The UCL Practitioner

Supreme Court discusses UCL "unlawful" prong: Munson v. Del Taco, Inc.

In Munson v. Del Taco, Inc., ___ Cal.4th ___ (Jun. 11, 2009), a case involving disability discrimination under the Unruh Civil Rights Act, the Supreme Court discussed the UCL's "unlawful" prong:

Gunther also noted that under its interpretation of section 51, subdivision (f), violations of the ADA that do not involve intentional discrimination might still find a remedy in California law through an action charging an unlawful business practice (Bus. & Prof. Code, §§ 17200, 17203). (Gunther, supra, 144 Cal.App.4th at p. 234.) Though true, that could not have been a purpose of adding subdivision (f) to section 51 of the Civil Code. Violations of federal as well as state and local law may serve as the predicate for an unlawful practice claim under Business and Professions Code section 17200. (See Quacchia v. DaimlerChrysler Corp. (2004) 122 Cal.App.4th 1442, 1450, fn. 5; Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 838-839.) Assuming all other requirements for such an action were met, therefore, violations of the ADA’s accessibility mandate, whether involving intentional discrimination or not, would be remediable through Business and Professions Code sections 17200 and 17203. It did not take incorporation of the ADA mandate into the Unruh Civil Rights Act to achieve that result.

Slip op. at 18-19 (bold added). I believe this is the first time that the Supreme Court, rather than the Court of Appeal, has confirmed that a UCL "unlawful" prong claim may be predicated on violations of federal and local laws as well as state laws. This language is also useful for its confirmation that the UCL carries no "intent" element (or any other element of scienter). 

Recorder Roundtable: Thanks for Coming!

Thanks to all who attended the Recorder Roundtable on Prop. 64 and Tobacco this morning.  I really enjoyed it and learned a lot from my co-speakers, particularly Will Stern and Trent Norris on the defense side, and also of course Reed Kathrein on my side of the table.  We could have gone on talking all day. 

There are a lot more upcoming events of interest.  Don't miss Will Stern on August 5, 2009, 12:00-1:30, when the Bar Association of San Francisco will present "Section 17200 Update After In re Tobacco II Cases."   Will will be joined by Judge Richard Kramer and Jim Sturdevant.  Should be very interesting. 

Also, July 31 is the last day for plaintiffs' attorneys to pre-register at the early bird rate for the CAOC Convention, which will take place on November 12-15, 2009 in San Francisco.  The class action panel on Friday, November 13, will feature Elizabeth Cabraser, Tim Blood and others.  I will be speaking on Saturday, November 14 on the "Grow Your Practice" panel.  I will cover recognizing possible class action cases and co-counseling in such cases.

Last but not least, the annual Golden State and UCL Institute of the State Bar's Antitrust and UCL Section is scheduled for Thursday, October 22, 2009 in San Francisco, where UCL and antitrust panels will proceed on parallel tracks.  Both Will Stern and I are slated to speak.  By that time we'll know whether rehearing is granted in Tobacco or not.  Registration is not yet available, but you'll want to mark your calendar.

Reminder: Recorder Roundtable on Tobacco Wednesday in San Francisco

Please register to attend the Recorder Roundtable, "Proposition 64: Are the Standards Changing?" scheduled for Wednesday, July 22, 2009, at 9:00 a.m. at the Commonwealth Club in San Francisco. I will be participating along with Will Stern, Reed Kathrein, and Trent Norris.  I hope to see some of you there.  See this prior blog post for more details, or click here to register. 

Massachusetts Supreme Judicial Court strikes down no-class-action arbitration clause: Feeney v. Dell, Inc.

In Feeney v. Dell, Inc., ___ N.E.2d ___ (Jul. 2, 2009), the Supreme Judicial Court of Massachusetts struck down a no-class-action arbitration clause as contrary to public policy:

We decide in this case whether a statutory right to participate in class action lawsuits can permissibly be foreclosed by a provision in a consumer contract compelling individual arbitration. The plaintiffs, John A. Feeney and Dedham Health and Athletic Complex (Dedham Health), appeal from an order of a judge in the Superior Court compelling arbitration of their claims--brought as a putative class action--alleging that Dell improperly collected Massachusetts sales tax on the purchase of optional service contracts sold in connection with the purchase of Dell computers when (according to the plaintiffs) no such tax was due, and that the collection of such tax violated the Massachusetts consumer protection act, G.L. c. 93A. We conclude that the provision compelling individual arbitration in the plaintiffs' consumer contracts is not enforceable because it is contrary to the fundamental public policy of the Commonwealth favoring consumer class actions under G.L. c. 93A.

....

We decline to enforce a prohibition on class actions in a consumer contract where to do so would in effect sanction a waiver of the right to proceed in a class action under G.L. c. 93A. Allowing companies that do business in Massachusetts, with its strong commitment to consumer protection legislation, to insulate themselves from small value consumer claims creates the potential for countless customers to be without an effective method to vindicate their statutory rights, a result clearly at odds with our public policy.

[Hat tip: The Oregon Class Action Blog (via The Complex Litigator).]

U.S. Supreme Court takes up CAFA case: Hertz v. Friend

In June, the U.S. Supreme Court granted certiorari in a CAFA case, Hertz Corp. v. Friend, no. 08-1107.  Copies of the cert. petition and other briefs are available at SCOTUSBlog.   This is the statement of the question presented:

Whether, for purposes of determining principal place of business for diversity jurisdiction citizenship under 28 U.S.C. § 1332, a court can disregard the location of a nationwide corporation's headquarters - i.e., its nerve center.

I did not previously report on the very short, unpublished Ninth Circuit opinion in this case, Friend v. Hertz Corp.,  297 Fed. Appx. 690, 2008 WL 4750198 (9th Cir. Oct. 30, 2008). The opinion reads, in full:

MEMORANDUM

Hertz's Notice of Appeal makes clear that Hertz removed this class action under the Class Action Fairness Act (CAFA). 28 U.S.C. § 1453(c). Therefore, even assuming we lack authority “to accept an appeal from the denial of a motion to remand when a class action has been removed to federal court on the basis of traditional diversity jurisdiction,” Saab v. Home Depot U.S.A., Inc., 469 F.3d 758, 759 (8th Cir.2006), rather than pursuant to CAFA, we have jurisdiction over Hertz's timely appeal from the district court's order remanding this class action to state court. 28 U.S.C. § 1453(c)(1).

The district court correctly applied the “place of operations” test to determine Hertz's principal place of business. Tosco Corp. v. Communities for a Better Env't., 236 F.3d 495 (9th Cir.2001); Industrial Tectonics v. Aero Alloy, 912 F.2d 1090 (9th Cir.1990). Taking the facts as set forth in the Declaration of Krista Memmelaar, Hertz's relevant business activities are “significantly larger” in California than in the next largest state, Florida. Although the difference between the amount of Hertz's business activity in California and the amount of its activity in Florida is not as large as the difference deemed to be significant in Tosco, California nevertheless “contains a substantial predominance” of Hertz's operations. Tosco Corp., 236 F.3d at 500.

Neither Tosco nor Industrial Tectonics supports Hertz's argument that we must consider the comparative population of states in which a corporation operates to determine whether activities are significantly larger in one state than another. Id.; Industrial Tectonics, 912 F.2d at 1092. Nor do policy concerns mandate the application of a per capita calculation. With its extensive California contacts and business activities, Hertz is not in jeopardy of being mistreated in California courts.

Because California is Hertz's principal place of business under the “place of operations” test, we do not apply the nerve center test. Tosco, 236 F.3d at 500.

AFFIRMED.

(Footnote omitted.)  Another Ninth Circuit case, Davis v. HBSC Bank Nevada, N.A., 557 F.3d 1026 (2009), will probably be impacted as well.  See this blog post for more on Davis.  The petitioner devoted an entire supplemental brief to a discussion of Davis. 

New Ninth Circuit UCL/CLRA pleading decision: Kearns v. Ford Motor Co.

In Kearns v. Ford Motor Co., 567 F.3d 1120 (9th Cir. Jun. 8, 2009), the Ninth Circuit held that "the heightened pleadings standards of Rule 9(b)" applied to UCL and CLRA claims that were "grounded in fraud." 

In a recent post-Tobacco decision, a federal district court followed Kearns but determined that the complaint's allegations satisfied the heightened pleading standard because they "sufficiently identified 'the circumstances constituting fraud so that the defendant can prepare an adequate answer from the allegations.'" Germain v. J.C. Penney Co., 2009 WL 1971336, *3-*5 (C.D. Cal. Jul. 06, 2009) (quoting Walling v. Beverly Enterprises, 476 F.2d 393, 397 (9th Cir.1973)).

Two new opinions on class settlement objections: Consumer Privacy Cases and Clark v. American Residential Services LLC

Two new opinions on class action settlement objections have been handed down in the past two weeks:

• In Consumer Privacy Cases, ___ Cal.App.4th ___ (Jun. 30, 2009), the Court of Appeal (First Appellate District, Division Five) affirmed the final approval order, rejecting arguments that "class members were not given adequate notice of the settlement, that the settlement was not fair, reasonable and adequate, and that the court erred in approving attorneys’ fees to class counsel."
  
• In Clark v. American Residential Services LLC, ___ Cal.App.4th ___ (Jul. 6, 2009), the Court of Appeal (Second Appellate District, Division Eight) vacated the final approval order "because the trial court lacked sufficient information to make an informed evaluation of the fairness of the settlement."  The decision contains an interesting discussion of Kullar v. Foot Locker Retail, Inc., 168 Cal.App.4th 116 (2008).  The Complex Litigator has a more detailed post on it.

Blogosphere coverage of Amalgamated and Arias

The California Wage and Hour Law Blog for Employees (a new law blog created in January by attorney Steve Pearl) has an interesting post on Amalgamated and Arias.  The Complex Litigator also has a detailed post.   

Welcome to the 21st century: Electronic Discovery Act signed into law in California

At last year's CAOC convention, I pointed out during my presentation, "Discovery Techniques in Class Action Cases," that the California Judicial Council had painstakingly drafted a set of electronic discovery rules for California, but that Governor Schwarzenegger vetoed the implementing legislation for non-substantive reasons in September 2008. 

The legislation was reintroduced last December, and on Monday, Governor Schwarzenegger signed A.B. 5, the Electronic Discovery Act.  The full text of the Act is here.  It takes effect immediately. 

Recorder Roundtable on Prop. 64, July 22 in San Francisco

A Recorder Roundtable on Prop. 64 has been scheduled for July 22, 2009 from 9:00 to 11:00 a.m. at the Commonwealth Club in San Francisco.  I will be one of the panelists, along with Will Stern of Morrison & Foerster (author of the Rutter Group's UCL practice guide and, of course, Prop. 64), Reed Kathrein of Hagens Berman, and Trent Norris of Arnold & Porter.  Steven Pressman of GC California, a Recorder affiliate, will be the moderator.  Earn two hours of MCLE credit for the bargain price of $95.  Click here to register. 

If you haven't attended a Recorder Roundtable in the past, I can tell you the format makes for a lively and interesting discussion. I attended the last one on Prop. 64 in February 2005, three months after the initiative passed, and it was great.  Will was one of the speakers then as well.  The main topic of our discussion on July 22nd will be In re Tobacco and where the law is headed from there. 

Also, save the date of October 22, 2009 for the annual program of the State Bar's Antitrust and Unfair Competition Law Section.