Court Opinion

ID: 2746599
Source: CourtListenerOpinion
Date Created: 2014-10-29 20:00:59.580507+00
Date Added: 2024-06-11T09:53:45.969209
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                OCT 29 2014

                                                                          MOLLY C. DWYER, CLERK
                    UNITED STATES COURT OF APPEALS                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

VERONICA GUTIERREZ and ERIN                      No. 13-16195
WALKER, individually and on behalf of
all others similarly situated,                   D.C. No. 3:07-cv-05923-WHA

              Plaintiffs - Appellees,
                                                 MEMORANDUM*
  v.

WELLS FARGO BANK, NA,

              Defendant - Appellant.

VERONICA GUTIERREZ and ERIN                      No. 13-16598
WALKER, individually and on behalf of
all others similarly situated,                   D.C. No. 3:07-cv-05923-WHA

              Plaintiffs - Appellees,

  v.

WELLS FARGO BANK, NA,

              Defendant - Appellant.

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
VERONICA GUTIERREZ and ERIN                      No. 13-16749
WALKER, individually and on behalf of
all others similarly situated,                   D.C. No. 3:07-cv-05923-WHA

              Plaintiffs - Appellants,

  v.

WELLS FARGO BANK, NA,

              Defendant - Appellee.

                    Appeal from the United States District Court
                      for the Northern District of California
                     William Alsup, District Judge, Presiding

                      Argued and Submitted October 8, 2014
                            San Francisco, California

Before: THOMAS, McKEOWN, and W. FLETCHER, Circuit Judges.

       In Gutierrez v. Wells Fargo Bank, NA, 704 F.3d 712 (9th Cir. 2012), we held

that the National Bank Act preempts state regulation of the posting order of debit

card transactions. Because the restitution award was predicated on the district

court’s conclusion that state law prohibited Wells Fargo from posting debit

transactions in a high-to-low order, we vacated and remanded for the district court

to determine “what relief, if any,” was owed to the plaintiffs (collectively

“Gutierrez”) on the surviving state law fraud and misrepresentation claims. Id.

at 730.

                                          2
      On remand, the district court awarded Gutierrez the same amount of

restitution, enjoined Wells Fargo from making certain false or misleading

statements, and denied Gutierrez’s request for prejudgment interest. We affirm the

district court’s award of restitution and denial of prejudgment interest. We vacate

the district court’s injunction and remand for entry of an injunction consistent with

this memorandum disposition.

I. Restitution

      Wells Fargo attacks the restitution award on multiple grounds. It first

contends that a pretrial email sent by Gutierrez’s counsel waived any claim to

restitution arising from Wells Fargo’s false or misleading statements. However,

Wells Fargo did not press a waiver argument before trial, and the district court

cited ample record evidence that all parties “understood that restitution was still on

the table in the event an injunction against the practice was entered.” We agree

with the district court that Gutierrez did not waive her claim to restitution.

      Wells Fargo further alleges that the district court’s restitution award

penalizes the bank for practices permitted by the National Bank Act. Although the

district court erred in stating that Wells Fargo’s misrepresentations were

“intertwined with the other elements of the scheme and [could not] be

meaningfully separated into discrete causes of harm,” this descriptive error is

                                           3
harmless. As the district court clarified on the next page of its ruling, the

restitution award was based on Wells Fargo “affirmatively misleading the class,” a

state law claim, not on a “practice protected by federal preemption.”

      Wells Fargo also characterizes the restitution award as an improper award of

expectation damages. It argues that the district court was not empowered to award

class-wide restitution because “there [was] no evidence in the record that all class

members would have behaved differently in the absence of the

misrepresentations.” California courts, however, have “repeatedly and consistently

[held] that relief under the UCL is available without individualized proof of

deception, reliance and injury.” In re Tobacco II Cases, 207 P.3d 20, 35 (Cal.

2009). Rather, California law permits plaintiffs to recover any property that “may

have been acquired by means of” a defendant’s false or misleading statements.

Cal. Bus. & Prof. Code § 17203.

      As we noted in our prior opinion, the record is replete with examples of

Wells Fargo’s false and misleading statements. Gutierrez, 704 F.3d at 728-30.

The district court’s calculation of the restitution award was based on factual

findings that are not clearly erroneous; “substantial evidence” supports the

restitution award. Colgan v. Leatherman Tool Grp., Inc., 38 Cal. Rptr. 3d 36, 63

(Ct. App. 2006). We reject Wells Fargo’s additional arguments that restitution is

                                           4
barred by the federal Due Process Clause or the Rules Enabling Act.

II. The Injunction

      The district court enjoined Wells Fargo from making “any false or

misleading representations relating to the posting order of debit-card purchases,

checks, and ACH transactions in its customer bank accounts.” Wells Fargo urges

us to invalidate the injunction because it does not “‘state its terms specifically’ and

‘describe in reasonable detail . . . the act or acts restrained.’” Del Webb Cmtys.,

Inc. v. Partington, 652 F.3d 1145, 1149-50 (9th Cir. 2011) (quoting Fed. R. Civ. P.

65(d)(1)(B)-(C)). Unlike the injunction in Del Webb, which contained a vague

prohibition on all “illegal, unlicensed and false practices,” id. at 1150, the

injunction here gives the defendant “fair notice” in “plain English” of what conduct

is proscribed, Reno Air Racing Ass’n., Inc. v. McCord, 452 F.3d 1126, 1134 (9th

Cir. 2006).

      The injunction is overbroad, however, because it encompasses false

statements regarding the posting order of checks and ACH transactions. The

district court made specific factual findings that consumers were not confused by

the posting order of checks and ACH transactions. The injunction is “more

burdensome to the defendant than necessary to provide complete relief to the

plaintiffs.” Califano v. Yamasaki, 442 U.S. 682, 702 (1979). We vacate the

                                           5
injunction and direct the district court to enter an injunction that does not reference

false or misleading statements about the posting order of checks and ACH

transactions.

III. Prejudgment Interest

      On cross-appeal, Gutierrez asserts that the district court erred by failing to

award prejudgment interest pursuant to California Civil Code Sections 3287 and

3288. Section 3287 requires the award of prejudgment interest when the amount

of a monetary award is “certain, or capable of being made certain by calculation”

before trial. Here, by contrast, the amount of restitution awarded to Gutierrez

“depend[ed] upon a judicial determination based upon conflicting evidence.”

Esgro Cent., Inc. v. Gen. Ins. Co., 98 Cal. Rptr. 153, 158 (Ct. App. 1971). Section

3288 states that prejudgment interest “may be given, in the discretion of” the trier

of fact. The district court did not abuse its discretion with respect to the denial of

prejudgment interest.

      AFFIRMED in part, VACATED in part, and REMANDED. Each party

shall pay its own costs on appeal.

                                           6