The ruling could prompt more retailers to file price-fixing suits against manufacturers of all kinds of products, said Craig Corbitt, a partner in the San Francisco office of Zelle Hofmann Voelbel & Mason. Corbitt wrote a friend-of-the-court brief on behalf of Pharmacists Planning Services Inc. in support of the plaintiffs.
"This now allows intermediaries such as the pharmacies and other retailers who buy from manufacturers and resell to the public to pursue their own claims," he said. "There should be an enhancement of antitrust enforcement in California."
The ruling will help consumers pursue class action lawsuits brought under the Unfair Competition Law (UCL), said Kimberly Kralowec of the Kralowec Law Group in San Francisco, who had written a friend-of-the-court brief on behalf of the Consumer Attorneys of California.
The court held that plaintiffs can seek an injunction under the UCL even if they aren't necessarily entitled to restitution, which was in question since the passage of Proposition 64, a 2004 ballot initiative that limited private lawsuits against companies.
"We argued in our amicus brief that a right to get an injunction shouldn't be tied in that way to the right to recover restitution," Kralowec said.
To give credit where credit is due, Pamela Parker of Robbins Geller Rudman & Dowd really should have been mentioned as the person who wrote CAOC's brief. While my name also appeared on the brief, the majority of the work was hers and she did a great job on it.
Congratulations to Sharon Arkin, Tom Haklar, Kevin Calcagnie and Mark Robinson on being named 2010 California Lawyer Attorneys of the Year. They are the team who "pulled out a ground-breaking victory in May at the California Supreme Court" in Tobacco II.
The February 2010 issue of California Lawyer has this article on Kwikset Corp. v. Superior Court (Benson), which is now pending before the California Supreme Court. The article is by Mark P. Pifko of Arnold & Porter in Los Angeles.
More than two years have passed since the California Supreme Court decided Gentry v. Superior Court, 42 Cal.4th 443 (2007), which ostensibly opened the door to arbitrations in employment class action[s]. While proponents of class action arbitration rejoiced when the Gentry opinion was issued, the floodgates of class action arbitrations never opened. In all likelihood, that is because questions remain regarding the procedures, scope and implications of class action arbitrations.
Tuesday's Daily Journal had a "perspective" article, "When Courts Disagree," by H. Scott Leviant, author of The Complex Litigator. The full text is available there. An excerpt:
The conclusions of the Kaldenbach and Cohen Courts that Tobacco II, a decision in which the California Supreme Court reversed [a] decertification order, raise two important questions. First, is there any evidence that lower courts are disregarding the legal holdings and policy mandates of the California Supreme Court in significant numbers, particularly in the class action context? Second, if there is such an occurrence, why are lower courts disregarding the legal holdings and policy mandates of the California Supreme Court?
Today's Daily Journal has an article, "The Clash Over Class Actions" (subscription) about class certification issues raised in various cases pending in the Ninth Circuit and federal district courts within the Ninth Circuit.
While there are a few interesting cases pending in the Ninth Circuit, such as the Dukes case, I think the article is a bit overblown.
The October 2009 issue of California Lawyer has an interesting article on Sullivan v. Oracle Corp., 557 F.3d 979 (9th Cir. 2009), in which the California Supreme Court has accepted certified questions relating to the UCL. See Sullivan v. Oracle, no. S170577 . An excerpt from the article (by Pamela A. MacLean):
When both sides filed petitions for rehearing, however, the Ninth Circuit backpedaled. In February it withdrew its opinion in Sullivan II [Sullivan v. Oracle Corp., 547 F.3d 1177 (9th Cir. 2008)] and certified three questions to the California Supreme Court. First, does state overtime law apply to out-of-state residents who work for a California company inside the state? Second, if state law does apply, can plaintiffs make a section 17200 claim? And third, if a California employer sets policies that violate the FLSA for its out-of-state workers, does a section 17200 claim apply to the federal violation for those employees no matter where they work? (See Sullivan v. Oracle Corp., 557 F.3d 979 (9th Cir. 2009).)
Lawyers on both sides of the issue say the most significant question is whether section 17200 applies to employees hired by California companies but who work in other states. If the answer is yes, "There could even suddenly be a private right of action under the [federal] prevailing wage statute," says Michael J. Walsh, an employment law specialist with Walsh & Walsh in Irvine who represents employees. Currently, he adds, only the Department of Labor can sue to recover under the prevailing wage provisions of the Davis-Bacon Act, which sets minimum wages on federal projects.
Michael Walsh, of course, is the author of the top California wage and hour blog, Wage Law.
This post is slightly off-topic, but the opinion is remarkable and all litigators should read it. In Nazir v. United Airlines, Inc., ___ Cal.App.4th ___ (Oct. 9, 2009), the Court of Appeal (First Appellate District, Division Two) reversed an order granting "what may well be the most oppressive [summary judgment] motion ever presented to a superior court," involving "a record the likes of which we have never seen." Slip op. at 1, 3.
It isn't a good sign when an appeal court refers to a lower court's "ruling" in quote marks as if it's not worthy of the term.
But that's exactly what San Francisco's First District Court of Appeal did — three times — Friday in reversing a "ruling" by San Mateo County Superior Court Judge Marie Weiner in an overpapered case featuring 5,415 pages of briefs.
It's true the panel critized the judge's "ruling," but its criticism of the defendant's briefing — which noted major procedural and substantive defects — was much harsher.
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.
Yesterday, the Supreme Court denied review and depublication in the Troyk case (docket). Justices Baxter, Chin and Corrigan voted to grant review. An article (subscription) by Mike McKee in yesterday's Recorder discussed this case in more detail.
In an article in this morning's Recorder, Mike McKee writes: "Big Tobacco and other major businesses took a hit Monday when the California Supreme Court ruled that class actions over alleged fraud can go forward, even if it's impossible to tell whether every plaintiff was harmed by deceptive ads."
Consumer class-action lawsuits are alive and well in California after a 4-3 decision Monday from the state Supreme Court that limited the reach of a 2005 voter initiative targeting frivolous lawsuits.
The ruling was a big win for plaintiff's attorneys, who feared the court would make it nearly impossible for them to use the state's unfair competition law to hold businesses responsible for false advertising claims.
The California Supreme Court decided 4-3 today that consumers can file class-action lawsuits against the tobacco industry and other businesses under a law voters limited in 2004, reversing a trend in the lower courts.
The decision, written by Justice Carlos R. Moreno, revived a class-action lawsuit against the tobacco industry that lower courts dismissed. ....
The ruling was the state high court’s most significant interpretation of Proposition 64, the 2004 initiative that limited suits under a major consumer law to people who claimed they had lost money or property as a result of a company’s wrongdoing.
By interpreting this so-called “standing” requirement flexibly, the court cleared the way for consumer class actions that many lower courts have been throwing out.
The Daily Journal has an article this morning on yesterday's argument in Miller v. Bank of America. The article begins:
While hearing a giant class action lawsuit against Bank of America Corp. over how it charges bank fees, several California Supreme Court justices suggested Tuesday that upholding a $1 billion dollar verdict against the bank could do more harm than good to the elderly and disabled customers bringing the suit.
Today's Recorderreports that yesterday, the EEOC filed an amicus brief supporting class certification in Dukes v. Wal-Mart. The case is still scheduled for argument before the Ninth Circuit en banc panel next Tuesday, March 24.
This article from Wednesday's Recorder provides an example of a federal case in which the court granted a defense motion to preemptively deny class certification.
In Picus v. Wal-Mart Stores, Inc., No. 2:07-CV-00682 (order filed 03/16/09), a district judge in Nevada construed the Nevada Deceptive Trade Practices Act ("NDTPA"), and in denying certification, distinguished Wiener v. Dannon Co., ___ F.R.D. ___, 2009 WL 383650 (C.D. Cal. Jan. 30, 2009) (discussed in this blog post), in which a district judge in California granted class certification of UCL and CLRA claims based on alleged misrepresentations about the defendants' products. The Nevada judge concluded that the Nevada Supreme Court would not adopt substantive elements of California law (specifically, presumed reliance based on materiality of the misrepresentation or nondisclosure) when construing the NDTPA. Slip op. at 11-12.
The opinion also asserts that California law "require[s] individual proof of reliance and causation." Id. at 13. That's not correct. Even if proof of reliance and/or causation is required under the UCL or CLRA, that proof is not necessarily, categorically, individualized, as the court seemed to conclude. The opinion itself cites California case law (namely, the Supreme Court's decision in Vasquez) holding that reliance can sometimes be presumed on a classwide basis, even in cases involving common-law fraud.
It's not clear why this decision warranted such extraordinary coverage in the Recorder.
This morning's Daily Journal has an interesting article on the oral arguments this week in Tobacco and Fairbanks. The article tells us why Chief Justice George will not hear Tobacco:
And while Chief Justice Ronald M. George is usually the swing vote in such close cases and a fair indicator of which way the decision will turn, he'll be sitting out Tuesday's oral argument and the decision because one of the defense firms in the case, Loeb & Loeb in Los Angeles, handles his estate planning.
His replacement, Justice Eileen C. Moore of the 4th District Court of Appeal, graduated from the conservative Pepperdine University School of Law and was honored a few years back by the Consumer Attorneys Association of Los Angeles.
The article also mentions the Supreme Court's opinion in Meyer and the recently-filed rehearing petition.