The UCL Practitioner

More coverage of Meyer v. Sprint Spectrum

Today's Recorder reports that "CLRA Suits Require Actual Injury" (subscription).  The article begins:

More than four years ago, California voters passed Proposition 64, limiting suits filed under the state's unfair competition law to individuals actually injured by someone else's illegal acts.

On Thursday, the California Supreme Court took a similar step by restricting suits filed under the state's Consumer Legal Remedies Act to plaintiffs who have suffered real damage because of an allegedly unlawful practice.

The Complex Litigator, however, points out in this post that the Supreme Court in Meyer took pains to emphasize the difference between "any damage," as used in the CLRA, and "actual damage," and to explain that "the breadth of the phrase 'any damage' indicates a category that includes, but is greater than, 'actual damages." Meyer, slip op. at 5 (emphasis added).  In other words, the CLRA's standing requirement remains less strict than the UCL's.  As Monique Olivier told The Recorder, "The ruling ... [is] no 'death knell' for the CLRA." 

Agreed.  Most plaintiffs who bring CLRA cases have suffered "any damage" as interpreted in Meyer and won't have an issue with standing.  Still, as I told The Daily Journal, "it's a significant problem when companies insert unconscionable provisions into their contracts and apparently no one can sue to stop them from doing that."  Laura Ernde, "Justices Restrict Fine-Print Lawsuits,"  The Daily Journal (Jan. 30, 2009).  Consumers could very well be deterred from attempting to enforce rights that, because of an unconscionable contract term, they thought they had given up. 

Reminder: Apply by Feb. 2 for the State Bar Antitrust and UCL Executive Committee

As a reminder, this coming Monday, February 2, 2009, is the deadline to submit your application (including letters of recommendation) to become a member of the Executive Committee of the State Bar's Antitrust and Unfair Competition Law Section.  See this blog post for more info. 

Landmark Supreme Court CLRA decision: Meyer v. Sprint Spectrum L.P.

The Supreme Court's opinion is now up in Meyer v. Sprint Spectrum L.P., ___ Cal.4th ___ (Jan. 29, 2009).  It holds that Civil Code section 1780(a) creates a standing requirement even for CLRA injunctive relief cases, and that plaintiffs lacked standing where the defendant inserted an unconscionable provision into a contract (which the CLRA prohibits) but had not yet attempted to enforce it.  Slip op. at 3-14.  Notably, the opinion expressly disapproves part of Kagan v. Gibraltar Sav. & Loan Assn., 35 Cal.3d 582, 593 (1984), where the Supreme Court had previously said “we interpret broadly the requirement of section 1780 that a consumer ‘suffer[ ] any damage’ to include the infringement of any legal right as defined by section 1770.” Id. at 10 n.3.

I view this case as an outgrowth of Prop. 64. I do not think that litigants or courts would have focused so heavily on reading an actual damage "standing" requirement into the CLRA if not for that fact that most CLRA cases also include UCL claims. After Prop. 64, UCL standing was on everyone's mind and was actively and repeatedly litigated in cases that also included CLRA claims. We have seen Prop. 64 bleed over into several other causes of action, not just the CLRA. The CLRA is simply the most notable example of a related, but separate, claim that Prop. 64 jurisprudence has significantly affected. 

BREAKING NEWS: Supreme Court to hand down Meyer v. Sprint Spectrum decision tomorrow

The Supreme Court just announced that tomorrow, it will hand down its eagerly-anticipated decision in Meyer v. Sprint Spectrum, no. S153846, in which the Court will interpret the CLRA. When the opinion is posted at approximately 10:00 a.m. tomorrow morning, it will be available at this link: Meyer v. Sprint Spectrum, ___ Cal.4th ___ (Jan. 29, 2009).

Meanwhile, here is my oral argument preview with the issues on review and links to some of the briefs, and here is attorney Kelly Chen's oral argument report.

New Ninth Circuit UCL "safe harbor" opinion: Hauk v. JP Morgan Chase Bank USA

In Hauk v. JP Morgan Chase Bank USA, ___ F.3d ___ (Jan. 23, 2009), the Ninth Circuit held that the defendant's compliance with the Truth-in-Lending Act (15 U.S.C. §§1601-1667f) and Reg. Z (12 C.F.R. Part 226) did not create a Cel-Tech "safe harbor" for the defendant's other conduct or support the trial court's order granting summary judgment of the UCL claim in the defendant's favor.  Slip op. at 835-40. 

New UCL "unlawful" prong decision: Lu v. Hawaiian Gardens Casino, Inc.

In Lu v. Hawaiian Gardens Casino, Inc., ___ Cal.App.4th ___ (Jan. 22, 2009), the Court of Appeal (Second Appellate District, Division Three) held that claims for violation of certain Labor Code provisions could proceed under the UCL's "unlawful" prong, even though the provisions themselves carred no private right of action.  Slip op. at 11. 

New UCL restitution decision: Pineda v. Bank of America, N.A.

In the published portion of Pineda v. Bank of America, N.A., ___ Cal.App.4th ___ (Jan. 21, 2009), the Court of Appeal (First Appellate District, Division Three) held that Labor Code "section 203 penalties may not be recovered as restitution under Business and Professions Code section 17203." Slip op. at 2; see id. at 7-10. The practical result of this holding is that, while the unpaid wages themselves may be recovered as UCL restitution (see Cortez v. Purolator Air Filtration Products Co., 23 Cal.4th 163, 173 (2003)), a shorter statute of limitations will apply to claims for any waiting time penalties associated with those unpaid wages.

The Complex Litigator has a detailed post on Pineda. Wage Law was following Pineda, but does not yet have a post on the new opinion. 

Reminder: CAOC's Third Annual Class Action Seminar is this coming Wednesday, January 28

Just a reminder to register now for CAOC's Third Annual Class Action Seminar: Class Action Hurdles From the Plaintiff's Perspective.  The seminar will take place this coming Wednesday, January 28, 2009 from noon to 5:30 p.m. (registration begins at 11:30 a.m.), followed by a reception, at the Sir Francis Drake Hotel in San Francisco.  The cost (for 4 hours' general MCLE credit plus 1 hour of ethics credit) is $160 for CAOC or SFTLA members or $185 for non-members.   

This seminar is always excellent.  The panel I'm looking forward to the most is called "The Importance Of Class Actions In American Jurisprudence – Perspectives From The Bench," featuring Judges Jeremy Fogel, Richard Kramer, and Anthony Mohr, who I hope will all attend the post-seminar reception as well.  Other prominent speakers include Elizabeth Cabraser, Brad Seligman, and Arthur Bryant.  I am a speaker myself this year and it would be great to see some of you there, so I hope you will sign up and attend!

Ninth Circuit refuses to enforce forum selection clause in UCL/CLRA case: Ramkissoon v. AOL LLC

In Ramkissoon  v. AOL LLC, 552 F.3d 1077 (9th Cir. Jan. 16, 2009), the Ninth Circuit refused to enforce a contract provision selecting Virginia state courts as the forum for all claims against AOL.  California's interest in enforcing its broad consumer protection statutes outweighed any interest of Virginia.  Virginia has no procedure for consumer class actions; by contrast, the CLRA expressly prohibits waiver of the rights conferred.  Civ. Code §1781. Hence, the majority concluded that the choice-of-law clause was unenforceable as well.  One judge believed further development of the record was needed to confirm that the plaintiffs were California consumers to whom the CLRA would apply in the first place.

UPDATE:  I was reading this opinion again and noticed that in his concurrence, Judge Bea cited a law blog -- The Wall Street Journal Law Blog.  552 F.3d at 1088 n.3. 

Court of Appeal grants rehearing in Troyk v. Farmers Group, Inc.

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. 

New UCL/CLRA decision: Paduano v. American Honda Motor Co.

In Paduano v. American Honda Motor Co., ___ Cal.App.4th ___ (Jan. 12, 2009), the Court of Appeal (Fourth Appellate District, Division One) reinstated UCL and CLRA causes of action that the trial court had summarily adjudicated in the defendant's favor.  One justice dissented. 

Yesterday's Recorder reported that "Hybrid Owner's Suit Gets Green Light" (subscription).

New class certification decision: Ghazaryan v. Diva Limousine, Ltd.

In Ghazaryan v. Diva Limousine, Ltd., ___ Cal.App.4th ___ (Dec. 22, 2008; pub. ord. Jan. 12, 2009), the Court of Appeal (Second Appellate District, Division Seven) reversed an order denying class certification of certain wage and hour claims. 

"7th Circuit Makes It Harder for Plaintiffs to Keep Securities Class Actions in State Court": Katz v. Gerardi

Today's National Law Journal has this report on a new Seventh Circuit decision, Katz v. Gerardi, ___ F.3d ___ (7th Cir. Jan. 5, 2009), which addresses whether CAFA applies to certain securities class actions and creates a split in authority with the Ninth Circuit. 

In July, the Ninth Circuit held that CAFA's "general grant of the right of removal of high-dollar class actions does not trump" section 22(a) of the Securities Act of 1933 (15 U.S.C. section 77v(a)), which contains a "specific bar to removal of cases [filed in state court and] arising under the ... Act."  Luther v. Countrywide Home Loan Servicing LP, 533 F.3d 1031, 1034 (9th Cir. 2008).

Now, the Seventh Circuit has held that "[c]laims listed in [28 U.S.C.] §1453(d) are not removable. Other securities class actions are removable if they meet the requirements of the 2005 Act (100 investors, $5 million in controversy, minimal diversity). To read §22(a) as Katz [and the Ninth Circuit] does would be to make most of §1453(d) pointless."  Katz, slip op. at 7.  Chief Judge Easterbrook had this to say about the Ninth Circuit's opinion in Luther:

Luther failed to recognize that §22(a) of the 1933 Act is not a subset of the 2005 Act. More importantly, Luther did not appear to understand that §1453(d) tells us how the 2005 Act affects securities cases: the ninth circuit did not analyze this language or even acknowledge its existence. We therefore disagree with Luther and hold that securities class actions covered by the 2005 Act are removable, subject to the exceptions in §1332(d)(9) and §1453(d). Because it creates a conflict among the circuits, this opinion was circulated before release to all judges in active service. See Circuit Rule 40(e). None of the judges favored a hearing en banc.

Id. at 8.

State Bar Antitrust and Unfair Competition Law Section Executive Committee applications due February 2, 2009

The Antitrust and Unfair Competition Law Section of the State Bar of California is seeking applicants for its Executive Committee.  Members of the Executive Committee serve a three-year term which would begin in September 2009.  Applications (including letters of recommendation) are due on February 2, 2009.  This is a competitive application process and involves a formal appointment by the State Bar Board of Governors.  More information, including the application form, is available at the State Bar's website. 

I am a current member of the Executive Committee; my three-year term began this past September.  We expect to be filling about six vacancies as some of the current members' terms expire.  I would encourge qualified persons to apply, particularly those who specialize in handling UCL cases (as distinct from antitrust cases).  Most of the current committee members are antitrust specialists, so those with significant experience handling UCL cases would be particularly welcome applicants.  The one limitation is that if someone else from your law firm is already a member of the Committee, you are not eligible.  Also, past participation in Section activities is a factor considered in the appointment process. 

U.S. Supreme Court preemption decision: Altria Group, Inc. v. Good

By now, you have probably already read the Supreme Court's new preemption decision, Altria Group, Inc. v. Good, ___ U.S. ___, 129 S.Ct. 538 (Dec. 16, 2008). (See this blog post for my original coverage of this case.) In Altria, the Supreme Court held that the Federal Cigarette Labeling and Advertising Act ("FCLAA") (15 U.S.C. §§1331 et seq.) did not preempt a claim under the Maine Unfair Trade Practices Act (a statute very similar to the UCL) for deceptive advertising of "light" cigarettes.

I have been thinking about the impact of this case, if any, on the pending Tobacco case, in which we expect the California Supreme Court to interpret Prop. 64. The California Supreme Court's earlier preemtion decision was, if anything, narrower than Altria. In In re Tobacco Cases II, 41 Cal.4th 1257 (2007) (discussed in this post), the California Supreme Court held that the FCLAA did partly preempt the UCL claims in that case -- to the extent they had to do with marketing cigarettes to minors. The Supreme Court considered itself bound by Lorillard Tobacco Co. v. Reilly, 533 U.S. 525 (2001), but in Altria v. Good, the U.S. Supreme Court distinguished that case:

Reilly involved regulations promulgated by the Massachusetts attorney general “‘in order to address theincidence of cigarette smoking and smokeless tobacco use by children under legal age ... [and] in order to prevent access to such products by underage customers.’” 533 U. S., at 533 (quoting 940 Code Mass. Regs. §21.01 (2000)).  The regulations did not pertain to the content of any advertising; rather, they placed a variety of restrictions on certain cigarette sales and the location of outdoor and point-of-sale cigarette advertising. The attorney general promulgated those restrictions pursuant to his statutory authority to prevent unfair or deceptive trade practices. Mass. Gen. Laws, ch. 93A, §2 (West 1996). But although the attorney general’s authority derived from a general deceptive practices statute like the one at issue in this case, the challenged regulations targeted advertising that tended to promote tobacco use by children instead of prohibiting false or misleading statements. Thus, whereas the “prohibition” in Cipollone was the common-law fraud rule, the “prohibitions” in Reilly were the targeted regulations. Accordingly, our holding in Reilly that the regulations were pre-empted provides no support for an argument that a general prohibition of deceptive practices is “based on” the harm caused by the specific kind of deception to which the prohibition is applied in a given case.

Altria, slip op. at 12.  

The outcome of Altria is consistent with the Supreme Court's decision in March 2008 to deny cert. in the Tobacco preemption case. Review had already been granted in Altria in January 2008.  And in supplemental letter briefs in Tobacco, the parties both took the position that the preemption case has no bearing on the Prop. 64 case. Even so, Altria may well prove to limit the precedential value of the California Supreme Court's Tobacco preemption decision going forward.

Ninth Circuit publishes RSS feed for new opinions

I just discovered that the Ninth Circuit publishes an RSS feed for new opinions. This appears to be a very recent development.  It is definitely a welcome one. 

UPDATE:  The Ninth Circuit has redesigned its entire website, and added RSS feeds, as of just this week.  [Via]

Another new federal nationwide class certification decision: Parkinson v. Hyundai Motor America

Nationwide class certification was recently granted in another UCL and CLRA auto defect case, Parkinson v. Hyundai Motor America, 2008 WL 5233200 (C.D. Cal. Dec. 12, 2008). In that case, as in another recent decision, the court (Chief Judge Alicemarie H. Stotler) narrowly interpreted the Ninth Circuit's opinion in Sullivan v. Oracle Corp., 547 F.3d 1177 (9th Cir. 2008) (discussed in this post):

[T]he Court recognizes that extraterritorial application of the UCL is improper where non-residents of California raise claims based on conduct that allegedly occurred outside of the state. See Sullivan v. Oracle Corp., ___ F.3d ___, No. 06-56649, 547 F.3d 1177, 2008 WL 4811911, at *10 (9th Cir. Nov. 6, 2008). In Sullivan, for example, the Ninth Circuit, citing Norwest Mortgage, Inc. v. Superior Court, 72 Cal.App.4th 214, 85 Cal.Rptr.2d 18 (1999), held “that § 17200 does not apply to the claims of nonresidents of California who allege violations of the FLSA outside California.” Sullivan, 547 F.3d 1177, 2008 WL 4811911, at *10. However, extraterritorial application of the UCL is not barred where the alleged wrongful conduct occurred in California. See Norwest Mortgage, 72 Cal.App.4th at 224-25, 85 Cal.Rptr.2d 18. In light of defendant's alleged in-state conduct discussed above, the Court finds that certification of a nation-wide class for plaintiffs' UCL claim is not barred under the Ninth Circuit's reasoning in Sullivan.

Parkinson, 2008 WL 5233200 at *18. Thanks to the blog reader who forwarded this decision.

New federal nationwide class certification decision: Mazza v. American Honda Motor Co.

The court (Judge Valerie Baker Fairbank) granted nationwide class certification of UCL and CLRA claims in an auto defect action, Mazza v. American Honda Motor Co., ___ F.R.D. ___, 2008 WL 5256432 (C.D. Cal. Dec. 16, 2008). Many thanks to the blog reader who forwarded the order.