The UCL Practitioner

Live blog of "UCL Remedies" panel at the 2022 Golden State Institute

Today I'm attending the 2022 Golden State Antitrust and Unfair Competition Law Institute at the Julia Morgan Ballroom in San Francisco. The 3:00 p.m. panel is entitled: "UCL Remedies: You Can't Always Get What You Want." The speakers are Andre Mura of Gibbs Law Group LLP; Zoe Savitsky of the Oakland City Attorney's Office; Steven E. Swaney of Veneable LLP; and Betsy C. Manifold of Wolf Haldenstein as moderator. This promises to be an excellent talk. 

It's been a very long time since I've done a live blog, but my plan is to cite new decisions of interest mentioned by the panel that I haven't previously covered on the blog. Here we go:

1. New California Supreme Court opinion on civil penalties recoverable in a UCL public prosecutor action and the equitable nature of that remedy: Nationwide Biweekly Administration, Inc. v. Superior Court, 9 Cal.5th 279 (2020).
2. New California Supreme Court opinion on geographic scope of UCL remedies in a public prosecutor action; local prosecutors may recover statewide civil penalties as well as statewide injunctive relief: Abbott Laboratories v. Superior Court, 9 Cal.5th 642 (2020).
3. Johnson & Johnson public prosecutor action involving cervical mesh extensively addressed issue of how civil penalties are calculated.
4. Court of Appeal rejects argument that harms resulting from lost market share is recoverable as UCL restitution in a competitor action: Lee v. Luxottica Retail N. Am., Inc., 65 Cal.App.5th 793, 797 (2021).
5. New Ninth Circuit opinions on "adequate legal remedy" defense to UCL claims:
   1. Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020) (Sonner I) (action involved misrepresentations regarding a dietary supplement; UCL and CLRA claims brought; Ninth Circuit affirmed dismissal of UCL claim because CLRA provided adequate legal remedy--importantly, as a matter of federal common law under Eire)
   2. Sonner v. Premier Nutrition Corp., 49 F.4th 1300 (9th Cir. 2022) (Sonner II) (same plaintiff re-filed her case in state court (Alameda County); defendant's motion to enjoin state-court proceeding was denied due to uncertainty over jurisdictional issue)
   3. Guzman v. Polaris Indus., 49 F.4th 1308 (9th Cir. 2022) (decided Sept. 29, 2022) (affirmed dismissal of UCL claim with directions to dismiss without prejudice to re-filing in state court)
   4. The above case summaries are by panelist Steven Swaney. My takeaway is these decisions may provide a way to avoid federal jurisdiction, allowing your UCL class action to proceed in state court.  Panelist Andre Mura just pointed out that this may be a pyrrhic victory for defendants. I agree. Panelist Swaney is now pointing out that defendants should think long and hard before moving to dismiss UCL claims under Sonner.
6. Several new opinions on "public injunctive relief" in private UCL litigation. The issue is coming up a lot, according to panelist Mura, because it's relevant to whether the UCL claim is arbitrable under McGill (see this blog post).
   
   1. Hodges v. Comcast Cable Communications, LLC, 21 F.4th 535, 542 (9th Cir. 2021) (held that the injunction sought was "public" rather than private)
   2. Stover v. Experian Holdings, Inc., 978 F.3d 1082 (9th Cir. 2020) (addressing Article III standing)
   3. Rogers v. Lyft, Inc., 452 F.Supp.3d 904, 919 (N.D. Cal. 2020) (addressing Prop. 64 standing)
   4. DiCarlo v. MoneyLion, Inc., 988 F.3d 1148 (9th Cir. 2021) (construing McGill)

As you can imagine, the panel had much more to say about the new decisions, and they also provided an interesting and useful summary of each form of UCL remedy. Many thanks to the panelists for a great discussion. That's all for today's live blog.

UCL's extraterritorial reach in public prosecutor actions: Abbott Labs. v. Superior Court

Yesterday, the California Supreme Court handed down its opinion in Abbott Laboratories v. Superior Court, ___ Cal.5th ___ (Jun. 25, 2020), holding that "[t]he UCL does not preclude a district attorney, in a properly pleaded case, from including allegations of violations occurring outside as well as within the borders of his or her county."  Slip op. at 1. 

On the question of monetary relief in particular, the Court summarized its holding as follows:

In sum, the text of the UCL grants broad civil enforcement authority to district attorneys, and this broad grant of authority is consistent with the statute’s purpose and history. We see no indication that in an enforcement action brought by a district attorney, the Legislature intended to limit civil penalties or restitution to the geographic boundaries of the district attorney’s county.

Id. at 16.  My coverage of the oral argument in this case is available here.

Oral argument report: Abbott Laboratories v. Superior Court

Yesterday, the Supreme Court heard oral argument in Abbott Laboratories v. Superior Court (Rackauckas), no. S249895.  Abbott involves the territorial reach of the UCL provisions authorizing district attorneys, as well as certain county counsel and city attorneys, to bring UCL actions on behalf of the general public. This was the Court's first foray into remote oral argument by video conference, and it was a success (scroll down for screen shots and my thoughts on the procedure).  On the merits, I think the DA's office will prevail. 

The defendants, supported by the Attorney General's office as amicus curiae, argued that the Orange County District Attorney is authorized to obtain a statewide public injunction, but only the Attorney General may seek statewide restitution.  The oral argument, therefore, was focused mainly on statutory interpretation and legislative intent. 

Justice Liu broke in first, querying whether a "centralized enforcement model" or a "decentralized" one "is what the legislature contemplated here."  He pointed out that the California Constitution gives the AG's office "direct supervisory authority" over the DAs, but not over the county counsel and city attorneys who are also empowered to bring UCL actions.  He asked whether "tension" existed between the UCL and this constitutional provision. 

Justices Liu, Cuéllar, and Kruger all had questions about how the AG's office is notified of new UCL public prosecutor actions, whether notice should be required, and what the AG typically does when notified of new actions. 

The Chief Justice asked about the purpose of the UCL, which is "to protect consumers."  She pointed out that many businesses' operations are not limited to a single county, and the "understanding" that the AG can't always take action in every county.  "Why shouldn't we construe [the UCL] to give statewide power to the DAs?"  She said that doing so "ensures greater protections for consumers, not less," and that adding administrative procedures at the front end, such as formal notice to the AG, "provides less protection." 

It was undisputed, according to Justice Liu, that the UCL authorized the DAs to pursue civil litigation, and to seek statewide injunctive relief.  So the only question was the monetary relief.  He said that the UCL "is not silent at all" on the scope of the DAs' authority.  Section 17203 says that "any person" may bring a UCL action and, under section 17206, seek all forms of enumerated relief "for each violation." 

The Chief Justice asked point blank:  "If DAs can bring the action and have authority to get an injunction, why don't they have the power to get restitution?"  Defendants' appellate counsel (attorney Jay Lefkowitz) admitted the statute was "silent" on the point, but argued it was "better" not to read that authority "into a silent statute." 

On balance, based on the thrust of the justices' questions, and the fact that they posed tougher questions to defendants' counsel, I think the Court will hold that the DAs' offices may seek statewide restitution.  We will find out in approximately ninety days (by Monday, July 6). 

The live video stream was interesting and instructive for future remote arguments.  As it turned out, three justices, not two, participated by videoconference.  In this screen shot (click on each image to enlarge), you can see Justice Corrigan, the Chief Justice, Justice Liu, and Justice Cuéllar on the bench, with Justice Kruger on a very large monitor newly installed in the courtroom: 

The screen shot below depicts the public video feed as it first appeared, with images of eight of the lawyers slated to argue the different cases on the morning calendar, in no apparent order.  In the top middle image (click to enlarge), you can just make out Justice Corrigan, the Chief, and Justices Liu and Cuéllar seated well apart from each other across the bench:

Once the Abbott case was called, the image shifted to this view, with Justice Kruger and pro tem Justice Fujisaki in the top left and right screens: 

Attorneys Kelly Ernby, Yvonne Mere and Jay Lefkowitz argued Abbott.  Attorney Blanca Young was apparently slated to argue a later case, yet her image remained onscreen throughout the Abbott argument.  We now know that arguing attorneys' video images may be visible to the public at any time.  In particular, while the argument proceeds in your case, your image will be displayed, so your non-verbal reactions to the proceedings should be measured. It is unclear whether the justices in the courtroom saw the same composite view, or if the arguing attorney's image was enlarged while he or she was speaking.  The image was not enlarged in the public live-stream. 

Multiple cameras were installed in the courtroom, allowing the video feed to shift to the justices when they had questions, but only for the four seated in the courtroom.  Here, Justice Liu asked a question while Justice Cuéllar looked on: 

And here, the Chief Justice emphasized a point.  She was careful to ask, at the end of each argument segment, if the justices participating remotely had any questions.  She also helped the advocates keep track of their time allotments. 

When the Abbott argument concluded and the next case was called, the screen shifted to include Justices Chin and Groban, both participating remotely, along with Justice Kruger and three arguing attorneys:

If many more remote arguments are conducted, the procedures and camera-work will probably evolve.  The next oral argument dates on the Court's calendar are May 4-8, May 18-22, and June 1-5.  The early May calendar should be posted next week.  I would imagine that the early May arguments, at the very least, will be done remotely.  After a break in July and August, oral arguments will resume the week of September 1.  At the Lectern has a post on the argument with more screenshots.  The Recorder's take on the argument is here.

Supreme Court to hear UCL public prosecutor case today: Abbott Laboratories v. Superior Court

Today at 9:00 a.m., the California Supreme Court will hear oral argument in Abbott Laboratories v. Superior Court (Rackauckas), no. S249895, which presents this UCL-related question (quoted from the Court's online docket): 

Does a district attorney have the authority to recover restitution and civil penalties under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) for violations occurring outside his or her territorial jurisdiction?

The Court of Appeal said no, on a 2-1 vote (see this blog post).  The parties' Supreme Court briefs are available here.

This is the first week of oral arguments since the full scope of the COVID-19 pandemic became clear.  The Supreme Court has issued two standing orders on argument procedure (see this order dated March 16, 2020 and this order dated March 27, 2020).  All arguments will take place in San Francisco until further notice.  Arguing counsel will participate remotely, as will at least two of the seven justices.  No more than 15 members of the press will be allowed in the courtroom at any one time.  They will be admitted on a first come, first served basis.  The public may observe by live video stream.

Per the latest updated argument calendar, Abbott Laboratories will be the first case argued under the new rules. The logistics may be complicated by the fact that the real party in interest requested, and was granted, leave to share 10 minutes of argument time with counsel for several amici curiae.   Justice Chin and Justice Fujisaki (of the First Appellate District, Division Three, assigned pro tempore in place of Justice Groban, who is recused) are the two justices who will participate remotely, according to the webcast information.  The live-stream video can be accessed on this page, at a link to be posted shortly before the argument begins.   

Supreme Court to consider public prosecutors' intra-state territorial reach under the UCL: Abbott Laboratories v. Superior Court

The Supreme Court's April oral argument calendar, announced last week, includes a full slate of cases.  In other words, the Court will conduct business as usual—except that the arguments will take place in San Francisco (not Los Angeles, as previously planned), and the parties' counsel will participate remotely.  The arguments will be live-streamed as usual, so we can observe them from the comfort of our homes while "sheltering in place."  (As for filing deadlines, on Friday, the Court extended most of them by 30 days.) 

One case set for argument involves the UCL.  On Tuesday, April 7, 2020 at 9:00 a.m., the Court will hear Abbott Laboratories v. Superior Court (Rackauckas), no. S249895, which presents the following question (according to the Court's online docket): 

Does a district attorney have the authority to recover restitution and civil penalties under the Unfair Competition Law (Bus. & Prof. Code, § 17200 et seq.) for violations occurring outside his or her territorial jurisdiction?

On a 2-1 vote, the Court of Appeal (First Appellate District, Division One) said no.  From the introduction: 

The California Constitution designates the Attorney General the “chief law officer of the State” (Cal. Const., art. V, § 13), and consistent with this constitutional provision, the Attorney General “has charge, as attorney, of all legal matters in which the State is interested” (Gov. Code, § 12511) and also “shall ... prosecute or defend all causes to which the State ... is a party in his or her official capacity.” (Gov. Code, § 12512.) The District Attorney, on the other hand, is a county officer whose territorial jurisdiction and power is limited accordingly. Though section 17204 confers standing on district attorneys to sue in the name of the people of the State of California, it cannot constitutionally or reasonably be interpreted to grant the District Attorney power to seek and recover restitution and civil penalty relief for violations occurring outside the jurisdiction of the county in which he or she was elected. A contrary conclusion would permit the District Attorney to usurp the Attorney General's statewide authority and impermissibly bind other district attorneys, precluding them from pursuing their own relief. Thus, in the absence of written consent by the Attorney General and other county district attorneys, the District Attorney must confine such monetary recovery to violations occurring within the county he serves.

Abbott Labs. v. Superior Court, 25 Cal.App.5th 1, 9 (2018). 

Justice Dato, dissenting, explained, first of all, that the "proper time" to determine the scope of any monetary or injunctive relief would be after liability has first been determined.  Id. at 33.  He further explained: 

The UCL is an exceedingly broad remedial statute designed to encourage multiple avenues of enforcement. (See Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949-950.) Indeed, a district attorney can prosecute a UCL claim based even on alleged violations of a statute that provides a different government agency with the sole authority to bring enforcement actions. (People v. McKale (1979) 25 Cal.3d 626, 632-633.) And as the majority recognize, “[t]he civil remedies of the [UCL] were enacted because criminal remedies were too often inadequate to protect the public, especially where corporate defendants were concerned.” (People v. E.W.A.P. Inc. (1980) 106 Cal.App.3d 315, 321.) Pursuing litigation against corporate defendants is expensive, and the Legislature was doubtless aware that both financial and political considerations may sometimes discourage a public prosecutor from undertaking such a case. Consistent with the UCL's broad remedial purposes and the perceived need for vigorous enforcement, there is nothing unconstitutional about the Legislature's decision to permit and encourage multiple public prosecutors with overlapping lines of authority on the theory that more enforcement in this context is better than less.

Id. at 35; see also In re Facebook, Inc., Consumer Privacy User Profile Litig., 354 F.Supp.2d 1133 (N.D. Cal. 2019) ("the majority opinion in Abbott Labs., which strained to narrow California's plain statutory language, is likely wrong").

As of this writing, the Supreme Court has not yet posted copies of the briefs online, but when that happens, the briefs will be available here. 

[Hat tip to At the Lectern, which is doing a good job tracking all the Supreme Court's orders dealing with the COVID-19 crisis.]

UCL jury trials in public prosecutor actions? Supreme Court to decide in Nationwide Biweekly v. Superior Court

On February 5, 2020, the Supreme Court heard oral argument in Nationwide Biweekly Administration v. Superior Court, no. S250047, involving whether a jury trial right exists in UCL public prosecutor actions seeking statutory penalties.  The Court of Appeal (First Appellate District, Division One) held that there is a jury trial right on liability, but that the amount of civil penalties, and the propriety of other equitable remedies (such as injunctive relief), is for the court to determine. Nationwide Biweekly Administration, Inc. v. Superior Court, 24 Cal.App.5th 438 (2018). 

We will learn the Supreme Court's take on these questions by May 5, 2020 (ninety days after February 5, 2020).  As a practical matter, that means the opinion will be issued by no later than May 4, 2020 (the last Monday before the deadline).

The video of the oral argument is available at this link.  The argument took place in Sacramento, which will not be happening again for a while.  These are extraordinary times.  Here in San Francisco, we are "sheltering in place" as of early Tuesday.  Everyone please stay safe. 

FAL not void for vagueness: People v. Superior Court (J.C. Penney Corp.)

People v. Superior Court (J.C. Penney Corp.), ___ Cal.App.5th ___ (Apr. 16, 2019), is a public prosecutor action alleging that J.C. Penney, Macy's, Kohl's and Sears violated the UCL and FAL when they "sold products online by means of misleading, deceptive or untrue statements regarding the former prices of those products."  Slip op. at 2.  The appeal concerned the FAL claims only. 

The Court of Appeal (Second Appellate District, Division Four) closely examined the FAL and concluded that it is not constitutionally void for vagueness, either on its face or as applied against the defendants.  The Court of Appeal also rejected the defendants' argument that the FAL impermissibly infringed on their free speech rights.  

Supreme Court to consider jury trial right in UCL public prosecutor actions: Nationwide Biweekly Admin., Inc. v. Superior Court

Last September, the Supreme Court granted review in Nationwide Biweekly Administration v. Superior Court, no. S250047, which presents the following issue (according to the docket):

Is there a right to a jury trial in a civil action brought by the People, acting through representative governmental agencies, pursuant to the Unfair Competition Law (Bus. & Prof. Code, § 17200, et seq.), the False Advertising Law (Bus. & Prof. Code, § 17500, et seq.) or the Check Sellers, Bill Payers, and Proraters Law (Fin. Code, § 12200, et seq.), when the People seek statutory civil penalties among other forms of relief?

The Court of Appeal (First Appellate District, Division One) held that there is a jury trial right in such a public prosecutor action on the question of liability.  The amount of civil penalties, and the propriety of other equitable remedies (such as injunctive relief), is for the court to determine. Nationwide Biweekly Administration, Inc. v. Superior Court, 24 Cal.App.5th 438 (2018). 

The panel canvassed the past UCL case law on the jury trial question, and concluded that most of the past cases considered the Sixth Amendment right to a jury trial in criminal actions, not the common-law jury trial right secured by the California constitution, on which the defendant relied.  Under the common law, governmental actions seeking civil penalties were considered legal, not equitable, and were triable by jury:

[C]ontrary to the People’s assertion, there is no line of cases holding that there is no right to jury trial in a UCL enforcement action brought by the government and seeking statutory penalties. Rather, there is a line of cases holding that the Sixth Amendment right to jury trial in criminal cases is inapplicable to the UCL—a proposition with which we agree. Only one case, Bhakta, has concluded there is no right to a jury trial in a UCL enforcement action under article I, section 16 of the California Constitution. However, as we have discussed, in our view the Bhakta court’s analysis was incomplete and failed to take into account that statutory penalties are a significant remedy under the UCL and such penalties, under historic English common law, would have been sought in the courts of law, thus securing to defendants the right to jury trial.  [Citations.]

Id. at 460-61 (citing People v. Bhakta, 162 Cal.App.4th 973 (2008)).   

In a footnote, the panel considered one of the leading cases holding that UCL actions between private litigants carry no jury trial right:

The Bhakta court cited Hodge v. Superior Court (2006) 145 Cal.App.4th 278, 284 (Hodge), for the proposition that the UCL provides for “only equitable remedies.” (Bhakta, supra, 162 Cal.App.4th at p. 979.) Hodge, however, was a wage and hour case in which the plaintiff employees sought back wages for overtime. (Hodge, at pp. 281–282.) The defendant employer claimed it had a right to jury trial because its liability was based on conduct that was “unlawful” under the Labor Code. (Id. at p. 283.) The Hodge court concluded otherwise, stating “the UCL provides only for equitable remedies,” “[d]amages are not available.” (Id. at p. 284.) Thus, said the appellate court, “the UCL is not simply a legislative conversion of a legal right into an equitable one. It is a separate equitable cause of action.” (Ibid.) In short, the Hodge court was not called upon to address, nor did it, the issue of statutory penalties sought in a government enforcement action.

Furthermore, in observing that other courts had held there is no jury trial right under the UCL, the Hodge court cited to [three cases] all holding that there is no Sixth Amendment right to jury trial under UCL, a conclusion with which we agree but which is not apposite to the right to jury trial in a civil case. (Hodge, supra, 145 Cal.App.4th at p. 285.)

Id. at 460 n.11 (emphasis in original; hyperlink added).  For more on Hodge, see my original blog post on that opinion. 

It will be interesting to see what, if anything, the Supreme Court has to say about Hodge or other decisions on the jury trial right in private UCL actions.  As of April 5, 2019, the merits briefing in Nationwide Biweekly is complete. 

Supreme Court hands down new UCL preemption opinion: Solus Industrial Innovations, LLC v. Superior Court

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. 

UCL insurance opinion: The Traveler's Property Cas. Co. v. Actavis, Inc.

In The Traveler's Property Cas Co. v. Actavis, Inc., ___ Cal.App.5th ___ (Nov. 6, 2017), the Court of Appeal (Fourth Appellate District, Division Three) considered whether the defendant pharmaceutical companies' CGL insurance policies required the insurers to defend a UCL "public prosecutor" action brought by Santa Clara and Orange Counties.  The complaint alleges that the defendants' opioid marketing campaigns, instituted in the 1990s to "increase sales of opioids and enhance corporate profits," were deceptive, unfair and unlawful.  The Court of Appeal found no duty to defend the action (or a similar action brought by the City of Chicago). 

The complaint in the underlying UCL action is available at this link.

Supreme Court schedules UCL case for argument in November: Solus Industrial Innovations v. Superior Court (People)

Last week, the Supreme Court announced that a UCL public prosecutor action, in which review was granted in 2015, will be orally argued on November 7, 2017 at 10:00 a.m. during the Court's special session in Sacramento.  Solus Industrial Innovations v. Superior Court (People), No. S222314.  

For a discussion of the procedural history of this case, see these two blog posts.  The Court of Appeal held that federal law (namely, Fed/OSHA) preempted the Orange County District Attorney's UCL and FAL prong claims, which are predicated in part on asserted violations of state workplace safety standards (i.e., Cal/OSHA).  Solus Industrial Innovations LLC v. Superior Court (People), 229 Cal.App.4th 1291 (2014), review granted.  

Copies of the Supreme Court briefs can be obtained at this link. 

San Francisco City Attorney invokes UCL in suit against Equifax

Yesterday, San Francisco City Attorney Dennis Herrera filed suit in San Francisco Superior Court against Equifax.  The complaint has a single cause of action: for violation of the UCL. In particular, the complaint alleges a series of UCL "unlawful" prong violations.

The Chronicle has more on this action and the other Equifax data breach cases.

Another new UCL public prosecutor opinion: People v. Overstock.com, Inc.

In People v. Overstock.com, Inc., ___ Cal.App.5th ___ (Jun. 2, 2017), the Court of Appeal (First Appellate District, Division Four) affirmed a judgment of more than $6.8 million (!) in civil penalties, plus injunctive relief, against Overstock.com for UCL and FAL violations. 

New UCL public prosecutor opinion: People ex rel. Harris v. Aguayo

In People ex rel. Harris v. Aguayo, ___ Cal.App.5th ___ (Apr. 26, 2017; pub. ord. May 25, 2017), the Court of Appeal (Second Appellate District, Division Two), affirmed an award of UCL restitution and civil penalties in the amount of nearly $4 million, as well as a broad permanent injunction precluding the defendants from repeating the wrongful acts comprising their "complex real estate scam." 

The opinion's summary of the applicable law, which governs in public and private actions alike, reads as follows:

The UCL is a law enforcement tool designed to protect consumers and deter and punish wrongdoing.  (Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 503.)  It prohibits any “unlawful, unfair or fraudulent business act or practice.”  (§ 17200.)  Each of the three types of wrongful conduct is recognized as distinct from the others.  “‘“[A] practice is prohibited as ‘unfair’ or ‘deceptive’ even if it is not ‘unlawful’ or vice versa.”’  [Citations.]”  (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)  The People may prove an unlawful act by showing virtually any violation of federal, state, or local law.  (Ibid.)  To show a fraudulent act, the law requires a showing that members of the public are “‘“likely to be deceived.”’  [Citation.]”  (Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 839.)  The fraudulent element may be proved even if there is no evidence that anyone was “‘actually deceived, relied upon the fraudulent practice, or sustained any damage.  [Citation.]’”  (Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1146.)

Slip op. at 9-10.  The opinion goes on to confirm the broad scope of the trial court's discretion in awarding restitution and fixing the amount of civil penalties.  Id. at 21-35.  As for the injunction, the opinion says this:

The trial court properly enjoined each independent act in furtherance of appellants’ wrongful scheme. [¶] Appellants assert that they know what they have done wrong, and will not “repeat mistakes of the past.”  The trial court did not believe this, finding instead that they had no remorse or insight into their own wrongdoing.  The trial court’s decision to enjoin each precise misdeed in appellants’ wrongful scheme was designed to ensure the protection of the public.

Id. at 37-38.

Public prosecutor obtains preliminary injunction under the UCL: People ex rel. Feuer v. Nestdrop, LLC

In another opinion from earlier this year (March), the Court of Appeal affirmed the trial court's issuance of a preliminary injunction under the UCL, holding that the City of Los Angeles had shown that it was likely to prevail on the merits of its "unlawful" prong claim. People ex rel. Feuer v. Nestdrop, LLC, 245 Cal.App.4th 664 (2016). 

The claim asserted that the defendants had aided and abetted violations of a municipal code provision banning most medical marijuana businesses from operating in Los Angeles (Proposition D).  Id. at 667-71. The defendants' mobile app violated the ordinance, the City argued, by allowing people to order medical marijuana and have it delivered to their homes within city limits.  See id. The opinion's conclusion reads:

The City established a likelihood of proving defendants' Nestdrop app caused, aided, or abetted the violation of Proposition D because, outside of the narrow exception for designated primary caregivers, it prohibits the vehicular delivery of medical marijuana to qualified participants, identification card holders, or primary caregivers in the City. Because the City has demonstrated a likelihood of success on its claim that defendants facilitated a violation of Proposition D, defendants' opposition to the City's unfair competition allegations necessarily fails. Defendants made no showing at all concerning the balance of hardships, much less that the balance tipped sharply in their favor. The trial court was right to enter a preliminary injunction.

Id. at 678.  I mention this case mainly because it demonstrates the power of the UCL in the hands of public prosecutors when an underlying statute (or ordinance) does not expressly provide a civil remedy. 

UCL preemption opinion from earlier this year: People ex rel. Harris v. Delta Air Lines, Inc.

This is another opinion from earlier in the year (May) that I haven't yet reported on.

In People ex rel. Harris v. Delta Air Lines, Inc., 247 Cal.App.4th 884 (2016), the Attorney General brought a UCL "unlawful" prong action against Delta Air Lines, alleging that Delta's mobile app violated the Online Privacy Protection Act (Cal. Bus. & Prof. Code §§22575-79).  The Court of Appeal (First Appellate District, Division Three) affirmed the trial court's holding that this claim was expressly preempted by the federal Airline Deregulation Act of 1978. 

Of interest is the Court's conclusion that the claim "related to" Delta's air transportation services:  

We also reject the Attorney General's argument that the complaint does not relate to Delta's services. By its complaint, the State seeks to compel Delta to maintain its Fly Delta mobile application in compliance with the OPPA's privacy policy requirements. The Fly Delta mobile application, selected and designed to facilitate access to the airline's services, is a marketing mechanism "appropriate to the furnishing of air transportation services." (Wolens, supra, at p. 228.) As alleged in the complaint, the Fly Delta mobile application, at a minimum, "may be used to check-in online for an airplane flight, view reservations for air travel, rebook cancelled or missed flights, pay for checked baggage, track checked baggage, and access a user's frequent flyer account." Thus, it is clear, beyond cavil, that the complaint does "relate to" Delta's services in that the allegations have a "connection with, or reference to" Delta's services.

Id. at 901.

Supreme Court takes up UCL public prosecutor action: Solus Industrial Innovations v. Superior Court

Happy New Year to all readers of this blog!  I hope everyone had a great holiday season. 

On Wednesday, January 14, 2015, the Supreme Court granted review in Solus Industrial Innovations v. Superior Court (People), No. S222314.  The Court's two newest justices joined in the unanimous vote to take up the case.

In this UCL public prosecutor action, the Orange County District Attorney seeks civil penalties against an employer for violating California's workplace safety standards.  In its original opinion, the Court of Appeal (Fourth Appellate District, Division Three) held that the UCL claim was preempted by Fed/OSHA (the federal Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq.)).

My post on the Court of Appeal's original opinion is here.

In July, the Supreme Court issued a "grant and transfer" order directing the Court of Appeal to "reconsider the matter in light of Statutes 1972, chapter 1084, pp. 2020-2021."    My post on the "grant and transfer" order is here. 

In September, the Court of Appeal issued a new opinion in which it again concluded that the UCL claim was preempted.  Solus Industrial Innovations LLC v. Superior Court (People), 229 Cal.App.4th 1291 (2014), review granted.   The District Attorney petitioned for review, and the Supreme Court has now taken up the case on the merits. 

"Grant and transfer" ordered in UCL public prosecutor action: Solus Industrial Innovations v. Superior Court

Earlier this year, the Court of Appeal (Fourth Appellate District, Division Three) handed down its opinion in Solus Industrial Innovations, Inc. v. Superior Court, 224 Cal.App.4th 17 (2014), review granted.  

Solus is a UCL public prosecutor action for civil penalties for alleged violations by an employer of California's workplace safety standards.  The defendant argued that the claim was preempted by federal law; the Orange County District Attorney's office argued that because the U.S. Secretary of Labor had approved California's safety standards, California may enforce them by any mechanism approved by the Legislature, including the UCL.

The Court of Appeal disagreed, based largely on a curious misunderstanding about when the UCL was first enacted: 

Our assessment of whether the district attorney’s UCL causes of action are preempted by federal law begins with the observation that the UCL was enacted in 1977 (Stats. 1977, ch. 299, § 1, p. 1202), which is after the Secretary initially approved California’s workplace safety plan.  Hence, there is no basis to infer that reliance on those provisions as a supplemental remedy for violation of California’s workplace safety standards was contemplated as part of the Secretary’s initial decision approving California’s plan. 

Slip op. at 11 (bold added; italics in original). 

In my blog post on the Court of Appeal's opinion in this case, I wrote as follows:

In fact, the UCL was enacted in 1933. .... The UCL has allowed public prosecutors to bring suit to enjoin "unlawful" conduct since 1963.  It is possible that the Court of Appeal meant to say that the provisions allowing public prosecutors to recover civil penalties in UCL actions were first enacted in the 1970s, but even those first appeared in 1972, not 1977.  See fmr. Civ. Code § 3370.1 (stats. 1972, ch. 1084, p. 2021), cited in People v. Superior Court (Olson), 96 Cal.App.3d 181, 191 (1979).  All that happened in 1977 was that the UCL was recodified as part of the Business and Professions Code.

(Emphasis added.)

According to the Solus opinion, California's workplace safety plan was not even enacted until 1973, and was approved by the Secretary of Labor the same year — after the Legislature amended the UCL in 1972 to allow public prosecutors to seek civil penalties for any unlawful, unfair or fraudulent conduct.  The misunderstanding in the paragraph of the opinion quoted above, therefore, may have been outcome-determinative.

The Orange County District Attorney's office filed a petition for review, and on June 16, 2014, the California Supreme Court issued this order:

The petition for review is granted. The cause is transferred to the Court of Appeal, Fourth Appellate District, Division Three, with directions to reconsider the matter in light of Statutes 1972, chapter 1084, pp. 2020-2021.

Solus Industrial Innovations v. Superior Court, No. S217651 (emphasis added). 

It will be interesting to see the new opinion when it is handed down. 

New UCL public prosecutor opinion addresses federal preemption: Solus Industrial Innovations LLC v. Superior Court

In Solus Industrial Innovations LLC v. Superior Court, ___ Cal.App.4th ___ (Feb. 24, 2014; mod. Mar. 17, 2014), the Court of Appeal (Fourth Appellate District, Division Three) held that the Orange County District Attorney's action for civil penalties under the UCL was preempted by Fed/OSHA (the federal Occupational Safety and Health Act of 1970 (29 U.S.C. § 651 et seq.)).

The opinion contains a couple of curious statements, such as this one:

Our assessment of whether the district attorney’s UCL causes of action are preempted by federal law begins with the observation that the UCL was enacted in 1977 (Stats. 1977, ch. 299, § 1, p. 1202), which is after the Secretary initially approved California’s workplace safety plan.  Hence, there is no basis to infer that reliance on those provisions as a supplemental remedy for violation of California’s workplace safety standards was contemplated as part of the Secretary’s initial decision approving California’s plan. 

Slip op. at 11 (bold added; italics in original).

In fact, the UCL was enacted in 1933.  Justice Kennard's dissenting opinion in Cel-Tech contains a useful historical summary:

Our Legislature first recognized unfair competition in 1933 when it amended Civil Code former section 3369 (hereafter section 3369), which had addressed the availability of injunctive relief in general. The 1933 amendment had three aspects: It authorized injunctions in cases of "unfair competition"; it authorized the Attorney General, district attorneys, and private persons to seek such injunctions; and it defined "unfair competition" as any "unfair or fraudulent business practice and unfair, untrue or misleading advertising and any act denounced by Penal Code sections 654a, 654b or 654c." (Stats. 1933, ch. 953, § 1, p. 2482.)

....

In 1963, the Legislature again amended section 3369 to add "unlawful" business practices to the list of proscribed conduct. In doing so, it expanded the definition of unfair competition with respect to conduct violating statutory prohibitions, for now any business practice that violated an independent statutory duty was an instance of unfair competition that could be enjoined even if the underlying statute did not specifically authorize injunctive relief. (Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 112-113 [section 3369 extended to " 'anything that can properly be called a business practice and that at the same time is forbidden by law' "].)  ....  In 1977 the Legislature reenacted, without substantive change, the unfair competition portion of section 3369 as Business and Professions Code sections 17200, 17201, 17202, 17203, and 17204. (Stats. 1977, ch. 299, § 1, p. 1202.) In 1992, the Legislature expanded the scope of the unfair competition law to include unfair business acts as well as practices; the operative language now reads in full: "As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code." (Bus. & Prof. Code, § 17200.)

Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co., 20 Cal.4th 163, 194-95 (1999) (Kennard, J., dissenting) (emphasis added). 

The UCL has allowed public prosecutors to bring suit to enjoin "unlawful" conduct since 1963.  It is possible that the Court of Appeal meant to say that the provisions allowing public prosecutors to recover civil penalties in UCL actions were first enacted in the 1970s, but even those first appeared in 1972, not 1977.  See fmr. Civ. Code § 3370.1 (stats. 1972, ch. 1084, p. 2021), cited in People v. Superior Court (Olson), 96 Cal.App.3d 181, 191 (1979).  All that happened in 1977 was that the UCL was recodified as part of the Business and Professions Code. 

Here's another curious excerpt from the Solus opinion:

Here, the district attorney proposes to utilize the UCL as a means of imposing truly massive penalties against Solus, based specifically upon its alleged violation of workplace safety laws.  Significantly, and in contrast to Rose, this is not merely a private UCL cause of action, brought by a litigant who has suffered injury in fact as a result of defendant’s anti-competitive conduct, and who seeks restitution for that injury and to enjoin such conduct in the future.  This is instead an action, available only to a representative of the state, which is expressly intended to penalize a party for past misconduct.  (Bus. & Prof. Code, § 17206, subd. (a) [civil penalties “shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General, by any district attorney, by any county counsel  . . . or . . . by a city prosecutor”].)

Under each of these two UCL causes of action, the district attorney seeks to recover penalties of up to $2,500 per day, per employee, for the period from November 29, 2007 to March 19, 2009.  That represents a potential penalty in excess of $1 million per employee, for each cause of action.  And of course, the penalties available under the UCL are cumulative, and thus would be assessed in addition to whatever penalties were directly provided for under the Labor Code (and thus directly approved by the Secretary as part of California’s state plan.)  By contrast, as the district attorney acknowledges, the total penalty actually imposed by Cal/OSHA in the stayed administrative action arising out of these same violations was under $100,000.

Slip op. at 15-16 (emphasis in original). 

This overlooks the fact that the UCL plainly authorizes penalties of less than $2,500 (the statute says "up to" that amount "per violation") and that the trial court has significant discretion in determining what "per violation" means.  The text of section 17206(b) lists the factors the trial court must consider in determining the size of a penalty award:

In assessing the amount of the civil penalty, the court shall consider any one or more of the relevant circumstances presented by any of the parties to the case, including, but not limited to, the following: the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant's misconduct, and the defendant's assets, liabilities, and net worth.

Bus. & Prof. Code § 17206(b).  The Court of Appeal's analysis assumes that the maximum penalty amounts sought in the complaint would automatically be awarded, which is by no means certain.

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. 

San Francisco City Attorney files UCL action against Monster Beverage Corp.

On May 6, 2013, the San Francisco City Attorney's office commenced a UCL action against Monster Beverage Corp.  The press release and a copy of the complaint, filed in San Francisco Superior Court, are available at this link. 

The complaint alleges that the company "aggressively markets" its Monster Energy drinks to children and teenagers, notwithstanding the known health risks to young people of consuming the high levels of caffeine that the drinks contain. The complaint contains detailed factual allegations followed by a single cause of action for violation of the UCL, and seeks injunctive relief, restitution, and civil penalties.

New UCL public prosecutor opinion: People ex rel. City of Dana Point v. Holistic Health

In this UCL public prosecutor action, the Court of Appeal (Fourth Appellate District, Division Three) reversed summary judgment in favor of the City of Dana Point, finding triable issues of fact on whether the defendant medical marijuana dispensary had violated the Compassionate Use Act.  People ex rel. City of Dana Point v. Holistic Health, ___ Cal.App.4th ___ (Feb. 13, 2012).

What's interesting about the opinion are the civil penalties the trial court had imposed for violating the UCL: $1,315,000.  Slip op. at 7.  The trial court also permanently enjoined the defendant from "selling, serving, storing, keeping or giving away marijuana within the municipal boundaries of the City."  Id.  Although the Court of Appeal reversed this judgment, it shows what the trial court is likely to do if the City ultimately prevails in the action.

It also shows what a powerful tool the UCL can be in public prosecutor actions. 

New UCL and FAL public prosecutor opinion: People v. JTH Tax, Inc.

In People v. JTH Tax, Inc., ___ Cal.App.4th ___ (Jan. 17, 2013), the Court of Appeal (First Appellate District, Division Four) affirmed the judgment in a public prosecutor action brought under the UCL and FAL.

Among other things, the opinion holds that ordinary agency principles apply in UCL cases:

[A]s the People point out, our Supreme Court has held, without the limitations urged by [defendant] in the present case, that “section 17500 [the FAL] incorporates the concept of principal-agent liability.”  (Ford Dealers Assn. v. Department of Motor Vehicles (1982) 32 Cal.3d 347, 361 (Ford Dealers).)  Since violations of the UCL “include any . . . unfair, deceptive, untrue or misleading advertising and any act prohibited by [the FAL]” (§ 17200), Ford Dealers establishes that persons can be found liable for misleading advertising and unfair business practices under normal agency theory.  To the extent that Toomey, supra, 157 Cal.App.3d 1, or Emery, supra, 95 Cal.App.4th 952 hold otherwise, which defendant implies without stating outright in the course of arguing its limiting theories, these cases are mistaken.

Slip op. at 24. 

The opinion also discusses how to determine the number of "violations" for purposes of awarding civil penalties under the UCL and FAL.  Id. at 33-40.  The analysis for the defendant's false TV advertisements differed from that employed for the false print ads.  See id.  The last section of the opinion affirms the trial court's detailed injunctive relief order.  Id. at 40-47. 

The trial judge in this case was Judge Curtis E.A. Karnow, who was recently reassigned to one of the two complex litigation departments of the San Francisco Superior Court.  Judge Kramer will now preside in a civil trials department. 

Interesting unpublished UCL public prosecutor opinion: People ex rel. Herrera v. Stender

On December 4, 2012, the Court of Appeal (First Appellate District, Division Two) handed down an interesting, but unpublished, UCL opinion.  People ex rel. Herrera v. Stender, 2012 WL 6016722, No. A131625 (Dec. 4, 2012). 

The San Francisco City Attorney sought to invoke the UCL in an attempt to shut down an immigration law practice allegedly headed up by an attorney who had resigned from the Bar with disciplinary charges pending. The opinion holds that the Rules of Professional Conduct can form the predicate of a UCL "unlawful" prong claim.  Slip op. at 17-18.  It also addresses the economic abstention doctrine (id. at 29-30) and the scope of injunctive relief available under the UCL.

UPDATE:  On January 3, 2013, the opinion was certified for publication.  Here is a link to the docket.

Recent UCL public prosecutor decision addresses statute of limitations: People v. E*Poly Star, Inc.

In People v. E*Poly Star, Inc., 205 Cal.App.4th 1316 (May 14, 2012), the Court of Appeal (Second Appellate District, Division Seven) held that the trial court erred in concluding that the UCL's four-year statute of limitations barred public prosecutor claims brought under the UCL's "fraudulent" prong. 

As the opinion notees, the Supreme Court is considering whether the delayed discovery rule and the continuing violation doctrine apply to UCL claims.  Aryeh v. Canon Business Solutions, Inc., no. S184929 (review granted 10/20/10).  Aryeh has been fully briefed and is awaiting oral argument.

New UCL public prosecutor opinion: People ex rel. Trutanich v. Joseph

In People ex rel. Trutanich v. Joseph, ___ Cal.App.4th ___ (Apr. 18, 2012), the Court of Appeal (Second Appellate District, Division Two) affirmed an order granting summary judgment and the ensuing permanent injunction in a UCL public prosecutor action. 

Trutanich was an action by the city attorneys of Los Angeles and Culver City for violations of the Narcotics Abatement Law, the Public Nuisance Law, and the UCL's "unlawful" prong. 

More on the Ninth Circuit's recent CAFA decision: Washington v. Chimei Innolux Corp.

A new blog sponsored by Thompson Reuters called On The Case has an interesting post on the ramifications of the Ninth Circuit's CAFA decision handed down last week, Washington v. Chimei Innolux Corp., ___ F.3d ___ (Oct. 3, 2011). 

Here's an excerpt:

What's important about the ruling isn't just that the Washington and California LCD [antitrust] cases will remain in state court. The Ninth Circuit panel's decision endorses the power of state AGs to bring their own cases even when private class actions cover the exact same conduct. AGs, in other words, can pre-empt private cases--which is just what plaintiffs lawyers in the municipal bond derivatives class action before Manhattan federal judge Victor Marrero assert has happened in their case. Many of the muni bond derivative defendants have reached settlements with state AGs, rather than settling in the class action. The plaintiffs lawyers assert that it's an easy out for defendants, whose regulatory settlements aren't subject to a federal judge's oversight, as real class actions are.

My post mentioned the ramifications for PAGA actions, but these further ramifications are worth considering as well if you are handling a case in which the state enforcement agencies have expressed interest. 

New Ninth Circuit CAFA decision: Washington v. Chimei Innolux Corp.

In Washington v. Chimei Innolux Corp., ___ F.3d ___ (Oct. 3, 2011), the Ninth Circuit held that parens patriae actions filed by the state are not "class actions" within the meaning of CAFA. 

Unlike private litigants, the Attorneys General have statutory authority to sue in parens patriae and need not demonstrate standing through a representative injury nor obtain certification of a class in order to recover on behalf of individuals. See Wash. Rev. Code § 19.86.080; Cal. Bus. & Prof. Code § 16760. ....  

....

Put another way, class actions are always representative actions, but representative actions are not necessarily class actions.

Slip op. at 9, 10.  A similar analysis likely applies to PAGA cases post-Arias.

[via]

Recent UCL public prosecutor decision: People ex rel. Harris v. Black Hawk Tobacco, Inc.

In People ex rel. Harris v. Black Hawk Tobacco, Inc., ___ Cal.App.4th ___ (Jul. 13, 2011; pub. ord. Aug. 8, 2011), the Attorney General office used the UCL to enforce several federal and state statutes regulating the sale of tobacco:

The superior court granted a preliminary injunction, prohibiting defendants and appellants Black Hawk Tobacco, Inc. (Black Hawk) and Frederick Allen McAllister (McAllister) from selling cigarettes to non-Indians in violation of state and federal laws.  Black Hawk and McAllister appeal from the order granting the injunction.  (Code Civ. Proc., § 904.1, subd. (a)(6).)

On appeal, defendants argue that the State of California cannot regulate defendants’ sale of cigarettes to non-Indians because defendants are operating stores located on trust lands held by the United States for the Agua Caliente Band of Cahuilla Indians (the Band), a federally-recognized tribe.  We reject this argument and hold the superior court did not abuse its discretion in granting the preliminary injunction against defendants.

....

The unfair competition law, proscribing any unlawful business practice, provides broad authority for an injunction.  (Bus. & Prof. Code, § 17200 et seq., § 17203; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.)  Express authority for injunctive relief is provided by the California Cigarette Fire Safety and Firefighter Protection Act.  (Health & Saf. Code, § 14955, subd. (f).)  Defendants admitted their cigarette sales did not comply with state and federal law.  As elaborated in the following analysis, it is reasonably probable that the People will prevail on the merits.

Slip op. at 1, 8.

Decisions of interest from April and May 2011

The Court of Appeal and Ninth Circuit handed down the following decisions in April and May (listed in reverse chronological order by publication date):

Folgelstrom v. Lamps Plus, Inc., 195 Cal.App.4th 986 (Apr. 29, 2011; pub. ord. May 20, 2011; mod. Jun. 7, 2011) (Second Appellate District, Division Five) (affirming dismissal of UCL claim for lack of Prop. 64 standing; reversing dismissal of Song-Beverly Act claim, following Pineda v. Williams-Sonoma)

Knapp v. AT & T Wireless Services, Inc., 195 Cal.App.4th 932 (Apr. 25, 2011; pub. ord. May 20, 2011) (Fourth Appellate District, Division Three) (affirming order denying class certification of UCL, CLRA and fraud claims, which suffered from Kaldenbach problems)

Archer v. United Rentals, Inc., 195 Cal.App.4th 807 (May 19, 2011; mod. Jun. 13, 2011) (Second Appellate District, Division One) (affirming dismissal of UCL claim for injunctive relief for lack of Prop. 64 standing; reversing order denying class certification of Song-Beverly Act claim, following Pineda v. Williams-Sonoma)

People ex rel. Harris v. Pac Anchor Transportation, Inc., 195 Cal.App.4th 765 (May 18, 2011) (Second Appellate District, Division Five) (reversing dismissal of public prosecutor action in which the Attorney General's office employed the UCL's "unlawful" prong to pursue the defendant for wage and hour violations, holding that the FAA Authorization Act did not preempt the claims)

Marlo v. United Parcel Service, Inc., 639 F.3d 942 (9th Cir. Apr. 28, 2011) (affirming order decertifying class in wage & hour misclassification case)

Starbucks Corp. v. Superior Court (Lords), 194 Cal.App.4th 820 (Apr. 25, 2011) (Fourth Appellate District, Division Three) (reversing order permitting discovery of class list by putative class representatives who lacked standing)