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California Consumers Have Legal Tools To Fight Bad Business Practices

Updated: Jun 1



Several laws give California consumers considerable firepower to go after businesses that falsely advertise their products and/or services or employ other fraudulent business practices. These laws also give unscrupulous consumers suffering from “buyer’s remorse” substantial leverage to go after blameless businesses. No matter whether you are an aggrieved consumer or a business that has been wrongfully accused of bad business practices, understanding California’s complicated legal landscape governing these claims is essential. Here, I highlight two of these such laws—the Consumer Legal Remedies Act and the Song-Beverly Act—and provide some examples to illustrate your rights.


Consumer Legal Remedies Act

The Consumer Legal Remedies Act (“CLRA”) prohibits businesses from engaging in deceptive advertising or unfair business practices. Among other things, under the CLRA it is unlawful for businesses to:


· Pass off goods or services as those of another.

· Represent 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.

· Represent that goods are original or new if they have deteriorated unreasonably or are altered, reconditioned, reclaimed, used, or secondhand.

· Represent that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have.

· Advertise goods or services with intent not to sell them as advertised.

· Advertise goods or services with intent not to supply reasonably expectable demand, unless the advertisement discloses a limitation of quantity.

· Advertise furniture without clearly indicating that it is unassembled if that is the case.

· Make false or misleading statements of fact concerning reasons for, existence of, or amounts of, price reductions.


If a consumer has purchased goods or services from a business that has deployed one of these proscribed practices, the CLRA provides remedies to make that consumer “whole.” This includes a procedure for making a “correction offer” to the business which, if accepted, may spare both parties from a lawsuit. Importantly, if the consumer prevails on his or her CLRA claim, the business can be held responsible for paying his or her attorney fees.


Example A: let’s say that you purchased furniture—a fancy bedroom set—at Big Box Furniture (“BBF”) store. The BBF salesman tells you that the bedroom set is brand new, will be made of maple, and is in stock and can be delivered that week. Unfortunately, this turns out not to be true. The bedroom set is not in stock. After waiting for several months for delivery, a different bedroom set made from pine (and slightly worse for the wear) is delivered to your house. You ask for your money back, but BBF store points to their “no refunds/no returns” policy and says that you are out of luck.


In Example A, the CLRA would likely give you ample ammunition to get your money back: first by sending the business a “correction offer” (most likely demanding a full refund for violating the CLRA on several grounds); and if it didn’t accept that offer, then second, by filing a lawsuit. And, under the CLRA, if you prevail, the court would likely award your attorney’s fees on top of your damages.


It is smart to consult an attorney before going down the CLRA path, both to ensure that you have a valid claim and that you follow the appropriate steps to be made “whole” again (including getting your attorney’s fees paid by the other side).


Song-Beverly Consumer Warranty Act

When a seller provides an express warranty (like a written guarantee) and goods do not conform to the warranty, the California consumer has a right to bring the goods to be repaired. If the goods cannot be repaired, the goods much either be replaced or the buyer’s money refunded. This is known as the Song-Beverly Consumer Warranty Act (“Song-Beverly”), which sets standards for implied and express warranties for new consumer goods sold in California.


Regardless of whether an express warranty covers the goods, Song-Beverly provides that every retail sale of consumer goods in California is accompanied by an implied warranty that the goods are “merchantable,” meaning that they are fit for the ordinary purposes for which these types of goods are used. This provision also requires that goods be adequately contained, packaged, and labeled and conform to any representations made on that labeling.


When the seller knows that the goods will be used for a particular purpose and the buyer relies on the seller to provide suitable goods, there is an additional implied warranty of “fitness,” warranting that the goods shall be fit for that purpose.


When consumer goods don’t live up to their express or implied warranties and the retailer or manufacturer refuses to stand by their products, Song-Beverly gives the consumer the ability to take the responsible entity to court. Like the CLRA, a party who prevails under Song-Beverly is not only entitled to damages that make them whole, but can also recover any fees spent on an attorney.


Let’s look at a couple more examples to illustrate how Song-Beverly works:


Example B: Let’s say you go back to BBF and purchase a couch that guarantees that it will not sag for ten years. On the fifth year, however, you notice a huge indentation one side of the couch. BBF, however, insists to you that is normal wear and tear. Song-Beverly, however, says that BBF (or the manufacturer) needs to honor the express warranty it made, and either provide a repair, replace, or refund.


Example C: Let’s say that you also purchase a treadmill from BBF that is not covered by an express warranty. After a few months of use, the frame is bent and after running for 15 minutes the treadmill turns off and needs to be restarted. Because the treadmill is not fit for its ordinary purposes—running for reasonable amounts of time—you should be able to enforce the implied warranty of merchantability.


In both Example B and Example C, if BBF (or the manufacturer) refuses to own up to their responsibility, they could be on the hook for not only paying your damages but also the costs of your lawsuit and your attorney’s fees.


Takeaways

Consumers should not feel shy about enforcing their rights. And they should be aware that, if sellers or manufacturers do not take their complaints seriously, the law gives them several tools to make sure that they are not taken advantage of. Chief among these tools is the attorney fee shifting provisions in the CLRA and Song-Beverly. This can make getting legal assistance (which attorneys often provide on a contingency basis for these matters) much easier.


These laws, however, also present potential problems for scrupulous business owners. They can potentially enable consumers suffering from buyer’s remorse to try shaking down a business even though they do not have legitimate complaints about the products they purchased.


Regardless, if you are a consumer or business owner dealing with these issues, you should seek an experienced attorney to help navigate this complex area of California law. Please feel free to contact David Russell (David@RussellLawPC.com) to discuss in more detail what options you may have available.