On September 11, 2020, the California Court of Appeal issued a decision with two crucial holdings limiting the scope of California’s Automatic Renewal Law (ARL), Business and Professions Code sections 17600, et seq.
In Mayron v. Google LLC, No. H044592, 2020 WL 5494245 (Cal. Ct. App. Sept. 11, 2020), one of the first cases to put the State’s infamous ARL to the test, the Court of Appeal clarified that:
(1) there is no private right of action for a violation of the ARL’s provisions, and
(2) a plaintiff seeking to use an alleged ARL violation as the basis for a claim under the Unfair Competition Law (UCL), Business and Professions Code sections 17200, et seq. is subject to the requirements for standing under the UCL.
More specifically, a plaintiff seeking to repackage an alleged ARL violation under the “unlawful” prong of the UCL must allege an economic injury sufficient to establish standing.
The Lawsuit
Eric Mayron filed his action in Santa Clara Superior Court, seeking to assert claims against Google LLC for violations of the ARL and unfair competition on behalf of a putative class. Mayron alleged that Google failed to provide “clear and conspicuous disclosures,” obtain his affirmative consent to recurring charges, or adequately explain how to cancel with respect to the subscription data plan available through Google Drive (which provides up to 15 GB of data for free and charges $1.99 per month for additional storage up to 100 GB). According to Mayron, each of these alleged failures constitutes a violation of the ARL.
The trial court sustained Google’s demurrer without leave to amend, dismissing Mayron’s ARL claims on the ground that the statute does not create a private right of action, and dismissing the UCL claims for lack of standing, as Mayron had failed to sufficiently allege an “injury.”
On appeal, the Court reviewed and affirmed both of the foregoing determinations.
The ARL Does Not Create A Private Right Of Action
The ARL was enacted in 2009 to “end the practice of ongoing charging of consumer credit or debit cards . . . without the consumers’ explicit consent for ongoing shipments of a product or ongoing deliveries of service.” In furtherance of this purpose, the ARL imposes notice and consent requirements on companies that utilize a subscription model or recurring charges for their business, and provides remedies for violations of these requirements. The ARL does not, however, arm plaintiffs with an independent cause of action to tack onto any lawsuit.
The Court rejected Mayron’s argument that the Legislature intended to create a private right of action by providing for remedies in Section 17604; although such a provision does imply an action to recover the remedies provided for, an intent by the Legislature to create a private right of action must be “clear, understandable, [and]...
