The CLRA Demand Letter Trap: How Plaintiffs Sidestep the Law’s Intent

The CLRA Demand Letter Trap: How Plaintiffs Sidestep the Law’s Intent

Almost every week, I get a familiar email from a company: “We just received this demand letter. What is it? Is it serious?”

The letter in question is almost always the same thing: a demand under the California Consumer Legal Remedies Act (CLRA). And the answer to their question is also always the same: Yes—it’s serious. Very serious.

What’s surprising isn’t that these letters are being sent. It’s that so many sophisticated companies still don’t recognize what they are—or understand the risk they carry. Because when it comes to consumer protection statutes in California, no law has the potential to do more damage to a business than the CLRA.

What is the CLRA?

The CLRA is one of California’s most powerful consumer protection statutes. It allows plaintiffs to bring claims for unfair or deceptive practices in connection with the sale or lease of goods and services. And if successful, a CLRA claim opens the door to compensatory damages, punitive damages, and attorneys’ fees—particularly dangerous in the context of class actions.

Recognizing the exposure this creates, the California legislature built in an important safeguard: before filing a lawsuit seeking damages, a plaintiff must give the business written notice and 30 days to cure the alleged violation.

The idea is simple: give companies a chance to correct their behavior before dragging them into costly litigation. If the company fails to act, then the plaintiff can proceed with a damages claim.

The problem is plaintiffs’ lawyers often exploit a procedural loophole that undermines the entire purpose of the statute.

Here’s how it works: The statute doesn’t require a 30-day demand letter if the plaintiff is only seeking injunctive relief—in other words, if the lawsuit is solely intended to stop the offending behavior and doesn’t request any money. That exception makes sense in theory. If you’re not seeking damages, you don’t need to wait.

But in practice, plaintiffs use this as a tactical move. They file a complaint stating that they are only seeking injunctive relief. At the same time—sometimes even on the same day—they send the 30-day CLRA demand letter. Then, once the 30-day clock runs, they amend their complaint to add a claim for damages.

It’s a maneuver that lets them get into court immediately—while still preserving the ability to seek money later.

Why It’s a Problem

This tactic may check the procedural boxes, but it flouts the intent of the statute.

The 30-day notice requirement was designed to give businesses a true opportunity to fix the issue before facing the burdens of litigation. That’s impossible when a complaint is already filed. At that point, the company’s resources are directed toward litigation—hiring counsel, evaluating exposure, drafting responsive pleadings—not toward evaluating and implementing a potential cure.

To put it in familiar terms: It’s as if a contract gave you 30 days to fix a billing dispute before being sued—but instead of waiting, the other side sued you immediately, then argued that the 30-day window somehow still counted.

That’s not how notice-and-cure provisions are supposed to work.

Courts Are Reluctant to Intervene

I’ve raised this issue in demurrers and motions to dismiss. In my view, amending a complaint after 30 days doesn’t cure the original defect. Once a lawsuit is filed seeking CLRA-based relief—damages or not—the business is already under the threat the statute was designed to delay.

But many courts don’t want to wade into this issue. It’s largely untested, and judges are understandably reluctant to be the first to opine on a question of statutory interpretation with real implications for consumer litigation statewide.

Some dismiss on other grounds. Others deny the motion outright. But the core issue remains: the statutory intent is being sidestepped—and courts, as well as the California legislature, have not yet clearly addressed it.

This should concern every company doing business in California. The CLRA was intended to balance consumer rights with fair notice to businesses. And yet, through this procedural end-run, plaintiffs are increasingly able to initiate litigation while still claiming compliance with the statute’s safeguard.

What Businesses Should Do

• Know what a CLRA demand letter looks like. Treat it with the same urgency as a litigation hold or data breach notification.
  
  
• Act quickly. Engage counsel immediately to evaluate your options and respond appropriately.
  
  
• Push back when necessary. If a lawsuit is filed before the 30-day period runs, and then amended later, it’s worth raising the issue.
  
  Too many companies are caught off guard. Too few courts are scrutinizing the tactic. But the more this strategy is exposed, the better the chance of returning the CLRA to its intended function: protecting consumers and giving businesses a fair chance to address problems before facing litigation.