In a new opinion handed down yesterday, Princess Cruise Lines, Ltd. v. Superior Court (Wang), ___ Cal.App.4th ___ (Nov. 10, 2009), the Court of Appeal (Second Appellate District, Division Eight) came close to interpreting Tobacco II's notorious footnote 17, but didn't quite get there.
In footnote 17, the Supreme Court took pains to make clear that "as a result of" requires proof of actual reliance only in "fraudulent" prong cases, but not in "unfair" or "unlawful" prong cases not based on alleged fraud:
We emphasize that our discussion of causation in this case is limited to such cases where, as here, a UCL action is based on a fraud theory involving false advertising and misrepresentations to consumers. The UCL defines ‘unfair competition’ as ‘includ[ing] any unlawful, unfair or fraudulent business act or practice . . . .’ ([Bus. & Prof. Code,] § 17200.) There are doubtless many types of unfair business practices in which the concept of reliance, as discussed here, has no application.In re Tobacco II Cases, 46 Cal.4th 298, 325 n.17.
In Princess Cruise Lines, the plaintiffs argued that they need not prove "reliance" because the defendant's allegedly wrongful conduct "is an unfair business practice that does not involve fraud, i.e., they seek to place themselves within the rule set forth Tobacco II that UCL claims that are not based on fraud do not require reliance." Slip op. at 8 (emphasis added).
The Court of Appeal held that the trial court should have granted summary judgment in the defendant's favor because "there is simply no ... evidence in this record" that the defendant's allegedly "unfair" conduct was in fact "unfair." Id. at 10. The Court also held that if "reliance" is required, the record contained no evidence of that, either. Id. at 8.
The final interesting part of Princess Cruise Lines is its holding that "as a result of" in the CLRA means the same thing as "as a result of" in the UCL, and that, therefore, "the analysis of the phrase ... found in Tobacco II" governs in CLRA cases: "[R]eliance is required for CLRA actions, with the limitations noted in Tobacco II." Slip op. at 11-12 (emphasis added).
UPDATE: Scott Leviant's post on Princess Cruise Lines points out that the same three panel members (Justices Rubin, Flier and Bigelow of the Second Appellate District, Division Eight) also gave us Cohen v. DIRECTV (discussed here), yet Princess Cruise Lines does not even mention Cohen. Interesting.