As I previously reported, last week the Supreme Court heard oral arguments in two cases potentially implicating the ordinary rule that a UCL "unlawful" prong may proceed regardless of whether the legislature intended the "borrowed" law to carry a private right of action. Zhang v. Superior Court (Cal. Cap. Ins.), no. S178542, was argued last Wednesday, and Rose v. Bank of America, no. S199074, was argued Tuesday.
Emily Green of the Daily Journal had a story on the Zhang argument in last Thursday's paper. An excerpt:
Plaintiffs lawyers and insurance companies have waited more than three years for the state Supreme Court to take up the case of Yanting Zhang, a homeowner who sued her insurance company for false advertising after it repeatedly stalled her efforts to get recovery after an apartment fire.
But at oral argument Wednesday, ... the questions posed by the justices suggested the court is inclined to rule in favor of Zhang, who wants to move forward with her claim.
The backdrop to the case is a prior California Supreme Court decision that says private citizens can't privately sue insurers who commit unfair practices under the state's Unfair Insurance Practices Act. Only the insurance commissioner can do that. Moradi-Shalal v. Fireman's Fund Ins. Companies, 46 Cal.3d 287 (1988).
Much of oral argument centered on whether Moradi-Shalal affected Zhang's case. ....
[Justice] Corrigan questioned why Zhang should be precluded from suing the company for false advertising. If one of the parties has no intention of living up to its side of the contract, she said, then the contract is "fraudulently induced."
Justice Corrigan is one of the more conservative members of the Court, so if her questions favored the plaintiff, that is a strong signal that the plaintiff may ultimately prevail.
I have seen no press coverage of Rose, but an attorney present reported that the questioning in that case also seemed to favor the plaintiffs' position. The attorney said that from the questioning, it appeared that the justices were accepting the argument that the repeal of the private right of action for violations of the Truth in Savings Act (12 U.S.C. § 4301 et seq.) did not affect the Act's preemption language or establish a federal policy precluding state enforcement of its provisions.
Both opinions are due to be filed no later than the week of August 5, 2013.