(Santa Barbara County Super. Ct. No. 01221332). J. William McLafferty, Judge
The opinion of the court was delivered by: Perren, J.
CERTIFIED FOR PUBLICATION
Respondent Cingular Wireless, LLC (Cingular) advertised a cellular phone for sale at half the retail price if the purchaser also enrolled in a calling plan package. The California Code of Regulations requires that sales tax be computed on the non-sale price of the product. The regulation permits, but does not require, that the charge be passed on to the customer. Cingular did so without informing the customer prior to sale that the tax would be based on the full price of the cell phone. The amount of tax is shown on the sales invoice furnished to the customer at the time of sale.
Appellant Richard Yabsley alleged that Cingular engaged in unfair competition in violation of Business and Professions Code section 17200*fn1 and misleading advertising in violation of section 17500 by failing to inform the consumer that the tax would be imposed on the full price of the cell phone. The trial court sustained Cingular's demurrer to Yabsley's first amended complaint without leave to amend finding that the provisions of California Code of Regulations, title 18, section 1585 (Regulation 1585)*fn2 requiring that the sales tax be calculated based on the non-sale price of the phone and permitting the retailer to collect this amount from the customer provided a "safe harbor" from such claims. We affirm on that basis and also for the reasons stated in the recent decision of Loeffler v. Target Corporation (2009) 173 Cal.App.4th 1229.
FACTUAL AND PROCEDURAL HISTORY
Cingular advertised a cell phone for $149.99, a 50 percent reduction in the phone's retail price, if the purchaser enrolled in a Cingular wireless calling plan. Yabsley saw the advertisement and purchased the cell phone with the calling plan. When he received the sales receipt, he noticed that the sales tax was imposed on the regular price of the cell phone, $299.99, rather than the discounted price of $149.99, resulting in the payment of $11.62 more in sales tax than he had anticipated.
Yabsley filed a class action complaint for declaratory relief against the State Board of Equalization (Board), asserting that Regulation 1585, governing taxation of sales of wireless communication devices, was invalid because it conflicted with Revenue and Taxation Code section 6051 imposing a sales tax on gross receipts.
Yabsley filed a first amended complaint (FAC), naming the Board and Cingular as defendants, but dismissed the Board the same day. The FAC alleges that Cingular's advertising practices were deceptive under sections 17200 and 17500 by failing to apprise prospective customers that sales tax would be charged on the undiscounted price of the cell phone.
Cingular filed a demurrer asserting it has immunity from such a claim under the safe harbor provided by Regulation 1585. This regulation requires that sales tax on a "bundled" cell phone sale, i.e., a cell phone purchased with a call plan, be calculated based on the phone's higher, unbundled price.
Prior to a hearing on Cingular's demurrer, Yabsley sought to file a second amended complaint (SAC). The proposed SAC added a claim that Cingular violated the Consumer Legal Remedies Act (CLRA), Civil Code section 1750 et seq. The trial court denied the motion for leave to file the SAC and, after hearing on the FAC, the court sustained Cingular's demurrer without leave to amend and entered a judgment of dismissal.
After we filed a published opinion affirming the trial court's judgment, we were informed by the California Attorney General that the parties were required to notify it of any lawsuit involving the Unfair Competition Law (UCL) and False Advertising Law (FAL). (§§ 17209, 17536.5; Cal. Rules of Court, rule 8.29.) We granted the Attorney General leave to intervene and ordered a rehearing. We granted requests by Cingular to file a supplemental brief and by the State Board of Equalization to file an amicus curiae brief.
Subsequently, we requested and received supplemental briefing by the parties on the issue of whether Yabsley had standing to bring this action. Prior to oral argument, our colleagues in Division Three of this court decided Loeffler v. Target Corporation, supra, 173 Cal.App.4th 1229. We invited ...