Court Opinion

ID: 2620380
Source: CourtListenerOpinion
Date Created: 2013-10-30 20:05:35.26258+00
Date Added: 2024-06-11T08:23:01.408053
License: Public Domain

FILED
                           NOT FOR PUBLICATION                                OCT 30 2013

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

                            FOR THE NINTH CIRCUIT

JUNE WOOLVERTON JOHNSON, an                      No. 12-55233
individual, on behalf of herself and all
others similarly situated,                       D.C. No. 2:11-cv-06406-R-JC

              Plaintiff - Appellant,
                                                 MEMORANDUM*
  v.

WAL-MART STORES, INC., a Delaware
corporation,

              Defendant - Appellee.

                   Appeal from the United States District Court
                      for the Central District of California
                    Manuel L. Real, District Judge, Presiding

                      Argued and Submitted October 8, 2013
                              Pasadena, California

Before: PREGERSON, WARDLAW, and TALLMAN, Circuit Judges.

       June Johnson appeals the Rule 12(b)(6) dismissal with prejudice of her

putative class action against Wal-Mart. The gravamen of Johnson’s complaint is

that Wal-Mart allegedly misrepresented that it charged her a nine dollar “recycling

        *
             This disposition is not appropriate for publication and is not precedent
except as provided by 9th Cir. R. 36-3.
fee” with her purchase of a seventy-seven dollar car battery because the “recycling

fee” was required by California law, when, in fact, California does not require such

a fee. We have jurisdiction under 28 U.S.C. § 1291, and we reverse.

      1. The district court erred by concluding that Johnson alleged insufficient

injury-in-fact under California law to state a claim upon which relief can be

granted. A plaintiff suffers economic injury-in-fact under California law if he

“surrender[s] in a transaction more . . . than he . . . otherwise would have” or is

“required to enter into a transaction, costing money or property, that would

otherwise have been unnecessary.” Kwikset Corp. v. Superior Court, 51 Cal. 4th
310, 323 (2011); accord Hinojos v. Kohl’s Corp., 718 F.3d 1098, 1102 (9th Cir.

2013) (noting that a plaintiff suffers economic injury if induced “to spend more

than he otherwise would have spent”).

      Johnson alleges that she would not have paid the additional nine dollar fee if

she had known that California law did not require her to pay it and that Wal-Mart

intended to keep the nine dollars for itself. On a motion to dismiss, we accept

these factual allegations as true. Alvarez v. Chevron Corp., 656 F.3d 925, 930 (9th

Cir. 2011). Drawing upon our “judicial experience and common sense,” Ashcroft

v. Iqbal, 556 U.S. 662, 679 (2009), we conclude that these factual allegations

permit a reasonable inference that Johnson paid more “than she otherwise would

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have” if Wal-Mart had not engaged in the alleged misrepresentation, Kwikset

Corp., 51 Cal. 4th at 323. Johnson’s claim is “plausible on its face” because it is

reasonable to infer that Johnson, if correctly informed, would not have given Wal-

Mart the nine dollar fee in addition to paying seventy-seven dollars for the battery.

Iqbal, 556 U.S. at 678.

      The district court erred by relying on Bower v. AT&T Mobility, LLC, 196
Cal. App. 4th 1545 (2011), which is inapposite. In Bower, the plaintiff

characterized her injury as being “denied any opportunity [to] shop around for

retailers that do not charge consumers this discretionary fee.” Id. at 1554

(alteration in original). Here, by contrast, Johnson’s claimed injury is the actual

loss of nine dollars. On appeal, Wal-Mart asserts that Peterson v. Cellco P’ship,

164 Cal. App. 4th 1583 (2008), requires affirmance. In Peterson, however, the

plaintiffs “[did] not allege they paid more for the insurance due to defendant’s

collecting a commission.” Id. at 1591. Here, Johnson does allege that she paid

more because of Wal-Mart’s challenged conduct.

      2. The district court also erred by determining that Johnson failed to satisfy

the pleading requirements of Fed. R. Civ. P. 9(b). Rule 9(b) requires a plaintiff

averring fraud to plead the “who, what, when, where, and how” of the alleged

misconduct. Vess v. Ciba-Geigy Corp. USA, 317 F.3d 1097, 1106 (9th Cir. 2003).

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He must also offer “an explanation as to why the statement or omission

complained of was false or misleading.” In re GlenFed, Inc. Sec. Litig., 42 F.3d
1541, 1548 (9th Cir. 1994) (en banc), superseded by statute on other grounds as

stated in SEC v. Todd, 642 F.3d 1207, 1216 (9th Cir. 2011).

      Johnson’s complaint satisfies these requirements. She alleges that, at its

Ridgecrest, California, store on August 3, 2010, Wal-Mart implicitly

misrepresented to her that it was required by law to charge the nine dollar

“recycling fee” by posting a sign stating that “[s]ome states require a fee when you

buy a new battery” and by charging the fee, identifying it as a “recycling fee” on

her receipt. She alleges falsity because California does not require such a fee and

Wal-Mart “actively concealed” the truth. The district court’s stated rationale – that

Wal-Mart’s statements were true and Johnson simply misunderstood the law –

erroneously evaluated the merits of Johnson’s claims rather than the particularity

of her pleadings. Johnson’s allegations make it unequivocally clear to Wal-Mart

what conduct it must defend. See Bly-Magee v. California, 236 F.3d 1014, 1019

(9th Cir. 2001).

      3. The district court did not hold that any misrepresentations made by Wal-

Mart were nonactionable statements of the law, Miller v. Yokohama Tire Corp.,

358 F.3d 616, 621 (9th Cir. 2004), as Wal-Mart now suggests. And we decline

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Wal-Mart’s invitation to affirm on these alternative grounds. “If a

misrepresentation as to a matter of law includes, expressly or by implication, a

misrepresentation of fact, the recipient is justified in relying upon the

misrepresentation of fact to the same extent as though it were any other

misrepresentation of fact.” Restatement (Second) of Torts § 545(1) (1977); see

also Miller, 358 F.3d at 621 (discussing the Restatement’s position that

misrepresentations of law are not actionable if they do not “include[] a

misrepresentation of fact”). Wal-Mart’s sign and receipt may well have implied a

factual assertion that California, not Wal-Mart, would receive the recycling fee.

      The panel retains jurisdiction over any further appeals in this action.

      REVERSED AND REMANDED.

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