h ic h H ino jo s m a y b e e n tit le d u n d e r th e U C L

. I d. T her ef

ore, ev en t houg h i t ne ed not be pl ed i n or der t o af f ord hi m st andi ng, t he pri ce t hat H i no jos wo ul d have o t herwi se pai d , i f any , wi l l c ert ai nl y b e rel evant t o t he
ca l cu l ati o n o f

resti t uti o n, assum i ng H i no jo s i s ab l e to p ro v e h i s f alse
a d v e rtising a lleg a tio n s. Se e Kor ea Suppl y Co. , 63 P. 3d at 94 6–47 ( r ei t er at i n g t h at di s go rgem ent i s on l y a v ai l abl e u n der t h e U CL f or dam age s a c t u a l l y s u f

f e r e d b y t h e pl a i n t i f

f )

. I n a n y e v e n t , Hi n oj os ne ed
n ot be a bl e t o pr ov e t h e qu an t u m of da mag es h e s u f

f er ed i n or der t o be ent i t l ed t o i njunct i ve rel i ef gi ven t hat he al l eges s uf f i ci ent f act s t o pro ve t h at h e s u f

f er ed s o me e c o n o m ic inj u ry. See Kw i ks et , 246 P. 3d a t 894–95 ( n ot i n g t h at a U CL pl ai n t i f f ma y obt ai n an i n

j u n ct i on ev en wh en h e ca n n ot p rove hi s ent i t l em ent t o res t i t ut i o n). wo uld have purc ha se d th e me rc ha nd ise in ques tio n h a d it s “orig inal” or “ regular” price not be en misrepr esente d. There is no require ment, however, that Hinojos separ ately plead how much he w ould have pa id for the mer chandise had he known i ts true mar

ket value. Kwikset expli citly reje cted that argument. Id. at 891 n.15 (“ Be cause the issue her e is only the thr e sh old matte r o f s tand ing , n ot whe the r a nd ho w muc h to
awa rd in restitution, a

specific measure of the amount of [t he
a lle g e d] lo ss i s n ot r e qu ir e d. ” ); see id. at 894–95. 6

In denying H inojos’s moti on for r econside ration, the district c ourt limit ed Kwikset on the a lte rn a tiv e g ro un d th a t it addres ses UCLand F AL standing only

in case s involving

“ f a c tu a l m i s r e p r e s e n t at i o n s a b o u tth e c o mp o s i t i o n , e f f e c ts, orig in, and substance of adve rtised produc ts.” Kohl’s advanc es a similar a

rgument in slightly

differ ent form when it a rgue s th a t Kwikset

does not apply

beca use th er e was “ no differ ence in va lue betwee n the product ‘as labeled’ an dt he product ‘a s i t actua lly

is,’ beca use the produc ts . . . are one and the same.” In other wor ds, acc ordingto Kohl’s and theH I N O JOS V

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12 district court, whe n a mer chant misrep re sents the “r egular” price of his w are s, it doe s not misre prese nt the innate value of tho se wa re s so the mis le d c on sume r h a s su ff e re d n o e c on omi c injury ; he g ets the pro du ct h e ex pecte d at the pric e he expected.
Kwikset c ann ot b e so e a sil y

lim ite d. I t is tr

ue tha t Kwikset itself involved misrepre sentations reg ardingh o w the
me rc ha nd ise in q

ue sti on wa s p roduce d; t

he de fe nd ant i n Kwikset wa s a manu fa c tur e r o f l oc ks e ts, wh ic h it fa lse ly labeled a s having been “Made in [the] U.S.A.” I t is also true that Kwikset

descr ibed a number

of oth er ex amples of misrepre sentations conce rninga produc t’s orig i n or composition t h at would be ac tionable under the UCLand FAL : meat fa lsely

labeled a s kosher or ha lal , wine labe led with the wrongreg ion or y ear , blood diamonds mislabeled as conflict-f ree , and g oods falsely sugg esting they

wer e produce d by

union labor. Kwikset , 216 P

. 3 dat 889–90. Nothing in Kwikset , howeve r, sug g ests t h at these e x amples
wer e int ended to be exhaustive instead of illustrative. To the contra ry , these e x amples we re of fer ed to expl ai n wh y

the particula r misrepre sentation at i s s u e in Kwikset , which did inv olv e ho w the pr od

uc t wa s ma

nu fa c tur e d, wa s si g nif

ic ant. That is why

they wer e introduce d in a par agra p h beg inning with the sentenc e: “To some c onsumers, proc esses a nd place s of orig in matter.” Id. at 889.
The district cour

t’s “compositio n , eff

ects, orig in, and sub s ta n c e ” te s t ign o r e s th e f

a c t th at, to o th e r c o n s u me r s, a product’s “ regular” or “or igina l” price matters; it provides important information about the produc t’s worth an d the pres t i ge that owne rship of that produc t convey s. See Dhruv Gre wal & L arry

D. Compeau, Comparative Price Adve rtising: Informative or Dec eptive? , 1 1 J

. o f P u b

. P o l ’ y &H I N O JOS V

. K OHL ’ S C O RP

. 13

W e s ee n o me r i t t o t h e D ef en dan t s ’ obj ec t i on t h at w e may n ot r el y on 7
ar t i cl es f r om a ma r k et i ng jo urn al a t t h e mot i on t o di s mi s s s t ag e. W e do
no t rel y on t he ci t ed art i cl e t o est ab l i sh f act s ab o ut H i no jos’ s case t hat are not co nt ai ned i n t he pl eadi ng s , b ut rat her i n s uppo r t of t he concl us i on t hat false a d v e rtise m e n ts a b o u t a p ro d u c t’s tru e m a rk e t p ric e a re sign ifi c a n t t o c o n su m e rs
. See Rubi o v

. Capi t al O ne Bank , 6 1 3 F .3 d 1 1 9 5 , 1 2 0 0

– 0 1 (9 th C i r
. 2 01 0) (r ef

er r i ng , at t he mo t i on t o di s mi s s s t age , t o publ i s hed e mp i r i cal
res earch ab o ut co nsumer b ehavi o r t o d et erm i ne whether an ad vert i seme nt was po t ent i al l y m i sl ead i ng). Mktg. 52, 55 ( Spring 1 9 9 2 ) (“ By cre atingan impression of
sav in g s , th e p r e s e n c e o f

a h igh e r r e f e r e n c e p r ic e e n h an ces subjects’ pe rce ived value a nd willingness to b u y

the produ c t.” ); id. at 56 (“ [E] mpirical studies indicate that as discount siz e incr ease s, consumers’ perc eptions of value and the ir wi lli ng ne ss to buy the pr od uc t inc re a se , wh ile th e ir intention to search f

or a lowe r price decr ease s.”). 7 Mis inf or matio n a bo ut a pr od uc t’ s “n ormal” pr ic e is, there fore , signific ant to many consumers in the same way as a false product label would be. See Kwikset , 246 P.3d at 890 (re cog nizi ngthat falsely

labelinga watch as a

Rolex would be
an a c tio na

ble mis re pr e se ntatio n e ve n if the watc h w a s a

“ fu nc tio na l[] eq

uiv a le nt” of a Rol e x). Th at, o f c ours e , is why
re ta ile rs lik e Ko hl’ s h ave an in c e nti ve to advert ise f a lse “sale s.” I t is also w h y the California le g islature has pr oh ibi te d th e m fr om do ing so
. In f a c t, t he de c e ive d b arg a in hunter suff

ers a more obvious ec onomic injury as a result of false a dvertising than the Kwikset consumer who was dupe d into buy ing f

oreig n-made g oods, beca

use the barg ain hunter’ s e xpe c tatio ns a

bo ut the pr od

uc t he jus t pu

rc ha se d is pr e c ise ly that it has a highe r perceive d value and there fore has a hig her
resa le value.
Th e dis tr ic t court ’s te st wo uld a lso e lim inate c on sume rs ’ ability to bring UCLand F AL

claims for a

vast arr ay

of otherH I N O JOS V

. K OHL ’ S C O RP

.

14
mis le a din g mark e tin g pr a c tic e s th at ha ve little or

no thi ngto do with a produc t’s “composition, eff ec t s , orig in, and substance.” For example, none of the f ollowing adver tisements de al with the “composition, eff ect, orig in, and substance” of the produc t: “not available in store s,” “ava ilable for a limit ed time only ,” “the same model of shoe worn by L eB ron J ames,” “50% of customers who pur chase d product X a lso purchase d our produc t,” and “ more doc tors rec ommend our produc t than any other bra

nd.” Ye t all of the se e xamp le s re pr e se nt e ff e c tiv e mark e tin g te c hn iqu e s th a t, if false, can be used to de ceive consumers in t o m aking purcha ses they

would not otherwise make

. Kwikset g ives no indication that Proposition 64 meant to silently close the door on consumers’ ability to br ing UCL and FAL claims based on
s u ch fa l s e a dv ert i s i n g.
To the contra

ry , Kwikset emphasized that Proposition 64
was e nacte d no t to eliminate individual consumer suits when the consumer was actua lly dece ived by a m i sleading adver tisement, but rather

to stop “fis h i n g expeditions ” by
consumers a

nd attorney s who may

have ne ver e ven intended to purcha se a pr oduct that was be ing f alsely adve rt ised. Kwikset , 24 6 P.3 d at 88 4; see also id. at 894. I f Proposition 64 wer e interpre ted to require more than that a consumer have purcha sed a product that he would not have pur chase d absent the misleadingadver

tisement, then it “would bringto an end private consum er e nforc ement of ba ns on many

label misrepre sentations, contra ry to [ its] appar ent intent . .

. .” Id.
a t 89 1. Th is i s p re c ise ly wh at w ou ld happe n to pr ivate consumer e nfor ce ment of California’ s prohibition on adver tising fa lse “sale s,” C al. B us. & Prof . Code § 17501, under the district court’s a pproac h.H I N O JOS V

. K OHL ’ S C O RP

. 15

Fur t her mo r e, t he mat er i al i t y of a mi s r epre s enta t i on i s t y pi cal l y an 8 i ssue o f f ac t , an d t he refo re sho uld no t b e d ec i d ed at t he m o t i o n to d i sm i ss sta g e
. See I

n r e St er oi d H orm on e P r od uct Ca s es , 104 Cal

. Rpt r
. 3d 329, 3 3 8

– 3 9 (Ca l

. C t

. A p p
. 20 1 0 ). The district cour

t al t er n atively

descr ibed its holding as stemming fr om the fac t that Hinojo s go t t h e “be nefit of the barg ain” be cause he kept the g oods that he purchased a nd they wer e not def

ective

. T his “bene fit of the bar g ain” rationale was e x plicitly

reje cted in Kwikset

. 246 P. 3 dat 892–93. Kwikset

held that the “b en efit of the barg ain” defe nse is permis s i ble only if the misrepre sentation that the
c on sume r a lle g e s w a s n ot “ mat eria l.” A r e pr e se ntatio n is “mater ial,” howe ver, if a

rea sonable c onsumer woul dattach imp or tanc e to i t or

if “the maker of

the re prese ntation knows
or ha s r e a so n to kn ow that it s r e c ipi e nt r e g ard s o r i s li ke ly to reg ar d t h e matter a s important in determining his choice of action.” Id. a t 892 (q

uo tin g Re state me nt ( Se c on d) of To rt s, 8 § 538, subd. (2)(b) (1977)) . More over, the leg islature’s decision to prohibit a par t i cu l ar misleadingadver tising prac tice is evidence that the le g islature has de emed that the pr a c tic e c on sti tut e s a

“ mate ri a l” m i s r e p r e s e nt a

t ion , a nd c ourt s must defer

to that determination. S ee id. Her e, Hinojos sp e c if ic a lly and pla us ibl y a lle g e s that Ko hl’ s fa lse ly mark e ts its products at reduc ed pric es pre cisel y b ecause c onsumers such as himself r easona

bly reg ard price reduc tions as material inf or ma tio n w he n ma kin g pu rc ha sing de c isi on s. F ur the rm or e , b oth state and fe de ra l la w s pe c if ic a lly pr oh ibi t reta ilers from advertisingfalse “ sales.” See Cal. Bus. & Prof. Code § 17501 (F AL ); Cal. Civil Code § 1770(a) (13) ( CL RA); 16 C. F

. R. § 2 3 3

. 1 ( a ) ( F e d e r a l T r a d e Co mm is s ion regulations). There fore , the district court’s d e te r mination that Hinojos has suffe red no economic injury beca use he re ceive d the “be nefit o f t h e bar g ain” is contra ry to Kwikset

be c a us eH I N O JOS V

. K OHL ’ S C O RP

.

16 Hinojos alleg es t hat Kohl’s made mate rial misrepre sentations that in du c e d hi m to buy pr od uc ts h e wo uld

no t ot he rw ise have pur chase d.

In s u m , p ri ce ad v ert i s em en t s m at t er
. Ap p l yi n g Kwikset in a straig htforwa

rd manne r, we hold that whe n a consume r purcha ses merc handise on the ba sis of false pr ice inf or mat io n, and

wh e n th e c on sume r a lle g e s th a t he wo uld not have made the purcha se but for the misrepre sentation, he has standing t o sue under the UCLand F AL

beca use he ha s s u f f e r e d an e c o n o m i c i n

j ur y.
II
The CL RA provides a se cond, over lappingprohibition on adver tising non-e x istent sales. Sp ec ifically , it forbids “[m] aking false or misleading statements of fac t conce rning
rea sons f or, exis tence of, or amounts of price reduc tions.” Cal. Civil Code § 1770(a) (13). In turn, Cal. Civil Code § 1780(a) provides a cause of action to “ [a] ny consumer who suffe rs any damage as a r esult of the u s e o r employ ment by any person of

a method, ac t, or prac tice dec lare d to be unlawful by

Section 1770.” Cal. Civi l Code § 1780(a) (empha sis added). The district court’s c onclusion that Hi no jos fa ile d to e sta

bli sh sta nd ing un de r the CL RAbe c a us e he di d no t suf

fe r “ any dama g e ” is e rr on e ou s f

or the same rea sons that its det er m inations reg ardingUCLand F AL s t an d i n g we re wr o n g.
In Mey er v. Sprint Spec trum L.P. , 200 P.3d 295, 299, 302–03 (Cal. 2009), the California Supreme Court made cle ar th a t t h e CL RA ’ s “ an y

d ama g e ” r e qu ir e me n t i s a c a p a c ious
o n e th a t in c lu d e s an y p e c un ia r y d ama g e a s w e ll a s opportunity

costs and tra nsaction costs that re sult when aH I N O JOS V

. K OHL ’ S C O RP

. 17

c on sume r i s mi sle d b y de c e pti ve mark e tin g pr a c tic e s. Be cause t he “a

ny damag e” sta

ndard inc ludes eve n minor pecunia ry damag e, we conclude that any plaintif f who has standing under the UCL ’s and F AL ’s “lost mo n ey or proper ty ” re quirement will, a fo rti or i , have suf fer ed “a ny damag e” f

or purpose s of establishi ng CL RA standing. See, e.g. , Klein v. Chevron U.S.A., I nc. , 137 Cal. Rptr. 3d 293, 320 (Cal. Ct. A

pp. 2012) (noting that wher e a pla intiff alleg ed an “ec onomic injury ” under the UCL he also ade quately alleg ed inj ur y un de r t he CL RA ); Mlejnec ky v. Olympus Im aging Am. Inc. , 2011 WL1497096, at *4 (E.D. Ca l. 2011) (unpublished) (same) . Acc ordingl y , Hinojos adequately alleg es that he
s u f f e r e d “ an y d am a g e ” f

o r p ur p o s e s o f th e C L RA

. We there fore reve rse and hold that Hinojos adequately alleg es an injury under the CL RA.
III Finally , beca

use Kwikset

provides more than suff i ci ent g uidance with reg ard to the state -law statutory standing qu e sti on s p re se nte d in

thi s c a se , w e de ny

the De fe nd ants ’ mot ion to c e rt if y thi s matte r to the Ca lif

or nia Sup re me Court

. Although w e deny

the motion on its merits, an additi o n al comment is re q uired in lig ht of the circ umstances unde r which the motion was made

. Kohl’s re moved this l aw s u it to federa l court, deny ing Hi no jos the stat e fo rum in

wh ic h h e so ug ht t o h ave his c a se hear d. Although Kwik

se t was discussed e x tensivel y i n the parties’ appellat e brie fs, Kohl’s did not sug g est that
c e rt if ic a tio n w a s n e c e ssa

ry , o r a pp ro pr iate , e ith e r i n it s an s w e r in g b r ie f o r at o r a l ar g u me n t. M o r e im p o rta nt, any objective witness to the oral argument would have c oncluded that the chanc es that Kohl’s would pre vail on the merits wer eH I N O JOS V

. K OHL ’ S C O RP

.

18
sli m at be st. Th e n, a

month a nd a da y a ft e r o ra l argume nt, Ko hl’ s f ile d a motio n to ce rt if

y , sug g e sti ngfo r t

he fi rs t ti me that cer tification would be a

pp ro p ri ate a

nd strong ly

urg ing that we c ertify

this cas e to the California Supreme Court rathe r than de cide it. The moti on to cer tify did not rely

on any interveningauthority

or on any case decide d afte r Kohl’s filed its appellate br ief, nor did it make any new substantive arguments. Furthe rmore, K ohl’s offe red no rea son for f ailing to mention certification prior to or du ri ng oral a rgument or for ur g ing c ertifica

tion only afte r we expressed prof ound skept ici sm at or a l argume nt r e g ard ingthe me ri ts o f i ts position.
We h ave lon g loo ke d w ithdis fa vo r u po n mo tio ns to c e rt if y that are fi le d a ft e r t

he mov ing pa

rt y ha s fa ile d to ava il itself of a pr ior opportunity to seek c ertification. S

e e , e

. g. , Thompson v. Paul , 547 F.3d 1055, 1065 (9th Cir. 2008). F or example, in states that acc ept ce rtifi cation fr om fede ral dis tr ic t court s (un lik e Ca lif or nia ), we have a

he ld t hat th e re is
a “ pr e sumpt ion

a g a ins t c e rt if

yinga qu e sti on to a state supreme c ourt afte r the fe dera l dist ri ct court has issued a decision” when the party

that lost below did not mention t he possibili ty

of ce rtification until af

ter the district court ente red summary judgme nt ag ainst it. S uch reque sts f or ce rtification
are g e ne ra lly ina

pp ro pr iate , we have he ld, be c a us e “ [a] p art

y s h o u l d n o tb e a l l o we d

‘as ec o n d

ch an ce atv i ct o ry ’ t h ro u gh
cer tification.” Id. (qu o t i n g In re Complaint of McLinn , 744 F.2d 677, 681 ( 9th Cir. 1984)).
Her e, Kohl’s ha d an opportunity to sugg est ce rtification in i ts p re -a

rgume nt b ri e f o r e ven at or a l argume nt. I t c ou ld have ur g ed that, in the eve nt that this cour t was not persua ded that California lawcl ea rly favor ed its position, t he appropr iate cour se of a ct i o n would be ce rtification to theH I N O JOS V

. K OHL ’ S C O RP

. 19

Ca lif or nia Sup re me Co urt. Ye t it

c ho se at th a t po int

no t to ur g e c e rt if

ic a tio n as an

a lte rn ate c ou

rs e of a c tio n, pr e suma

bly for tactica l r easons—possibly beca use having p reva iled b e l o wi tg r e a t l y p r e f

e r r e d t o h av e th e c a s e d e c i d e d b y a fede ral c ourt. Only

afte r (corre ctly

) per ceivingat ora l argument that we were not inclined to rule in its favor on the merits did Kohl’s file its motion for c ertification. F or re asons simil ar to those e x presse d in Thompson , we strong ly disfavor a p ar t y that preva iled below re questing cer tification for the fi rs t ti me a ft e r i t be c ome s a pp are nt at or a l argume nt t hat it is
no t li ke ly to p re va il i n f

e de ra l c ourt

. Our c ourt ha s a lso de ve lop e d ru le s to e ns ur e that a pa rt y may no t ma nip ulate the a

pp e llate sy ste m by se e kin g to a vo id
a pa ne l it vie ws a s unli ke ly

to accep t it s leg a l po sit ion . It is for that r eason that we do not make pa nels public u ntil the first workingday

of the we ek pre cedi n g oral a rgument and permit motions for continuance s afterthe pane l has bee n announce d only

“under exceptional circ umstances.” See Gene ral Or der 3.5. H ere , Kohl’s urg ed ce rt i fi cation for the f i r s tt i m e o n l y a f

t e r i th a d th e o p p o rtun i ty both to learn which
m e mb e r s o f

th i s c o urtw o u l d

h e ar i t s a p p e a l and

to a sse ss those judg es’ a ctual v i ew s of its case , based upon the
conce rns the j u d g es expressed at oral ar g ument. Having g ained that knowle dg e, Kohl’s sought t o send t his case ba ck t o s t at e court whe nce it ca me, in light of its per ception that the fe d er al co urt was unlikely to rule in its favor. Kohl’ s c on du c t r e g ard ingc e rt if

ic atio n vio late d bo th o ur

ru le a g a ins t belated c ertificat i on reque sts and our long -standing pr oh ibi tio n a g a ins t a

pa rt y ’s us e of

pr oc e dura l mo tio ns to avoid havingits appeal de cided by a pane l it perce ives as
un fa vo ra ble

. Mo re ov e r, he re Ko hl’ s re qu e st w ou ld n ot o nly
a ff e c t the op e ratio n o f t he fe de ra l c ourt , b ut w ou ldH I N O JOS V

. K OHL ’ S C O RP

.

20

unnece s s ar ily

embroil the Supreme Court of the State of Ca lif or nia in K oh l’ s atte mpt to fi nd a mor e fa vo ra ble fo rum.
C ONCL US I ON
I n K w i kset , th e Ca lif

or nia Sup re me Court

he ld t hat a ll a
consumer ne ed alleg e to establish standingto br ing a UCL or F AL c lai m is that ( 1) the de fe nd ant m a de a fa lse repr esentation a

bout a product, (2) the consumer pu rc h ased the produc t in reliance on the m i s re p re sentation, and (3) he would not have pur chase d the product otherwise. We rejec t the De fe nd ants ’ a

rgume nt t

hat Kwikset

is d ist inguis ha

ble beca u s e i t involved a diffe rent ty pe of unla

wful misrep r e s e n tati o nth anth e o n e at i s s u e h e r e
. We th e r e f ore reve rse the district c ourt’s dismissal of Hinojos’s UC Land FAL claims. For

near ly identical re asons, we a lso rever se the dis tr ic t court ’s dis mis sa l of Hin ojo s’ s CL RAc la ims . We a lso deny the Def endant’ s motion to ce rtify both on the merits and b ec au s e o f t h e c i rc u m s t an ce s at t en d an tt o i t s fi l i n g.
R E V E R S E D a n d R E M A N D E D ; M o t i o n t o C e r t if y DENIED.

WARDL AW, Ci rcuit J udg e, conc urringin part and
c on c ur ri ngin t he re su lt:

I am please d to concur

in the majority

opinion, ex cept that Ic on c ur on ly a s to the re su lt o f P art

I I I , w hic h d e nie s K oh l’ s’ reque st to certify

the state lawstanding require ments for revie w by t h e C alifornia Supre me Court. Although I ag ree th a t K o h l’ s ’ f

ir s t r e mo v in g th e a c ti o n f r o m s tate to f

eder al court, a nd then s eeking to have the matter on a ppeal c ertifiedH I N O JOS V

. K OHL ’ S C O RP

. 21

to t he state c ourt , ra ise s su sp ic ion a s to Ko hl’ s’ mot ivatio ns , on this recor d and without providing an opportunit y to Kohl’s to respond, it is somewhat unfa ir to conclude that Kohl’s had only a nef arious mot ive. I would simply deny the request as
un t i m e l y.