The UCL Practitioner

Reminder: Alameda County Bar Association Employment Law Symposium today in Oakland

A reminder that the Alameda County Bar Association's Employment Law Symposium starts today at 1:00 p.m. (registration and optional lunch at noon) at the Lake Chalet in Oakland, and it's not too late to sign up.  The fourth panel, running from 5:15-7:00 p.m., is called "Complex Litigation in Alameda County: How to Be Most Successful and Effective in Departments 17 and 20."  This panel will feature Judges Freedman and Brick and their current and former research attorneys, Mr. Stemmler, Ms. Whitman, and Mr. Obbard.  You may separately register for each individual panel.  A reception follows from 7:05-8:00 p.m.

It's too bad this event conflicts with Game 2 of the World Series.  Go Giants!  Last Saturday night after we won the NLCS the cheering and honking could be heard through the city literally for hours.  It reminded me of election night two years ago.  Go Giants!  

Fall 2010 issue of Competition

The Fall 2010 issue of Competition, the journal of the Antitrust and Unfair Competition Law Section of the State Bar of California, is now out, and it has a number of articles of interest to practitioners in our field:

"Outsourcing Justice:  The California Supreme Court's Decision in County of Santa Clara v. Superior Court (Atlantic Richfield)," by William L. Stern and Nicholas A. Roethlisberger

"The Collaboration Between Public Entities and Private Counsel: Prosecuting Cases that Otherwise Might Not Be Brought," by Bruce L. Simon and William J. Newsom

"The Revitalization of a Valuable Cause of Action for Competitors: Clayworth v. Pfizer's Implications for UCL Standing in Competitor Lawsuits," by Matthew K. Wegner 

"The Restitutionary Claim Requirement for Standing Under the UCL: Does Clayworth v. Pfizer End the Debate?" by Daniel K. Slaughter

"The Rise of the 'Private Surgeon General,'" by William L. Stern and Janelle J. Sahouria

Will Stern is great at coining new terms. He is responsible for the term "non-class class," used to describe pre-Prop. 64 UCL representative actions. In his article in Competition, he coins the phrase "private surgeon general action" to describe certain types of false advertising cases against manufacturers of processed foods, herbal supplements, and other household consumables.  The focus of his article is the defense of such actions.

Supreme Court briefs in Kwikset Corp. v. Superior Court (Benson)

The Supreme Court has posted online copies of the briefs in Kwikset Corp. v. Superior Court (Benson), no. S171845, which is scheduled for oral argument in San Francisco on Wednesday, November 3, 2010 at 9:00 a.m.:

S171845 - KWIKSET CORPORATION v. S.C. (BENSON)

• Real Parties' in Interest Petition for Review
• Petitioners' Answer to Petition for Review
• Real Parties' in Interest Reply to Answer to Petition for Review
• Real Parties' in Interest Opening Brief on the Merits
• Petitioners' Answer Brief on the Merits
• Real Parties' in Interest Reply Brief on the Merits
• Real Parties' in Interest Supplemental Brief

This case will address important questions relating to the proper interpretation of the UCL's post-Prop. 64 standing requirement.  Chief Justice George is not recused in this case, which is one factor that distinguishes it from Tobacco II.

After the case is argued on November 3, the opinion will be due in 90 days.  That works out to February 1, 2011.  However, Chief Justice George's term ends on January 2, 2011.  Will the Court expedite decision in the cases on the November calendar?  How will it handle the December calendar (scheduled for the week of December 6, 2010)?  I don't have an answer to either of these questions. 

UPDATE:  In response to my questions, the folks from At the Lectern undertook a review of opinions issued after the retirements of other Supreme Court justices. They found that many of the retired justices continued to sign opinions for several months after they departed from the Court.  At the Lectern predicts that the Acting Chair of the Judicial Council will assign Chief Justice George as a pro tem justice in all of the cases that he hears through the December calendar.  This is a logical prediction and is one solution that had crossed my mind.

Supreme Court takes up UCL statute of limitations case: Aryeh v. Canon Business Solutions, Inc.

Last week, the Supreme Court granted review in a statute of limitations case, Aryeh v. Canon Business Solutions, Inc., no. S184929. 

In Aryeh, the Court of Appeal (Second Appellate District, Division Eight) examined the "continuing violation" doctrine and held, on a 2-1 vote, that it did not apply to UCL claims.  Aryeh v. Canon Business Solutions, Inc., 185 Cal.App.4th 1159 (2010) (review granted).  This blog's original post on the Court of Appeal's June 2010 opinion is here.

It looks like the Supreme Court will be resolving the split in authority on whether the delayed discovery rule applies in UCL cases, which the Court of Appeal acknowledged in Aryeh but did not address.  This is the statement of issues on review from the main docket page:

(1) May the continuing violation doctrine, under which a defendant may be held liable for actions that take place outside the limitations period if those actions are sufficiently linked to unlawful conduct within the limitations period, be asserted in an action under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.)?

(2) May the continuous accrual doctrine, under which each violation of a periodic obligation or duty is deemed to give rise to a separate cause of action that accrues at the time of the individual wrong, be asserted in such an action?

(3) May the delayed discovery rule, under which a cause of action does not accrue until a reasonable person in the plaintiff's position has actual or constructive knowledge of facts giving rise to a claim, be asserted in such an action?

State Bar's Antitrust and UCL Institute: Thanks for coming!

Thanks to everyone who attended the State Bar's 20th Annual Golden State Antitrust and Unfair Competition Law Institute yesterday.  As one of the co-organizers of the event, I could not have been more pleased with the two UCL panels.  My colleague Craig Corbitt did a wonderful job putting together the antitrust panels as well.  A special thanks to Los Angeles County Superior Court Judge Zaven V. Sinanian for coming up from down south to join us, and of course to Mitch Wood and Ana Castillo at the State Bar for all their hard work.  The bar has certainly been set high for next year.

U.S. Supreme Court briefing in AT&T Mobility LLC v. Concepcion

The folks at Consumer Law & Policy Blog have a very useful page with links to all of the briefs (merits and amicus) in AT&T Mobility LLC v. Concepcion, no. 09-893.  The page also has links to a variety of commentary on the case, which is scheduled for oral argument on Tuesday, November 9, 2010. 

Also, here is a direct link to the amicus brief of Public Justice filed on October 6, 2010.

Please attend the State Bar's 20th Annual Golden State Antitrust and Unfair Competition Law Institute this Thursday

It's not too late to register for the State Bar's 20th Annual Golden State Antitrust and Unfair Competition Law Institute, which will take place this Thursday, October 21, 2010 at the Westin St. Francis Hotel in San Francisco.

The panels are going to be great.  In the afternoon, there will be two advanced UCL panels, one focusing on standing and class certification and the other on remedies and defenses.  I've seen the program materials, and they are superb.  The panelists are all top practitioners in this field:

UCL Breakout #1: Advanced Principles: UCL Standing and Class Certification. This panel will address standing and class certification under the UCL’s three prongs, with particular focus on the differences (if any) between UCL class action practice in state and federal courts.

• Daveed A. Schwartz, Moderator, Bullivant Houser Bailey PC
• David W. Kesselman, Blecher & Collins
• Monique Olivier, Duckworth Peters Lebowitz Olivier LLP
• Roxane A. Polidora, Pillsbury Winthrop Shaw Pittman LLP

UCL Breakout #2: Advanced Principles: UCL Remedies and Defenses.  This panel will discuss the UCL’s restitution and injunctive relief remedies, the interplay between the two, including the impact of Clayworth v. Pfizer, and the continued development of defenses in UCL actions.

• H. Scott Leviant, Moderator, Spiro Moss LLP
• Dina E. Micheletti, Fazio | Micheletti LLP
• Heather A. Moser, Morrison & Foerster LLP
• Paul J. Riehle, Sedgwick, Detert, Moran & Arnold LLP
• Honorable Zaven V. Sinanian, Los Angeles County Superior Court

The State Bar's annual program is always excellent, and I encourage everyone to register and attend.  See the program brochure for more details, or click here to register.

BASF Oct. 23 program CANCELLED

If you registered for the BASF program, "Strategies for Launching and Running a Small Law Office," scheduled for Saturday, October 23, the program has unfortunately been cancelled.  The BASF Solo & Small Firm Committee is planning to run each of the scheduled panels as a stand-alone lunchtime program starting in January 2011.  Check the BASF events page for updates in the coming months. 

BREAKING NEWS: Eleventh Circuit issues new opinion on rehearing in Cappuccitti v. DirecTV

Today the Eleventh Circuit handed down a new opinion on rehearing in the Cappuccitti case.  Cappuccitti v. DirecTV, ___ F.3d ___ (11th Cir. Oct. 15, 2010).  More on this new opinion later.

UPDATE:  Here is the introductory paragraph of the three-judge, per curiam opinion, which neatly summarizes the new decision and its holding:

On July 19, 2010, we issued an opinion in this case. Cappuccitti v. DirecTV, Inc., No. 09-14107, slip op. (11th Cir. July 19, 2010). We based our decision on our interpretation of the jurisdictional requirements of the Class Action Fairness Act of 2005 (“CAFA”), Pub. L. No. 109-2, 119 Stat. 4 (codified in scattered sections of 28 U.S.C.), which we have elsewhere called a “statutory labyrinth.” Lowery v. Ala. Power Co., 483 F.3d 1184, 1199 (11th Cir. 2007). Subsequent reflection has led us to conclude that our interpretation was incorrect. Specifically, CAFA’s text does not require at least one plaintiff in a class action to meet the amount in controversy requirement of 28 U.S.C. § 1332(a). Accordingly, we construe both parties’ petitions for rehearing en banc to include petitions for panel rehearing, vacate our earlier opinion, and replace it with this one.

Slip op. at 2 (footnote omitted) (emphasis added). 

The opinion's ensuing discussion of the jurisdiction question is very short, simple and straightforward; nothing surprising about it, this time.  Id. at 4-7.  The opinion then goes on to address the substantive issue on appeal.  It reverses the district court's order denying the defendant's motion to compel arbitration, and remands the case for further proceedings.  Id. at 7-17.

Supreme Court grants review in class certification case: Faulkinbury v. Boyd & Associates

Yesterday, the Supreme Court granted review in Faulkinbury v. Boyd & Associates, no. S184995.  Briefing is deferred pending resolution of Brinker.  

According to the docket, five depublication requests were filed.  Both the review petition and at least two of the depublication requests pointed out the decision's implicit assumption that meal periods need only be "offered" to workers.  That assumption led the Court of Appeal to affirm the trial court's order denying class certification of the meal period claim. 

Here is my short original post on the Court of Appeal opinion, Faulkinbury v. Boyd & Associates, Inc., 185 Cal.App.4th 1363 (2010), handed down in June.  Under Rule of Court 8.1105(e)(1), the opinion is no longer citable precedent. 

New Jersey Supreme Court class certification decision: Lee v. Carter-Reed Co.

On September 30, 2010, the New Jersey Supreme Court handed down a noteworthy decision in which it reversed denial of class certification in a consumer fraud case involving a dietary supplement.  Lee v. Carter-Reed Co., ___ A.3d ___ (Sept. 30, 2010).

Consumer Law & Policy Blog has more on the decision.

U.S. Supreme Court class arbitration case set for argument: AT&T Mobility v. Concepcion

At the Consumer Attorneys of California Class Action Symposium last Friday, I learned that oral argument has been scheduled for Tuesday, November 9, 2010 in AT&T Mobility LLC v. Concepcion, no. 09-893. 

This is the case in which the U.S. Supreme Court will be addressing whether the FAA preempts state-law unconscionability principles as applied to no-class-action arbitration clauses in consumer contracts of adhesion.  SCOTUSblog has collected all of the briefs at this link. 

Making Our Democracy Work: A Judge's View by Stephen Breyer

Today's San Francisco Chronicle has a review of the new book by U.S. Supreme Court Justice Stephen Breyer, Making Our Democracy Work: A Judge's View. 

I have Justice Breyer's earlier book, Active Liberty: Interpreting Our Democratic Constitution, and it is quite good.

CASD Class Action Symposium starts today in San Diego

I'm in San Diego today for the Consumer Attorneys of San Diego 3rd Annual Class Action Symposium.  If you are here please come up to me and say hi.  I will also be at the judges' reception tonight. 

Today also happens to be the seventh anniversary of the day on which I first created The UCL Practitioner.  It's interesting how things end up happening in life.  I'm not so sure I'd have my own firm in 2010 if I hadn't created this blog in 2003.  What I do know is that such a result was very far from my mind at the time.

"Courts split on affirmative defenses"

On September 24, 2010, the Wisconsin Law Journal had a short article discussing recent decisions on whether the "heightened pleading standard" of Twombly and Iqbal applies to a defendant's affirmative defenses as well as to the plaintiff's complaint. 

At least two California federal judges have held that it does. Barnes v. AT & T Pension Ben. Plan-Nonbargained Program, ___ F.Supp.2d ___, 2010 WL 2507769 (N.D. Cal. Jun. 22, 2010) (Patel, J.); CTF Dev., Inc. v. Penta Hospitality, LLC, 2009 WL 3517617 (N.D. Cal. Oct. 26, 2009) (Alsup, J.). 

[Via The Legal Reader.]

Oral argument scheduled in Kwikset Corp v. Superior Court (Benson)

Yesterday, the Supreme Court posted its oral argument calendar for November.  Argument has been set for Wednesday, November 3, 2010 at 9:00 a.m. in Kwikset Corp. v. Superior Court, no. S171845.  This is the issue on review, according to the docket: 

Does a plaintiff's allegation that he purchased a product in reliance on the product label's misrepresentation about a characteristic of the product satisfy the requirement for standing under the Unfair Competition Law (Bus. & Prof. Code, section 17200 et seq.) that the plaintiff allege a loss of money or property, or is such a plaintiff unable to allege the required loss of money or property because he obtained the benefit of his bargain by receiving the product in exchange for the payment?

The Court of Appeal found no standing, holding in effect that the plaintiff got what he paid for notwithstanding the manufacturer's false (and unlawful) representations about the product's geographic origin.  Kwikset Corp. v. Superior Court (Benson), 171 Cal.App.4th 645 (2009). This was my original blog post from March 2009 on the decision. 

The November arguments will be held in San Francisco, so I'm going to see if I can attend and report.

Thoughts on Clark v. Superior Court (Nat'l Western Life Ins. Co.)

I've been meaning to write more on Clark v. Superior Court (Nat'l Western Life Ins. Co.), 50 Cal.4th 605 (Aug. 9, 2010).  In Clark, the Supreme Court held that the enhanced remedies of Civil Code section 3345 (applicable in certain cases brought by senior citizens and disabled persons) are not recoverable in a UCL "unlawful" prong case predicated on violation of that statute.  

The Court had this to say about UCL restitution:

For the reasons given above, we conclude that trebled recovery may be awarded under Civil Code section 3345, subdivision (b) only if the statute under which recovery is sought permits a remedy that is in the nature of a penalty. We now consider whether the unfair competition law, the basis of plaintiffs' private party action, falls within that category. 

As we have seen, restitution is the only monetary remedy authorized in a private action brought under the unfair competition law.  (Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at pp. 1146, 1148.)  Restitution is not a punitive remedy.  The word “restitution” means the return of money or other property obtained through an improper means to the person from whom the property was taken.  (Kasky v. Nike, Inc., supra, 27 Cal.4th at p. 950; Kraus v. Trinity Management Services, Inc., supra, 23 Cal.4th at pp. 126-127.) “The object of restitution is to restore the status quo by returning to the plaintiff funds in which he or she has an ownership interest.” (Korea Supply Co. v. Lockheed Martin Corp., supra, 29 Cal.4th at p. 1149, italics added.) In contrast, a penalty is a recovery “ ‘without reference to the actual damage sustained....’ ” (Murphy v. Kenneth Cole Productions, Inc. (2007) 40 Cal.4th 1094, 1104.) “Penalties provide for ‘ “recovery of damages additional to actual losses incurred, such as double or treble damages....” ’ ” (Ibid.)  Because restitution in a private action brought under the unfair competition law is measured by what was taken from the plaintiff, that remedy is not a penalty and hence does not fall within the trebled recovery provision of Civil Code section 3345, subdivision (b).

Slip op. at 9-10 (emphasis added).  Contrast this with what the Court said in Tobacco II a year earlier:

"[T]o state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, 'it is necessary only to show that "members of the public are likely to be deceived."'" (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 951 [119 Cal.Rptr.2d 296, 45 P.3d 243].)  To achieve its goal of deterring unfair business practices in an expeditious manner, the Legislature limited the scope of the remedies available under the UCL. "A UCL action is equitable in nature; damages cannot be recovered. [Citation.] . . . We have stated under the UCL, '[p]revailing plaintiffs are generally limited to injunctive relief and restitution.' [Citation.]" (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.)

The fraudulent business practice prong of the UCL has been understood to be distinct from common law fraud. "A [common law] fraudulent deception must be actually false, known to be false by the perpetrator and reasonably relied upon by a victim who incurs damages. None of these elements are required to state a claim for injunctive relief" under the UCL. (Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, 332; see State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1105.)  This distinction reflects the UCL's focus on the defendant's conduct, rather than the plaintiff's damages, in service of the statute's larger purpose of protecting the general public against unscrupulous business practices. (Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 453.)

In re Tobacco II Cases, 46 Cal. 4th 298, 312 (2009) (footnote omitted) (emphasis added). 

So, enthusiastic readers, are the two holdings consistent, and if not, how do we reconcile them?

Blog pages updated

I've updated my list of pending California Supreme Court cases of interest to practitioners in our field.  The main update was to move the decided cases, such as Clayworth, Clark and County of Santa Clara, from the pending section to the concluded section of the list.  There have been few review grants of interest lately.  If I've forgotten any let me know. 

I've also added Clayworth and Clark to my list of leading Supreme Court UCL decisions. 

Supreme Court briefs in Brinker Restaurant Corp. v. Superior Court (Hohnbaum)

Speaking of Supreme Court briefs, everything in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), no. S166350, is collected and available online at this link.  The review petition, answer and reply; the fifteen letters in support of review; the merits briefs; the twenty-three amicus briefs; and the parties' answers to the amicus briefs are all there. 

Brinker has not yet been scheduled for oral argument.  See the main docket page for a description of the issues on review.