New UCL decision: People ex rel. Lockyer v. Brar

To complement the Daily Journal's story from Monday, the Court of Appeal (Fourth Appellate District, Division Three) yesterday issued yet another opinion called People ex rel. Lockyer v. Brar, ___ Cal.App.4th ___ (Nov. 30, 2005). The case involves the Attorney General's UCL action against a lawyer accused of abuses like those of the Trevor Law Group. The AG obtained a $1.7 million default judgment, representing substantial civil penalties, after the attorney failed to timely answer the complaint. The Court of Appeal affirmed the trial court's order denying the attorney's motion for relief from default. To say that the opinion is harsh is to put it mildly, so I will just say this. The CLRA is a very good alternative cause of action to consider in the post-Prop. 64 world. If your client has suffered injury in fact and you are seeking class certification anyway, pleading a CLRA claim should not significantly complicate your UCL action (assuming the CLRA applies to the defendant's conduct). But no one should try to file a Trevor-style "shakedown" case under the CLRA. Civil Code section section 1780(d) gives the trial court discretion to award attorneys' fees to a prevailing defendant if the plaintiff acts in subjective bad faith. Corbett v. Hayward Dodge, Inc., 119 Cal.App.4th 915, 925-26 (2004). The problem here is not with the law (either the CLRA or the UCL), but with the attorney who decides to abuse it.

Comments

[John Hanson]

Is there any information out there on whether the CLRA applies to software?

Software is not a tangible good, and it is licensed, and not sold, so it seems that the CLRA wouldn't be appropriate for pursuing unfair competition by software vendors.

[Kimberly]

You raise an interesting question that I don't think the appellate courts have ever addressed. The CLRA applies primarily to transactions involving the "sale or lease" of "goods or services." Civil Code section 1761(a) defines "goods" as "tangible chattels bought or leased for use primarily for personal, family or household purposes ...." I would want to talk to a computer expert about whether software is really intangible. I also wonder whether it would make a difference if you bought the software by going to Best Buy and purchasing a CD-ROM, or if you bought it online and simply downloaded it onto your computer. If anyone has any ideas about this, please post a comment.