The UCL Practitioner

Still more Mervyn's amicus briefs

Thanks to my lovely readers, I have three more Mervyn's amicus briefs to share:

• Amici Curiae Brief of California Chamber of Commerce et al. (submitted 09/15/05)
  
• Amici Curiae Brief of Consumer Attorneys of California, Janice Duran and Julia Ramos (submitted 09/22/05)
  
• Amici Curiae Brief of Pacific Legal Foundation and Central California Citizens Against Lawsuit Abuse (submitted 09/22/05)
  

These have all been added to my list of Prop. 64 appellate briefs.

"Court Says Prop 64 Wipes Out Visa Case"

This morning's Recorder has the story (subscription required). I remember the underlying Statement of Decision by Judge Sabraw was a significant one, holding that Visa failed to adequately disclose its currency conversion fees. I was even a class member. I'm sure an enormous amount of work went into the case on both sides, and it will be interesting to see what happens on remand. At least the opinion leaves open the possibility of amending to substitute an affected plaintiff.

New Prop. 64 retroactivity decision: Schwartz v. Visa Int'l Service Assn.

Yesterday, the Court of Appeal (First Appellate District, Division One) issued another Prop. 64 retroactivity opinion, Schwartz v. Visa Int'l Service Assn., ___ Cal.App.4th ___ (Sept. 28, 2005). So now, in the First District, we have the Mervyn's case in Division Four (published but review granted), Wise v. PG&E in Division Five (Prop. 64 holding unpublished), and now Schwartz in Division Two (published). Schwartz holds that Prop. 64 applies to pending cases. The decision has been added to my list of Prop. 64 appellate opinions (which has been updated and moved over to the new site).

Recent federal order on the UCL post-Prop. 64: Aureflam v. Pho Hoa Phat

On September 16, 2005, an interesting order was issued in Aureflam Corp. v. Pho Hoa Phat I, Inc., case no. 5:05-cv-00746-RS (N.D. Cal. Sept. 16, 2005). It addresses a number of questions of first impression relating to the interpretation of the UCL as amended by Prop. 64.

The case is a dispute between two owners of Vietnamese restaurant chains. The plaintiff's original suit alleged trademark infringement and unfair business practices under the UCL. The defendant counter-claimed, seeking cancellation of the trademark registration, damages for fraud on the patent office, and injunctive relief under the UCL. The district court (Magistrate Judge Seeborg) granted the plaintiff's motion to dismiss the UCL counterclaim, holding that the defendant had neither alleged "actual injury" nor satisfied the requirements of Code of Civil Procedure section 382. (The case was filed in 2005, after Prop. 64's efffective date, so retroactivity was not an issue.)

The only "actual damages" the defendant claimed were "the attorneys' fees incurred in responding to the principal claim filed by [the plaintiff]." Slip op. at 5. That was held to be insufficient:

The Court has not located, nor did [the defendant] cite, any authority which supports the proposition that attorneys' fees incurred in this action may constitute an actual injury for purposes of a Section 17200 counterclaim. .... Although it is perhaps conceivable that a definition of "actual damages" may emanate from the [California] Supreme Court ... that would include attorneys' fees, there is no current authority which provides that such fees constitute an actual injury for the purpose of Section 17200.

Id. That is an understatement, given that there is essentially no authority at all about what "injury in fact" means. But what's odd about it is the implicit assumption that a UCL claimant seeking injunctive relief only would have to establish an actual injury. That assumption makes little sense, even given the recent amendments to the UCL. One of the main functions of injunctive relief is to stop a threatened injury before it occurs, not after someone has been harmed. Moreover, as the Supreme Court recognized in California v. Altus Finance, S.A., ___ Cal.4th ___ (Aug. 17, 2005), a UCL claim for injunctive relief can be crafted so as to rectify individual wrongs, rather than widespread public ones.

Another interesting thing about this order is its assumption that California rules of class action procedure would apply to a UCL claim filed in federal court:

More Mervyn's amicus briefs

Many thanks to the readers who forwarded copies of these additional amicus briefs in Mervyn's:

• Amicus Curiae Brief of AARP (leave to file granted 08/31/05)
• Amici Curiae Brief of Express Scripts, Inc., National Prescription Administrators, Inc., Aetna Health of California, Inc. and Aetna Life Ins. Co. (submitted 09/22/05)

If you have any others, please send them along.

Amicus briefs in Mervyn's

It seems that last week was the deadline to file amicus curiae briefs in the Mervyn's case. I've received two so far:

• Amici Curiae Brief of Center for Biological Diversity, Environmental Protection Information Center, and Electronic Frontier Foundation (submitted 09/21/05)
• Amicus Curiae Brief of Civil Justice Association of California (submitted 09/23/05)

According to the docket, a total of thirteen amicus briefs have been submitted. If you have a copy of any of them, please send it to me and I'll put it up. Meanwhile, these two have been added to my list of Prop. 64 appellate briefs.

Second District, Division Eight reaffirms its views on Prop. 64 retroactivity in unpublished opinion

In Turner v. Aon Risk Services, Inc., no. B174111 (Sept. 6, 2005), the Court of Appeal (Second Appellate District, Division Eight) reaffirmed its holding in Consumer Advocacy Group v. Kintetsu Enters, Inc., 129 Cal.App.4th 540 (2005) that Prop. 64 does not apply to pending cases:

The initial question before us is whether applying Proposition 64 to pending cases would violate the established rule against retrospective application of a new statute. Respondents contend that this case should be dismissed because Proposition 64 applies to eliminate appellant’s standing to pursue the present claim. Appellant asserts he has standing because applying the Proposition would violate the well-established principle against retroactive application of new legislation. We agree with appellant. We recently held in Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America that the application of Proposition 64 to pending cases is a retroactive or retrospective application of the law. (Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America (2005) 129 Cal.App.4th 540, 569.) Therefore, we find that Proposition 64 does not apply to this case.

Slip op. at 3. What's interesting is that the unpublished Turner opinion was issued by a slightly different panel of justices. Justice Cooper authored Kintetsu, and was joined by Justices Boland and Johnson. Justice Flier authored Turner, and was joined by Justices Cooper and Boland. So we have a quorum of four justices in the Second District who believe that Prop. 64 may not be applied retroactively. Kintetsu remains the only citable published opinion that so holds.

Welcome!

Welcome to The UCL Practitioner's new home! I will be gradually copying all of my old archives from 17200blog.blogspot.com to this site. I've already copied all of my posts for September. Eventually this site will contain everything from the former site, and more. I will continue to host large pdf files with orders, briefs, etc. at my other site, www.17200blog.com (which is hosted by my long-suffering friend Gary).

In just a few short weeks it will be two years since I started the blog, so I think a new, clean design and a new service provider (Typepad) is a good way to celebrate. As always, thanks for reading!

Supreme Court denies review in McCann v. Lucky Money

Today, the Supreme Court denied review in McCann v. Lucky Money, Inc., no. S134874. As I reported on September 9, the Supreme Court had previously given itself an extension of time to decide whether to grant or deny review, leading to speculation that review might be granted even though the Court of Appeal's discussion of Prop. 64 retroactivity was unpublished.

New UCL "unlawful" prong decision: CPF Agency Corp. v. R&S Towing

In CPF Agency Corp. v. R&S Towing Service, ___ Cal.App.4th ___ (Sept. 16, 2005), the plaintiff's UCL claim was predicated on the defendant's alleged violation of Vehicle Code section 22658, subd. (i)(2). The Court of Appeal reversed the trial court's order granting the defendant's motion to strike, holding that the Vehicle Code provision, and therefore the UCL claim, was not preempted by federal law.

"Trial Over Wal-Mart Lunch Breaks Begins"

Since I'm taking a lunch break myself, I thought I'd report that my firm's Wal-Mart case went to trial last week. Opening statements were yesterday. The Washington Post has the story, and here are some more. I've assisted with some of the UCL and appellate briefing, but I'm not working directly on the trial. The trial team is working as hard as I've ever seen any lawyers work. Go Fred and Jessica! UPDATE: Jessica's picture is in the Chronicle today on page D3! Unfortunately, the online version of the article has no photo.

New class action decision: Shapell Industries v. Superior Court

In Shappell Industries, Inc. v. Superior Court, ___ Cal.App.4th ___ (Sept. 19, 2005), the Court of Appeal (Second Appellate District, Division Four) addressed an interesting and somewhat abstract question. What happens to a putative class action when the claims of the sole named class representative are voluntarily dismissed without prejudice? Does a case still exist? The Court of Appeal concluded that it does:

[The fact that the named class representative] dismiss[ed] himself as an individual party to the action meant that there was no named representative plaintiff of the putative class. But in our view the putative class remained extant, awaiting proper amendment of the complaint to add a new representative plaintiff. A dismissal by only some of the plaintiffs means the court is not divested of subject matter jurisdiction and the suit continues. .... California courts recognize and preserve the rights of absent class members, even before the issue of certification has beeen determined.

(Slip op. at 8-9.) Until class certification is denied, "[t]he alleged putative class members are the parties interested in prosecuting the action, such that an actual, justiciable controversy exists, pending amendment to add a named representative plaintiff." (Slip op. at 11.) The Court concluded:

The trial court did not err in permitting [the new plaintiff] to amend the complaint, where [he] came forward promptly as the proposed representative plaintiff, and where no attempt was made to state a new cause of action against [the defendant], but rather the intent was to substitute an unsuitable representative plaintiff for an apparently suitable one.

(Slip op. at 12-13.) This decision could have ramifications for Prop. 64 litigation in which leave to amend is sought to add an affected class representative. I also wonder what happens if the trial court finds the case suitable for class treatment in every respect except the typicality or adequacy of the particular class representative. Shouldn't leave to amend to substitute a new class representative be granted there as well? Cf., e.g., Lazar v. Hertz Corp., 143 Cal.App.3d 128, 144 (1983) (conditionally granting class certification to permit substitution of a suitable class representative).

Supreme Court might take up UCL "restitution"

The Supreme Court is showing some interest in reviewing the Court of Appeal's decision in Madrid v. Perot Systems Corp., 130 Cal.App.4th 440 (2005), which addressed the scope of restitutionary relief under the UCL. According to the docket, the Supreme Court has given itself an extension of time, through October 19, to grant or deny review. My original post on Madrid is here. Thanks to the reader who emailed me with this tip. UPDATE: On October 12, 2005, the Supreme Court denied the petition for review.

Coming Soon!

Look for The UCL Practitioner coming soon to this new site.  Meanwhile, please visit the original site here.

Supreme Court gives itself more time to grant or deny review in Kintetsu case

On Monday, September 12, the Supreme Court extended its time to grant or deny review in Consumer Advocacy Group v. Kintetsu Enterprises, case no. S135587. The Supreme Court now has until October 27 to act.

Kintetsu is one of the two remaining published opinions on the Prop. 64 retroactivity question. Compare Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America, 129 Cal.App.4th 540 (2005) (Prop. 64 does not apply to pending cases) with Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc., 129 Cal.App.4th 1228 (2005) (Prop. 64 does apply to pending cases). To the best of my knowledge, no review petition was filed in Huntingdon.

Petrini opinion now on Court of Appeal's website

The Petrini opinion appeared on the Court of Appeal's website yesterday afternoon. See this post for more info.

First District, Division Five goes the other way on Prop. 64 retroactivity

In an opinion issued yesterday, most of which is unpublished, the First Appellate District, Division Five, parted company with its brethren in Division One Four, and held: "We agree with the reasons articulated in those cases that have concluded that Proposition 64 applies to pending cases because it repeals a right of action created wholly by statute and does not contain a saving clause." Wise v. Pacific Gas & Elec. Co., ___ Cal.App.4th ___ (Sept. 12, 2005) (slip op. at 23). Proposition 64 did not destroy the plaintiffs' case, however. They alleged actual harm, and would also be permitted to amend their complaint (which was filed long before Prop. 64 was enacted) to seek class certification. (Slip op. at 23.) Somehow it seems that the defendant was better off before, but maybe that's just me.

The panel's (unpublished) discussion of UCL "restitution" is also interesting:

The essence of plaintiffs’ action is that PG&E charged ratepayers for services it failed to deliver, to wit, replacement of obsolete gas regulators. In other words, plaintiff ratepayers paid for something they did not get after PG&E deceptively obtained a rate increase from the PUC on the representation the increase was necessary to carry out the replacement project. Plaintiffs have alleged a valid claim for restitutionary relief: through a deceptive business practice, PG&E obtained from plaintiffs money in which they have an ownership interest.

(Slip op. at 21 (citation omitted).) In other words, the UCL authorizes restitution to a plaintiff who paid for something that the defendant failed to deliver. The next question, which the opinion did not address, is how that something is valued for purposes of awarding restitution. In this case, the plaintiffs seem to be alleging that PG&E obtained a rate increase from the PUC by promising to replace old gas regulators, which it did not do. The restitution would simply be the amount of the rate increase, rather than, say, the value of the regulators.

Off-topic post: Roberts confirmation hearings

SCOTUSblog is live-blogging the hearings as we speak (or, I should say, type). That's something I'd love to be able to do for the Mervyn's and Branick arguments next year. However, the technical hurdles (not to mention the Court's rule against electronic devices in the courtroom) might make it impossible.

Did Prop. 64 resuscitate "damages" as a UCL remedy?

Reader Jeffery L. Fazio posted this thoughtful analysis as a comment to my August 26th post. I'm re-posting it here in full because I think it is worthy of serious discussion:

I’ve been doing some thinking about one of the anomalies created by Proposition 64: Its requirement that plaintiffs demonstrate they have suffered damages (i.e., a loss of money or property) before they’re permitted to bring a UCL action, even though they’re not allowed to actually recover those damages if they prove their claim.

The asymmetry — not to mention the inherent unfairness — of that result has led me to reexamine the underpinnings of the rule that prohibits courts from awarding damages under the UCL, and although I’ve yet to complete that task, it seems that the prohibition against the award of damages in a UCL action needs to be reconsidered.

Before the California Supreme Court addressed the issue in Bank of the West v. Superior Court, damages were recognized as one of the remedies available to plaintiffs in UCL cases. That was so because the ability to award damages was deemed an essential part of the courts’ equitable powers to do justice by whatever means were necessary.

Third District holds Prop. 64 retroactive in unpublished opinion

On Thursday, the Third District Court of Appeal issued its eagerly-awaited opinion in Petrini Van & Storage v. Superior Court (no. C049042). The opinion, which is unpublished, is not yet available on the Court of Appeal's website, but I'm happy to be able to say that a reader sent me a copy of it yesterday afternoon.

Another reader, who attended the oral argument, correctly predicted that the Court would hold that Prop. 64 applies retroactively to pending cases. Justice Sims filed a concurrence expressing the view that "the plain meaning of language enacted by Proposition 64 says that its standing requirement applies to pending actions." Slip op., concurrence at 1. For reasons I've already explained, I respectfully disagree. The concurrence quotes a single word from Prop. 64—"prosecuted"—without mentioning the other language in Prop. 64 that creates doubt and ambiguity about the electorate's intent. It would be as logical to isolate the word "bringing" and conclude therefrom that the electorate expressly intended prospective application.

Supreme Court extends its deadline to grant review in McCann v. Lucky Money

On August 25, the Supreme Court gave itself additional time—through October 5—to decide whether to grant review in McCann v. Lucky Money, Inc., no. S134874. McCann is another case in which the Court of Appeal's discussion of Proposition 64 was unpublished. This activity leads me to wonder why in the world didn't the Supreme Court also grant review in Frey v. Trans Union Corp. (no. S133272) (which it depublished instead), Duran v. Superior Court (May Dept. Stores) (no. S132689), MasterCard Int'l, Inc. v. Superior Court (no. S131416), and Foundation Aiding the Elderly v. Superior Court (no. S133293)? Maybe the Court likes to be enigmatic.

Supreme Court grants review in Cohen v. Health Net

As I previously reported, on August 19, the Supreme Court gave itself more time—until September 23—to grant or deny review in Cohen v. Health Net of California, Inc., no. S135104. Last week, on August 31, the Court issued a "grant and hold" order, granting review but deferring all further activity in the case until Mervyn's and Branick are resolved. So, we now know that it was, indeed, the Prop. 64 retroactivity issue that piqued the court's interest. This is the second case that the Supreme Court has taken up in which the Court of Appeal's Prop. 64 retroactivity discussion was unpublished.

First District does not address Prop. 64 in Wilson v. Brawn of California

An eagerly-anticipated decision from the First Appellate District, Division One did not reach the Prop. 64 retroactivity question, despite the parties' supplemental briefing on the question. Wilson v. Brawn of California, Inc., ___ Cal.App.4th ___ (Sept. 2, 2005).

New Ninth Circuit UCL decision: Arizona Cartridge Remanufacturers Assn. v. Lexmark Int'l

In Arizona Cartridge Remanufacturers Assn., Inc. v. Lexmark Int'l, Inc., ___ F.3d ___ (9th Cir. Aug. 30, 2005), the Ninth Circuit addressed the UCL's "unfair" and "fraudulent" prongs, and affirmed an order granting summary judgment in the defendant's favor.

Additional Mervyn's and Branick briefs now online

I obtained these additional briefs from the Supreme Court. Again, these are large files and may take a while to download. Patience is a virtue when downloading large files.

Californians for Disability Rights v. Mervyn's:

• Answer Brief on the Merits
  
• Reply Brief on the Merits

Branick v. Downey Sav. & Loan:

• Answer Brief on the Merits
  
• Amicus Curiae Brief of AARP
  
• Reply to AARP Amicus Curiae Brief

I was unable to obtain a copy of the reply brief on the merits in Branick. That reply brief was submitted for filing on Wednesday, along with a request for leave to file an overlength brief. Presumably, that brief will become available after the Supreme Court acts on the overlength brief request. Meanwhile, the other briefs have been added to my list of Prop. 64 appellate briefs. UPDATE: There were typographical errors in the links to the reply brief on the merits in Mervyn's and the answer brief on the merits in Branick. The errors have been fixed. Thanks to the readers who brought these errors to my attention.

With sympathy for our compatriots in Louisiana

Through the grapevine, I received the following email, which originated from a law professor in the affected area:

I know your hearts, in particular, are for lawyers. Think of this...

5,000 - 6,000 lawyers (1/3 of the lawyers in Louisiana) have lost their offices, their libraries, their computers with all information thereon, their client files - possibly their clients, as one attorney who e-mailed me noted. As I mentioned before, they are scattered from Florida to Arizona and have nothing to return to. Their children's schools are gone and, optimistically, the school systems in 8 parishes/counties won't be re-opened until after December. They must re-locate their lives.

Our state supreme court is under some water - with all appellate files and evidence folders/boxes along with it. The 5th Circuit Court of Appeals building is under some water - with the same effect. Right now there may only be 3-4 feet of standing water but, if you think about it, most files are kept in the basements or lower floors of courthouses. What effect will that have on the lives of citizens and lawyers throughout this state and this area of the country? And on the law?