Recent UCL "unlawful" prong decision: Dell, Inc. v. Superior Court (Mohan)

This case got lost in the blog pile for a few weeks. In Dell, Inc. v. Superior Court (Mohan), ___ Cal.App.4th ___ (Jan. 31, 2008), the Court of Appeal (First Appellate District, Division Four) addressed a UCL "unlawful" prong claim. Plaintiffs alleged that the defendants violated certain Revenue & Taxation Code provisions by collecting sales and use taxes on optional service contracts sold with computers (which, in turn, violated the UCL). The trial court conducted a stipulated bench trial on the discrete issue of whether sales of the service contracts were subject to sales or use tax. The trial court determined that they were not, and the Court of Appeal agreed.

Comments

[John Waid]

One update. The plaintiff did sue the defendant under the UCL, but the defendants cross-claimed against the State Board of Equalization for a refund of tax. The parties stipulated to try the tax issue as a separate issue. The trial was thus solely on whether or not the defendants should prevail on their cross-complaint against the Board. After all, if the court agreed with the Board, the case was over. As it happened, the court did not agree. The trial court reserved jurisdiction over the issue of whether or not the UCL can be used to adjudicate tax disputes.

[Kimberly A. Kralowec]

Thanks for the clarification!