New federal decision on UCL's extraterritorial operation: In re Mattel, Inc.

In In re Mattel, Inc., ___ F.Supp.2d ___, 2008 WL 5147996 (C.D. Cal. Dec. 8, 2008), the court (Judge Dale S. Fischer) addressed the UCL's (and the CLRA's) extraterritorial reach and narrowly interpred the Ninth Ciruict's opinion in Sullivan v. Oracle Corp., ___ F.3d ___, 2008 WL 4811911 (Nov. 6, 2008) (discussed in this post):

Mattel and Fisher-Price contend that the non-California Plaintiffs may not assert claims under section 17200 and the CLRA against them. But “state statutory remedies may be invoked by out-of-state parties when they are harmed by wrongful conduct occurring in California.” Norwest Mortgage, Inc. v. Superior Ct., 72 Cal.App. 4th 214, 224-25 (1999). Plaintiffs have adequately alleged that Mattel and Fisher-Price's conduct occurred, if at all, in--or had strong connections to--California. Cf. Sullivan v. Oracle Corp., ___ F.3d. ___, 2008 DJDAR 16630, 16635 (9th Cir. Nov. 6, 2008) (Section 17200 does not apply to claims of nonresidents of California complaining of conduct that took place outside of California). Plaintiffs complain of misrepresentations made in reports, company statements, and advertising that are reasonably likely to have come from or been approved by Mattel corporate headquarters in California. (See SAC ¶¶ 53-68.) The connections between Fisher-Price and California are weaker, but the complaint does allege that “many of [Fisher-Price's] executives, including its Vice President of Consumer Products, are located in California.” (SAC ¶ 232.) While these connections may, after a more thorough development of the facts, prove to be specious or irrelevant, the Court finds that the alleged California connections are sufficient to state claims by non-California plaintiffs.

Mattel, 2008 WL 5147996 at *5 (footnote omitted). This is the correct interpretation of both Norwest and Sullivan, at least for purposes of the UCL claim, because it focuses on whether any wrongful conduct originated from California.