Sonner v. Premier Nutrition Corp., No. 18-15890 (9th Cir. 2020)
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The Ninth Circuit issued (a) an order amending its opinion filed on June 17, 2020, denying the petition for rehearing, and denying on behalf of the court the petition for rehearing en banc; and (b) an amended opinion affirming on different grounds the district court's dismissal of plaintiff's claims for restitution.
In this case, plaintiff voluntarily dismissed her sole state law damages claim and chose to proceed with only state law equitable claims for restitution and injunctive relief. Plaintiff did so in an attempt to try the class action as a bench trial rather than to a jury.
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 explained 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. In this case, plaintiff failed to demonstrate that she lacked an adequate legal remedy.
Court Description: Restitution. The panel issued (a) an order amending its opinion filed on June 17, 2020, denying the petition for rehearing, and denying on behalf of the court the petition for rehearing en banc; and (b) an amended opinion affirming 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. SONNER V. PREMIER NUTRITION CORP. 3 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.
This opinion or order relates to an opinion or order originally issued on June 17, 2020.
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