Travis Gonzales v. Carmax Auto Superstores ( 2017 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
TRAVIS Z. GONZALES, an No. 14-56305
individual,
Plaintiff-Appellee, D.C. No.
8:13-cv-01391-CJC-
v. RNB
CARMAX AUTO
SUPERSTORES, LLC, a
Virginia Limited Liability
Company; SANTANDER
CONSUMER USA, INC., an
Illinois Corporation; SAFECO
INSURANCE COMPANY OF
AMERICA, a New Hampshire
Corporation,
Defendants-Appellants.
2 GONZALES V. CARMAX
TRAVIS Z. GONZALES, an No. 14-56842
individual,
Plaintiff-Appellant, D.C. No.
8:13-cv-01391-CJC-
v. RNB
CARMAX AUTO
SUPERSTORES, LLC, a ORDER
Virginia Limited Liability
Company; SANTANDER
CONSUMER USA, INC., an
Illinois Corporation; SAFECO
INSURANCE COMPANY OF
AMERICA, a New Hampshire
Corporation,
Defendants-Appellees.
Filed January 6, 2017
Before: Stephen Reinhardt, Alex Kozinski,
and Kim McLane Wardlaw, Circuit Judges.
Order
GONZALES V. CARMAX 3
SUMMARY*
Attorney’s Fees / California Consumer Legal
Remedies Act
The panel held that plaintiff Travis Gonzales was not
barred from recovering appellate attorney’s fees against
CarMax Auto Superstores, LLC, under Section 1782 of the
California Consumer Legal Remedies Act (“CLRA”), and
remanded to the district court to determine in the first
instance whether Gonzales qualified as a prevailing plaintiff
under the CLRA and the reasonableness of the fees he
requested.
Section 1782(b) of the CLRA provides that “no action for
damages may be maintained under Section 1780 if an
appropriate correction . . . is given . . . to the consumer within
30 days after receipt of the notice.” Interpreting Section
1782, the California Court of Appeal held that no attorney’s
fees were recoverable in actions for damages under the
CLRA unless the plaintiff’s notice letter is not appropriate or
timely.
The panel held that because plaintiff Gonzales sought
only injunctive relief for CarMax’s violation of the CLRA,
CarMax’s correction offer did not bar Gonzales from
recovering attorney’s fees. The panel held that Section
1782(b) applied only to an action for damages.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
4 GONZALES V. CARMAX
The panel held that it was relatively clear that Gonzales
achieved his litigation objectives, where he was awarded
summary judgment on appeal but the district court still had to
enter a final judgment on remand. The panel concluded that
the district court should determine in the first instance
whether Gonzales was a “prevailing party” under section
1780(e) of the CLRA, and the reasonableness of Gonzales’
requested attorney’s fees.
COUNSEL
Hallen D. Rosner (argued), Rosner, Barry & Babbitt, LLP,
San Diego, California, for Plaintiff-Appellant/Cross-
Appellee.
Kurt A. Schlichter (argued), Steven C. Shonack, Jamie L.
Keeton, Schlichter & Shonack, LLP, El Segundo, California,
for Defendants-Appellees/Cross-Appellants.
ORDER
Travis Z. Gonzales seeks attorney’s fees under
California’s Consumer Legal Remedies Act (“CLRA”) in
connection with these two appeals, which were consolidated
for purposes of oral argument and decision. In Case No. 14-
56842, we granted summary judgment to Gonzales on his
CLRA and Unfair Competition Law claims. In Case No. 14-
56305, we affirmed the district court’s denial of attorney’s
fees to CarMax under Section 1780(e) of the CLRA.
Gonzales’s application for appellate attorney’s fees
presents the following issues: (1) whether Gonzales is barred
GONZALES V. CARMAX 5
from collecting attorney’s fees because CarMax proffered an
appropriate correction pursuant to Section 1782 of the CLRA;
(2) whether Gonzales is a “prevailing plaintiff” under Section
1780(e) of the CLRA; (3) whether Gonzales’s attorney’s fee
requests are reasonable.
We conclude that Gonzales is not barred from recovering
attorney’s fees under Section 1782 of the CLRA.
Consequently, we remand to the district court to determine in
the first instance whether Gonzales qualifies as a prevailing
plaintiff under the CLRA and the reasonableness of the fees
he has requested.
1. CarMax’s correction offer, whether it was
appropriate or not, does not bar Gonzales from
recovering attorney’s fees.
Under California Civil Code § 1782(b), “no action for
damages may be maintained under Section 1780 [of the
CLRA] if an appropriate correction, repair, replacement, or
other remedy is given, or agreed to be given within a
reasonable time, to the consumer within 30 days after receipt
of the notice.” CarMax argues that it made a timely and
appropriate CLRA correction offer, which Gonzales rejected.
Therefore, according to CarMax, Gonzales is barred from
recovering any fees for continuing to pursue his claims. We
reject CarMax’s argument.
The California Court of Appeal has “interpreted section
1782 to create a requirement analogous to exhaustion of
administrative remedies” and therefore has concluded that
“[a]ttorney fees are not recoverable in actions for damages
under the CLRA unless the response to the notice letter is not
an appropriate one or no response is forthcoming within the
6 GONZALES V. CARMAX
statutory time period.” Benson v. S. Cal. Auto Sales Inc.,
192 Cal. Rptr. 3d 67, 77 (Cal. Ct. App.), review denied (2015)
(emphasis added). The Benson court, however, explicitly
declined to “address the requirements for an attorney fee
award based on a request for injunctive relief.” Id. at 77–78.
In addition to actual and punitive damages, the CLRA
explicitly authorizes injunctive relief, restitution, and “[a]ny
other relief that the court deems proper.” Cal. Civ. Code
§ 1780(a). In the present case, Gonzales’ Second Amended
Complaint did “not seek damages of any kind” on his CLRA
claim, but rather sought only an “injunction prohibiting acts
or practices which violate the CLRA.” As the California
Supreme Court noted, “section 1782, subdivision (d)
contemplates the filing of a CLRA action for injunctive relief
alone, and such actions are not subject to the requirements of
subdivisions (a) and (b) of notice and allowance for voluntary
correction,” which apply only to an action for damages.
Meyer v. Sprint Spectrum L.P., 200 P.3d 295, 301 (Cal.
2009). Because Gonzales sought only injunctive relief for
violation of the CLRA,1 CarMax’s correction offer does not
bar Gonzales from recovering attorney’s fees.2
1
As explained in our original opinion, CarMax violated Section
11713.18(a)(6) of the California Vehicle Code, and violations of that
provision are “actionable under the Consumer Legal Remedies Act.” Cal.
Veh. Code § 11713.18(b); see also Gonzales v. CarMax Auto Superstores,
LLC, 840 F.3d 644, 649 (9th Cir. 2016).
2
We are not presented here with the question of a plaintiff who seeks
both injunctive relief and damages under the CLRA, and accordingly
express no view on that issue.
GONZALES V. CARMAX 7
2. The district court should address whether
Gonzales is a prevailing plaintiff in the first
instance
Under the CLRA, “[t]he court shall award court costs and
attorney’s fees to a prevailing plaintiff in litigation.” Cal. Civ.
Code § 1780(e). Because the CLRA does not define the term
“prevailing plaintiff,” California courts have “adopt[ed] a
pragmatic approach, determining prevailing party status
based on which party succeeded on a practical level.”
Graciano v. Robinson Ford Sales, Inc., 50 Cal. Rptr. 3d 273,
281–82 (Cal. Ct. App. 2006). “Under that approach, the court
exercises its discretion to determine the prevailing party by
analyzing which party realized its litigation objectives.” Id. at
282(citation and quotation marks omitted); Parkinson v.
Hyundai Motor Am., 796 F. Supp. 2d 1160, 1169 (C.D. Cal.
2010) (“A plaintiff is the prevailing party if he or she
obtained a ‘net monetary recovery’ or ‘realized its litigation
objectives,’ including pursuant to a settlement agreement.”)
(quoting Kim v. Euromotors W./The Auto Gallery, 56 Cal.
Rptr. 3d 780, 786 (Cal. Ct. App. 2007)).
The California Court of Appeal has also instructed,
however, that “[d]eterminations of whether [a plaintiff] is a
‘prevailing plaintiff’ and the amount to be awarded, if any,
are to be made, in the first instance, by the trial court in the
sound exercise of its discretion.” Kim, 56 Cal. Rptr. 3d at 788.
Here, as CarMax argues, although Gonzales was awarded
summary judgment on appeal, our opinion did not order a
particular remedy—the district court must still enter a final
judgment on remand. Consequently, although it is relatively
clear that Gonzales “achieved his litigation objectives” on
appeal, the district court should, after fashioning a remedy in
conformity with our opinion, determine in the first instance
8 GONZALES V. CARMAX
whether Gonzales qualifies as a prevailing plaintiff under
Section 1780(e) of the CLRA and the reasonableness of
Gonzales’ requested attorney’s fees in both case No. 14-
56842 and 14-56305.
IT IS SO ORDERED.