Antitrust Law Daily Wrap Up, STATE UNFAIR TRADE PRACTICES—Cal. App. Ct.: Jack in the Box not held liable for alleged combo meal overcharges, (Jan 5, 2015)

By Jody Coultas, J.D.

A trial court did not err in dismissing Jack in the Box customers’ California consumer protection law claims for failure to properly state a claim showing that certain Jack in the Box franchisees overcharged for its combo meals, a California appellate court has held. The trial court also properly imposed discovery sanctions on the consumers (Pratt v. Jack in the Box, Inc., December 31, 2014, McGuiness, W.).

Jack in the Box had a policy of charging 89 cents to upgrade any small combo meal to a large combo meal. The customers alleged that Jack in the Box charged more than 89 cents for upgrading the specific small combo at issue to a large combo during the relevant time frame in violation of the California consumer protection laws.

A trial court held that the customers would not be permitted to pursue class claims until they had obtained legal representation. However, the customers did not obtain counsel. Also, the court held that the complaint was “vague and unintelligible,” the fraud claims were not specifically pleaded, and the other claims were insufficient even given the liberal pleading standard. The court dismissed the entire action with prejudice.

All of the challenges to the trial court judge’s authority lacked merit, according to the court. The customers argued that the trial court lacked legal jurisdiction over them because the judge erred in denying their peremptory challenges, refused to prepare a settled statement of the hearing at which the court denied their peremptory challenge, and erroneously denied their challenge for cause, which was largely based upon the fact that the trial court denied their initial peremptory challenge. The court noted that the customers, as pro. per. litigants, were treated like any other party, affording them no greater consideration than other litigants and attorneys. A peremptory challenge must be made within 15 days of the assignment of a civil action for all purposes to a particular judge, yet the customers waited months to assert a peremptory challenge.

The court rejected the customers’ challenge to the trial court’s order striking class allegations and sustaining the demurrer without leave to amend. The customers argued that Jack in the Box “violated the law” and misled the court by requesting judicial notice of their original complaint at the time they filed their demurrer to the first amended complaint, and that Jack in the Box mischaracterized the allegations of the first amended complaint in contravention of the principle that factual allegations must be accepted as true when ruling on a demurrer. Because the arguments focused on the superseded first amended complaint were outside the purview of the court, those arguments were disregarded. The customers merely repeated the allegations in the second amended complaint, and failed to demonstrate viable individual claims for relief or that they could amend the complaint to state a cause of action.

The trial court did not abuse its discretion in denying the customers’ motions to compel and imposing discovery sanctions, according to the court. The customers argued that their motions to compel were meritorious because Jack in the Box failed to specify why the discovery requests were vague, ambiguous, unintelligible, and unduly burdensome. However, the trial court properly found the discovery requests incoherent and primarily addressed to class-wide claims. The impropriety of the discovery requests provided a basis for the sanctions, which were significantly less than Jack in the Box sought as compensation for having to respond to the motions.

The case is No. A139960.

Attorneys: Kenneth Pratt, pro se. Brian Paul Maschler (Gordon Rees LLP) for Jack in the Box Inc.

Companies: Jack in the Box, Inc.

Cases: Advertising StateUnfairTradePractices CaliforniaNews