## Facts

- R.J. Reynolds Tobacco Company (RJR) operated “Camel Cash,” a loyalty program from 1991 to 2007, placing “Camel Cash” certificates (“C-Notes”) in Camel cigarette packages.
- RJR advertised that consumers could save C-Notes and exchange them for catalog merchandise under stated program terms.
- Plaintiffs alleged they purchased Camel cigarettes, enrolled in the program, and accumulated C-Notes in reliance on RJR’s redemption representations.
- In October 2006, RJR announced program discontinuation and stated participants could redeem C-Notes until March 31, 2007.
- Plaintiffs alleged that beginning in October 2006, RJR stopped printing catalogs and told participants no merchandise remained, leaving accumulated C-Notes effectively unredeemable.
- Plaintiffs filed a putative class action asserting breach of contract, promissory estoppel, and claims under California’s Unfair Competition Law (UCL) and Consumer Legal Remedies Act (CLRA).
- The district court dismissed all claims under Rule 12(b)(6), and plaintiffs appealed.

## Issues

1. Whether the allegations plausibly established an enforceable unilateral contract (or promise) arising from the Camel Cash program and a breach based on the alleged elimination of meaningful redemption.
2. Whether plaintiffs plausibly stated promissory estoppel based on RJR’s program representations and plaintiffs’ alleged reliance.
3. Whether plaintiffs plausibly stated UCL and CLRA claims by adequately pleading reliance and causation tied to actionable misrepresentations or deceptive conduct.

## Decision

- The Ninth Circuit affirmed in part, reversed in part, and remanded.
- The court reversed dismissal of the breach of contract claim, holding plaintiffs plausibly alleged an offer, acceptance by performance, consideration, and breach.
- The court reversed dismissal of the promissory estoppel claim, holding plaintiffs plausibly alleged a promise, foreseeable and substantial reliance, and potential injustice absent enforcement.
- The court affirmed dismissal of the UCL and CLRA claims for failure to adequately plead reliance and causation as required under those statutes.

## Legal Principles

- A consumer rewards program may form a unilateral contract where the sponsor’s representations constitute an offer and consumers accept by performance (e.g., purchasing, collecting, and attempting to redeem program currency).
- Reserved discretion in promotional materials does not necessarily negate an offer when the alleged exchange is sufficiently definite to infer contractual obligation at the pleading stage.
- Consideration may be plausibly alleged where the program is designed to induce repeat purchases and brand loyalty in exchange for promised redemption value.
- A plausible breach may be stated where a sponsor announces an end date for redemption but allegedly renders redemption impracticable by withdrawing catalogs and merchandise before the deadline.
- Promissory estoppel may apply where program statements plausibly amount to promises, participants plausibly relied by undertaking the encouraged conduct, and enforcement may be necessary to prevent injustice.
- UCL and CLRA claims require sufficiently pleaded reliance on actionable misrepresentations or deceptive practices and a causal link between such conduct and the claimed economic injury.

## Conclusion

The Ninth Circuit held that plaintiffs plausibly alleged that Camel Cash marketing created enforceable obligations under unilateral contract and promissory estoppel theories based on acceptance by performance and the alleged denial of meaningful redemption, but it upheld dismissal of statutory consumer claims because the pleadings did not adequately connect reliance and causation to actionable deception under the UCL and CLRA.


Sateriale v. R.J. Reynolds Tobacco Co., 697 F.3d 777 (9th Cir. 2012)