The UCL Practitioner

New Ninth Circuit CAFA opinion construes Standard Fire: Rodriguez v. AT&T Mobility Services LLC

In Rodriguez v. AT&T Mobility Services LLC, ___ F.3d ___ (9th Cir. Aug. 27, 2013), the Ninth Circuit construed the U.S. Supreme Court's first, and so far only, CAFA decision, Standard Fire Ins. Co. v. Knowles, 133 S.Ct. 1345 (2013) (discussed in this blog post).

Standard Fire addressed whether the plaintiff could avoid federal jurisdiction under CAFA by stipulating that classwide damages did not exceed $5 million or by attempting to waive damages above that figure.  The answer was no, although this did not relieve the defendant (as the removing party) of its burden to prove that the amount-in-controversy requirement was met. 

In Rodriguez, the parties agreed that Standard Fire required reversal of the district court's remand order, which was issued before the opinion in Standard Fire.  The Ninth Circuit directed the district court to reconsider the remand motion. Slip op. at 7. 

Regarding the burden of proof, the panel determined that Standard Fire overruled Lowdermilk v. U.S. Bank National Association, 479 F.3d 994 (9th Cir. 2007) (discussed here), which had imposed a "legal certainty" standard, instead of an ordinary preponderance of the evidence standard, for countering the complaint's amount-in-controversy allegations:

The reasoning behind Lowdermilk's imposition of the legal certainty standard is clearly irreconcilable with Standard Fire. We hold that Standard Fire has so undermined the reasoning of our decision in Lowdermilk that the latter has been effectively overruled. A defendant seeking removal of a putative class action must demonstrate, by a preponderance of evidence, that the aggregate amount in controversy exceeds the jurisdictional minimum. This standard conforms with a defendant's burden of proof when the plaintiff does not plead a specific amount in controversy.

....

A lead plaintiff of a putative class cannot reduce the amount in controversy on behalf of absent class members, so there is no justification for assigning to the allegation weight so significant that it affects a defendant's right to a federal forum under § 1332(d)(2). Our reasons for applying a legal certainty standard are now clearly irreconcilable with intervening Supreme Court authority. Accordingly, Lowdermilk has been effectively overruled by Standard Fire.

Slip op. at 14, 15. 

Back when Standard Fire was first handed down, a blog reader emailed me to suggest that it overruled Lowdermilk.  It turns out this reader was right on according to Rodriguez.

Seventh Circuit reconfirms class certification post-Comcast: Butler v. Sears Roebuck and Co.

Last week, the Seventh Circuit handed down its new, post-Comcast opinion in Butler v. Sears Roebuck and Co., ___ F.3d ___ (7th Cir. Aug. 22, 2013). 

This is one of the three cases in which the U.S. Supreme Court issued a "grant, vacate and transfer" (or "GVR") order post-Comcast.  As it did in its original opinion, the Seventh Circuit (in an opinion by Judge Posner) reversed the district court's order denying class certification of claims for breach of warranty arising out of alleged defects in the defendant's front-load washers. 

A lot of language from the original opinion was retained and appears in the new one.  The discussion of Comcast appears at pp. 5-8.  Here are a few sound bites:

• "Sears is wrong to think that anything a dissenting opinion approves of the majority must disapprove of."  Slip op. at 7 (emphasis in original).  (This brings to mind Justice Werdegar's concurrence in Brinker; some litigants have argued that the rest of the justices must have disagreed with everything she said, or they would have joined it.  It is equally possible that they considered the matters unnecessary to the opinion.)
• "As we explained in McReynolds v. Merrill Lynch, Pierce, Fenner & Smith, Inc., 672 F.3d 482, 491-92 (7th Cir.2012), distinguishing Wal-Mart Stores, Inc. v. Dukes, 131 S.Ct. 2541 (2011), a class action limited to determining liability on a class-wide basis, with separate hearings to determine—if liability is established—the damages of individual class members, or homogeneous groups of class members, is permitted by Rule 23(c)(4) and will often be the sensible way to proceed. " Slip op. at 7.  
• "Sears thinks that predominance is determined simply by counting noses: that is, determining whether there are more common issues or more individual issues, regardless of relative importance. That's incorrect. An issue “central to the validity of each one of the claims” in a class action, if it can be resolved “in one stroke,” can justify class treatment. Wal–Mart Stores, Inc. v. Dukes, supra, 131 S.Ct. at 2551. That was said in the context of Rule 23(a)(2), the rule that provides that class actions are permissible only when there are issues common to the members of the class (as of course there are in this case). But predominance requires a qualitative assessment too; it is not bean counting."   Slip op. at 8-9 (citing Amgen).
• "It would drive a stake through the heart of the class action device, in cases in which damages were sought rather than an injunction or a declaratory judgment, to require that every member of the class have identical damages. If the issues of liability are genuinely common issues, and the damages of individual class members can be readily determined in individual hearings, in settlement negotiations, or by creation of subclasses, the fact that damages are not identical across all class members should not preclude class certification. Otherwise defendants would be able to escape liability for tortious harms of enormous aggregate magnitude but so widely distributed as not to be remediable in individual suits." Slip op. at 9-10.
• "There is a single, central, common issue of liability: whether the Sears washing machine was defective. Two separate defects are alleged, but remember that this class action is really two class actions. In one the defect alleged involves mold, in the other the control unit. Each defect is central to liability. Complications arise from the design changes and from separate state warranty laws, but can be handled by the creation of subclasses."  Slip op. at 10-11.
• "The concordance in reasoning and result of our decision and the Sixth Circuit's decision [in In re Whirlpool Corp. Front-Loading Washer Product Liability Litig., ___ F.3d ___, 2013 WL 3746205 (6th Cir. Jul. 18, 2013)] averts an intercircuit conflict."  Slip op. at 11.
  

My post on the Sixth Circuit's post-Comcast Whirlpool opinion is here.  In other blog coverage on Butler v. Sears, Paul Karlsgodt predicts that moldy washing machines will save the consumer class action from extinction. 

We still await the Seventh Circuit's post-Comcast opinion in the third GVR case, RBS Citizens, N.A. v. Ross, no. 12-165.  This one is an employment matter. 

The UCL and wrongful foreclosure: Glaski v. Bank of America, N.A.

In Glaski v. Bank of America, N.A., ___ Cal.App.4th ___ (Jul. 31, 2013; pub. ord. Aug. 8, 2013), an individual wrongful foreclosure action, the Fifth District has a single paragraph addressing the UCL:

Based on the foregoing, we conclude that Glaski’s fourth cause of action has stated a claim for wrongful foreclosure.  It follows that Glaski also has stated claims for quiet title (third cause of action), declaratory relief (fifth cause of action), cancellation of instruments (eighth cause of action), and unfair business practices under Business and Professions Code section 17200 (ninth cause of action).  (See Susilo v. Wells Fargo Bank, N.A. (C.D.Cal. 2011) 796 F.Supp.2d 1177, 1196 [plaintiff’s wrongful foreclosure claims served as predicate violations for her UCL claim].)

Slip op. at 26-27.  The citation to a federal district court decision suggests that no other California Court of Appeal opinion has addressed whether conduct constituting wrongful foreclosure (which is a catch-all term that can encompass a variety of defects in the foreclosure process, including statutory violations) can form the predicate for a UCL claim. There's no reason why it shouldn't, particularly after Rose and Zhang reconfirmed the broad scope of the UCL's "unlawful" prong.

New class certification opinion: Hendleman v. Los Altos Apartments, L.P.

In Hendelman v. Los Altos Apartments, L.P., ___ Cal.App.4th ___ (Jul. 22, 2013; pub. ord. Aug. 20, 2013), the Court of Appeal (Second Appellate District, Division Three) affirmed the trial court's order denying class certification in an action by tenants against their landlord for breach of the implied warranty of habitability (and related claims).

UPDATE:  On November 26, 2013, the Supreme Court depublished this opinion.  Hendleman v. Los Altos Apartments, No. S213598.

Webinar on Rose and Zhang today (Weds. 8/21) at noon

It's not too late to register for today's webinar on the California Supreme Court's Rose and Zhang decisions.  The webinar, entitled Recent Developments in Unfair Competition Law: A View from the Supreme Court, is presented by the Antitrust and Unfair Competition Law Section of the State Bar of Califronia, and will take place today (Wednesday, August 21, 2013) from noon to 1:00 p.m.  Click here for more information and to register.

It should be a great program.  It will feature Peter Abrahams, defense counsel in Zhang; Henry Rossbacher, plaintiff's counsel in Rose; and Will Stern as the moderator.

Pending California Supreme Court cases list updated

I've updated my list of pending California Supreme Court cases relevant to the areas of practice covered by this blog. 

The only new cases added to the list are five more "grant and holds" involving arbitration issues and stayed pending resolution of Sanchez or Iskanian.  Removing all the "grant and hold" cases from the list, here's what's pending.  (If I've missed any, please drop me an email.) 

There are two class certification cases (Ayala and Duran); three arbitration-related cases (Sonic-Calabasas, Sanchez, and Iskanian); one preemption case (Pac Anchor); and one "unfair" prong case (Cipro): 

Ayala v. Antelope Valley Newspapers, No. S206874 (review granted 01/30/13)

• Issue: This case presents questions concerning the determination of whether common issues predominate in a proposed class action relating to claims that turn on whether members of the putative class are independent contractors or employees.
• Court of Appeal Opinion:  Ayala v. Antelope Valley Newspapers, Inc., 210 Cal.App.4th 77 (2012)

Iskanian v. CLS Transportation, No. S204032 (review granted 09/19/12)

• Issues: (1) Did AT&T Mobility LLC v. Concepcion (2011) 563 U.S. __ [131 S. Ct. 1740, 179 L.Ed.2d 742] impliedly overrule Gentry v. Superior Court (2007) 42 Cal.4th 443 with respect to contractual class action waivers in the context of non-waivable labor law rights? (2) Does the high court's decision permit arbitration agreements to override the statutory right to bring representative claims under the Labor Code Private Attorneys General Act of 2004 (Lab. Code, § 2698 et seq.)? (3) Did defendant waive its right to compel arbitration?
• Court of Appeal Opinion: Iskanian v. CLS Transp. Los Angeles, LLC, 206 Cal.App.4th 949 (2012)

Duran v. U.S. Bank National Association, no. S200923 (review granted 05/16/12)

• Issue: This case presents issues concerning the certification of class actions in wage and hour misclassification litigation and the use of representative testimony and statistical evidence at trial of such a class action.
• Court of Appeal Opinion: Duran v. U.S. Bank National Ass'n., 203 Cal.App.4th 212 (2012)
• Briefs: available at this link

Sanchez v. Valencia Holding Co., no. S199119 (review granted 03/21/12)

• Issue: Does the Federal Arbitration Act (9 U.S.C. § 2), as interpreted in AT&T Mobility LLC v. Concepcion (2011) 563 U. S. __, 131 S.Ct. 1740, preempt state law rules invalidating mandatory arbitration provisions in a consumer contract as procedurally and substantively unconscionable?
• Court of Appeal Opinion: Sanchez v. Valencia Holding Co., LLC, 201 Cal.App.4th 74 (2011)

In re Cipro Cases I & II, no. S198616 (review granted 02/15/12)

• Issue: May a suit under the Cartwright Antitrust Act (Bus. & Prof. Code, § 16720 et seq.) be brought to challenge "reverse exclusionary payments" made by pharmaceutical manufacturers to settle patent litigation with generic drug producers and prolong the life of the patents in question? 
• Court of Appeal Opinion: In re Cipro Cases I & II, 200 Cal.App.4th 442 (2011)

People ex rel. Harris v. Pac Anchor Transportation, Inc., no. S194388 (review granted 08/10/11)

• Issue: Is an action under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) that is based on a trucking company's alleged violation of state labor and insurance laws "related to the price, route, or service" of the company and, therefore, preempted by the Federal Aviation Administration Authorization Act of 1994 (49 U.S.C. § 14501)?
• Court of Appeal Opinion: People ex rel. Harris v. Pac Anchor Transportation, Inc., 195 Cal.App.4th 765 (May 18, 2011)

Sonic-Calabasas A, Inc. v. Moreno, no. S174475 (review granted 09/09/09)

• Issues:  (1) Can a mandatory employment arbitration agreement be enforced prior to the conclusion of an administrative proceeding conducted by the Labor Commissioner concerning an employee's statutory wage claim? (2) Was the Labor Commissioner's jurisdiction over employee's statutory wage claim divested by the Federal Arbitration Act under Preston v. Ferrer (2008) __ U.S. __, 128 S.Ct. 978, 169 L.Ed.2d 917?
• Supreme Court Opinion:  Sonic-Calabasas A, Inc. v. Moren0, 59 Cal.4th  (Feb. 24, 2011) 
• U.S. Supreme Court Order (10/31/11):  The petition for writ of certiorari is granted. The judgment is vacated, and the case is remanded to the Supreme Court of California for further consideration in light of AT&T Mobility LLC v. Concepcion, 563 U.S. ___ (Apr. 27, 2011).
• Supreme Court Order (01/11/12): In light of the United States Supreme Court's order vacating our judgment in the above-entitled case and remanding the cause to this court "for further consideration in light of AT&T Mobility LLC. v. Concepcion, 563 U.S. __ (2011) [131 S.Ct. 1740]," the parties are requested to brief the significance of that case. The parties are requested to file and serve simultaneous briefs by February 10, 2012, and may file and serve reply briefs by February 24, 2012.

New public prosecutor opinion addresses interplay between UCL and litigation privilege: People v. Persolve LLC

In People v. Persolve LLC, ___ Cal.App.4th ___ (Aug. 15 2013), the Court of Appeal (Fifth Appellate District) reinstated a UCL "unlawful" prong claim brought by the Kern County District Attorney against a debt collection company for violation of the Rosenthal Act (Civ. Code §§ 1788 et seq.) and the federal Fair Debt Collection Practices Act (15 U.S.C. §§ 1692 et seq.). 

The trial court held that the litigation privilege barred the action because the challenged debt-collection activity related to anticipated litigation.  Slip op. at 2.  The parties did not really dispute, and the Court of Appeal seemed to agree, that the conduct fell within the scope of the privilege because it bore some relation to anticipated litigation (i.e., a lawsuit to enforce the debt).  See id. at 5-6.

The disputed question was whether applying the privilege would make the fair debt collection practices statutes effectively inoperable, and in turn, whether a UCL "unlawful" prong claim predicated on those statutes' violation should be permitted notwithstanding the privilege.  See id. at 6-7.  The Court of Appeal noted that the privilege is "not without limit," and that "Courts have found exceptions to [it] based on irreconcilable conflicts between the privilege and other coequal state laws."  Id. at 6.  An earlier decision, Komarova v. National Credit Acceptance, Inc., 175 Cal.App.4th 324 (2009), held that "the privilege cannot be used to shield violations" of the Rosenthal Act.  Id. at 7.  The same reasoning applied to the federal Act, the Court held.  Id. at 8.

The defendants pointed out that the DA's enforcement action was brought under the UCL, not the state or federal debt collection statutes.  They relied on two decisions holding that the litigation privilege can bar UCL claims.  Id. at 8-9 (citing Rubin v. Green, 4 Cal.4th 1187 (1993); People ex rel. Gallegos v. Pacific Lumber Co., 158 Cal.App.4th 950 (2008) (discussed in this blog post)).

The Court of Appeal was not persuaded:

Where, as here, the “borrowed” statute is more specific than the litigation privilege and the two are irreconcilable, unfair competition law claims based on conduct specifically prohibited by the borrowed statute are excepted from the litigation privilege.  Applying the privilege to unlawful practices based on specific violations of the California Act and the Federal Act would effectively render the protections afforded by those acts meaningless.  In contrast, in both Rubin and Gallegos, the application of the litigation privilege did not render the prohibitions underlying the unfair competition claims significantly or wholly inoperable.  Civil statutes for the protection of the public should be interpreted broadly in favor of their protective purpose.  Accordingly, the People’s unfair competition law claims that are based on conduct that is specifically prohibited by the California Act and/or the Federal Act are not barred by the litigation privilege.  (Komarova, supra, 175 Cal.App.4th at pp. 339-340.)

Id. at 9-10 (emphasis added).  This reasoning should apply not only in public prosecutor actions, but also in cases brought by private litigants. 

State Bar webinar next Wednesday on Rose and Zhang

Next Wednesday, August 21, 2013 at 12:00-1:00 p.m., the Antitrust and Unfair Competition Law Section of the State Bar of California will present a webinar on Rose and Zhang.

It looks like it's going to to be very good, as well as a bargain at $55.  The webinar will feature defense counsel from Zhang, plaintiff's counsel from Rose, and Will Stern as the moderator.  

Recent Developments in Unfair Competition Law:
A View from the Supreme Court

This month the California Supreme Court issued two significant Unfair Competition Law cases, Zhang v. Superior Court and Rose v. Bank of America.  With these two decisions, the California Supreme Court appears to be embracing a more expansive interpretation of UCL. In this informative program, the lawyers who argued the two cases before the California Supreme Court will discuss the impact these decisions will have on future UCL cases.

Speakers:

Peter Abrahams, Horvitz & Levy LLP (defense counsel in Zhang)

Henry Rossbacher, The Rossbacher Firm (plaintiff's counsel in Rose)

William L. Stern, Morrison & Foerster LLP (moderator)

Click here for more information and to register.

For more on the Rose and Zhang opinions, see these blog posts. 

Renewed class certification motion denied in Dukes v. Wal-Mart

On August 2, 2013, Judge Breyer denied the renewed motion for class certification filed in Dukes v. Wal-Mart after remand.  Dukes v. Wal-Mart Stores, Inc., 2013 WL 3993000 (N.D. Cal. Aug. 2, 2013).

The renewed motion sought certification of a much smaller class, consisting of employees of stores in Wal-Mart's "California regions."  The class of 150,000 proposed members was only 10% the size of the nationwide class of 1.5 million originally certified by Judge Jenkins. But Judge Breyer found that the smaller proposed class "suffers from the same problems identified by the Supreme Court, but on a somewhat smaller scale."  Id. at *10. 

Interestingly, he said that what the plaintiffs should have done was "identify an employment practice and define a class around it."  Id.  He was "not impressed" with their effort to connect Wal-Mart's disparate treatment of women (which the statistical evidence appears to establish) with assertedly common practices that they had not identified or advanced in their earlier motion. 

Answers to amici briefs filed in Duran v. U.S. Bank N.A.

Last week, the parties filed their answers to the amici curiae briefs in Duran v. U.S. Bank National Association, no. S200923.  The answer briefs are available at these links:

• Respondents' Answer to Amici Curiae Briefs (filed 08/06/13)
• U.S. Bank's Answer to Amici Curiae Briefs (filed 08/07/13)

A complete list of links to all the briefs filed in this case is here.  (Disclosure: I am one of the attorneys for CELA in this case and authored CELA's amicus brief.) 

Briefing is now complete in this case, unless the Supreme Court grants leave for additional briefs to be filed. 

On an unrelated subject, last week I noted that the oral argument calendar for September had been announed, and that no cases of interest were scheduled.  However, At the Lectern pointed out that on September 4, 2013, the Court will hear argument in Garcia on Admission, no. 202512, which involves whether an undocumented immigrant who graduated from law school and passed the bar exam can be admitted to practice law. 

This is an interesting case for sure, although unrelated to what I normally cover on this blog. The briefs in the case are here.

No cases of interest set for oral argument in September 2013

Yesterday, the California Supreme Court posted its oral argument calendar for September 2013.  None of the cases I'm following has been set.  More than one arbitration-related case is fully briefed and ready for argument, including Sanchez v. Valencia Holding Co., no. S199119 (review granted 03/21/12).  Sanchez has calendar preference, and briefing was completed last November. 

In other news, this week the parties filed their responses to the amicus briefs in Duran v. U.S. Bank National Association, no. S200923 (review granted 05/16/12).  I will be posting those online and adding them to my list of Duran briefs later.  Duran is now fully briefed, although it may be a very long time before the case is argued.

Cert. petition filed in cy pres settlement case: Lane v. Facebook

On July 26, 2013, a petition for a writ of certiorari was filed with the U.S. Supreme Court by the objectors in the Lane v. Facebook case.   Marek v. Lane, no. 13-136.

In its original opinion in this case, the Ninth Circuit affirmed a class action settlement with a significant cy pres component.  Lane v. Facebook, Inc., 696 F.3d 811 (9th Cir. 2012).  En banc rehearing was denied in February, with six judges strenuously dissenting.  Lane v. Facebook, Inc., 709 F.3d 791 (9th Cir. 2013). 

The cert. petition describes the issue presented as follows:

Federal Rule of Civil Procedure 23(e)(2) requires that a settlement that binds class members must be“fair, reasonable, and adequate.” In this case, the Ninth Circuit upheld approval of a settlement that disposed of absentee class members’ claims while providing those class members no relief at all. Breaking with decisions of the Second, Third, Fifth, Seventh, and Eighth Circuits, the Ninth Circuit held that the settlement’s award of $6.5 million to establish a new foundation controlled by the lead defendant and class counsel was a fair and adequate remedy under the trust-law doctrine of cy pres.  The question presented is:

Whether, or in what circumstances, a cy pres remedy that provides no direct relief to class members comports with the requirement of Rule 23(e)(2) that a settlement that binds class members must be“fair, reasonable, and adequate.”

It will of course be very interesting to see whether this case is taken up. The other pending U.S. Supreme Court petition that I'm currently following is POM Wonderful LLC v. The Coca Cola Co., No. 12-761 (U.S.) (discussed here).  This case has already been relisted once. 

If you are aware of any other pending cert. petitions of interest, please drop me an email. 

Supreme Court holds insurance companies enjoy no special immunity from UCL liability: Zhang v. Superior Court

In the second of last week's pair of UCL decisions, Zhang v. Superior Court (Cal. Capital Ins. Co.), ___ Cal.4th ___ (Aug. 1, 2013), the Supreme Court held that Moradi-Shalal did not grant insurance companies special immunity from UCL liability.  This excerpt is from the introduction:

We hold that Moradi-Shalal does not preclude first party UCL actions based on grounds independent from section 790.03, even when the insurer’s conduct also violates section 790.03.  We have made it clear that while a plaintiff may not use the UCL to “plead around” an absolute bar to relief, the UIPA does not immunize insurers from UCL liability for conduct that violates other laws in addition to the UIPA.  (Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 283-284 (Manufacturers Life); see also Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182-183 (Cel-Tech); Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43 (Quelimane); Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 565 (Stop Youth Addiction).)

Here, plaintiff alleges causes of action for false advertising and insurance bad faith, both of which provide grounds for a UCL claim independent from the UIPA.  Allowing her also to sue under the UCL does no harm to the rule established in Moradi-Shalal. 

Slip op. at 2 (footnote omitted) (citing Moradi-Shalal v. Fireman’s Fund Ins. Companies, 46 Cal.3d 287 (1988)).

Time permitting later in the week, I will provide more thoughts on Zhang in a future post.  

Supreme Court reconfirms broad scope of UCL's "unlawful" prong: Rose v. Bank of America, N.A.

The opinions handed down yesterday in Rose v. Bank of America, N.A., ___ Cal.4th ___ (Aug. 1, 2013), and Zhang v. Superior Court (Cal. Capital Ins. Co.), ___ Cal.4th ___ (Aug. 1, 2013), were both unanimous and both authored by Justice Corrigan (with a concurrence by Justice Werdegar in Zhang).  Both decisions reaffirm the longstanding general rule that a UCL "unlawful" prong claim may be predicated on a violation of any law — state or federal, statutory or court-made — regardless of whether the underlying law independently carries a private right of action. 

Here are my thoughts on Rose, and I'll discuss Zhang on Monday.

Rose involved a UCL "unlawful" prong claim predicated on violations of the federal Truth in Savings Act ("TISA") (12 U.S.C. §§ 4301 et seq.).  TISA previously carried an explicit statutory private right of action, but Congress allowed that provision to expire 10 years after it was enacted.  Rose, slip op. at 1-2.  The Court of Appeal held that this (in)action evinced an intention by Congress to preclude private civil enforcment, and that the UCL claim was therefore barred.  Id. at 3. 

The Supreme Court disagreed, and reversed. 

The opinion discusses a series of "familiar principles on which the UCL operates."  Id. at 5.  One of them is that the UCL's "unlawful" prong may "borrow" a federal statute as the predicate violation even if "Congress has decided not to allow private enforcement of the federal law."  Id.  The opinion explains:

[W]e have made it clear that by borrowing requirements from other statutes, the UCL does not serve as a mere enforcement mechanism.  It provides its own distinct and limited equitable remedies for unlawful business practices, using other laws only to define what is “unlawful.”  (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150 [UCL provides equitable avenue for prevention of unfair business practices, with streamlined procedures and limited remedies].)  The UCL reflects the Legislature’s intent to discourage business practices that confer unfair advantages in the marketplace to the detriment of both consumers and law-abiding competitors.

Id. at 7. 

The only exceptions to this general rule are narrow ones:   if the UCL action is actually barred by some other prinicple of law, or if some other law explicitly authorizes or immunizes the challenged conduct, the UCL claim may not proceed.  As Rose explains:

It is settled that a UCL action is not precluded “merely because some other statute on the subject does not, itself, provide for the action or prohibit the challenged conduct.  To forestall an action under the [UCL], another  provision must actually ‘bar’ the action or clearly permit the conduct.”  (Cel-Tech, supra, 20 Cal.4th at p. 183; see Zhang v. Superior Court (Aug. 1, 2013, S178542) __ Cal.4th __ [pp. 12-14]; Stop Youth Addiction, supra, 17 Cal.4th at p. 566.)

Id. at 8 (emphasis added). Even evidence of a legislative "intent to create a comprehensive, exclusive scheme" for regulating a particular field is not enough to "actually bar" a UCL action.  Id. at 6 (citing Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553, 560 (1998)).  Such an action "enforc[es] the UCL, not the statutes underlying [the] claim of unlawful business practice."  Id.

In Rose, no such bar existed.  The proposed UCL claim was not actually precluded by any other act of Congress or by any other affirmative expression of legislative intent.  On the contrary, an unexpired TISA provision expressly permitted "private actions under state laws consistent with TISA.  Thus, the abolition of the TISA remedy does not amount to a bar against UCL claims."  Id.  

The opinion reiterates this fundamental point:

[T]he UCL ... is meant to provide remedies cumulative to those established by other laws, absent express provision to the contrary.  (Bus. & Prof. Code, § 17205.)  We have long recognized that the existence of a separate statutory enforcement scheme does not preclude a parallel action under the UCL.  (Stop Youth Addiction, supra, 17 Cal.4th at pp. 572-573, citing cases.)

Id. at 9-10 (italics in original; bold added) (footnote omitted).

The opinion ends with an interesting footnote citing Bowen v. Ziasun Technologies, Inc., 116 Cal.App.4th 777 (2004) (discussed in these blog posts).  Bowen held that "the UCL does not apply to claims arising from securities transactions."  Rose, slip op. at 10 n.8.  The Supreme Court observed that "[w]hatever the scope and merits of that holding may be, it does not apply here."  Id. (citations omitted). I think this suggests that the Court may view Bowen as inconsistent with the principles reaffirmed in Rose.  (In Overstock.com, Inc. v. Gradient Analytics, Inc., 151 Cal.App.4th 688 (2007) (discussed here), another Court of Appeal panel declined to follow Bowen.)  The Court has reserved that question for another case and another day. 

As between Rose and Zhang, Rose was the more straightforward case.  The opinion is shorter (11 vs. 24 pages) and, unlike Zhang, unanimous in its reasoning (7-0 with no concurrence). It does not really break any unbroken ground, and is based instead on "familiar principles" long established in the Supreme Court's UCL jurisprudence.  I think the opinion will serve to restrain lower courts from construing the UCL's "unlawful" prong more narrowly than the Supreme Court's older precedents warranted (as may have happened in Bowen, for example, as well as in Rose below, and in another case even more recently).

I will have thoughts on Zhang next week.