In a recent published decision, the California Court of Appeal reiterated several concepts central to CLRA omission claims.
To start with, although the CLRA contains a long laundry list of prohibited practices, none of the practices listed expressly involve non-disclosure or concealment. Instead, the CLRA bars conduct like “Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have…” and “Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another.”
Yet courts nonetheless have typically held that the CLRA may be interpreted to prohibit omissions. In Gutierrez v. Carmax, the California Court of Appeal reaffirmed those holdings. The court engaged in a comprehensive analysis of the text, the legislative history, prior decisions, and other considerations, and held:
failures to disclose material facts are actionable under the CLRA. In particular, we conclude paragraphs (5), (7) and (9) of subdivision (a) of Civil Code section 1770 proscribe material omissions in certain situations.
The court also reaffirmed principles concerning a closely related issue: In what circumstances are omissions actionable under the CLRA? The court signed off on the “four situations” that have been incorporated into CLRA jurisprudence from case law concerning common law fraud.… Read more