The UCL Practitioner

Judge Walker grants nationwide class certification in Chavez v. Blue Sky Natural Beverage Co.

Many thanks to the blog reader who forwarded Chief Judge Vaughn R. Walker's recent class certification order in Chavez v. Blue Sky Natural Beverage Co., 2010 U.S. Dist. LEXIS 60554 (N.D. Cal. Jun. 18, 2010).  The order does not appear to be available on Westlaw yet.  UPDATE:  The order is now available on Westlaw and has also been assigned a Federal Rules Decisions cite: Chavez v. Blue Sky Natural Beverage Co., ___ F.R.D. ___, 2010 WL 2528525 (N.D. Cal. 2010).

My prior blog post on this case is at this link.

Notably, Judge Walker followed Tobacco II's holding that only the named class representatives, and not the unnamed class members, must satisfy the UCL's post-Prop. 64 standing requirement.  Chavez, 2010 U.S. Dist. LEXIS 60554 at *27-*28, *37 (citing In re Tobacco II Cases, 46 Cal.4th 298, 324 (2009)).  He found no Article III bar to applying Tobacco II in federal court.  See id. at *27-*28. 

He further followed Tobacco II in holding that the plaintiffs' UCL claim (based on misrepresentations of the geographic origin of goods) did not require individualized proof of reliance, actual deception or injury.  Id. at *29 (citing Tobacco II, 46 Cal.4th at 320).  In granting class certification, he followed In re Steroid Hormone Product Cases, 181 Cal.App.4th 145 (2010), rather than Cohen v. DirecTV, Inc., 178 Cal.App.4th 966 (2009).  Chavez, 2010 U.S. Dist. LEXIS 60554 at *29-*30. 

In other words, this decision is as significant as the original nine post-Tobacco II cases. 

Also of interest, the plaintiffs submitted the report of a marketing expert in support of class certification on the "materiality of [the defendant's] product labeling and marketing."  Chavez, 2010 U.S. Dist. LEXIS 60554 at *32.  Materiality was relevant to the CLRA and common-law fraud claims, which Judge Walker certified based on the doctrine of presumed reliance.  Id. at *30-*31.  Judge Walker considered the expert report in accordance with the standards set forth in the new Dukes v. Wal-Mart en banc opinion.  Id. at *32 (citing Dukes v. Wal-Mart Stores, Inc., 603 F.3d 571, 603 & n. 22 (9th Cir. 2010)).

I am occasionally asked about the use of expert testimony in false advertising cases to establish whether a particular misrepresentation or omission was material (for CLRA purposes) or likely to deceive a reasonable consumer (for UCL purposes).  It makes a lot of sense as a theoretical matter (although it is not required, see Brockey v. Moore, 107 Cal.App.4th 86 (2003)).  Up to now, however, the only case I could think of actually involving such testimony was Lavie v. Procter & Gamble Co., 105 Cal.App.4th 496 (2003).  The unpublished portion of that decision discussed the expert testimony in depth (see this blog post). 

New class certification decision: Faulkinbury v. Boyd & Assoc., Inc.

In Faulkinbury v. Boyd & Associates, Inc., ___ Cal.App.4th ___ (Jun. 24, 2010), the Court of Appeal (Fourth Appellate District, Division Three) reversed in part and affirmed in part an order denying class certification of various wage and hour claims. 

UPDATE: On October 13, 2010, the Supreme Court granted review in this case.  Faulkinbury v. Boyd & Associates, no. S184995.  Briefing is deferred pending resolution of Brinker.  Under Rule of Court 8.1105(e)(1), the Court of Appeal opinion is no longer citable precedent. 

Supreme Court denies review in ninth post-Tobacco II case: Pfizer v. Superior Court (Galfano)

During its conference last week (on June 17, 2010), the Supreme Court denied review and depublication in the ninth post-Tobacco II case, Pfizer, Inc. v. Superior Court (Galfano), no. S181786. 

[Via Bailey Class Action Daily.] 

MCLE teleseminar Monday, June 28: "Navigating the Waters: Understanding the Intricacies of the UCL and CLRA"

The State Bar's Antitrust and UCL Section, along with the ABA, will present "Navigating the Waters: Understanding the Intricacies of California’s Unfair Competition Law and Consumers Legal Remedies Act" on Monday, June 28, 2010 at 9:00-10:00 a.m. Pacific.  Registration for this teleseminar is free!

These are the speakers:

• Sheldon H. Jaffe, Deputy Attorney General, State of California Department of Justice, San Francisco, CA
• Alan Mansfield, Consumer Law Group of California, San Diego, CA
• William L. Stern, Morrison Foerster, San Francisco, CA
• Svetlana S. Gans, Kilpatrick Stockton LLP, Washington, DC (Moderator)

Visit the Section homepage for more information, or click here to register by Friday, June 25.

New UCL statute of limitations opinion: Aryeh v. Canon Business Solutions, Inc.

Many thanks to the reliable JS for emailing me about Aryeh v. Canon Business Solutions, Inc., ___ Cal.App.4th ___ (Jun. 22, 2010), in which the Court of Appeal (Second Appellate District, Division Eight) addressed the UCL's statute of limitations.  The trial court sustained the defendant's demurrer without leave to amend, holding the claims time-barred, and the Court of Appeal affirmed by a 2-1 vote. 

The majority accepts the idea that the "discovery rule" does not apply in UCL cases, without considering the split in authority on that point.  Slip op. at 6 (citing Snapp & Associates Ins. Services, Inc. v. Robertson, 96 Cal.App.4th 884 (2002)); but see Broberg v. The Guardian Life Ins. Co., 171 Cal.App.4th 912 (2009). (The dissent, however, notes the split. Dissent, slip op. at 1 n.1.)

The opinion goes on to hold that the "continuing violations" doctrine  does not apply in UCL cases.  Slip op. at 8-13. The opinion concludes: "The statute of limitations on a UCL action begins to run upon accrual unless equitably tolled." Id. at 13.

The dissenting opinion holds that "the similarly named but conceptually distinct 'continuous accrual' doctrine is applicable," rather than the "continuing violations" doctrine.  Dissent, slip op. at 2.  The dissent explains:

The continuing violation doctrine ... is implicated only when recovery is sought for some conduct that falls within the statute of limitations and some that falls outside the statute. If appellant were arguing that his pre-January 31, 2004 claims are nevertheless actionable because the continuing violation rule allows them to be joined with his timely claims, then we would have the issue the majority raises: Does the continuing violation rule apply to UCL claims? But that is not appellant’s argument.

Appellant’s contention is much simpler: respondent’s conduct in violating the terms of the parties’ agreement comprised a series of unfair business practices. Those acts occurring within four years of the filing of the complaint are actionable. Those that occurred earlier are barred by the statute of limitations.

Id. at 3-4 (emphasis in original). The dissent thus concludes that the demurrer was improperly overruled because it asserted at least some timely claims.  Id. at 10. 

The majority and dissenting opinions in this case are worth a full read.

Supreme Court takes up attorney work product case: Coito v. Superior Court (State of California)

Although not strictly related to the UCL or class action practice, the Supreme Court's grant of review yesterday in Coito v. Superior Court (State of California), no. 181712, is of interest.  The case will address the extent to which the attorney work product doctrine protects witness statements gathered in investigating a case. 

On a 2-1 vote, the Court of Appeal (Fifth Appellate District) held that the witness statements in question were not protected. Coito v. Superior Court (State of California), 182 Cal. App. 4th 758 (2010).  More on that opinion can be found at Professor Martin's blog, California Appellate Report, and in these two posts at The Complex Litigator.

Appellate practice MCLE program tonight in San Francisco

Tonight, the Appellate Section of the Barristers Club of the Bar Association of San Francisco will present "Views from the Bench: Best Practices in Appellate Advocacy," featuring Ninth Circuit Court of Appeals Judges Carlos T. Bea and William A. Fletcher and California Court of Appeal Justice Laurence Kay (Ret.). 

From the brochure: 

This moderated panel discussion will focus on best practices in written and oral appellate advocacy. The topics will include drafting persuasive appellate briefs, presenting an effective oral argument, and the 'dos and don'ts' of brief writing and oral advocacy. The panel discussion will be followed by a reception with light refreshments.

The program runs from 6:00-7:00 p.m. (registration begins at 5:30) at the BASF Conference Center, 301 Battery Street, 3rd Floor, San Francisco. 

U.S. Supreme Court grants cert. in class arbitration case: AT&T Mobility LLC v. Concepcion

Last week, on May 24, 2010, the U.S. Supreme Court granted cert. in AT&T Mobility LLC v. Concepcion, no. 09-893. 

The Ninth Circuit's opinion in this case was Laster v. AT&T Mobility LLC, 584 F.3d 849 (2009), affirming an order striking down a no-class-action arbitration provision as unconscionable under California law (namely, Discover Bank).  (See my very brief blog post on the case from last October.) 

This is the question presented as stated in the cert. petition:

Whether the Federal Arbitration Act preempts States from conditioning the enforcement of an arbitration agreement on the availability of particular procedures--here, class-wide arbitration--when those procedures are not necessary to ensure that the parties to the arbitration agreement are able to vindicate their claims.

In other words, does the FAA preempt state-law unconscionability principles as applied to no-class-action arbitration clauses in consumer contracts of adhesion? 

The briefs have been collected at ScotusBlog (scroll down). Of particular interest is a short supplemental brief filed by the respondents (i.e., the consumers) on Stolt-Nielsen S.A. v. AnimalFeeds Int'l Corp., 559 U.S. ___ (Apr. 27, 2010):

Stolt-Nielsen concerned whether parties could be compelled to arbitrate on a classwide basis where they had not agreed to do so. That issue is not remotely present in this case, and does not bear on the question presented. Here, there is no dispute that AT&T’s agreement forecloses all classwide proceedings. The issue here is not (as in Stolt-Nielsen) whether a party may be compelled to participate in class arbitration in the face of an agreement that does not authorize it, but rather whether the agreement itself may be held invalid, under generally applicable state contract law, because it excludes class remedies. See 9 U.S.C. § 2 (arbitration agreements are valid and enforceable, “save upon such grounds as exist in law or equity for the revocation of any contract”).

Supp. Brief of Respondents, May 7, 2010, at 1. 

New opinion on class arbitration: Arguelles-Romero v. Superior Court

In Arguelles-Romero v. Superior Court (AmeriCredit Financial Services, Inc.), ___ Cal.App.4th ___ (May 13, 2010; modified May 20, 2010), the Court of Appeal (Second Appellate District, Division Three) addressed a no-class-action arbitration clause.  The opinion contains an interesting discussion of both Discover Bank and Gentry.