The UCL Practitioner

New Ninth Circuit CAFA opinion: Lewis v. Verizon Communications, Inc.

In Lewis v. Verizon Communications, Inc., ___ F.3d ___ (9th Cir. Nov. 18, 2010), the Ninth Circuit addressed CAFA's $5 million amount in controversy requirement.

U.S. Supreme Court up or down vote to be announced: Dukes v. Wal-Mart

The Dukes v. Wal-Mart case was on the U.S. Supreme Court's conference schedule last Tuesday, November 23, 2010, which means that the results of the conference can be expected to be announced today at 10:00 a.m. Eastern.  Wal-Mart Stores, Inc. v. Dukes, no. 10-277. 

When it is posted, the Supreme Court's order list for November 29 should be available at this link. 

UPDATE: The Dukes case was not on the order list this morning. We will probably have to wait at least another week. Orders are next scheduled to be announced next Monday, December 6.

UPDATE #2:  The Dukes docket now indicates (which it did not earlier this morning) that the case has been re-distributed for conference on Friday, December 3.  Again, that means that the vote should be announced the following Monday, December 6.  SCOTUSblog also noted the Court's unexpected failure to announce its vote today following its conference on November 23. 

Supreme Court to hand down opinion tomorrow in Pineda v. Bank of America

Well, I'm interrupting my hiatus already because the Supreme Court just announced that tomorrow (November 18, 2010) it will hand down its opinion in Pineda v. Bank of America, no. S170758, which was argued on October 5, 2010. 

Pineda is the case involving whether waiting time penalties may be recovered as restitution under the UCL.  See this blog post for more.  The California Channel has the video of the oral argument here.  (According to Scott Leviant the Pineda argument starts at about the 7:30 mark in the video.)

When the opinion is posted online, it should be available at this link:

• Pineda v. Bank of America, N.A., ___ Cal.4th ___ (Nov. 18, 2010)

Blog hiatus

This post will be the last until after Thanksgiving.  Please continue to forward interesting decisions, briefs, news, etc.  And, no, I'm not on vacation; I can be reached by email ([email protected]) or at the office (415-546-6800).

I hope everyone has a good Thanksgiving.  Plaintiffs' attorneys, please come to the CAOC Convention, which begins this Thursday night with the Women's Caucus reception.

Upcoming appellate-related MCLE programs in San Francisco

The Appellate Practice Section of the Bar Association of San Francisco is sponsoring or co-sponsoring three events in November and December.  The following is from the Section's announcement email:  

On November 17th from 12-1:30, the Section will co-sponsor (along with the Labor &Employment Section) “How Reid v. Google Will Affect You.”  The program will feature former section Chair Don Willenburg of Gordon & Rees LLP speaking about the evidentiary and appellate review aspects of this recent, major California Supreme Court case and Marvin Dunson III of Valdez Dunson & Doyle LLP speaking about the case’s employment aspects.   For registration, click here. 
 
On December 6th, from 12:00-1:15, the Section will sponsor “Effective Oral Argument on Appeal,” which will offer great tips and address some recent debate about the utility of oral argument.  The program will feature former section member Justice Kathleen Banke, Associate Justice of the First District Court of Appeal, Division One; former section Chair Raymond Cardozo of Reed Smith LLP; current Vice Chair Ethan Schulman of Crowell & Moring LLP; and myself as speakers.  For registration, click here.
 
On December 9th, from 12:00-1:45, the Section will sponsor “The George Court:  A Thematic Retrospective.”  We are honored to have as speakers for this timely program Professor Gerald Uelmen from Santa Clara University School of Law; Honorable Joseph Grodin, former Justice of the California Supreme Court  and Distinguished Emeritus Professor of Law from UC Hastings College of the Law; and Professor Shaun Martin of USD School of Law and host of the lawblog California Appellate Report.  The program should be very interesting and will highlight some of the identifiable themes and trends of the Supreme Court under Chief Justice George and address some specific topics.  For registration, click here.

Appellate specialization credit will be offered for all three programs and you can sign up for them on line at www.sfbar.org/calendars.

New federal UCL "fraudulent" prong decision: In re Neurotonin Marketing & Sales Practices Litigation

Many thanks to the blog reader who drew my attention to a new federal decision of interest, In re Neurotonin Marketing & Sales Practices Litigation, ___ F.Supp.2d ___, 2010 WL 4325225 (D. Mass. Nov. 3, 2010).  In this post-trial decision, the court orders the defendant (Pfizer) to pay $95 million in restitution to the plaintiff (Kaiser Foundation Health Plan) for violations of the UCL's "fraudulent" prong. 

The decision is lengthy and covers a variety of very interesting UCL-related subjects, including "reliance" post-Tobacco II, partial omissions, the delayed discovery rule, choice-of-law, causation, the measure of restitution, and pre-judgment interest in UCL actions. 

This case shows just how powerful the UCL can be.

Third Circuit orders supplemental briefing in class settlement case: Sullivan v. DB Investments, Inc.

Yesterday, the en banc Third Circuit issued an order directing supplemental briefing in the diamonds antitrust case, Sullivan v. DB Investments, Inc. 

You may recall that en banc rehearing was granted in this case in August.  See this blog post for a discussion of the original three-judge panel decision from July, Sullivan v. DB Investments, Inc., 613 F.3d 134 (3d Cir. 2010), which vacated an order granting final approval of a nationwide settlement of direct and indirect purchaser claims for price-fixing in the diamond industry. 

Take a look at the supplemental briefing order.  The questions presented for further briefing are quite interesting.  An excerpt:

(1) The parties are directed to address the following assertions:

(a) the predominance inquiry requires that each potential class member share at least one identical claim;

(b) predominance is satisfied if class members have different claims as long as each contains elements requiring resolution of common issues of fact;

(c) predominance is satisfied if class members have related, but different, claims that all arise out of the same course of conduct on the part of the defendant;

(d) predominance does not examine the ‘claims,’ as such, of all potential plaintiffs, but focuses on the ‘predominance’ of common, versus individualized, issues of fact or law that will be presented by a certain class action, as framed in the complaint, and as anticipated to be tried. 

[Via How Appealing.]

News reports on oral argument in AT&T Mobility LLC v. Concepcion

As you might expect, there has been a lot of press coverage of yesterday's argument in AT&T Mobility LLC v. Concepcion.  You can read the transcript for yourself here.  The California Supreme Court's Discover Bank opinion is a central focus of the discussion, as is a mythic "9,000-foot cow."

Here is an excerpt from the Washington Post's report:

But what had been billed as an epic battle played out during the one-hour oral argument more like a law school seminar on contract law: Phrases such as "contract of adhesion," "obstacle preemption" and "unconscionability" dominated the debate.

The justices' questions suggested a more limited ruling on the facts of the specific case rather than the broad decision on class-action suits that the 26 groups submitting friend-of-the-court briefs had addressed.

The arguments also raised questions about states' rights. State and federal courts in California agreed with a state law that said businesses' attempts to ban arbitration class-action suits unfairly tilt the field against consumers. And some justices indicated that the decision should be up to the states.

"Who are we to say that the state is wrong about that?" Justice Elena Kagan asked.

The New York Times reports that "Supreme Court Weighs Class Action Suits."

Dahlia Lithwick's article at Slate is called "Can You Hear Them Now? The Supreme Court reads the fine print on your cell phone contract."  She predicts a consumer win.

In a similar vein, Law.com reports: "Class Actions on the Ropes? Not Likely."

The New York Law Journal believes that "Justices' Comments Offer Hope for Class Action Litigators" (subscription).

ADR Prof Blog has a guest post on the argument by Professor Jean Sternlight of Boyd School of Law at the University of Nevada, Las Vegas. 

Oral argument preview: AT&T Mobility LLC v. Concepcion

Today at 10:00 a.m. Eastern, the U.S. Supreme Court will hear oral argument in AT&T Mobility LLC v. Concepcion, no. 09-893.   AT&T's reply brief (which consists mainly of a frontal attack against the validity of Discover Bank) was only just filed eleven days ago, on October 29, 2010. 

Transcripts of U.S. Supreme Court arguments are generally available within hours after the argument takes place.  When it is posted online, the argument transcript in Concepcion should be available at this link.  (Also, here's the link to the main argument transcripts page.)

Sunday's San Francisco Chronicle had an opinion piece called "Supreme Court case could end class action suits," and on November 5 the Los Angeles Times reported that "Consumers' right to file class actions is in danger."  The American Bar Association's preview of the case summarizes the proceedings and holdings below and the arguments made in the briefs.   [Links via SCOTUSblog.]

A tenth post-Tobacco II opinion: Sevidal v. Target Corp.

The Court of Appeal (Fourth Appellate District, Division One) has handed down a tenth post-Tobacco II opinion, Sevidal v. Target Corp., ___ Cal.App.4th ___ (Oct. 29, 2010).  The opinion affirms an order denying class certification of UCL claims for lack of ascertainability and because (inventing a new element of certification) the class was "overbroad."  It thus falls on the defense side of the ledger.

The Complex Litigator has a detailed post on the opinion.  The plaintiffs in Sevidal seem to have had some Kaldenbach-type problems that are not going to be present in every UCL action.

It also bears pointing out that class certification jurisprudence does not recognize an "overbroad class definition" as an independent basis to deny certification (even though the Sevidal court discusses this in a separate section of the opinion).  Whether a class definition is "overbroad" might be relevant to the ascertainability or predominance analyses, but it is not a separate element of certification.

As authority for denying class certification because the class definition was "overbroad," the Sevidal court cited Pfizer, Inc. v. Superior Court, 182 Cal.App.4th 622 (2010), and no other authority.  Pfizer did deny certification solely on the basis that the class was "overbroad," but its only authority for doing so was Kwaak v. Pfizer, Inc., 881 N.E.2d 812, 818 (Mass. App. 2008) (cited in Pfizer, 182 Cal.App.4th at 633 n.6).  A careful review of that case shows that the certification order was reversed because common questions did not predominate—not because the class definition was "overbroad":

In this case, there is insufficient information in the record to identify any such similarity of exposure, deception, and causation. The class certified is everyone who purchased Listerine products during the advertising campaign, regardless whether a purchaser was exposed to the campaign. ... [N]ot every product was mislabeled. Some Listerine products, for example, contained no label or tag connected to the advertising campaign. Moreover, the advertising campaign also changed substantially over time, moving, for example, from advertisements that may have improperly conveyed a floss-replacement message (the most obviously objectionable aspect of the campaign) to advertisements that expressly did not. Therefore, many of those exposed to the advertising campaign may not have been exposed to unfair or deceptive acts as defined by [the relevant statute]. In  analyzing these false advertising claims, the court will be forced to draw fine lines between actionable deception and permissible puffery. Also unclear is whether those exposed to the deceptive aspects of the advertising campaign purchased Listerine for reasons unrelated to the advertising, such as to freshen their breath or as an adjunct to flossing. [Citation.] Whether a causal connection exists between a deceptive act and a loss is not just difficult to identify but appears to vary widely depending on the customer.

Id. at 818 (footnotes omitted).  The word "overbroad" appears in that opinion only once, in a footnote.  Id. at 819 n.8.

As I've explained before, the problem with denying class certification in post-Prop. 64 UCL actions because of lack of reliance by unnamed class members is that, as the Supreme Court confirmed in Tobacco II, the unnamed class members need not establish reliance (or, for that matter, deception or injury).  Neither they nor the named class representatives need to prove those elements at trial.  It makes no sense to deny class certification because of lack of predominance on elements that will never have to be established at trial, either on a classwide basis or, indeed, at all. 

Let us not allow Prop. 64 creep to redefine the elements of certification in California.

Oral argument report: Kwikset Corp. v. Superior Court (Benson)

The Supreme Court heard oral argument on November 3, 2010 in Kwikset Corp. v. Superior Court (Benson), no. S171845.  Jonathan W. Cuneo of Cuneo Gilbert & DaLuca, LLP in Washington, D.C. argued for the plaintiffs.  Fredrick A. Rafeedie of Jones, Bell, Abbott, Fleming & Fitzgerald LLP in Los Angeles argued for the defendant. 

Mr. Cuneo began: This Court must reverse the Court of Appeal to confirm the power of Californians who every day vote with their wallets by choosing products in whole or in part based on how the products were made.  Consumers care about process as well as the final result.

Justice Werdegar:  Our concern is that after Proposition 64 it’s required that the consumer has lost money or property.  If the consumer buys a product, and it works as it’s supposed to work, and it’s not defective, even if the consumer preferred a made in the USA product how would they have lost money? 

Cuneo: People buy things for lots of reasons.  Sometimes to support a social cause.

Justice Corrigan:  I agree, but it seems a more tenuous argument when you’re talking about locksets.  Cuneo:  It applies across the board.  There are many people who want to purchase products made in the US. 

Justice Corrigan:  What if there are two locksets, side by side, they both cost $50.  They are the same except one is labeled made in the USA.  How have I lost money or property?

Cuneo:  Because you made a purchase decision based on a misrepresentation.  You have lost $50.  Justice Moreno:  Is that the measure of restitution?  Cuneo:  No.  Justice Moreno:  How would you measure it?  Cuneo: Restitution under the UCL is flexible.  In this case we never sought rescission.  Justice Moreno:  You’re not seeking the full amount of out-of-pocket loss?  Cuneo:  Absolutely not.  One of the beauties of the UCL is that it allows the judge to fashion an appropriate remedy. That is what happened here.  [And he described the three forms of injunctive relief ordered by the trial court, described at 171 Cal.App.4th at 649.]  This discretion is a significant limitation on the UCL’s reach.  Restitution is necessarily a flexible remedy.  Sometimes the defendant receives a benefit in circumstances in which the plaintiff is not harmed – did not pay extra.  In that case, the court has the ability to fashion injunctive relief and grant limited restitution as in this case.

Justice Kennard: What Prop. 64 says is [and she quoted it].  As I listen to your argument in response to questions from the bench, you said your client lost money when your client paid for a particular lock.  Cuneo:  Yes. Justice Kennard: But so long as your client received a lock that’s working, where’s the harm?  Cuneo:  The harm is he did not get the benefit of the bargain—which is a lockset made in America. 

Justice Kennard: So your argument is that this was fraud?  Justice Chin (interjecting):  But the locksets weren’t inferior?  Cuneo: No.  Justice Chin: They were not overpriced?  Cuneo: We are prepared to amend our complaint to allege a price differential. 

Justice Kennard:  I’m trying to find an argument that is implicit in the rest of your argument.  Is the implicit argument this:  Is it your view that that would allow defendants to make misrepresentations with impunity?  Cuneo:  Yes. 

Justice Baxter:  How much was paid for the locksets?  Let’s say $50, and the consumer relies on the representation made in the US and then discovers later that parts were not—a misrepresentation.  And let’s assume that it’s clear that you could put it on eBay and it would sell for at least what the consumer paid.  Is it your position that that’s irrelevant to your suit?  Cuneo:  I think the answer’s no.  That’s almost a man bites dog story.  Justice Baxter: Let’s say a watch represented to be a Rolex and it’s not.  Cuneo: In that case you’d be very badly damaged.  There is a category of products where you can’t tell by looking at something whether it’s been misrepresented.  Justice Baxter:  Knockoffs.  But let’s say it’s worth more or equal in value to what you paid.  Is that relevant?

Cuneo:  In the ordinary case the answer is no.  There are extreme examples, where you might have lost money or property but were not injured in fact.  If you bought a piece of costume jewelry and found out later it’s the Hope diamond.  You have lost money or property but were not injured in fact.

Justice Chin:  So injury in fact is something different from lost money or property?  Cuneo:  Yes.  In this case, both are met.  Justice Corrigan: And that’s where the issue is joined.  I don’t disagree that they suffered injury in fact.   But if those two are different, where’s the lost money or property?  Cuneo:  No, by putting down your credit card or cash, you’ve lost money. 

Justice Moreno: Is any part of our claim for ill-gotten gains vis-à-vis the defendant’s gaining a competitive advantage?  Cuneo:  Yes.  What the defendant was able to save by shifting jobs to Mexico.  The thing about this case is there’s a statute that makes it a per se offense.  People cared enough about products made in the US that the legislature enacted a statute.  Suppose your religion requires you to eat only kosher foods.  You buy a hot dog mislabeled as kosher.  You’ve lost money or property.  If one examines the language of Prop. 64, its background and what the voters were told, it supports our position.

Justice Corrigan:  With misrepresentation off the table, it’s your position that when I bought a lock, I lost money or property?  Cuneo:  In the context of Prop. 64, what lost money means is you had a business transaction with the defendant.  In your hypothetical, there would be no violation because it doesn’t meet the “as a result of” requirement.

Justice Corrigan:  In my opinion it doesn’t meet “lost money or property” either.   Cuneo:  Pre-Prop. 64 we had unusually broad standing.  Prop. 64 meant to ensure that the plaintiff had a business dealing with the defendant.  The standing requirements don’t say anything about having to prove damages.  Lots of impractical things would result from defendant’s position.  One is valuation and damages would have to be decided at the outset.  Every UCL case would turn into a trial on market pricing.  There’s nothing in the legislative history that said the consumer would be stripped of the right to sue unless they prove a defect or a price differential.  [Then he turned to an example from the ballot materials involving bottled water that had not been properly tested, but was not necessarily bad water.]  There was no indication that the water was dangerous or overpriced.  But the proponents assured the voters that that case would survive.

Justice Corrigan: Well that case could survive if someone lost money or property because of the failure to test.  Cuneo:  But there was nothing about any additional proof.  Justice Corrigan:  No—the requirements are set out in the threefold test.  Cuneo:  In your hypothetical it doesn’t pass the “as a result of” test. 

Justice Baxter:  What if we didn’t have the UCL and the plaintiff sued for restitution under the common law.  What would the result be?  Cuneo:  It’s hard to answer because we’ve had the UCL for so long.  We should not throw out the baby with the bathwater.  [At this point in the argument I felt that the question of standing was being conflated with the question of restitution and how it might be measured.]  Justice Baxter: My question is whether rescission and restitution, in their common-law form, can be obtained if there’s a material misrepresentation that’s relied on.  Cuneo:  Under those circumstances you’re positing a situation in which the streamlined remedies of the UCL, which don’t require the same showing as fraud, would be gone and that would be a significant loss to the people of California. 

That was the end of Mr. Cuneo’s opening argument.  Before Mr. Rafeedie could say anything, Justice Baxter interjected:

Justice Baxter: In that hypothetical we were just discussing, why wouldn’t a consumer who discovered the misrepresentation about made in the USA, why couldn’t that person go into court and get rescission and restitution?  Rafeedie:  I’m not sure they couldn’t do that.  That’s not a cause of action alleged in this case.  Justice Baxter:  Would it be conditioned on proof that that they paid more for the product than it was worth?  Rafeedie:  No.  It would be conditioned on returning the product.

Chief Justice George:  That’s a pretty heavy burden.  Rafeedie:  I’m not sure you would have to go to court to do that.  You could go back to the store and say I found out this product was mislabeled and get your money back.  Chief Justice George:  In some cases a legal action might be required.  Justice Corrigan:  If you had to spend money to go to court then would you have lost money or property?  Rafeedie:  Yes, if you had to spend money to go to court. 

Justice Werdegar:  The purpose of the UCL is to protect consumers and competitors by promoting fair competition.  The mislabeling in this case is unfair competition.  Consumers are motivated to buy products made in the USA.  Prop. 64 requires economic damage.  If someone buys a lockset because it was labeled made in the USA, why have they not suffered economic injury if the implication is they would not have parted with their money for that lockset?  Rafeedie: That would satisfy injury in fact but not money or property.  Justice Werdegar:  The money is gone and the consumer would not have purchased the product.  Rafeedie:  One does not necessarily lose money or property under those circumstances.  Here, plaintiffs purchased locksets and they have had no problems with them.

Justice Kennard:  What is your response to the argument that manufacturers could engage in deceit with impunity so long as the product does what it’s supposed to do?  Rafeedie:  To the extent it does involve monetary loss, consumers can bring UCL actions.  If it does not, public prosecutors can bring the action.  Justice Kennard: But here we’re dealing with Prop. 64 standing.  Is your argument that under the language of Prop. 64, the consumer has not alleged injury in fact?  Rafeedie:  No.  The Court of Appeal found injury in fact satisfied and we have not argued against that.  We argue no lost money resulted from the misrepresentation.

Justice Werdegar:  But if I allege I would not have bought this property except for the misrepresentation, why have I not suffered economic loss?  Rafeedie:  You were in the market for a lock and you got one.  Justice Werdegar:  I don’t think the UCL requires a defect. We’re looking at defective products.  Rafeedie:  The Court of Appeal’s use of the term defective, if the misrepresentations induced you to buy something. 

Justice Werdegar:  You might have paid more for the label.  If kosher is important to me, even though the hot dog is delicious and has full nutritional value, have I not suffered injury because I would not have suffered the economic loss but for the label?  Rafeedie:  Not necessarily.  It depends on the circumstances.  Maybe the label allowed the manufacturer to command a premium price. 

Justice Moreno:  Is the plaintiff allowed a claim for ill-gotten gains due to the competitive advantage gained over other competitors?  Does the consumer have a UCL claim for that profit?  Rafeedie:  No, the consumer does not.  Justice Chin:  But a competitor might?  Rafeedie: Yes, a competitor might, but not a consumer. 

Chief Justice George:  Is your answer the same if the claim is a product was labeled organically grown?  Is it inconsequential that it was falsely labeled? Rafeedie: Yes.  Justice Chin:  Unless a premium was paid.  Rafeedie: Yes.

Justice Corrigan:  If you lost money or property returning the item; because you had to consult with a spiritual adviser because you ate non-kosher food; if you got sick.  There are lots of ways a consumer could lose money or property.  Rafeedie:  I agree.  Not necessarily limited to paying a premium.  That’s one type.  There might be consequential damages, conceivably lost profits.  These are the sorts of things fraud law allows recovery for. 

Chief Justice George:  There is a recent case that this Court decided called Bronco Wine.  In that case wine was labeled as from Napa Valley when it should have been labeled Lodi.  Assume the wine was just as good.  How would you recover restitution?  Rafeedie:  If that’s the only allegation it depends on the circumstances whether a loss was suffered.  If I wasn’t in the marketplace and wouldn’t have bought anything but for the misrepresentation.

Justice Werdegar: Whose burden is it to show that the plaintiff was really going to buy wine or a hot dog?  That they would not have bought something exactly comparable?  Rafeedie:  The plaintiff’s.  Justice Werdegar:  But the plaintiff has already alleged he would not have bought the product.  Does he have to show he never would have bought anything comparable?  Rafeedie:  Yes.  That’s what the plaintiff has to prove. Here we have no allegations that the plaintiff would have paid less for a comparable lockset.  Justice Werdegar: But they do allege they would not have given money for those locksets.  Rafeedie: That is part of the greater allegation that if we had known, we would not have bought. 

Justice Moreno: How is this case different from the Napa wine case? Would it be easy to measure restitution?  Rafeedie: Because there are no allegations of any differential in price.  Justice Moreno: Would you agree that in the Napa/Lodi example there is a difference?  Rafeedie: If there’s a differential in price that would be the difference.  Justice Moreno:  You’re saying here because the locksets are equal in quality there is no loss.  Rafeedie:  Yes, no allegation the locks are any different than they would have been if they had been made in the US.

Justice Baxter: But we’re not talking about damages under the UCL; were talking about restitution and injunctive relief.  If the purchaser can mitigate damages by selling on eBay, does that have any impact on the ability to proceed under the UCL?  Rafeedie:  Yes. 

Justice Corrigan: If the plaintiff alleged that he had lost money because he had to pay a fee to sell the product on eBay, pay shipping costs, then that would be sufficient?  Rafeedie:  Consequential damages could be.  Justice Corrigan:  If they could prove they suffered those damages then the expenditure of those moneys could constitute lost money or property?  Rafeedie:  Yes it could.  It’s not recoverable as restitution, however. 

That was the end of Mr. Rafeedie’s argument.  The rebuttal:

Cuneo:  In response to Justice Baxter’s questions about eBay, and I think Justice Chin had the same question.  If you can resell it for more on eBay, that is the same circumstance this Court just considered in Clayworth.  The pharmacists passed on the overcharge.  The holding of that case was they lost money or property when they paid for the price-fixed pharmaceuticals.  Clayworth was also—  Justice Chin (interrupting): This is not a question of passing on the value by selling on eBay.  If you get the value of the property, where’s the loss? 

Cuneo:  The second you pay for it you’ve got the loss under Clayworth.  The primary purpose of the UCL is injunctive relief, to enable people to stop misrepresentations in their tracks.  On the less than meritorious cases, let’s bear in mind that the UCL gives courts tremendous discretionary power to limit the remedies. The court can find a violation and the judge can say it’s not substantial enough for any relief.  Or the court can issue an injunction only, but nothing to the consumers.  The courts have the tools to address the concerns raised in the Tobacco II dissent by Justice Baxter.  What adoption of the Court of Appeal opinion would do is impose vast new burdens at the front end of UCL actions.  On the public prosecutor point, public prosecutors have their hands full.  That’s why the DAs filed an amicus brief on our side.

Justice Werdegar:  What remedies did the trial court order in this case.  Cuneo: [he described the three forms of injunctive relief].  Justice Werdegar: It denied restitution to consumers, correct?  Cuneo:  It did.  Justice Werdegar: It engaged in the discretionary, nuanced remedies you referenced, didn’t it?  Cuneo:  It did. 

And that was the end of the argument.  

It's not hard to guess where Justice Corrigan will come down on this question, but I don't think any of the other justices feel as strongly as she does.  Justices Werdegar and Kennard and even the Chief Justice appear to favor the plaintiff's position.  The one thing that I think can be safely predicted is a split decision.

The opinion will be due in 90 days.

Oral argument report coming on Kwikset v. Superior Court (Benson)

First of all it was a complete and total madhouse at the Civic Center this morning.  My husband drove me through an obstacle course including part of the parade route on McAllister just to get to the courthouse (mind you, this was 8:15 a.m.), and then afterwards (at about 10:15) to get to the BART station I had to walk all the way around City Hall, up Van Ness, past the Bill Graham auditorium.  Yeah, it was exciting.

This is a much better picture than the one I got on my phone.  If you're not familiar with the area, that's the state building to the left where the Supreme Court is:

[photo from sfgate.com]

The sidewalk in front of the building was packed.  As for the argument, it was not very heavily attended (hard to imagine why), but it was very interesting. I'll be typing up my report and posting it here later.  For now I'll just say it's going to be a split decision. 

Oral argument preview: Kwikset Corp. v. Superior Court (Benson)

This morning at 9:00 a.m., the Supreme Court will hear oral argument in in Kwikset Corp. v. Superior Court (Benson), no. S171845, in which the issue on revivew is as follows:

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 opinion, which found no standing under those facts, is here: Kwikset Corp. v. Superior Court (Benson), 171 Cal.App.4th 645 (2009) (rev. granted 06/10/09). 

I'm planning to attend the argument and will endeavor to provide a report later in the week.

A tale of two opinions

On August 26, 2010, the Second Appellate District, Division Seven, handed down an unpublished opinion, Brookler v. Radioshack Corp., 2010 WL 3341816 (Aug. 26, 2010) (no. B212893), in which it held as follows: 

[U]nless and until our Supreme Court holds otherwise, we agree with and adopt the analysis in Cicairos, supra, 133 Cal.App.4th 949, holding an employer's obligation under the Labor Code and IWC wage orders is to do more than simply permit meal periods in theory; it must also provide them as a practical matter. If the employer does not ensure compliance with meal period requirements, such behavior violates the Labor Code and corresponding wage orders. (See id. at p. 963.) “The IWC intended that, like overtime pay provisions, payment for missed meal and rest periods be enacted as a premium wage to compensate employees, while also acting as an incentive for employers to comply with labor standards.” (Murphy, supra, 30 Cal.4th at p. 1110.)

Id. at *3 (emphasis added).  This issue is, of course, now pending before the California Supreme Court in Brinker Restaurant Corp. v. Superior Court (Hohnbaum), no. S166350 (in which I am co-counsel for the workers). 

Multiple publication requests were filed in Brookler (including one by yours truly).  Division Seven denied them all.  Brookler itself is now pending before the Supreme Court (Brookler v. Radioshack Corp., no. S186357), but the Brookler opinion remains unpublished and uncitable in the many cases involving this issue that have not been stayed pending resolution of Brinker. 

On September 30, 2010, the Second Appellate District, Division Eight, handed down an unpublished opinion, Hernandez v. Chipotle Mexican Grill, Inc., 2010 WL 3789012 (Sept. 30, 2010). This decision holds:  "We conclude that employers must provide employees with breaks, but need not ensure employees take breaks."  Id. at *1.  On this basis, Division Eight affirmed the trial court's order denying class certification (which also had been predicated on the turn of that legal question).  Id. at *3.

Publication requests were filed in this case as well.  Yesterday, Division Eight granted them—unlike their colleagues down the hall in Brookler.  Both cases involved the same important legal issue, reached opposing conclusions, yet Division Eight found publication warranted, and Division Seven did not.  Why? 

The Supreme Court will likely issue "grant and hold" orders in both cases, as it previously did in Brinkley and Faulkinbury.  Therefore, Hernandez is not likely to remain published and citable for long. But these strange procedural events only add fuel to the fire burning in the lower state and federal courts.