On Monday, January 25, 2010, the Court of Appeal (Third Appellate District) in Sacramento held further oral argument in McAdams v. Monier, Inc., no. C051841, which is one of the Tobacco II "grant and hold" cases. My post on the original McAdams opinion from 2007 (in which the Court of Appeal reversed the trial court's order denying certification of UCL and CLRA claims) is here.
Many thanks to the blog reader who attended the argument and provided the following anonymous report:
Spirited oral argument from a Panel consisting of Justices Sims, Butz and Sakauye in this case, which alleges that defendant Monier failed to disclose that its “slurry” coated cement tiles would lose their color and degrade down to bare concrete. The majority of questions came from Justice Sims, who was focused on whether subsequent purchasers of the product could be part of the class, asking about the situation where a family buys a home with the roofing tiles already installed. Justice Sims noted, they have no idea about any misrepresentations made by Monier, so could they get damages? Appellant’s counsel, after first noting that only restitution is available under the UCL, indicated that yes, those homeowners would be in the class but that restitution would only be provided once for any property and that no double recovery (i.e., for the original purchaser of the home/roofing tiles and any subsequent purchaser) would be sought.
Monier’s main argument to the panel, as in its briefs, was that post-Tobacco II, there still needed to be proof that individual class members actually received a misrepresentation as an element under the fraud prong of the UCL and Justice Sims wanted to know whether defendant is arguing that plaintiffs are not entitled to any class, or only a class of those who saw the misrepresentations. Defense counsel responded that the determination of whether a class is appropriate is one that should be made on remand, by the trail court.
On rebuttal, in response to further questions by Justice Sims about whether a class could include individuals who never received defendant’s representations and whether it is simply enough under the UCL to show a representation was misleading even if no one actually saw it, plaintiff’s counsel replied that post-Proposition 64, only the named plaintiff had to prove they received and relied on the misrepresentation. In closing, appellant’s counsel emphasized that that under both pre- and post-Tobacco II decisions courts have held that no individualized proof is necessary if a defendant’s advertisement is “likely to deceive.”
One interesting thing about this report is the fact that, apparently, none of the original three panelists is now assigned to the case. The original opinion's author, Justice Davis, retired in early 2009. It is unclear why the other two original justices are no longer on the panel. In any event, it will be very interesting to see how this opinion comes out.
I note that we still have not yet seen an opinion in the other Tobacco II "grant and hold" case, Pfizer v. Superior Court (Galfano), no. B188106, which was argued on December 7, 2009. According to the "scheduled actions" page of the docket, the Pfizer opinion is due to be filed by March 1, 2010.