Silvaco Data Systems v. Intel Corp., ___ Cal.App.4th ___ (Apr. 29, 2010) is a case for misappropriation of trade secrets in which the plaintiff also brought a UCL claim. See pp. 37-41 for the Sixth District's discussion of standing (which, strangely, makes no mention of Tobacco II, a case undoubtedly relevant to the discussion).
Several new decisions of interest were handed down during my blogging hiatus (and before Dukes v. Wal-Mart):
Arenas v. El Torito Restaurants, Inc., ___ Cal.App.4th ___ (Mar. 15, 2010; pub. ord. Apr. 6, 2010) (Second Appellate District, Division Five) (affirming order denying class certification of certain wage and hour claims)
McGuigan v. City of San Diego, ___ Cal.App.4th ___ (Apr. 6, 2010) (modified Apr. 27, 2010) (Fourth Appellate District, Division One) (construcing Code of Civil Procedure section 1021.5; denying further award of attorneys' fees incurred preserving a class action settlement against objectors' appeal because defendant was no longer an "opposing" party)
Four of these (Morgan, Weinstat, Steroid Hormone Cases, and McAdams) generally favor the plaintiff's side, while the others generally favor the defendant. The decisions are difficult to reconcile, although Will and I tried to during the Rutter seminar. I'm starting to think that the Supreme Court will need to select a case to take up and elaborate on Tobacco II.
Yesterday, the Court of Appeal published its opinion in Pfizer v. Superior Court (Galfano), ___ Cal.App.4th ___ (Feb. 25, 2010; pub. ord. Mar. 2, 2010), which originally was handed down as an unpublished opinion last week. The opinion grants a writ of mandate reversing the trial court's order certifying a class, notwithstanding Tobacco II.
The docket does not list any letters requesting publication. It appears the panel simply reconsidered whether the opinion met the standards for publication and decided it did.
Yesterday, the Supreme Court handed down its opinion in the CAFA case, Hertz Corp. v. Friend, ___ U.S. ___ (Feb. 23, 2010).
Today, the Court of Appeal (Third Appellate District) handed down its opinion in McAdams v. Monier, Inc., ___ Cal.App.4th ___ (Feb. 24, 2010), once again reversing the order denying class certification of the CLRA and UCL claims.
On February 8, 2010, the Court of Appeal (Second Appellate District, Division Four) issued a modification order adding a new, three-page section to its opinion in Steroid Hormone Product Cases, ___ Cal.App.4th ___ (Jan. 21, 2010). As my post on the original opinion explained, this panel correctly interpreted Tobacco II (in a manner directly contrary to the Court of Appeal in Cohen).
Evidently, a rehearing petition was filed on February 2, urging the Court to follow Cohen and Vioxx. The quickly-issued modification order (which also denied rehearing with no change in the judgment) makes the panel's disagreement with those opinions clear. It is reasonable to assume that a review petition will be filed.
In other appellate activity of note, a rehearing petition was filed on January 22 and denied on January 26 in the Weinstat case (see this post). Again, a petition for review would not be surprising. And we still await opinions in the two "grant and hold" cases, Pfizer and McAdams.
UPDATE: Many thanks to the blog reader who wrote to advise that a petition for review was already filed last Thursday, February 11, in the Weinstat case. Weinstat v. Dentsply Int'l., no. S180179. I have also received copies of the petition for review and the rehearing petition, which will go up in a later post.
Another case interpreting Tobacco II has been handed down, and this one, like Weinstat a couple of weeks ago, refutes the Cohen court's interpretation.
In Steroid Hormone Product Cases, ___ Cal.App.4th ___ (Jan. 21, 2010), the Court of Appeal (Second Appellate District, Division Four) reversed an order denying class certification of UCL and CLRA claims. The case alleged that the defendant (GNC) sold nutritional supplements containing a controlled substance that was illegal to sell or possess without a prescription, and that the defendant failed to disclose to consumers that its product contained this illegal ingredient. Slip op. at 3-4. The plaintiff class consisted of all those who purchased the supplements. See id., passim.
The trial court denied class certification "on the ground that, with regard to both the UCL claim and the CLRA claim, an individualized inquiry would have to be conducted into whether the illegality of androstenediol products was material to each purchaser, to determine whether GNC’s alleged conduct caused injury to that purchaser." Id. at 8.
The Court of Appeal disagreed. Under Tobacco II made clear that "the standing provision added by Proposition 64 'was not intended to have any effect at all on unnamed class members.'" Id. at 10 (quoting Tobacco II, 46 Cal.4th at 321.) "Therefore, while a named plaintiff in a UCL class action now must show that he or she suffered injury in fact and lost money or property as a result of the unfair competition, once the named plaintiff meets that burden, no further individualized proof of injury or causation is required to impose restitution liability against the defendant in favor of absent class members." Id. (emphasis added).
This holding is directly contrary to Cohen.
The defendant raised the argument that the Cohen court found persuasive, namely, that Tobacco II merely addressed "standing" and was not relevant to class certification. This panel did not read Tobacco II that way:
GNC tries to avoid the required reversal by arguing in its respondent’s brief that the trial court’s ruling does not conflict with Tobacco II because Tobacco II addressed standing, while the trial court specifically stated that standing was irrelevant to the certification analysis. Although the court did state that standing was irrelevant, it nevertheless found that Proposition 64 added actual injury as an element of a cause of action for restitution under the UCL, and therefore injury must be established for each class member. Tobacco II made clear, however, that Proposition 64 only affected the named plaintiff’s standing in a UCL class action seeking restitution; it did not add an additional element to be satisfied by all class members.
Id. at 10-11 n.8 (citing Tobacco II, 46 Cal.4th at 321) (emphasis added). In other words, the Steroid Hormone Product Cases court recognized that because reliance and injury are not elements of a UCL claim, they are irrelevant to class certification. The court concluded that class certification should have been granted because common questions predominated:
Martinez’s UCL claim presents two predominate issues (other than Martinez’s individual standing), both of which are common to the class: (1) whether GNC’s sale of androstenediol products was unlawful; and if so, (2) the amount of money GNC “may have . . . acquired by means of” those sales that must be restored to the class (Bus. & Prof. Code, § 17203).
Id. at 11.
As for the CLRA claim, the doctrine of presumed reliance based on the materiality of the undisclosed information warranted class certification of that claim as well:
[Plaintiff] correctly argues that he is entitled to show that GNC’s alleged deceptive conduct caused the same damage to the class by showing that the alleged misrepresentation was material, even if GNC might be able to show that some class members would have bought the products even if they had known they were unlawful to sell or possess without a prescription. [Citation.] In other words, if Martinez can show that “‘material misrepresentations were made to the class members, at least an inference of reliance [i.e., causation/injury] would arise as to the entire class.’”
Id. at 13 (citing Vasquez v. Superior Court, 4 Cal.3d 800 (1971); Massachusetts Mutual Life Ins. Co. v. Superior Court, 97 Cal.App.4th 1282 (2002)) (footnote omitted).
The court then reaffirmed the "reasonable consumer" standard for CLRA cases, explaining:
the question that must be answered in this case is whether a reasonable person would find it important when determining whether to purchase a product that it is unlawful to sell or possess that product. It requires no stretch to conclude that the proper answer is “yes” -- we assume that a reasonable person would not knowingly commit a criminal act.
Id. at 14 (citing Civ. Code § 3548; Garnette v. Mankel, 71 Cal.App.2d 783, 787 (1945)). Finally, the court rejected the argument that a "reasonable bodybuilder" standard should apply instead, as well as the argument that "as a rule, bodybuilders care less about legality than non-bodybuilders." Id. Bodybuilders as a class will no doubt appreciate the vindication.
The Court of Appeal for the Third Appellate District has scheduled oral argument in the McAdams case for Monday, January 25, 2010 at 2:00 p.m. in Sacramento. McAdams v. Monier, no. C051841. McAdams is one of the three Tobacco II "grant and hold" cases.
In Weinstat v. Dentsply International, Inc., ___ Cal.App.4th ___ (Jan. 7, 2010), the Court of Appeal (Fourth First Appellate District, Division Four) reversed an order decertifying UCL and breach of warranty claims.
A group of dentists sued the manufacturer of an "ultrasonic scaler," which is a device used to clean teeth. According to the manufacturer, the device was also safe and appropriate for use as an irrigant/coolant during oral surgery. Slip op. at 1-3, passim. In fact, however, the device was unsafe for surgical use because it could not be adequately sterilized. Id. at 4.
Initially, the trial court granted class certification of the plaintiffs' UCL and breach of warranty claims. Id. at 5. After the Pfizer decision was handed down in 2006, however, the defendant moved to decertify the classes. Pfizer held -- erroneously, as it turned out -- that after Prop. 64, each class member would have to establish standing by proving that he or she individually relied on the defendant's misrepresentations. The trial court followed Pfizer in decertifying the UCL claim, and for good measure, reconsidered the breach of warranty claim and decertified that claim as well. Id. at 5-6.
The Court of Appeal reversed the decertification order:
Here it is abundantly clear that the trial court incorrectly believed that each class member must establish standing, thereby requiring the court to delve into individual proof of material[ity], reliance and resulting damage. Tobacco II has dispatched that reasoning and therefore reversal is appropriate.
Id. at 9. And that was essentially the end of the analysis.
Notably, unlike the court in Cohen, the Weinstat court considered it wholly unnecessary to address whether individualized reliance issues might impact the commonality element of class certification. Instead, pursuant to Tobacco II, the court simply reversed the decertification order and remanded for redetermination of a single question: "whether the named representatives can meet the UCL standing requirements announced in Tobacco II and if not, whether amendment should be permitted." Id. The Supreme Court did exactly the same thing in Tobacco II itself. In re Tobacco II Cases, 46 Cal.4th 298, 306 (2009).
In other words, Weinstat correctly followed Tobacco II as it was bound to do. Cohen misinterpreted Tobacco II and reached the wrong result.
The opinion also includes a lengthy footnote further interpreting Tobacco II and confirming that, even after Prop. 64, the substantive liability standard in a UCL "fraudulent" prong case is whether "the representations or nondisclosures in question would likely be misleading to a reasonable consumer. The question of materiality, in turn, is whether a reasonable person would attach importance to the misrepresentation or nondisclosure in deciding how to proceed in the particular transaction -- in other words, would a reasonable dentist attach importance to Dentsply's claim that the [device] was safe for use in surgery." Slip op. at 8 n.8 (citation omitted).
Next, the Court of Appeal turned to the breach of warranty claim, and held that that claim should not have been decertified, either.
As a procedural matter, the Court held that a decertification motion may be granted only upon proof of changed circumstances, such as a change in law or newly-discovered facts. Slip op. at 11-12. Because the defendant had presented none with respect to the warranty claim, the trial court had no power to decertify that claim:
In the case at hand, Dentsply’s motion for decertification was accompanied by changed circumstances, most notably the Pfizer decision. However, this circumstance only pertained to the UCL cause of action. Nevertheless, the trial court went on to address Dentsply’s reassertions as to why the breach of warranty class should be decertified as well. Decertifying one theory should not sanction decertifying another absent some commonality with the changed circumstance or some other situation justifying reconsideration. Here there was none.
Id. at 12.
Then, the Court held that, "even if the trial court correctly reconsidered its certification of the breach of warranty class, its substantive decision was wrong." Id. In an interesting and lengthy discussion, the Court determined that "reliance plays no role" in a claim for breach of express warranty. Id. at 12-17. And even if it did, none of the variations in the wording of defendants' misrepresentations would defeat certification. Id. at 17-21. "[T]he finding that the [misrepresentations] were not uniform does not imply that the variations were material to the claims ...." Id. at 19. On the most material question -- "biofilm infection risk" -- defendants "were silent." Id. (Here, the Weinstat court departs from Kaldenbach.) And finally, the defendant's hypothetical defenses to the warranty claim (specifically, its right to present "clear affirmative proof" that the misrepresentations in question did not go "to the essence of the agreement") could not defeat the predominance finding. Id. at 21-23.
Many thanks to everyone who wrote to alert me to this new decision.
In Birdsong v. Apple, Inc., ___ F.3d ___ (9th Cir. Dec. 30, 2009), the Ninth Circuit held that the district court had correctly granted the defendant's motion to dismiss the plaintiffs' UCL "fraudulent" prong claim (as well as their breach of express and implied warranty claims). The UCL claim was properly dismissed, the court held, due to lack of Prop. 64 standing.
Last Thursday, November 19, 2009, was a busy day for our state appellate courts. Thirteen published opinions (and one modification of a published opinion) were issued on that date. I've been following the opinions for a long time, and that's a huge number for a single day. It probably had something to do with the fact that the preceding day (Wednesday, Nov. 18) was a court closure day. I have a feeling that a lot of our appellate justices and research attorneys (not to mention our trial court judges) aren't exactly taking those days off.
Three of the Nov. 19th opinions, listed below, involve interesting UCL or class action issues. I will have more on these cases after the holiday. Happy Thanksgiving!
On Thursday, November 19, 2009, the Supreme Court finally acted on the last of the Tobacco II "grant and hold" cases, O'Brien v. Camisasca Automotive Mfg., no. S163207. Instead of transferring the case back to the intermediate appellate panel for further proceedings, as in McAdams and Pfizer (Galfano), the Court simply dismissed review. The dismissal order reads:
In light of the decision in In re Tobacco II Cases (2009) 46 Cal.4th 298 and Meyer v. Sprint Spectrum LP (2009) 24 Cal.4th 634, review in the above-entitled matter is dismissed. (Cal. Rules of Court, rule 8.528(b)(1).)
(Hyperlink added.) This means that the earlier Court of Appeal opinion stands and binds the parties, but it remains unpublished. Here is my original blog post on the Court of Appeal opinion, and the opinion itself (Second Appellate District, Division Three).
I'm sure the similarity of issues between O'Brien and Kwikset was not lost on the Supreme Court. Both are "Made in the U.S.A." cases that lower courts dismissed for lack of Prop. 64 standing (although the similarities end there). Perhaps the Court felt that leaving the O'Brien opinion unpublished was the best way to manage the development of the case law in this area. O'Brien, of course, was decided long before review was granted in Kwikset, and I'm not sure there is any procedural way to convert O'Brien into a Kwikset "grant and hold" case, which it could easily have become if it had been handed down later.
Interestingly, both O'Brien and Pfizer/Galfano are Second Appellate District, Division Three cases, and two of the panel Justices (Klein and Kitching) are the same. Justice Croskey will join in re-deciding Pfizer/Galfano in a few weeks, whereas Justice Aldrich was the third panelist in O'Brien.
The Court of Appeal for the Second Appellate District, Division Three, has scheduled oral argument in Pfizer v. Superior Court (Galfano), no. B188106, one of the Tobacco II "grant and hold" cases. The argument will take place on Monday, December 7, 2009 at 9:30 a.m. in Los Angeles. If anyone would like to attend and prepare a report of the oral argument for posting here, I would be glad to hear from you.
I have copies of the parties' supplemental briefs filed pursuant to Rule of Court 8.200(b)(1) as well as the two amicus briefs:
On November 6, 2009, the parties filed replies to the two amicus briefs, but I have not yet received copies of those. CAOC's amicus brief was written by yours truly, with critical assistance from fellow CAOC Board member David Arbogast. Thanks again, David!
Meanwhile, supplemental briefs have also been filed in the other Tobacco II "grant and hold" case, McAdams v. Monier, no. C051841 (Third Appellate District). In that case, however, there is no indication that the Court intends to conduct further oral argument.
Also, the McAdams panel rejected my application to file an amicus brief on behalf of CAOC. The order did not say why, and I honestly cannot fathom the reason. I'd file the same brief all over again because I can't see what was wrong with it. I wish the order had given a reason so that next time I could correct whatever it was that led them to reject the brief. In any event, McAdams is another case to follow closely.
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.
In a recent unpublished opinion, the Court of Appeal (First Appellate District, Division Two) applied Tobacco II's discussion of actual reliance in a non-class common-law fraud case. Whiteley v. R.J. Reynolds Tobacco Co., Nos. A119345, A121027 (nonpub. Oct. 14, 2009).
This is interesting because there has been discussion of whether Tobacco II might make common-law fraud class actions easier to certify. This unpublished decision shows, at least, that Tobacco II is going to be instructive in such cases.
In Cohen, the Court of Appeal (Second Appellate District, Division Eight) affirmed the trial court's denial of class certification of CLRA and UCL claims. In so doing, the Court misinterpreted Tobacco II.
The case alleged that DIRECTV advertised its HD satellite television service "without the intent to provide the customers" with the advertised levels of resolution, and "that DIRECTV switched its HDTV channels to a lower 'resolution,' reducing the quality of the television images it transmits to its subscribers." Slip op. at 3. The trial court denied certification of both the CLRA and the UCL claims because (among other reasons) it determined that actual reliance was an element of both claims. Id. at 7.
As for the UCL claim, the trial court held (in November 2007):
Prior to Prop 64 the standard for fraud was "likely to be deceived." However since Prop 64, amendments require the plaintiff to have suffered injury in fact and lost money or property. A conclusion may be drawn that class members must have actu[a]lly been deceived.
Id. (alteration in original; emphasis added). This, of course, is precisely the opposite of the Supreme Court's holding in Tobacco II. Yet, in Cohen, the Court of Appeal held that the trial court "did not apply an improper criterion in addressing the class certification issue." Slip op. at 16. That holding is, respectfully, wrong.
This is how the Court of Appeal described Tobacco II in Cohen:
... Tobacco II held that, for purposes of standing in context of the class certification issue in a “false advertising” case involving the UCL, the class members need not be assessed for the element of reliance. Or, in other words, class certification may not be defeated on the ground of lack of standing upon a showing that class members did not rely on false advertising. In short, Tobacco II essentially ruled that, for purposes of standing, as long as a single plaintiff is able to establish that he or she relied on a defendant’s false advertising, a multitude of class members will also have standing, regardless of whether any of those class members have in any way relied upon the defendant’s allegedly improper conduct.
Slip op. at 15 (italics in original; bold added).
That is not what Tobacco II held. As you may remember, both the trial court and the intermediate appellate court in Tobacco II had held that, "post Proposition 64, individual issues of exposure to the allegedly deceptive statements and reliance upon them, predominated over class issues." Tobacco II, 46 Cal.4th at 311 (describing lower courts' holding). In Tobacco II, class certification was not denied "on the ground of lack of standing," but rather because common questions would not predominate on the issue of reliance. That is the ruling Tobacco II expressly reversed. Tobacco II goes far beyond standing (as will be discussed in more detail below).
Nor did Tobacco II hold that if the class representative has standing, "a multitude of class members will also have standing." Slip op. at 15. On the contrary, Tobacco II holds that "standing requirements are applicable only to the class representatives, and not all absent class members." 46 Cal.4th at 306 (emphasis added). In other words, the class representative's standing does not confer standing on the unnamed class members; rather, the unnamed class members need not meet the standing requirements at all: "[A]ccepted principles of class action procedure ... treat the issue of standing as referring only to the class representative and not the absent class members.” Id. at 321.
Cohen also held that the UCL does not "authorize an award for injunctive relief and/or restitution on behalf of a consumer who was never exposed in any way to an allegedly wrongful business practice." Slip op. at 14. The Supreme Court held the opposite in Tobacco II:
[Business and Professions Code section 17204], construed in light of the “concern that wrongdoers not retain the benefits of their misconduct” (Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d 442, 452, 153 Cal.Rptr. 28, 591 P.2d 51) has led courts repeatedly and consistently to hold that relief under the UCL is available without individualized proof of deception, reliance and injury. (E.g., Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267, 10 Cal.Rptr.2d 538, 833 P.2d 545; Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 211, 197 Cal.Rptr. 783, 673 P.2d 660.)
Tobacco II, 46 Cal.4th at 321 (emphasis added).
Let me repeat that for emphasis. Under the UCL, "relief" may be ordered "without individualized proof of deception, reliance and injury." Id. (emphasis added).
The reason for this is simple. Actual deception, reliance and injury are not elements of a UCL claim. Id.; see also id. at 312 (UCL "fraudulent" prong claim requires proof only that “members of the public are likely to be deceived"); Morgan v. AT&T Wireless Services, Inc., 177 Cal.App.4th 1235, 1253 (2009) ("[P]re-Proposition 64 caselaw that describes the kinds of conduct outlawed under the UCL is applicable to post-Proposition 64 cases such as the present case. The only difference is that, after Proposition 64, plaintiffs (but not absent class members in a class action) must establish that they meet the Proposition 64 standing requirements." (citing Tobacco II)).
Contrary to the Cohen court's perception, Tobacco II addresses far more than just standing. The Supreme Court held that the standing requirement ("suffered injury in fact and lost money or property as a result of") could not be imposed on unnamed class members because doing so would serve to change these long-established elements of a UCL claim -- something the Court had previously held, in Mervyn's, Prop. 64 did not do:
[T]o hold that the absent class members on whose behalf a private UCL action is prosecuted must show on an individualized basis that they have “lost money or property as a result of the unfair competition” (§ 17204) would conflict with the language in section 17203 authorizing broader relief -- the “may have been acquired” language -- and implicitly overrule a fundamental holding in our previous decisions, including Fletcher, Bank of the West and Committee on Children's Television.
Had this been the intention of the drafters of Proposition 64 -- to limit the availability of class actions under the UCL only to those absent class members who met Proposition 64's standing requirements -- presumably they would have amended section 17203 to reflect this intention. Plainly, they did not.
[It] would undermine the guarantee made by Proposition 64's proponents that the initiative would not undermine the efficacy of the UCL as a means of protecting consumer rights, because requiring all unnamed members of a class action to individually establish standing would effectively eliminate the class action lawsuit as a vehicle for the vindication of such rights.
Tobacco II, 46 Cal.4th at 320, 321.
The Cohen opinion expresses the view that UCL claims are incompatible with class certification principles unless each class member proves reliance and injury:
[W]e find Tobacco II to be irrelevant because the issue of "standing" simply is not the same thing as the issue of "commonality." .... We see no language in Tobacco II which suggests to us that the Supreme Court intended our state's trial court's to dispatch with an examination of commonality when addressing a motion for class certification.
Slip op. at 15-16. Cohen overlooks the fact that Tobacco II necessarily addressed not only standing, but also commonality, because in Tobacco II, the Supreme Court expresssly reinstated an order granting class certification of a UCL "fraudulent" prong claim. The Supreme Court did not direct lower courts to dispense with commonality when analyzing class certification; but what it did do is direct lower courts to assess commonality in light of the actual elements of the claim ("likely to deceive" consumers) rather than non-existent ones (actual reliance and injury).
For a case in which the court employed precisely that approach to commonality, and found the element satisfied, see Plascencia v. Lending 1st Mortgage, ___ F.R.D. ___, 2009 WL 2569732 (N.D. Cal. Aug. 21, 2009) (discussed in this blog post.) Even the Court of Appeal in Kaldenbach (published on Monday) employed that approach.
The Cohen opinion concludes:
In short, ... factual questions associated with [unnamed class members'] relianceon DIRECTV’s alleged false representations was a proper criterion for the court’s consideration when examining “commonality”in the context of the subscribers’ motion for class certification, even after Tobacco II.
Slip op. at 16 (emphasis added). This holding takes us back to pre-Mervyn's and pre-Tobacco II days, when lower courts had (erroneously) held that Prop. 64 changed the UCL's substantive elements by importing a "reliance" requirement. The Supreme Court held in no uncertain terms that Prop. 64 "was not intended to have any effect on absent class members.” Tobacco II, 46 Cal. 4th at 319 (emphasis added). If Cohen stands, the effect will be major and substantive.
As defendants like to point out, the class action statute is a procedural device that is not to be employed to alter the underlying claim's substantive elements. See, e.g., Tobacco II, 46 Cal.4th at 312 (citing City of San Jose v. Superior Court, 12 Cal.3d 447, 462 (1974) ("Class actions are provided only as a means to enforce substantive law.")). The Cohen opinion uses the class action device to impose a "reliance" element that the Supreme Court has (twice) held Prop. 64 did not impose and is not part of the UCL. The opinion should either be depublished or taken up for review.
The Morgan court confired Tobacco II’s holding (and, for that matter, the Mervyn's holding) that Proposition 64 did not alter the UCL’s substantive liability standards, and that pre-Proposition 64 precedents (including those establishing the “likely to deceive” standard for “fraudulent” prong claims) continue to govern:
Thus, pre-Proposition 64 caselaw that describes the kinds of conduct outlawed under the UCL is applicable to post-Proposition 64 cases such as the present case. The only difference is that, after Proposition 64, plaintiffs (but not absent class members in a class action) must establish that they meet the Proposition 64 standing requirements.
…. As noted above, a fraudulent business practice is one that is likely to deceive consumers. A UCL claim based on the fraudulent prong can be based on representations that deceive because they are untrue, but also those which may be accurate on some level, but will nonetheless tend to mislead or deceive .... A perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by failure to disclose other relevant information, is actionable under the UCL.
Morgan, 2009 WL 3019780, *11-*12 (citing Tobacco II, 46 Cal. 4th at 312, 320; Pastoria v. Nationwide Ins., 112 Cal.App.4th 1490 (2003)) (emphasis added; internal quotation marks omitted).
The Court of Appeal discussed the facts necessary to establish a UCL “fraudulent” prong violation in a section entirely separate from its discussion of the facts necessary to prove the class representative’s standing. See id. at *11-*14 (Part B.1 (discussing liability); Part B.2 (discussing standing)).
Like Tobacco and Mervyn's, what Morgan teaches is that the elements of a UCL claim have not changed. For purposes of liability at trial, the question (in a "fraudulent" prong case) is whether the defendant's conduct was "likely to deceive" consumers. This should greatly simplify the class certification analysis in most cases, as it did in Plascencia.
A couple of Court of Appeal cases in which the parties filed supplemental briefs addressing the impact of Tobacco are very close to decision:
Shaw v. Bayer Corp. (In re Baycol Cases I & II), no. B204943 (Second Appellate District, Division Seven). This case stems from an order sustaining a demurrer to class allegations without leave to amend (among other rulings). Supplemental briefs addressing Tobacco were filed on July 6 and August 3, 2009. The case was argued and submitted last Friday, August 28, which means we can expect an opinion within 90 days of that date.
Kaldenbach v. United of Omaha Life Ins. Co., no. G038539 (Fourth Appellate District, Division Three). This case is an appeal from an order denying certification of an entire class. It was argued last October, but submission was subsequently vacated. On June 18, 2009, the parties submitted simultaneous supplemental briefs on Tobacco. The matter was ordered resubmitted on July 8, 2009.
As those who closely follow the appellate decisions know, these two divisions are light years apart in their general approach to class certification and the UCL, so it will be quite interesting to see what happens in these cases.
In addition, the two Tobacco "grant and hold" cases are proceeding apace. In McAdams v. Monier, no. C051841, and Pfizer v. Superior Court (Galfano), no. B188106, the parties' supplemental briefs pursuant to Rule of Court 8.200(b)(1) will be due today. Neither docket indicates that an extension of time was sought or obtained for those briefs.
UPDATE: The Pfizer docket now contains this entry dated yesterday:
Letter sent to counsel re:
On August 19, 2009, the Supreme Court remanded the matter to this court with directions to vacate the decision and to reconsider in light of In Re Tabacco II [sic]. Petitioner shall have until September 18, 2009 to file a supplemental opening brief. RPI shall have until October 5, 2009 to file a supplemental responding brief. Thereafter, this court will make a decision as to whether to conduct another oral argument in this matter. If so, the matter would tentatively be set for this court's November calendar. (K)
This case illustrates an important principle from Tobacco. There, the Supreme Court held (among other things) that the "as a result of" standing language "imposes an actual reliance requirement" on the individual named class representative in a UCL "fraudulent" prong case. In re Tobacco II Cases, 46 Cal.4th 298, 326 (2009). The Court was careful to clarify, however, that this holding was limited to claims "involving false advertising and misrepresentations to consumers," and that "[t]here are doubtless many types of unfair business practices in which the concept of reliance, as discussed here, has no application." Id. at 326 n.17.
Hiestand is one of those cases. The Hiestand complaint alleges (among other things) a UCL "unlawful" prong claim predicated on violation of Vehicle Code section 22651, which reads, in part:
A peace officer ... of a city, county, or jurisdiction of a state agency in which a vehicle is located, may remove a vehicle located within the territorial limits in which the officer ... may act, under the following circumstances:
(n) Whenever a vehicle is parked or left standing where local authorities, by resolution or ordinance, have prohibited parking and have authorized the removal of vehicles. A vehicle shall not be removed unless signs are posted giving notice of the removal.
(Emphasis added.) Because the defendants allegedly removed Mr. Hiestand's vehicle even though no "signs [were] posted giving notice of the removal," in violation of section 22651, and because Mr. Hiestand incurred and paid towing and storage costs, the standing requirement has been satisfied. Mr. Hiestand lost money or property "as a result of" the defendants' alleged violation of that law. He therefore has standing to bring a UCL class action in which neither he nor the unnamed class members will have to prove (at trial) actual "deception, reliance [or] injury." Tobacco, 46 Cal.4th at 320 (citing Bank of the West v. Superior Court, 2 Cal.4th 1254, 1267 (1992); Committee on Children’s Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 211 (1987)).
As this case illustrates, it will be important to consider the class representative's standing separate and apart from what must be proven at trial for purposes of liability for a UCL violation. Tobacco makes clear that, in "fraudulent" prong cases, the "likely to deceive" liability standard is unchanged. Id. Moreover, the standard for recovering restitution ("may have been acquired") is also unchanged and is "patently less stringent than the standing requirement." Id. The fact that the class representative must establish individual standing therefore should have no impact on the class certification analysis. In other words, the class certification analysis should be the same now as it was before Prop. 64.
It will be interesting to see how this plays out in the Hiestand case as well as in other cases. If you are litigating any of these issues at the trial court level, please keep me posted of developments. I haven't received copies of any relevant rulings in any state court cases yet.
In Kohen v. Pacific Investment Management Co., ___ F.3d ___, 2009 WL 1919013 (7th Cir. Jul. 7, 2009), Judge Posner had this to say about whether, under federal law, unnamed class members' standing must be proven at the class certification stage:
PIMCO argues that before certifying a class the district judge was required to determine which class members had suffered damages. But putting the cart before the horse in that way would vitiate the economies of class action procedure; in effect the trial would precede the certification. It is true that injury is a prerequisite to standing. But as long as one member of a certified class has a plausible claim to have suffered damages, the requirement of standing is satisfied.United States Parole Commission v. Geraghty, 445 U.S. 388, 404, 100 S.Ct. 1202, 63 L.Ed.2d 479 (1980); Wiesmueller v. Kosobucki, 513 F.3d 784, 785-86 (7th Cir.2008). This is true even if the named plaintiff (the class representative) lacks standing, provided that he can be replaced by a class member who has standing. “The named plaintiff who no longer has a stake may not be a suitable class representative, but that is not a matter of jurisdiction and would not disqualify him from continuing as class representative until a more suitable member of the class was found to replace him.” Id. at 786.
Before a class is certified, it is true, the named plaintiff must have standing, because at that stage no one else has a legally protected interest in maintaining the suit. Id.; Sosna v. Iowa, 419 U.S. 393, 402, 95 S.Ct. 553, 42 L.Ed.2d 532 (1975); Walters v. Edgar, 163 F.3d 430, 432-33 (7th Cir.1998); Murray v. Auslander, 244 F.3d 807, 810 (11th Cir.2001). And while ordinarily an unchallenged allegation of standing suffices, a colorable challenge requires the plaintiff to meet it rather than stand mute. Lujan v. Defenders of Wildlife, 504 U.S. 555, 561, 112 S.Ct. 2130, 119 L.Ed.2d 351 (1992). PIMCO tried to show in the district court that two of the named plaintiffs could not have been injured by the alleged corner. We need not decide whether it succeeded in doing so, because even if it did, that left one named plaintiff with standing, and one is all that is necessary.
Slip op. at 7-8, 2009 WL 1919013 at *3-*4 (bold added).
This issue, of course, may come up in some UCL cases pending in federal court as a result of CAFA. Some defendants have argued that Tobacco's clear holding that only the named class representative must meet Prop. 64's standing requirement (which, by its plain language, applies only to "the claimant"), would not govern UCL cases in federal court, because Article III standing rules would require more. At least one federal judge, however, had no problem applying this part of Tobacco in a federal case, and the Seventh Circuit opinion also supports the conclusion that only the named plaintiff need prove standing in class actions generally, whether in federal court under Article III or in California state court.
Many thanks to Scott Leviant for bringing this opinion to my attention.
In Baghdasaarian v. Amazon.com, Inc., ___ F.R.D. ___, 2009 WL 2263581 (C.D. Cal. Jul. 7, 2009), the court granted class certification of a UCL "fraudulent" prong claim, and followed Tobacco's holding that only the named class representative must satisfy the standing requirement:
Proposition 64 did not determine whether a plaintiff who has standing under the UCL must also show reliance by each class member. The California Supreme Court recently addressed this issue in the Tobacco II Cases. The California Supreme Court concluded that “standing requirements are applicable only to the class representatives, and not all absent class members.” In re Tobacco II Cases, 46 Cal.4th 298, 206 (Cal.2009). Thus, Plaintiff does not need to show affirmative proof that each individual class member relied on Defendant's deceptive conduct.
Id. at *3. The court's discussion of the individual plaintiff's standing is also interesting.
In December 2008, the Court of Appeal (Fourth Appellate District, Division One) handed down its original opinion in Troyk v. Farmers Group, Inc., 168 Cal.App.4th 1337 (2008) (see this blog post). Then, in January 2009, the court granted rehearing pursuant to the parties' joint request "to facilitate settlement," and the opinion became uncitable (see this blog post).
Last week, the court reissued what appears, on quick review, to be an identical opinion, Troyk v. Farmers Group, Inc., ___ Cal.App.4th ___ (Mar. 10, 2009). Simultaneously, the court issued the following order (according to the docket):
The Notice of Settlement and Stipulation Regarding Dismissal of Appeal have been received and reviewed by the Court. The Stipulation for Dismissal of Appeal is denied. The Court exercises its discretion to proceed with its opinion because of the broad public interest in the matter and the likelihood of the issues to recur. "[A] reviewing court has inherent discretion to resolve issues of continuing public interest even though these issues may have become moot in the particular case before it." (DuBarry Internat., Inc. v. Southwest Forest Industries, Inc. (1991) 231 Cal.App.3d 552, 556, fn. 2.)
I will try to write up more thoughts on the newly-issued Troyk opinion in a later post.
It is unlawful for any person, firm, corporation or association to sell or offer for sale in this State any merchandise on which merchandise or on its container there appears the words "Made in U.S.A." "Made in America," "U.S.A.," or similar words when the merchandise or any article, unit, or part thereof, has been entirely or substantially made, manufactured, or produced outside of the United States.
Last week, the Court of Appeal (Fourth Appellate District, Division Three) picked up its blue pencil and crossed this provision out of the FAL. Its opinion in Kwikset Corp. v. Superior Court (Benson), ___ Cal.App.4th ___ (Feb. 25, 2009), reads Prop. 64's standing requirement so narrowly that it is unlikely consumers will ever be able to assert a violation of this provision again. Companies may as well start mislabeling all of their products as "Made in the U.S.A.," because unless the AG's office steps in, there is nothing anyone can do to stop them.
In Kwikset, plaintiffs alleged that they paid money for defendant's products in reliance on (false) representations that the products were "Made in U.S.A." Plaintiffs alleged that they read and relied on that misrepresentation in deciding to make the purchase. They alleged that they would not have bought the products at all if not for the "Made in U.S.A." misrepresentation. They alleged that they spent good money on products they did not want, solely because of this misrepresentation. Slip op. at 5-6.
Was this enough for the Court of Appeal? No. Those allegations established that the plaintiffs suffered "injury in fact," the Court determined, but not that they "lost money or property" as a result. Id. at 8-13. Why not? Because the plaintiffs received functioning products in exchange for their money:
Absent a showing of some complaint about the cost, quality, or operation of the mislabeled [products] they purchased from petitioners, real parties received the benefit of their bargain and are not entitled to any restitution.
Id. at 11. The benefit of the bargain? The bargain was for a product Made in the U.S.A. The plaintiffs were induced to make a purchase and did not get what they paid for, not by any stretch. That is why misrepresentations about geographic origin are prohibited in the first place.
The Court of Appeal cited several other recent cases in which courts determined that plaintiffs got the benefit of the bargain despite the defendants' misrepresentations about the products. Id. at 5, 12 (citing , e.g., Hall v. Time, Inc., 158 Cal.App.4th 847 (2008); Animal Legal Defense Fund v. Mendes, 160 Cal.App.4th 136 (2008)). But those cases did not allege violations of specific, defined statutory prohibitions, such as those proscribing misrepresentations of geographic origin. In those cases, the courts could, at least arguably, find that the plaintiffs lacked standing without interpreting Prop.64 as repealing entire substantive provisions of the False Advertising Law. The effect of Kwikset is to substantively amend the FAL, contrary to Mervyn's.
The Kwikset plaintiffs offered to amend their complaint to allege that "there were other alternative ... products available ..., many of which were lower priced" than defendants' mislabeled ones; and that the value of defendants' mislabeled products "was less than what [they] paid" for them and less than "the value of the [products] as represented." Id. at 14. In other words, plaintiffs were prepared to amend their complaint to allege that by misrepresenting their products as "Made in U.S.A.," defendants were able to charge more for them than if truthfully labeled as foreign-made. See id.
Instead of remanding for the trial court to consider permitting this amendment in the first instance (as the Supreme Court did in Branick), the Court of Appeal decided for itself to refuse to permit amendment. The Court observed that plaintiffs "fail to provide any citation to the record or present any documentation to support the assertion there is evidence in the record supporting these proposed amendments." Id. The Court also focused in on the original plaintiff's deposition testimony that he had been reimbursed for his purchases (id.), without considering the fact that three new plaintiffs had joined in the action, and that they might not have been reimbursed (id. at 5). The Court issued a writ of mandate directing the trial court to sustain the defendants' demurrer to the complaint without leave to amend and dismiss the case. Id. at 15.
Since when must a plaintiff put "evidence in the record" to obtain leave to amend a complaint? A demurrer is not an evidentiary hearing, and plaintiffs are supposed to be given leave to amend if there is any reasonable possibility that they can cure the defect in pleading. Here, at least, they should have been given a chance to try.
Eventually, the Supreme Court is going to need to decide whether Prop. 64's standing langauge was intended to "blue-pencil" substantive provisions of the False Advertising Law by making them, as a practical matter, unenforceable by private litigants. This case may or may not be the Supreme Court's vehicle. Meanwhile, if you see something labeled "Made in the U.S.A.," there's no longer any reason to trust it in California.
On January 8, 2009, the Court of Appeal (Fourth Appellate District, Division One) granted rehearing after the parties filed a stipulation "for the court to grant rehearing on own motion to facilitate settlement." Troyk v. Farmers Group, Inc., no. D049983. Under Rule of Court 8.1105(e)(1), the opinion, previously published at 168 Cal.App.4th 1337 (2008), is no longer citable as precedent.
Here is my original, brief post on Troyk. I was planning to write another post with more thoughts on the decision, but now there seems to be little need. I have seen no news reports about a settlement in this case.
A new decision handed down yesterday, Troyk v. Farmers Group, Inc., ___ Cal.App.4th ___ (Dec. 9, 2008) (Fourth Appellate District, Division One), addresses Prop. 64 standing in some detail (slip op. at 48-61). I will post more on the decision later.
In Peterson v. Cellco Partnership, ___ Cal.App.4th ___ (Jun. 26, 2008; pub. ord. Jul. 21, 2008), the Court of Appeal (Fourth Appellate District, Division Three) held that the trial court properly sustained the defendant's demurrer without leave to amend. It determined that the plaintiff had not alleged sufficient facts to establish that he suffered "injury in fact" within the meaning of the UCL's standing provisions.
The July/August 2008 issue of CAOC's Forum magazine just arrived in the mail. It has my latest article, "UCL Standing to Seek Injunctive Relief: Is a Restitutionary Loss Required?" The article addresses two opposing federal decisions on that topic, Walker v. USAA Casualty Insurance Co. 474 F.Supp.2d 1168 (E.D. Cal. Feb. 12, 2007) and G&C Auto Body Inc. v. Geico General Insurance Co., 2007 WL 4350907 (N.D. Cal. Dec. 12, 2007). Focusing on the language of the UCL and relevant California decisional law, the article explains why a loss amounting to "damages" is sufficient to confer UCL standing, regardless of whether the loss also constitutes recoverable "restitution."
The article will soon be available at CAOC's website to CAOC members only. Other plaintiff-side attorneys, government lawyers, judges, research attorneys, etc., should email me at firstname.lastname@example.org if you would like a copy of the article.
In Medina v. Safe-Guard Products, Int’l, Inc., ___ Cal.App.4th ___ (Jun. 19, 2008) (Fourth Appellate District, Division Three), the Court of Appeal held that an insurance contract issued by an unlicensed insurer is nonetheless enforceable. The Court had some harsh language for the plaintiff, who attempted to pursue a UCL "unlawful" prong claim based on the argument that the defendant's violation of the Insurance Code's licensure requirement rendered the insurance contract entirely void and therefore valueless:
The irony is that Medina’s class action is predicated on the idea that he bought an absolutely void contract and cannot enforce it (hence he is out the money he paid for the contract, having received nothing for it). That raises the problem of just exactly what are the consequences to a consumer who buys an insurance contract from an unlicensed, out of state insurer. Is the consumer really without insurance? We are unaware of any California authority addressing the question, hence we publish our answer to it in this opinion. As readers might readily intuit, California law most certainly does not leave consumers in the lurch when they inadvertently purchase an insurance policy from an unlicensed insurer.
Slip op. at 2 (footnote omitted); see also id. at 7 ("[T]he case is a little more complicated ..., because it is Medina who, in this litigation, actually does not want the contract to be enforceable by him. He'd rather be a class action plaintiff whose case depends on the idea that the insurance contract is not enforceable." (Emphasis in original.)).
The opinion goes on:
[H]olding an insurance contract void because the insurer was not licensed is about the worst possible remedy for the illegality of the insurer’s unlicensed status. To do so would be incredibly harmful to consumers who unknowingly purchased insurance from unlicensed insurers, and who, all of a sudden, would find themselves stuck with a loss which they thought they validly insured against. (See McIntosh v. Mills, supra, 121 Cal.App.4th at p. 347 [noting “the harsh results that might be visited on innocent parties to a contract when their agreement is voided for illegality”].)
Id. at 5. Then, relying entirely on Hall v. Time Inc., 158 Cal.App.4th 847 (2008), the court concluded that the plaintiff had suffered no injury in fact and therefore lacked standing under Proposition 64:
Medina has not alleged that he didn’t want wheel and tire coverage in the first place, or that he was given unsatisfactory service or has had a claim denied, or that he paid more for the coverage than what it was worth because of the unlicensed status of Safe-Guard. He hasn’t suffered any loss because of Safe-Guard’s unlicensed status.
Id. at 9 (emphasis in original). The opinion's final footnote is interesting:
In his supplemental briefing, Medina also suggests that Hall is distinguishable because in that case the plaintiff obviously “intended the entire exercise as the predicate for a UCL lawsuit” while here Medina had no such intent. However, there is no statutory basis, at least in terms of the Proposition 64 amendment, to differentiate UCL actions based on the subjective motivation of the plaintiff; the differentiation is between instances where there is actual loss of property versus no such loss.
Id. at 10 n.10 (emphasis in original). It is certainly true that there is no statutory basis to differentiate UCL cases based on the plaintiff's subjective motivations, but some courts seem to do it nonetheless. The tone of this very opinion suggests, correctly or not, that the court does in fact have a problem with the plaintiff's motivation for bringing the case. Other examples include O'Brien v. Camisasca Automotive Manufacturing, Inc., 161 Cal.App.4th 388 (2008) (review granted, no. S163207) and Buckland v. Threshold Enterprises, Ltd., 155 Cal.App.4th 798 (2007). Given the tone of these opinions, it is not unreasonable to wonder whether the outcomes may have been impacted. I'm not suggesting actual impartiality, but tone can sometimes create an appearance of it.
Petition for Review GRANTED. Further action in this matter is deferred pending consideration and disposition of related issues in In re Tobacco II Cases, S147345, and Meyer v. Sprint Spectrum, LP, S153846 (see Cal. Rules of Court, rule 8.512(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 8.520(a) is deferred pending further order of the court.
In O'Brien, the Court of Appeal (Fourth Second Appellate District, Division Three) affirmed summary judgment in the defendant's favor, holding that the plaintiff lacked standing to assert UCL or CLRA claims because he did not suffer injury in fact as a result of the defendant's alleged misconduct. The suit challenged the defendant's purported mislabeling of its products as "Made in the U.S.A." O'Brien v. Camisasca Automotive Manufacturing, Inc., 161 Cal.App.4th 388 (2008). My original blog post on O'Brien is at this link.
The Court of Appeal's opinion in Cappa v. CrossTest, Inc. (First Appellate District, Division Four, nos. A113327, A114548) (Mar. 28, 2008) contains this discussion of the UCL:
Cappa alleged in the second cause of action for unfair business practices (Bus. & Prof. Code, § 17200 et seq.) that defendants had engaged in unfair and unlawful practices, including misclassifying Cappa and other employees as independent contractors; failing to pay wages to Cappa and other employees and provide them with wage statements; and misrepresenting the employment status of Cappa and other employees, thus reaping benefits and illegal profits at the expense of Cappa and his fellow employees. Cappa sought restitution of unpaid wages owed to him and his fellow employees, as well as disgorgement of profits defendants had enjoyed as a result of their unfair and unlawful practices.
Defendants acknowledge that this cause of action “depends entirely upon the viability of [the] first cause of action for wage violations.” As our Supreme Court has stated, “any business act or practice that violates the Labor Code through failure to pay wages is, by definition ([Bus. & Prof. Code, ]§ 17200), an unfair business practice.” (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 178.) We have already concluded the trial court should not have granted nonsuit on Cappa’s cause of action for violation of wage laws.
CrossTest points out that this action is subject to Proposition 64, under which a private person has standing to sue only if he or she “has suffered injury in fact and has lost money or property as a result of such unfair competition.” (Bus. & Prof. Code, § 17204, as amended by Prop. 64; § 3, see also Bus. & Prof. Code, § 17203, as amended by Prop. 64, § 2; see also Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 227; Aron v. U-Haul Co. of California (2006) 143 Cal.App.4th 796, 802-803.) Here, Cappa has alleged that he suffered injury in fact and lost money in the form of unpaid wages. In the circumstances, we conclude the trial court erred in granting nonsuit on the cause of action for unfair business practices. [Footnote 10]
[Footnote 10] In reaching this conclusion on the question of whether nonsuit was appropriate on the cause of action for unfair business practices, we express no opinion as to whether Cappa complied with the procedural requirements for stating a claim on behalf of alleged employees other than himself. (Bus. & Prof. Code, §§ 17203, 17204; Code Civ. Proc, § 382.)
Slip op. at 11-12. It seems to me that on remand, and before re-trial, the plaintiff could seek leave to amend his complaint to add class allegations if he wanted to go the class action route (and assuming the liability evidence is common to the other employees, as it seems to be from the Court of Appeal's summary of it).