CACD Federal MTD — CLRA Claims

Consumer Legal Remedies Act (CLRA) omission and misrepresentation claims are subject to Rule 9(b) heightened pleading and a structured duty-to-disclose framework. CACD federal MTDs apply the framework strictly: when an omission is the theory, plaintiffs must clear both an actionable-omission threshold and a Rule 9(b) particularity bar.

Rule 9(b) applies to CLRA fraud claims

Where a CLRA claim sounds in fraud (omission or misrepresentation), Rule 9(b) requires plaintiff to plead the "who, what, when, where, and how" of the alleged conduct. Vess v. Ciba-Geigy USA, 317 F.3d 1097, 1106 (9th Cir. 2003); Kearns v. Ford Motor Co., 567 F.3d 1120, 1125 (9th Cir. 2009).

The Hodsdon framework for actionable omissions

An omission is actionable under the CLRA only if it is either (a) contrary to a representation the defendant actually made, or (b) of a fact the defendant was obliged to disclose. Hodsdon v. Mars, Inc., 891 F.3d 857, 861 (9th Cir. 2018).

Four circumstances giving rise to a duty to disclose (Kulp/LiMandri)

A duty to disclose arises in only four circumstances under California law: (1) when defendant is in a fiduciary relationship with plaintiff; (2) when defendant has exclusive knowledge of material facts not known to plaintiff; (3) when defendant actively conceals a material fact; or (4) when defendant makes partial representations but suppresses material facts. Kulp v. Munchkin, Inc., 678 F. Supp. 3d 1158, 1169 (C.D. Cal. 2023); LiMandri v. Judkins, 52 Cal. App. 4th 326, 336 (1997).

Conjunctive central-function overlay (Wilson/Hodsdon)

For product-defect omissions, the Ninth Circuit reads the test as conjunctive: plaintiff must allege materiality + a defect that affects the product's central function + at least one LiMandri circumstance. Wilson v. Hewlett-Packard Co., 668 F.3d 1136 (9th Cir. 2012); Hodsdon, 891 F.3d at 863. Cosmetic concerns generally do not satisfy the central-function prong.

Materiality

The omitted fact must be material — plaintiff must plead how a reasonable consumer would have behaved differently with the additional disclosure. Falk v. General Motors Corp., 496 F. Supp. 2d 1088, 1095 (N.D. Cal. 2007); Daniel v. Ford Motor Co., 806 F.3d 1217, 1225 (9th Cir. 2015); Acevedo v. Sunnova Energy Corp., 738 F. Supp. 3d 1268, 1281 (C.D. Cal. 2024).

How CACD applies it (corpus examples)

• 449720330 (Ferrer Arroyo v. Albertsons — Wright II): packaging itself disclosed tampering risk; plaintiff alleged none of the four LiMandri circumstances; granted with leave.
• 460228766 (Milan v. JPMorgan — Wright II): SAC failed to plead the where/how of the omission; granted without leave (third bite).
• 446093589 (Clemmens v. American Honda — Wright II): paint defect is cosmetic, not central to vehicle function; conjunctive Hodsdon test fails.
• 427558123 (Eisman v. J&J — Wright II): omission theory bypassed by FDCA preemption (21 U.S.C. § 379r) where federal monograph governs disclosure.

If you're the moving party

• Walk through each of the four LiMandri circumstances and identify the specific factual void in the complaint.
• Attach the actual product packaging, contract, or disclosure under incorporation-by-reference — if the document discloses the very fact alleged to be concealed, the omission claim collapses.
• For product-defect omissions, frame the alleged defect as cosmetic or non-central to the product's function.
• Press the materiality element — demand specific facts about how a reasonable consumer's behavior would have changed.

If you're the opposing party

• Plead the specific LiMandri circumstance applicable (most often #2 exclusive knowledge or #4 partial representation + suppression) with concrete factual support.
• For product-defect cases, plead facts tying the defect to product function, performance, or safety — not merely appearance.
• Identify specific marketing materials plaintiff viewed and relied on; do not rely on generic "defendant marketed."
• Address materiality with reasonable-consumer-behavior allegations, not preventive-measures arguments that undercut the disclosure theory.

California's Consumer Legal Remedies Act applies only to transactions involving the "sale or lease of goods or services to any consumer." Cal. Civ. Code § 1770. The CLRA's substantive scope excludes purely financial transactions — a frequent and dispositive defense for banks, lenders, and financial-services defendants in CACD federal MTDs.

What the CLRA covers

The statute defines its core terms narrowly:

• "Goods" are "tangible chattels bought or leased for use primarily for personal, family, or household purposes." Cal. Civ. Code § 1761(a).
• "Services" are "work, labor, and services for other than a commercial or business use, including services furnished in connection with the sale or repair of goods." Cal. Civ. Code § 1761(b).

The Berry / Fairbanks exclusion

The Legislature deliberately removed "money" and "credit" from earlier CLRA drafts. Berry v. American Express Publishing, Inc., 147 Cal. App. 4th 224, 230-31 (2007). Berry held that a financial institution's act of extending lines of credit "strongly counsels" against expanding the statute to reach transactions involving money or credit unrelated to the sale or lease of goods or services.

The California Supreme Court extended Berry in Fairbanks v. Superior Court, 46 Cal. 4th 56, 65 (2009): "intangible items, such as bank accounts, are not 'goods' or 'services' within the meaning of the CLRA, and 'ancillary services' provided in connection with such an intangible item do not bring the transaction within the CLRA's scope."

Categories CACD courts have excluded

• Bank deposit accounts and ancillary services. Milan v. JPMorgan Chase (460228766) — Bill Pay Service is, at most, an "ancillary service" for an intangible item; no CLRA jurisdiction.
• Credit lines and loan products. Berry directly.
• Insurance products. Generally outside CLRA scope absent a tangible-good component.
• Payment-processing services. Movement of money is the core of the transaction.

Categories CACD courts have included

• Tangible consumer goods and their ancillary services. Albertsons gift cards (449720330) — the gift card itself is a tangible chattel and the CLRA applies, even though the gift card represents stored value.
• Consumer products and warranty services.
• Services attached to a tangible good (installation, repair).

Statutory standing: the corporate-plaintiff bar

A related but distinct CLRA bar: only an "individual" may sue under the CLRA. Cal. Civ. Code § 1780(a). Corporations, LLCs, and other business entities are excluded. Blair v. Mercedes-Benz of North America, Inc., 914 F.2d 261, 262 (9th Cir. 1990); Cooper v. Simpson Strong-Tie Co., 460 F. Supp. 3d 894, 912 (N.D. Cal. 2020).

In class-action posture, this requires the named representative to be an individual. A corporate co-plaintiff cannot rescue a CLRA claim if the natural-person plaintiff fails standing on other grounds.

Milan v. JPMorgan Chase (460228766) is canonical: corporate plaintiff Keirco, Inc. lacked CLRA standing because it was "not 'an individual' under the CLRA," while individual plaintiff Milan failed on the scope ground above.

If you're the moving party

• For financial-services defendants, lead with Berry/Fairbanks. The categorical exclusion of money and ancillary financial services is dispositive on most consumer-banking, lending, and insurance claims.
• For corporate plaintiffs, attack standing under Blair separately. The two grounds are independent and additive.
• Where plaintiff's CLRA claim is paired with FAL and UCL, attacking CLRA scope can also weaken the UCL unlawful-prong claim if it borrows CLRA as the predicate.

If you're the opposing party

• Identify the tangible-good component of the transaction. Where the dispute concerns a product purchased with money, plead the product (not the money) as the core transaction.
• For financial services, look for ancillary tangible-good arrangements that bring the transaction within scope.
• For corporate-plaintiff problems, drop the corporate co-plaintiff from the CLRA claim rather than fight Blair. Keep individual plaintiffs as the class representatives.