Yesterday, the Supreme Court reversed the Court of Appeal and held that an action by the Orange County District Attorney for civil penalties under the UCL was not preempted by Fed/OSHA (the federal Occupational Safety and Health Act (29 U.S.C. § 651 et seq.)). Solus Industrial Innovations, LLC v. Superior Court, ___ Cal.5th ___ (Feb. 8, 2018). The ruling allows public prosecutors to invoke the UCL to pursue civil penalties and injunctive relief against employers who fail to comply with workplace safety regulations. As reported in the San Francisco Chronicle, "State Supreme Court unanimous ruling allows big fines for unsafe workplaces."
This case has rather a long history. In 2014, I wrote this blog post on the Court of Appeal's original opinion, which, in the Supreme Court's words, "was based in part on a misapprehension concerning the date that unfair competition penalty provisions were enacted compared with the date the federal Secretary of Labor approved California’s occupational safety and health plan." Solus, slip op. at 4.
In early 2015, the Supreme Court issued a "grant and transfer" order, directing the Court of Appeal to reconsider. It did so, and in September 2015, handed down a second opinion in which it again found the claims preempted. Thereafter, the Supreme Court granted plenary review.
For those of us who follow the UCL and FAL, but who may not be especially interested in Fed/OSHA preemption issues, here are the passages of greatest interest:
The UCL concerns unfair competition, a term that “mean[s] and include[s] any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by [the false advertising law].” (Bus. & Prof. Code, § 17200.) The purpose of the UCL “is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.” (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.) As we have said, “the act provides an equitable means through which both public prosecutors and private individuals can bring suit to prevent unfair business practices and restore money or property to victims of these practices.” (Zhang v. Superior Court (2013) 57 Cal.4th 364, 371, italics added.) The FAL, for its part, makes actionable “untrue or misleading” statements made to “induce the public to enter into any obligation” to purchase goods and services. (Bus. & Prof. Code, § 17500.) Actions to enforce the UCL or FAL, which may be brought by government officials and by individuals who have suffered injury in fact (Bus. & Prof. Code, § 17203), address the “ ‘ “overarching legislative concern . . . to provide a streamlined procedure for the prevention of ongoing or threatened acts of unfair competition.” [Citation.]’ ” (Zhang, supra, 57 Cal.4th at p. 371, italics added.) And the remedies are “cumulative . . . to the remedies or penalties available under all other laws of this state.” (Bus. & Prof. Code, § 17205.)
As noted above, under state law, these actions are not considered on their face to be a means of enforcing the underlying law. “ ‘By proscribing “any unlawful” business practice, “[the UCL] ‘borrows’ violations of other laws and treats them as unlawful practices” that the [UCL] makes independently actionable. [Citations.]’ ” (Rose v. Bank of America, N.A. (2013) 57 Cal.4th 390, 396.) We have explained 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.’ [Citation.] 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 p. 397; see People ex rel. Harris v. Pac Anchor Transportation, Inc. (2014) 59 Cal.4th 772, 783 [Federal Aviation Administration Act does not on its face preempt UCL claims against motor carriers for misclassification of drivers]; In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1272 [a federal law governing cigarette sales to minors on its face did not expressly preempt the UCL, which “is a law of general application, and it is not based on concerns about smoking and health”]; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180; Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 560, 566 576.) Thus, the UCL and FAL are laws of general application.
We acknowledge that in some instances, a UCL claim may fall within a field of preemption. For example, in In re Tobacco Cases II, supra, 41 Cal.4th 1257, a UCL claim based on advertising activities alleged to violate Penal Code section 308 (prohibiting sale of tobacco products to minors and possession of such products by minors) was preempted as applied under the particular terms of a federal law governing cigarette labeling and advertising. (Id. at pp. 1272-1273.) Under the federal law involved, preemption turned on whether the particular UCL claim would impose a duty necessarily and inherently based on concerns about smoking and health. (Id. at p. 1273.) But here, the UCL and FAL claims are based on standards set forth in an approved state plan, and which therefore preempt any federal standards. Because these claims do not impose any duty on employers that is subject to federal preemption, they do not come within the principles articulated in Tobacco Cases II.
Slip op. at 25-27. I see no new ground broken here.
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