Sonner v. Premier Nutrition Corp., No. 18-15890 (9th Cir. 2020)
Annotate this CaseThe Ninth Circuit affirmed on different grounds the district court's dismissal of plaintiff's claims for restitution. Pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), the panel held that federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California's Unfair Competition Law (UCL) and Consumers Legal Remedies Act (CLRA). The panel held that the district court did not abuse its discretion in denying plaintiff leave to amend her complaint for a third time to reallege the CLRA damages claim. In this case, plaintiff failed to demonstrate that she lacked an adequate legal remedy.
Court Description: Restitution. The panel affirmed on different grounds the district court’s dismissal of plaintiff’s claims for restitution where plaintiff failed to demonstrate that she lacked an adequate legal remedy. Plaintiff brought a diversity action and sought $32 million on behalf of a class of consumers, but as equitable restitution rather than as damages. The district court applied its interpretation of California law and dismissed plaintiff’s claims for restitution because there was an adequate remedy at law, i.e., damages, available. The panel held, as a threshold jurisdictional issue, that pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64 (1938), and Guaranty Trust Co. of New York v. York, 326 U.S. 99 (1945), federal courts must apply equitable principles derived from federal common law to claims for equitable restitution under California’s Unfair Competition Law and Consumers Legal Remedies Act (“CLRA”). The panel held that state law cannot circumscribe a federal court’s equitable powers even when state law affords the rule of decision. The panel held that the district court did not abuse its discretion in denying plaintiff leave to amend her complaint for a third time to reallege the CLRA damages claim. SONNER V. PREMIER NUTRITION CORP. 3
The court issued a subsequent related opinion or order on August 20, 2020.
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