FOR PUBLICATION
`
`UNITED STATES COURT OF APPEALS
`FOR THE NINTH CIRCUIT
`
`
`KATHLEEN SONNER, on behalf of
`herself and all others similarly
`situated,
`
`Plaintiff-Appellant,
`
`
`
`v.
`
` No. 18-15890
`
`D.C. No.
`3:13-cv-01271-
`RS
`
`
`OPINION
`
`
`PREMIER NUTRITION CORPORATION,
`FKA Joint Juice, Inc.,
`Defendant-Appellee.
`
`Appeal from the United States District Court
`for the Northern District of California
`Richard Seeborg, District Judge, Presiding
`
`Argued and Submitted December 3, 2019
`San Francisco, California
`
`Filed June 17, 2020
`
`Before: Carlos F. Lucero,* Consuelo M. Callahan,
`and Bridget S. Bade, Circuit Judges.
`
`Opinion by Judge Bade
`
`
`* The Honorable Carlos F. Lucero, United States Circuit Judge for
`the U.S. Court of Appeals for the Tenth Circuit, sitting by designation.
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`SUMMARY**
`
`2
`
`
`
`
`
`Restitution
`
`The panel affirmed on different grounds the district
`
`court’s dismissal of plaintiff’s claims for restitution where
`plaintiff failed to demonstrate that she lacked an adequate
`legal remedy.
`
`Plaintiff brought a diversity action and sought $32
`
`million on behalf of a class of consumers, but as equitable
`restitution rather than as damages. The district court applied
`its interpretation of California law and dismissed plaintiff’s
`claims for restitution because there was an adequate remedy
`at law, i.e., damages, available.
`
`The panel held, as a threshold jurisdictional issue, that
`
`pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64
`(1938), and Guaranty Trust Co. of New York v. York, 326
`U.S. 99 (1945), federal courts must apply equitable
`principles derived from federal common law to claims for
`equitable restitution under California’s Unfair Competition
`Law and Consumers Legal Remedies Act (“CLRA”). The
`panel held that state law cannot circumscribe a federal
`court’s equitable powers even when state law affords the rule
`of decision.
`
`The panel held that the district court did not abuse its
`
`discretion in denying plaintiff leave to amend her complaint
`for a third time to reallege the CLRA damages claim.
`
`
`** This summary constitutes no part of the opinion of the court. It
`has been prepared by court staff for the convenience of the reader.
`
`

`

`
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`3
`
`COUNSEL
`
`
`Leslie E. Hurst (argued), Timothy G. Blood, Thomas J.
`O’Reardon II, and Paula R. Brown, Blood Hurst &
`O’Reardon LLP, San Diego, California; Todd D. Carpenter,
`Carlson Lynch Sweet Kilpela & Carpenter LLP, San Diego,
`California; Craig M. Peters, Altair Law, San Francisco,
`California; for Plaintiff-Appellant.
`
`Jessica Grant (argued), Angel A. Garganta, and Brian A.
`Featherstun, Venable LLP, San Francisco, California, for
`Defendant-Appellee.
`David M. Arbogast, Arbogast Law, San Carlos, California;
`Steven M. Bronson, The Bronson Firm APC, San Diego,
`California; for Amicus Curiae Consumer Attorneys of
`California.
`
`Xavier Becerra, Attorney General; Nicklas A. Akers, Senior
`Assistant Attorney General; Michele Van Gelderen,
`Supervising Deputy Attorney General; Michael Reynolds,
`Deputy Attorney General; Office of the Attorney General,
`Los Angeles, California; for Amicus Curiae State of
`California.
`
`
`
`OPINION
`
`BADE, Circuit Judge:
`
`On the brink of trial after more than four years of
`litigation, Plaintiff-Appellant Kathleen Sonner voluntarily
`dismissed her sole state law damages claim and chose to
`proceed with only state law equitable claims for restitution
`and injunctive relief. A singular and strategic purpose drove
`this maneuver: to try the class action as a bench trial rather
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`4
`
`than to a jury. Indeed, Sonner continued to seek $32,000,000
`on behalf of the consumers she represented, but as equitable
`restitution rather than as damages. But, to Sonner’s dismay,
`the plan backfired when, relying on its interpretation of
`California law, the district court dismissed her claims for
`restitution because an adequate remedy at law, i.e., damages,
`was available.
`
`Pursuant to Erie Railroad Co. v. Tompkins, 304 U.S. 64
`(1938), and Guaranty Trust Co. of New York v. York,
`326 U.S. 99 (1945), we hold that federal courts must apply
`equitable principles derived from federal common law to
`claims for equitable restitution under California’s Unfair
`Competition Law (“UCL”) and Consumers Legal Remedies
`Act (“CLRA”).
`
`I
`
`In March 2013, Vincent Mullins filed a putative class
`action regarding “Joint Juice,” a nutritional product
`manufactured, marketed, and sold by Defendant-Appellee
`Premier Nutrition Corporation
`(“Premier”).
` After
`substituting as the proposed class representative and named
`plaintiff, Sonner amended the complaint in September 2014.
`In April 2016, the district court certified a class of all
`California consumers who had purchased Joint Juice since
`March 1, 2009.
`
`The basis for the lawsuit is false advertising. In its
`marketing materials, Premier touts Joint Juice as a dietary
`supplement beverage that supports and nourishes cartilage,
`lubricates joints, and improves joint comfort.1 But,
`
`1 We treat all factual allegations in the operative complaint as true.
`See Dougherty v. City of Covina, 654 F.3d 892, 897 (9th Cir. 2011).
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`according to Sonner, Joint Juice fails to provide its
`advertised health benefits.
`
`5
`
`the complaint demanded
`As originally pleaded,
`injunctive relief under the UCL and CLRA, restitution under
`the UCL and CLRA, and damages under an Illinois
`consumer protection statute. In the first amended complaint,
`Sonner dropped her claim under Illinois law and amended
`the CLRA claim to seek damages because Premier failed to
`correct the alleged CLRA violations pursuant to California
`Civil Code § 1782. Both complaints demanded a jury trial.
`
`For years, the litigation proceeded in the typical fashion.
`Both sides took discovery, engaged in motion practice, and
`prepared for the looming jury trial. But less than two months
`before trial was scheduled to begin, and after defeating
`Premier’s summary judgment efforts, Sonner sought leave
`to file a second amended complaint to drop the CLRA
`damages claim. This strategy raises an obvious question:
`why would Sonner voluntarily abandon an ostensibly viable
`claim on the eve of trial after more than four years of
`litigation? The answer is also obvious: to request that the
`district court judge award the class $32,000,000 as
`restitution, rather than having to persuade a jury to award
`this amount as damages.
`
`Premier opposed the motion for leave. Citing futility,
`Premier urged that Sonner’s proposed second amended
`complaint would require dismissal of the restitution claims
`pursuant to California’s inadequate-remedy-at-law doctrine.
`Without the CLRA damages claim, Premier argued, the
`proposed complaint failed to state viable claims for
`restitution because an adequate legal remedy—damages—
`was available for that injury.
`
`

`

`6
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`During oral argument on the motion, the district court
`admonished Sonner that if Premier successfully moved to
`dismiss the restitution claims, the court would not allow
`Sonner to amend her complaint for a third time to reallege
`the CLRA damages claim. The district court explained that
`allowing Sonner to reassert the intentionally dropped claim
`under such circumstances would reflect “total prejudice to
`the court system,” would be “unfair” and “prejudicial” to
`Premier, and would constitute an “abuse of the court
`system.”
`
`The district court ultimately granted Sonner leave to
`amend and vacated the jury trial. Undeterred by Premier’s
`arguments and the district court’s warning, Sonner filed her
`second amended complaint in August 2017, dropping the
`CLRA damages claim. And, true to its word, Premier moved
`to dismiss the restitution claims pursuant to Federal Rule of
`Civil Procedure 12(b)(6), arguing that Sonner needed to—
`but could not—establish that she lacked an adequate legal
`remedy as required by both federal equitable principles and
`California law.
`
`After full briefing and oral argument, the district court
`granted Premier’s motion to dismiss.
` Applying its
`interpretation of California law, the district court held that
`Sonner could not proceed on her equitable claims for
`restitution in lieu of a claim for damages. Specifically, the
`district court concluded that claims brought under the UCL
`and CLRA remained subject to California’s inadequate-
`remedy-at-law doctrine, and that Sonner failed to establish
`that she lacked an adequate legal remedy for the same past
`harm for which she sought equitable restitution. The district
`court also denied Sonner’s request to amend her complaint
`to reallege the CLRA damages claim. After the district court
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`entered judgment, Sonner timely appealed the order
`dismissing her claims for equitable restitution to this court.
`
`7
`
`We review the district court’s decision to grant a motion
`to dismiss under Rule 12(b)(6) de novo, Fayer v. Vaughn,
`649 F.3d 1061, 1063–64 (9th Cir. 2011) (per curiam), and to
`deny a request for leave to amend for abuse of discretion,
`DCD Progs., Ltd. v. Leighton, 833 F.2d 183, 186 (9th Cir.
`1987). We may affirm the district court’s dismissal of the
`complaint on any basis supported by the record. See
`Johnson v. Riverside Healthcare Sys., LP, 534 F.3d 1116,
`1121 (9th Cir. 2008).
`
`II
`
`Although not the basis for the district court’s decision,
`we must first resolve a threshold jurisdictional question: do
`federal equitable principles independently apply to Sonner’s
`equitable claims for restitution or must we, as a federal court,
`follow only the state law authorizing that equitable remedy?
`
`Sonner argues that because her UCL and CLRA claims
`arise under California law and our jurisdiction rests in
`diversity, state law alone decides whether she must show a
`lack of an adequate legal remedy before obtaining restitution
`under those statutes. And, according to Sonner, the
`California legislature abrogated the state’s inadequate-
`remedy-at-law doctrine for claims seeking equitable
`restitution under the UCL and CLRA.2
`
`
`2 Sonner does not dispute that the restitution she seeks under the
`UCL and CLRA is restitution in equity, not restitution at law. See Great–
`W. Life & Annuity Ins. Co. v. Knudson, 534 U.S. 204, 214 (2002)
`(drawing a “fine distinction between restitution at law and restitution in
`equity”). And California courts have held that “the UCL provides only
`
`
`

`

`8
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`In contrast, Premier argues that federal courts in
`diversity are bound by
`traditional federal equitable
`principles, including the requirement that the party pursuing
`equitable relief establish that it lacks an adequate legal
`remedy. Premier also contends that equitable claims for
`restitution under the UCL and CLRA remain subject to
`California’s inadequate-remedy-at-law doctrine.
`
`A
`
`It has long been the province of federal courts sitting in
`equity to apply a body of federal common law irrespective
`of state law. See Russell v. Southard, 53 U.S. (12 How.) 139,
`147 (1851). Under the doctrine first prescribed in Erie,
`however, federal courts exercising diversity jurisdiction
`must follow state substantive law and federal procedural law
`when adjudicating state law claims. See Hanna v. Plumer,
`380 U.S. 460, 465 (1965). To carry out the thorny task of
`identifying whether a law is substantive or procedural, we
`generally use an “outcome-determination test,” which asks
`whether applying federal law instead of state law would
`“significantly affect”
`the
`litigation’s outcome.
` See
`Gasperini v. Ctr. for Humanities, Inc., 518 U.S. 415, 427
`(1996) (quoting York, 326 U.S. at 109). Thus, the outcome
`of a case in federal court should generally be “substantially
`the same, so far as legal rules determine the outcome of a
`litigation, as it would be if tried in a State court.” York,
`326 U.S. at 109.
`
`
`for equitable remedies.” See Hodge v. Superior Court, 51 Cal. Rptr. 3d
`519, 523 (Ct. App. 2006); see also Nationwide Biweekly Admin., Inc. v.
`Superior Court, No. S250047, 2020 WL 2107914, at *1 (Cal. 2020)
`(concluding that the “causes of action established by the UCL” are
`“equitable in nature”).
`
`

`

`
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`9
`
`But when deciding between state and federal law, we do
`not rely on a rote litmus test. See Hanna, 380 U.S. at 467.
`Rather, we must be cognizant of Erie’s dual aims:
`“discouragement of forum-shopping and avoidance of
`inequitable administration of the laws.” Gasperini, 518 U.S.
`at 428 (quoting Hanna, 380 U.S. at 468); see also Semtek
`Int’l Inc. v. Lockheed Martin Corp., 531 U.S. 497, 508–09
`(2001).
` And we should also consider the policies
`underpinning the applicable state and federal laws. See Byrd
`v. Blue Ridge Rural Elec. Coop., Inc., 356 U.S. 525, 537–38
`(1958).
`
`B
`
`As a result of Erie, the scope and application of federal
`common law narrowed considerably. See Tex. Indus., Inc.
`v. Radcliff Materials, Inc., 451 U.S. 630, 641 (1981) (noting
`that “absent some congressional authorization . . . federal
`common
`law exists only
`in
`. . . narrow areas”).
`Nevertheless, since Erie, the Supreme Court has instructed
`that a federal court’s equitable authority remains cabined to
`the traditional powers exercised by English courts of equity,
`even for claims arising under state law. See York, 326 U.S.
`at 104–07.
`
`In York, the Court addressed whether a state’s statute of
`limitations could be asserted as a defense to an equitable
`claim arising under state law. See id. at 100–01, 107. When
`summarizing the applicability of Erie, the Court made clear
`that Congress provided that the forms and modes of
`proceeding in suits of equity should conform to the historic
`uses of courts of equity. See id. at 104–05. Writing for the
`Court, Justice Frankfurter explained:
`
`In giving federal courts cognizance of
`equity suits in cases of diversity jurisdiction,
`
`

`

`10
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`Congress never gave, nor did the federal
`courts ever claim,
`the power
`to deny
`substantive rights created by State law or to
`create substantive rights denied by State law.
`
`that whatever
`This does not mean
`equitable remedy is available in a State court
`must be available in a diversity suit in a
`federal court, or conversely, that a federal
`court may not afford an equitable remedy not
`available in a State court. Equitable relief in
`a federal court is of course subject to
`restrictions: the suit must be within the
`traditional scope of equity as historically
`evolved in the English Court of Chancery; a
`plain, adequate and complete remedy at law
`must be wanting; explicit Congressional
`curtailment of equity powers must be
`respected; [and] the constitutional right to
`trial by jury cannot be evaded. That a State
`may authorize its courts to give equitable
`relief unhampered by any or all such
`restrictions cannot remove these fetters from
`the federal courts.
`
`Id. at 105–06 (internal quotation marks and citations
`omitted) (emphases added). The Court further instructed
`that “State law cannot define the remedies which a federal
`court must give simply because a federal court in diversity
`jurisdiction is available as an alternative tribunal to the
`State’s courts.” Id. at 106; see also Pusey & Jones Co. v.
`Hanssen, 261 U.S. 491, 497–98 (1923) (“That a remedial
`right to proceed in a federal court sitting in equity cannot be
`enlarged by a state statute is likewise clear. . . . The federal
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`court may therefore be obliged to deny an equitable remedy
`which the plaintiff might have secured in state court.”).
`
`11
`
`that “[t]he source of
`The Court also explained
`substantive rights enforced by a federal court under diversity
`jurisdiction . . . is the law of the States.” York, 326 U.S.
`at 112. Federal courts must therefore enforce “State-created
`substantive rights if the mode of proceeding and remedy
`[are] consonant with the traditional body of equitable
`remedies, practice and procedure.” Id. at 106.
`
`C
`
`In accordance with York, we hold that a federal court
`must apply traditional equitable principles before awarding
`restitution under the UCL and CLRA. It has been a
`fundamental principle for well over a century that state law
`cannot expand or limit a federal court’s equitable authority.
`See Payne v. Hook, 74 U.S. (7 Wall.) 425, 430 (1868) (“The
`equity jurisdiction conferred on the Federal courts is the
`same that the High Court of Chancery in England possesses;
`is subject to neither limitation or restraint by State
`legislation, and is uniform throughout the different States of
`the Union.”). Erie intervened in 1938, of course, and the
`merger of law and equity followed soon after. But in
`seventy-five years, the Supreme Court has never repudiated
`its statements in York—offered seven years after Erie—that
`state law can neither broaden nor restrain a federal court’s
`power to issue equitable relief.3
`
`
`3 We recognize that the statute York cited to support the principle
`that a “plain, adequate and complete remedy at law must be wanting,”
`326 U.S. at 105, was repealed in 1948 after the merger of law and equity,
`see 28 U.S.C. § 384 (repealed 1948). That merger does not, however,
`affect the validity of the principle. See, e.g., Grupo Mexicano de
`
`
`

`

`12
`
`
`SONNER V. PREMIER NUTRITION CORP.
`
`To be sure, York suggests that the “outcome” of a lawsuit
`should be “substantially the same” regardless of whether it
`is filed in state or federal court, 326 U.S. at 109, and applying
`federal equitable principles may lead to a different result if,
`as Sonner contends, California abrogated its inadequate-
`remedy-at-law requirement for claims brought under the
`UCL and CLRA. But the Supreme Court clearly foresaw the
`possibility of this sort of inconsistency in York and
`concluded that federal courts must nonetheless apply
`principles of federal common law. See id. at 105–06.
`According to the Court, even if a state authorizes its courts
`to provide equitable relief when an adequate legal remedy
`exists, such relief may be unavailable in federal court
`because equitable remedies are subject to traditional
`equitable principles unaffected by state law. See id. at 105–
`06 & n.3.4 Since York, the Court has never held or suggested
`
`Desarrollo S.A. v. All. Bond Fund, Inc., 527 U.S. 308, 322 (1999)
`(“Notwithstanding the fusion of law and equity by the Rules of Civil
`Procedure, the substantive principles of Courts of Chancery remain
`unaffected.” (quoting Stainback v. Mo Hock Ke Lok Po, 336 U.S. 368,
`382 n.26 (1949))); Oneida Indian Nation of N.Y. State v. Cty. of Oneida,
`464 F.2d 916, 922 (2d Cir. 1972) (“While [York] relied on § 16 of the
`Judiciary Act of 1789 (later Rev. Stat. § 723 and 28 U.S.C. § 384 (1940
`ed.)), which limited suits in equity to cases in which there was no ‘plain,
`adequate and complete remedy’ at law, and that statute was repealed in
`1948 as obsolete in view of the merger of law and equity under the
`Federal Rules of Civil Procedure, 62 Stat. 992, the principle remains
`intact.”), rev’d on other grounds, 414 U.S. 661 (1974).
`
`4 Sonner characterizes the Court’s statements in York regarding
`equitable remedies as dicta, and some courts have endorsed that view.
`See New Mexico ex rel. Balderas v. Real Estate Law Ctr., P.C., 401 F.
`Supp. 3d 1229, 1349 n.93 (D.N.M. 2019); Bangor Baptist Church v.
`State of Me., Dep’t of Educ. & Cultural Servs., 576 F. Supp. 1299, 1314
`& n.21 (D. Me. 1983). Even if we construe these statements as dicta, we
`must “afford [them] a weight that is greater than ordinary judicial dicta
`as prophecy of what the [C]ourt might hold.” Nettles v. Grounds,
`
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`that state law can expand a federal court’s equitable powers,
`even if allowing such expansion would ensure a similar
`outcome between state and federal tribunals.
`
`13
`
`Additionally, the “outcome” of this litigation is not our
`“only consideration” as we must also balance the policies
`underlying the state and federal laws. See Byrd, 356 U.S. at
`537–38. Here, as in Byrd, the principle precluding courts
`from awarding equitable relief when an adequate legal
`remedy exists implicates the well-established federal policy
`of safeguarding the constitutional right to a trial by jury in
`federal court. See id. at 537–39 (state rules should not
`abridge a constitutional right to a jury trial in federal court);
`see also Scott v. Neely, 140 U.S. 106, 110 (1891)
`(“[W]henever, respecting any right violated, a court of law
`is competent to render a judgment affording a plain,
`adequate, and complete remedy, the party aggrieved must
`seek his remedy in such court . . . because the defendant has
`a constitutional right to a trial by jury . . . .”). Even assuming
`California decided as a matter of policy to streamline UCL
`and CLRA claims by abrogating the state’s inadequate-
`remedy-at-law doctrine, the strong federal policy protecting
`the constitutional right to a trial by jury outweighs that
`procedural interest.
`
`Sonner cites our decision in Sims Snowboards, Inc. v.
`Kelly, 863 F.2d 643 (9th Cir. 1988), to argue that a federal
`court sitting in diversity applies state law to determine the
`availability of equitable relief. But Sims does not control
`
`830 F.3d 922, 930-31 (9th Cir. 2016) (en banc) (quoting Managed
`Pharmacy Care v. Sebelius, 716 F.3d 1235, 1246 (9th Cir. 2013)). And
`“[a]s a lower federal court, we are advised to follow the Supreme Court’s
`considered dicta.” Lemoge v. United States, 587 F.3d 1188, 1193 (9th
`Cir. 2009) (quoting Fernandez-Ruiz v. Gonzales, 466 F.3d 1121, 1129
`(9th Cir. 2006) (en banc)).
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`14
`
`here. In that diversity action, the district court awarded the
`plaintiff a preliminary injunction under Federal Rule of Civil
`Procedure 65 despite a California statute expressly
`prohibiting the issuance of an injunction under the
`circumstances. Id. at 646. We reversed and held that
`because “the outcome [of the case] is in large part
`determined at the preliminary injunction stage,” state law
`controls whether a federal court should grant preliminary
`injunctive relief. Id. at 647. And in accord with York, we
`noted that “[t]he general equitable powers of federal courts
`should not enable a party suing in diversity to obtain an
`injunction if state law clearly rejects the availability of that
`remedy.” Id.; see York, 326 U.S. at 110 (“Plainly enough, a
`statute that would completely bar recovery in a suit if
`brought in a State court bears on a State created right vitally
`and not merely formally or negligibly. As to consequences
`that so intimately affect recovery or non-recovery a federal
`court in a diversity case should follow State law.”).
`
`In contrast to Sims, we must now decide whether a
`federal court sitting in diversity can award equitable
`restitution under state law if an adequate legal remedy exists.
`Injunctive relief is not at issue, nor is Sonner exploiting the
`federal judiciary to access a remedy that California “clearly
`rejects.” See Sims, 863 F.2d at 647. Our inquiry instead
`aligns directly with the rigid restrictions on a federal court’s
`equitable powers explicitly enumerated in York. Indeed,
`since Sims, we have confirmed that a state “statute does not
`change the nature of the federal courts’ equitable powers.”
`See Can. Life Assurance Co. v. LaPeter, 563 F.3d 837, 843
`(9th Cir. 2009) (holding that federal equitable principles
`govern the appointment of a receiver independent of state
`law); see also Barranco v. 3D Sys. Corp., 952 F.3d 1122,
`1129 (9th Cir. 2020) (recognizing, in a diversity action
`where state law allowed equitable relief, that “‘[t]he
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`necessary prerequisite’ for a court to award equitable
`remedies is ‘the absence of an adequate remedy at law’”
`(quoting Dairy Queen, Inc. v. Wood, 369 U.S. 469, 478
`(1962))).5
`
`15
`
`Finally, our decision mirrors those of several other
`circuits, which have concluded, consistent with York, that
`state law cannot circumscribe a federal court’s equitable
`powers even when state law affords the rule of decision. See
`Davilla v. Enable Midstream Partners L.P., 913 F.3d 959,
`972–73 (10th Cir. 2019) (“The Supreme Court has
`concluded that ‘State law cannot define the remedies which
`a federal court must give’ . . . . Thus, the practice of
`borrowing state rules of decision does not apply with equal
`force to determining appropriate remedies, especially
`equitable remedies, as it does to defining actionable rights.”
`(quoting York, 326 U.S. at 105));6 SSMC, Inc., N.V. v.
`
`5 Sonner’s reliance on McKesson HBOC, Inc. v. New York State
`Common Retirement Fund, Inc., 339 F.3d 1087 (9th Cir. 2003), likewise
`does not support her desired outcome. McKesson addressed neither Erie
`nor York, and the court simply assumed that state law governed the
`availability of equitable remedies. See 339 F.3d at 1093-94. We thus
`are not bound by that decision. See, e.g., Galam v. Carmel (In re Larry’s
`Apartment, L.L.C.), 249 F.3d 832, 839 (9th Cir. 2001) (“[Q]uestions
`which merely lurk in the record, neither brought to the attention of the
`court nor ruled upon, are not to be considered as having so decided as to
`constitute precedents.” (quoting Webster v. Fall, 266 U.S. 507, 511
`(1925))); Lum v. City & Cty. of Honolulu, 963 F.2d 1167, 1170 n.1 (9th
`Cir. 1992) (noting that cases which “stumble into decisions on questions
`neither raised nor discussed by the parties or by the trial court are not
`treated as authoritative on those unstated assumptions and nonlitigated
`points”).
`
`6 Prior to Davilla, then-Judge Gorsuch observed that “[w]hen
`addressing cases arising under the diversity statute, we’ve seen the
`Supreme Court has likewise suggested that diversity authority doesn’t
`necessarily endow federal district courts the power or authority to issue
`
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`16
`
`Steffen, 102 F.3d 704, 708 (4th Cir. 1996) (rejecting the
`argument that district court erred in issuing a remedy beyond
`what state law permitted because “[s]tate law cannot define
`the remedies which a federal court must give simply because
`a federal court in diversity jurisdiction is available as an
`alternative tribunal to the State’s courts” (alteration in
`original) (quoting York, 326 U.S. at 106)); Perfect Fit Indus.,
`Inc. v. Acme Quilting Co., 646 F.2d 800, 806 (2d Cir. 1981)
`(“State law does not govern the scope of the equity powers
`of the federal court; and this is so even when state law
`supplies the rule of decision.”); Oneida Indian Nation of N.Y.
`State, 464 F.2d at 922 (holding that “[i]t is settled that federal
`courts may not apply state statutes expanding equity
`jurisdiction beyond that prevailing when the Constitution
`was adopted,” including “cases in which there was no ‘plain,
`adequate and complete remedy at law’”); Clark Equip. Co.
`v. Armstrong Equip. Co., 431 F.2d 54, 57 (5th Cir. 1970)
`(“Federal courts in diversity cases [have] the power to
`enforce State-created substantive rights by well-recognized
`equitable remedies even though such remedy might not be
`available in the courts of the State.”); Hertz v. Record Publ’g
`Co. of Erie, 219 F.2d 397, 398 n.2 (3d Cir. 1955) (“Federal
`remedies are not limited or affected by state law.”); see also
`Nat’l P’ship Inv. Corp. v. Nat’l Hous. Dev. Corp., 153 F.3d
`1289, 1291–92 (11th Cir. 1998) (citing Pusey & Jones and
`York to hold that federal law governs the appointment of a
`receiver in a diversity case because the equitable remedy of
`receivership is not a substantive right); Aviation Supply
`Corp. v. R.S.B.I. Aerospace, Inc., 999 F.2d 314, 316 (8th Cir.
`1993) (holding that federal law and federal equitable
`
`
`every form of equitable relief a state court might possess in the same
`situation.” Niemi v. Lasshofer, 728 F.3d 1252, 1259 (10th Cir. 2013)
`(citing York, 326 U.S. at 105).
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`principles govern the appointment of a receiver in a diversity
`case).
`
`17
`
`At bottom, “[t]hat a State may authorize its courts to give
`equitable relief unhampered by” the “restriction[]” that an
`adequate remedy at law be unavailable “cannot remove
`th[at] fetter[] from the federal courts.” York, 326 U.S.
`at 105–06. Guided by that instruction, we hold that the
`traditional principles governing equitable remedies in
`federal courts, including the requisite inadequacy of legal
`remedies, apply when a party requests restitution under the
`UCL and CLRA in a diversity action.7
`
`D
`
`Under these principles, Sonner must establish that she
`lacks an adequate remedy at law before securing equitable
`restitution for past harm under the UCL and CLRA. See
`Mort v. United States, 86 F.3d 890, 892 (9th Cir. 1996) (“It
`is a basic doctrine of equity jurisprudence that courts of
`equity should not act . . . when the moving party has an
`adequate remedy at law.” (ellipsis in original) (quoting
`Morales v. Trans World Airlines, Inc., 504 U.S. 374, 381
`(1992))); see also, e.g., Franklin v. Gwinnett Cty. Pub. Sch.,
`503 U.S. 60, 75–76 (1992) (holding that when “remedies are
`
`7 We need not linger long on Sonner’s argument that “under federal
`law” we look to the legislature’s intent with respect to “whether a statute
`provides for equitable remedies irrespective of an adequate-remedy-at-
`law.” The cases Sonner cites apply when equitable relief is sought under
`a federal statute, not a state statute. See United States v. Oakland
`Cannabis Buyers’ Coop., 532 U.S. 483, 497 (2001) (addressing
`injunctions under the Controlled Substances Act); Weinberger v.
`Romero-Barcelo, 456 U.S. 305, 316 (1982) (addressing injunctions
`under the Federal Water Pollution Control Act). Federal equitable
`principles are not subject to qualification by the intent of California’s
`legislature.
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`18
`
`equitable in nature . . . it is axiomatic that a court should
`determine the adequacy of a remedy in law before resorting
`to equitable relief”); Schroeder v. United States, 569 F.3d
`956, 963 (9th Cir. 2009) (“[E]quitable relief is not
`appropriate where an adequate remedy exists at law.”).
`
`Sonner fails to make such a showing. Initially, the
`operative complaint does not allege that Sonner lacks an
`adequate legal remedy. See O’Shea v. Littleton, 414 U.S.
`488, 502 (1974) (holding that a complaint seeking equitable
`relief failed because it did not plead “the basic requisites of
`the issuance of equitable relief” including “the inadequacy
`of remedies at law”). More importantly, Sonner concedes
`that she seeks the same sum in equitable restitution as “a full
`refund of
`the purchase price”—$32,000,000—as she
`requested in damages to compensate her for the same past
`harm. Sonner fails to explain how the same amount of
`money for the exact same harm is inadequate or incomplete,
`and nothing in the record supports that conclusion.8
`
`Accordingly, because Sonner fails to establish that she
`lacks an adequate remedy at law, we hold, albeit on
`alternative grounds, that the district court did not err in
`
`
`8 Sonner’s citation to American Life Insurance Co. v. Stewart,
`300 U.S. 203, 214 (1937), is unavailing. There, the Court held that “[a]
`remedy at law does not exclude one in equity unless it is equally prompt
`and certain and in other ways efficient.” Id. But Sonner fails to explain
`how damages are any less prompt, certain, or efficient than restitution,
`particularly when a jury trial for damages was just two months away
`when she amended her complaint. Likewise, that California enacted the
`UCL to create new “remedies” not “available at common law,” see
`Nationwide Biweekly Admin., Inc., 2020 WL 2107914 at *21, is not
`dispositive because it does not account for subsequently enacted statutes,
`such as the CLRA.
`
`

`

`SONNER V. PREMIER NUTRITION CORP.
`
`
`
`dismissing Sonner’s claims for equitable restitution under
`the UCL and CLRA.
`
`19
`
`III
`
`Turning to the final issue before us, we conclude that the
`district court did not abuse its discretion in denying Sonner
`leave to amend her complaint for a third time to reallege the
`CLRA damages claim. Sonner strategically chose to amend
`her complaint on the eve