The UCL Practitioner

Supreme Court holds UCL and CLRA claims survive SLAPP challenge: Serova v. Sony Music Entertainment

Last Thursday, August 18, 2022, the Supreme Court held that commercial sellers may not misrepresent the authorship of artistic works.  Accordingly, the Court determined, the trial court had improperly granted the defendant's anti-SLAPP motion in an action involving disputed representations that Michael Jackson was the vocalist on three tracks included in a posthumously-issued album.  Serova v. Sony Music Entertainment, ___ Cal.5th ___ (Aug. 18, 2022).

The unanimous opinion concludes:

Serova has sufficiently demonstrated, for purposes of the anti-SLAPP proceedings before us, that her CLRA and UCL claims related to [the album]'s packaging and promotional video have sufficient merit.  Perhaps in another context the First Amendment would limit the reach of our consumer protection laws, but Sony’s album-back promise and video are commercial advertising making claims about a product, and we will not place them beyond the reach of state regulation. 

Slip op. at 43.  Both the San Francisco Chronicle and the Los Angeles Times covered the opinion. This blog's prior coverage of the case is here and here.

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.

Supreme Court takes up UCL/anti-SLAPP case: Serova v. Sony Music Entertainment

During this week's conference, the Supreme Court granted review in Serova v. Sony Music Entertainment, No. S260736.  The statement of the issue on review has not yet been added to the main docket page, but the case involves UCL and CLRA claims based on allegedly false statements about whether Michael Jackson actually performed all the songs on an album marketed as a "Michael Jackson" album.  The Court will address whether these claims can survive an anti-SLAPP attack.  See this prior blog post for more on the rather lengthy procedural history of the case, which includes a prior review petition and a "grant and transfer" order.  

The Court took this action after giving itself an extension of time, to May 18, to grant or deny review.  With assistance from attorney David Arbogast, I filed CAOC's letter in support of review on the first day of the Bay Area's shelter-in-place orders.  The petition for review, answer, and reply are also of interest. Congratulations to plaintiffs' counsel, Jeremy Bollinger and Dennis Moss, on this result, and many thanks for sharing copies of these briefs. 

Recent decision addresses UCL in anti-SLAPP context: Serova v. Sony Music Entertainment

Last week (on April 8, 2020), the Supreme Court granted itself an extension of time to grant or deny review in Serova v. Sony Music Entertainment, No. S260736.  Serova involves the interplay between the UCL (and the CLRA) and the anti-SLAPP statute (Code Civ. Proc. § 425.16).  The action alleges that Sony Music (and related entities) marketed and sold an album by falsely attributing all ten songs on the album to Michael Jackson, when in fact, a cover singer performed three of the songs.  The action seeks injunctive relief, restitution and damages on behalf of a proposed class of California purchasers of the album (or of any of the three mis-attributed songs). 

This case has been to the Supreme Court once before.  In 2018, the Court of Appeal (Second Appellate District, Division Two) reversed the trial court's order denying Sony's anti-SLAPP motion, holding that the attribution of the songs to Michael Jackson "did not simply promote sale of the album, but also stated a position on a disputed issue of public interest."  Serova v. Sony Music Entertainment, 26 Cal.App.5th 759, 764 (2018). 

The Supreme Court issued a "grant and hold" order in December 2018.  In September 2019, the Court transferred the case back to the Court of Appeal with directions to reconsider the matter in view of FilmOn.com Inc. v. Double Verify Inc., 7 Cal.5th 133 (2019).   Serova v. Sony Music Entertainment, No. S251822.

After the parties filed supplemental briefing, the Court of Appeal issued its new opinion on January 8, 2020.  Serova v. Sony Music Entertainment, 44 Cal.App.5th 103 (2020).  The new opinion essentially adopted the same analysis and came to the same conclusion as the earlier opinion. 

A second petition for review was filed in February 2020.  On the day after the Bay Area "shelter in place" orders went into effect, I submitted a letter in support of review on behalf of CAOC.  (This is the case I mentioned in my post on March 19, 2020).  The current deadline for the Supreme Court to grant or deny review is Monday, May 18, 2020.  As a practical matter, that means the Court will act by no later than its conference scheduled for Wednesday, May 13, 2020. 

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. 

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. 

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. 

Supreme Court agrees to answer certified question in UCL "unlawful" prong case: De La Torre v. CashCall

On June 12, 2017, the Supreme Court agreed to answer questions certified by the Ninth Circuit in De La Torre v. CashCall, no. S241434.  As explained in the Ninth Circuit's order, De La Torre is a certified class action asserting a UCL "unlawful" prong claim based on alleged violations of Finance Code provisions concerning interest rates. 

The Supreme Court's website frames the issue as follows:

Can the interest rate on consumer loans of $2,500 or more governed by California Finance Code section 22303 render the loans unconscionable under section 22302?

The eventual opinion may or may not end up addressing the UCL directly.  According to the Ninth Circuit's order, one of the defendant's arguments was that California law "only recognize[s] unconscionability as a defense to a suit by a lender, not an affirmative UCL action for restitution."  Another was that section 22303 creates a Cel-Tech "safe harbor." 

Class certification not required for broad-ranging "public" injunctive relief under the UCL: McGill v. Citibank, N.A.

This morning, the California Supreme Court handed down its long-awaited opinion, McGill v. Citibank, N.A., ___ Cal.5th ___ (Apr. 6, 2017). 

In McGill, the Court was expected to address whether the Federal Arbitration Act, as construed in Concepcion, preempts the Broughton-Cruz rule (see this blog post for more on that rule).  However:

[I]t is now clear that the Broughton-Cruz rule is not at issue in this case.  As detailed above, late in the Court of Appeal proceedings, McGill asserted that the arbitration provision purports to preclude her from seeking public injunctive relief in any forum.  She repeats that assertion in this court ....   At oral argument before us, Citibank agreed with McGill’s reading of the arbitration provision.

Slip op. at 7 (emphasis in original).

Accordingly, the opinion addressed whether such a contractual provision—one purporting to completely eliminate the right to seek public injunctive relief under the UCL, FAL, and CLRA—was void, under ordinary contract-law principles, as contrary to public policy.  The Court held that it was.  Id. at 14. 

The opinion then addressed whether the FAA, construed in Concepcion, preempted this principle of California contract law.  It held that Concepcion did not.  Slip op. at 14-22. 

Here's the part that's really interesting.   The opinion addresses, at length, whether Prop. 64 eliminated the ability of private plaintiffs to seek broad-ranging public injunctive relief.  Not only did the Court say "no" to that (id. at 10-14), it also held that class certification is not required of a UCL or FAL claim seeking such relief!  Id. at 13-14. 

This has been an open question for the past twelve years, since Prop. 64 passed in November 2004.  (For example, see this 2005 blog post, this one from 2006, and this one from 2007.) 

Truthfully, I did not expect the Court to reach or decide it in McGill, but I think the Court's conclusion is absolutely the correct one.  Attempting to apply class certification principles to forward-reaching injunctive relief claims just doesn't make any sense, procedurally:  

[W]e have held that the phrase “compl[y] with Section 382 of the Code of Civil Procedure” (Bus. & Prof. Code, §§ 17203, 17535) “imposes a requirement that the action be brought as a class action.”  (Arias v. Superior Court (2009) 46 Cal.4th 969, 978.)  This requirement has never been imposed with regard to requests to enjoin future wrongful business practices that will injure the public, and we find nothing in the ballot materials for Proposition 64 suggesting an intent to link or restrict such relief to the class action context.  Indeed, imposing this requirement would largely eliminate the ability of a private plaintiff to pursue such relief, because class certification requires “the existence of both an ascertainable class and a well-defined community of interest among the class members” (Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913), and “ ‘the general public’ . . . fails to meet” this requirement (Czap v. Credit Bureau of Santa Clara Valley (1970) 7 Cal.App.3d 1, 6). 

Slip op. at 13 (emphasis added).  The opinion holds that the class certification requisite added by Prop. 64 applies only to claims by private plaintiffs "seek[ing] disgorgement and/or restitution on behalf of persons other than or in addition to the plaintiff.'"  Id. at 13-14 (quoting Kraus v. Trinity Management Services, Inc., 23 Cal.4th 116, 126 n.10 (2000))(emphasis in original). 

The opinion also strongly suggests that a defendant's "voluntary cessation of wrongful conduct" does not automatically preclude forward-reaching injunctive relief.  Id. at 10.  Notably, the opinion favorably cites Robinson v. U-Haul of California, 4 Cal.App.4th 304 (2016) (discussed in this blog post), in which the Court of Appeal rejected an argument that no injunction may issue under the UCL if the defendant voluntarily stops engaging in wrongful acts. 

For those interested in a general overview of the McGill opinion, this is the Court's introductory paragraph:

In previous decisions, this court has said that the statutory remedies available for a violation of the Consumers Legal Remedies Act (CLRA; Civ. Code, § 1750 et seq.), the unfair competition law (UCL; Bus. & Prof. Code, § 17200 et seq.), and the false advertising law (id., § 17500 et seq.) include public injunctive relief, i.e., injunctive relief that has the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the general public.  (Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 315-316 (Cruz); Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1077 (Broughton).)  The question we address in this case is the validity of a provision in a predispute arbitration agreement that waives the right to seek this statutory remedy in any forum.  We hold that such a provision is contrary to California public policy and is thus unenforceable under California law.  We further hold that the Federal Arbitration Act (FAA; 9 U.S.C. § 1 et seq.) does not preempt this rule of California law or require enforcement of the waiver provision.  We therefore reverse the judgment of the Court of Appeal.

Slip op. at 1.

Supreme Court takes up UCL standing case: Goonewardene v. ADP

Last week, on February 15, 2016, the Supreme Court granted review in Goonewardene v. ADP, No. S238941.  In this case, the Court of Appeal affirmed dismissal of the plaintiff's UCL and FAL claims for lack of standing, but allowed several other claims to move forward.  Goonewardene v. ADP, LLC, 5 Cal.App.4th 154 (2016).  My original post on the opinion is here.

I haven't seen the petition for review, but it's possible that it focused on the other claims considered in the Court of Appeal opinion, rather than the UCL and FAL claims. This is the issue on review, according to the docket:

Does the aggrieved employee in a lawsuit based on unpaid overtime have viable claims against the outside vendor that performed payroll services under a contract with the employer?

Under Rule of Court 8.115(e), as amended last year, the Court of Appeal opinion remains citable despite the grant of review, although it lacks precedential effect. 

Supreme Court requests supplemental briefing on UCL issue: McGill v. Citibank

On December 7, 2016, the California Supreme Court heard oral argument in McGill v. Citibank, No. S224086.  This case presents the question of whether the Federal Arbitration Act, as construed in Concepcion, preempts the Broughton-Cruz rule.  (See this blog post for more.)

In the vast majority of argued cases, the matter is submitted upon completion of oral argument, and the Court simply issues its opinion within 90 days of the argument date.   On Tuesday, January 24, 2017, however, the Court vacated submission and directed the parties to file supplemental briefs on an interesting UCL-related issue.  From the docket:

Submission is vacated to allow for supplemental briefing. The court requests that the parties serve and file supplemental briefs addressing the following question: Whether the 2004 amendments to the Unfair Competition Law and the false advertising law, through passage of Proposition 64, eliminated the ability of private plaintiffs to seek public injunctive relief? Amici curiae that have filed briefs in this matter may also file supplemental briefs addressing the above question if they so choose. All initial briefs addressing the above question must be served and filed simultaneously on or before February 6, 2017. Any reply to the supplemental briefs must be served and filed on or before February 13, 2017. This matter will be resubmitted, without further order, as of the date that the last supplemental brief is or could be timely filed under this or any subsequent order of this court. (See Cal. Rules of Court, rule 8.524(h).) Corrigan, J., was recused and did not participate.

(Emphasis added.)

Brinker is another example of a case in which the Court vacated submission post-argument and directed further briefing.  In that case, the eventual opinion did not turn on (or even mention) the issue on which supplemental briefing was ordered.  So, the McGill order is very interesting, to be sure, but it does not necessarily mean that this point will become a central focus of the Court's opinion.  What it does mean is that the opinion will be delayed by at least a few weeks. 

In my view, the clear answer to the Court's question is no, assuming the plaintiff meets the standing requirements imposed by Proposition 64.   The initiative did not alter any of the remedies afforded by the UCL (as held in Mervyn's; see this blog post), so all the same forms of injunctive relief should be available both before and after the amendments. 

Oral argument set in UCL/CLRA arbitration case: McGill v. Citibank

On October 6, 2016 at 9:00 a.m. in San Francisco, the Supreme Court will hear oral argument in McGill v. Citibank, No. S224086.  This case presents the question of whether the Federal Arbitration Act, as construed in Concepcion, preempts the Broughton-Cruz rule. 

The Court of Appeal (Fourth Appellate District, Division Three) said that it does.  See McGill v. Citibank, N.A., 232 Cal.App.4th 753 (2014), review granted.  

The Broughton-Cruz rule basically holds that claims for public injunctive relief, such as that available under the UCL and CLRA, are inarbitrable. For more on the rule, see this blog post.  For more on the Court of Appeal's opinion, see this blog post.

On Monday, the defendant filed a request that the argument be moved to the December calendar, but the docket indicates no ruling on that request as of Tuesday afternoon.  UPDATE:  The argument will be moved to the December calendar, exact date and time to be announced. 

Supreme Court depublishes UCL and CLRA standing opinion: Brooks v. CarMax Auto Superstores California LLC

On August 10, 2016, the Supreme Court issued an order depublishing the Court of Appeal's opinion in Brooks v. CarMax Auto Superstores California LLC, 246 Cal.App.4th 973 (2016), which was handed down in April. 

The opinion, which is now uncitable, summarizes the claims and trial court's ruling as follows:

After a court trial on stipulated facts, the court ruled Brooks had suffered no damage from CarMax's alleged violations of [Vehicle Code] section 11713.18 [which governs mandatory CQI Certificates for "certified" used vehicles], and therefore concluded she did not have standing to pursue claims under the CLRA or the UCL.  The court entered judgment for CarMax.  Brooks asserts on appeal that reversal is required because she adequately demonstrated the type of damage necessary to prosecute a claim under the CLRA or the UCL or, alternatively, she was entitled to prosecute her claims under the CLRA or the UCL without showing any injury.

Slip op. at 2. The Court of Appeal (Fourth Appellate District, Division One) disagreed with the trial court on the standing points, but affirmed the judgment after finding no deficiency in the defendant's CQI Certificate:

We agree with Brooks that the legislative scheme contemplates certain minimal standards must be met before a dealer may promote or sell a vehicle as certified, among which is that a dealer must provide a "completed inspection report indicating all the components inspected" to the buyer.  We also agree that, if those standards are not satisfied, a vehicle marketed and sold as certified has been mislabeled, and a buyer who establishes they would not have purchased the vehicle absent that "certified" label has standing to pursue claims for violation of the CLRA and UCL under the rationale of Kwikset, regardless of whether the particular vehicle purchased might be as mechanically sound or intrinsically valuable as a certified vehicle.

However, we conclude the trial court correctly entered judgment against Brooks (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981) because we reject Brooks's claim that the CQI Certificate was deficient in its content. ....

.....

Although the trial court premised its judgment on Brooks's lack of actual injury, we affirm the judgment as correct (Rappleyea v. Campbell, supra, 8 Cal.4th at p. 981) because we conclude both the content of the CQI Certificate and the mode it was provided to Brooks satisfied the requirements of section 11713.18, subdivision (a)(6).

Id. at 12-13, 20 (emphasis in original).

The successful depublication request was filed by Consumers for Auto Reliability and Safety, which presumably disagreed with the Court of Appeal's reading of the CQI certification requirements.

Supreme Court issues new UCL opinion - not! In re Cipro Cases I & II

Yesterday, the Supreme Court handed down its eagerly-anticipated opinion, In re Cipro Cases I & II, __ Cal.4th ___ (May 7, 2015), in which the Court was expected to reaffirm its landmark holding in Cel-Tech that conduct can be "unfair" under the UCL even if not "unlawful," and vice versa.

It didn't happen.  Here's the entirety of the discussion of the UCL claim:

V.        Unfair Competition Law and Common Law Monopoly Claims

The trial court entered judgment against plaintiffs on their unfair competition and common law monopoly claims using the same reasoning it applied to the Cartwright Act claim.  Because that reasoning was erroneous, we reverse on these claims as well.

Slip op. at 51. 

Oh, well.  Maybe next time. 

On the antitrust issue, the Court unanimously held that "pay-for-delay" agreements between pharmaceutical patent holders and generic-manufacturer competitors can be unlawful under the Cartwright Act:

Under federal antitrust law, these settlements are not immune from scrutiny, even if they limit competition no more than a valid patent would have.  (Federal Trade Commission v. Actavis, Inc. (2013) 570 U.S. ___, ___ [186 L.Ed.2d 343, 356, 133 S.Ct. 2223, 2230] (Actavis).)  We conclude the same is true under state antitrust law.  Some patents are valid; some are not.  Sometimes competition would infringe; sometimes it would not.  Parties illegally restrain trade when they privately agree to substitute consensual monopoly in place of potential competition that would have followed a finding of invalidity or noninfringement.  The Court of Appeal ruled to the contrary; we reverse.

Slip op. at 2.

Supreme Court takes up UCL/CLRA arbitration issue: McGill v. Citibank

Last week, on April 1, 2015, the Supreme Court granted review in McGill v. Citibank, No. S224086. 

In McGill, the Court of Appeal (Fourth Appellate District, Division Three) held that the Federal Arbitration Act, as construed in Concepcion, preempted the Broughton-Cruz rule.  See McGill v. Citibank, N.A., 232 Cal.App.4th 753 (2014), review granted.  

The California Supreme Court established this rule in a pair of cases: Broughton v. Cigna Healthplans of California, 21 Cal.4th 1066 (1999), which held that "the injunctive relief portion of a CLRA claim is inarbitrable," and Cruz v. PacifiCare Health Systems, Inc., 30 Cal.4th 303 (2003), which extended this holding to the UCL and FAL. 

My post on the Court of Appeal's original opinion in McGill is here.  If and when I obtain copies of the petition for review and other briefs, I will post them here.

Oral argument preview: In re Cipro Cases I & II

This morning at 9:00 a.m. in San Francisco, the Court will hear oral argument in In re Cipro Cases I & II, No. S198616.   This case involves some interesting questions of antitrust law as well as a sleeper UCL issue. 

From the court's docket:

This case presents the following 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?

Put another way, this is a "pay-for-delay" case.  The question before the Court is whether "pay for delay" agreements are per se unlawful under the Cartwright Act.  In 2013, the U.S. Supreme Court held that such agreements "can sometimes" violate the Sherman Act, and that they should be evaluated under the "rule of reason."  FTC v. Actavis, Inc., 133 S.Ct. 2223 (2013).  In late 2013, the California Supreme Court ordered the parties to file supplemental briefs on the impact of Actavis. 

The sleeper UCL issue is whether a defendant's conduct may be found "unfair" within the meaning of the UCL even if the conduct does not violate the Cartwright Act. The Court of Appeal said no (as discussed here).  I believe this answer contravenes Cel-Tech (as explained here and in my amicus brief for CAOC).

If my schedule permits, I plan to attend the argument today and report back on whether the Court or the parties discuss the UCL issue during what promises to be a very engaging argument.

Case with possible UCL issue set for oral argument: In re Cipro Cases I & II

Earlier this month, the Supreme Court posted its March 2015 oral argument calendar.  On March 3, 2015 at 9:00 a.m. in San Francisco, the Court will hear argument in In re Cipro Cases I & II, No. S198616. 

This case mainly raises some very interesting questions of antitrust law.  The litigation also involves a UCL claim, however, so it is possible the Supreme Court may address the UCL in its forthcoming opinion.  I filed an amicus brief for CAOC discussing one aspect of the UCL claim that the parties' briefing did not focus on.

My original post on the Court of Appeal's 2011 opinion is here.  In that opinion, the Court of Appeal reasoned that conduct not prohibited by the Cartwright Act could not be "unfair" within the meaning of the UCL.  I believe this reasoning is inconsistent with Cel-Tech, for reasons explained in detail in my amicus brief for CAOC. 

More discussion of Cipro appears in this blog post.  I first noted this issue more than nine years ago. (!)

I hope to be able to attend the argument on March 3 and see if the Court asks any questions about the UCL claim.  I have not yet attended any arguments with the two new justices presiding, so I'm looking forward to it. 

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. 

Supreme Court to hand down UCL preemption opinion this morning: People ex rel. Harris v. Pac Anchor (Updated)

Last week, the Supreme Court announced that it will be handing down its opinion this morning in People ex rel. Harris v. Pac Anchor Transportation, Inc., no. S194388.  Harris is a UCL public prosecutor action in which the defendant asserts federal preemption. 

When the opinion is posted online at approximately 10:00 a.m., it should be available at this link:

• People ex rel. Harris v. Pac Anchor Transportation, Inc., ___ Cal.4th ___ (Jul. 28, 2014)

This is the issue on review, according to the docket:

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)?

The Court of Appeal (Second Appellate District, Division Five) said no.  People ex rel. Harris v. Pac Anchor Transportation, Inc., 195 Cal.App.4th 765 (2011), review granted.  The introductory paragraph of the Court of Appeal's opinion read as follows:

Plaintiff and appellant State of California appeals from a judgment following an order granting judgment on the pleadings in favor of defendants and respondents Alfredo Barajas and Pac Anchor Transportation, Inc.  The State contends the Federal Aviation Administration Authorization Act (FAAAA) (49 U.S.C. § 14501 et seq.) does not preempt this action under California’s unfair competition law (UCL) (Bus. & Prof. Code, § 17200 et seq.) based on alleged violations of California labor and unemployment insurance laws.  We agree the State’s unfair competition action is not related to a price, route, or service of a motor carrier with respect to the transportation of property, and therefore, the action is not preempted by the FAAAA.  We reverse.

Slip op. at 1.

UPDATE:  The opinion is up.  The Supreme Court unanimously held the FAAAA does not preempt the UCL, either in general or as applied to the particular claim brought by the AG against the employer.

U.S. Supreme Court schedules UCL case for conference: Rose v. Bank of America

Last week, the U.S. Supreme Court put Bank of America, N.A. v. Rose, No. 13-662, on its conference agenda for June 26, 2014. 

This follows the filing on May 27 of the Solicitor General's brief recommending that the cert. petition be denied.

According to the SCOTUSblog calendar, June 26 is the last day of the Term on which the Court is scheduled to conference cases.  So there should be no further relisting, and the order granting or denying cert. should be announced by Monday, June 30. 

The cert. petition seeks to overturn the California Supreme Court's landmark UCL decision, Rose v. Bank of America, N.A., 57 Cal.4th 390 (2013), discussed here.

UPDATE:  On June 30, 2014, the U.S. Supreme Court denied the cert. petition.

Solicitor General recommends denying cert. in UCL matter: Rose v. Bank of America

As I previously reported, on March 10, 2014, the U.S. Supreme Court invited the Solicitor General to file a brief expressing the views of the United States in Bank of America, N.A. v. Rose, No. 13-662.  The cert. petition seeks to overturn the California Supreme Court's decision in Rose v. Bank of America, N.A., 57 Cal.4th 390 (2013) (discussed here).  

On May 27, 2014, the Solicitor General filed a brief recommending that the cert. petition be denied. The brief expresses the view that the California Supreme Court's ruling was correct and that it does not conflict with any federal appellate opinions.  The brief also points out that the ruling is interlocutory only.

The general counsel of the Consumer Financial Protection Bureau is a signatory to the brief along with the Solicitor General's office.  As explained on page 2, the CFPB is the agency currently empowered to adopt regulations to carry out the purpose of the federal Truth in Savings Act, which is implicated in Rose.  That agency appears to have no problem with the idea that California may have a parallel enforcement scheme.

See this blog post for links to the cert. petition and other briefs filed in the U.S. Supreme Court.  My original post on Rose is here.

U.S. Supreme Court developments of interest in four cases

A few more recent developments of interest from the U.S. Supreme Court:

• On February 24, 2014, the Court issued a GVR order (grant, vacate and remand) in CarMax Auto Superstores California, LLC v. Fowler, No. 13-439.  In this case, the California Court of Appeal (Second Appellate District, Division One), in an unpublished opinion, reversed the trial court's order compelling arbitration in a wage and hour class action.  Fowler v. CarMax, Inc., 2013 WL 1208111 (Cal. Ct. App. Mar. 26, 2013).  That opinion concluded, among other things, that Concepcion did not overrule Gentry v. Superior Court, 42 Cal.4th 443 (2007) (discussed in this blog post).  The California Supreme Court denied review, but now the U.S. Supreme Court has vacated the decision and directed the Court of Appeal to reconsider the matter in light of American Express Co. v. Italian Colors Restaurant, 133 S.Ct. 2304 (2013). 

• On February 26, 2014, the Court requested a response from the respondent, Moreno, in Sonic-Calabasas A, Inc. v. Moreno, No. 13-856.  The cert. petition challenges the California Supreme Court's decision in Sonic-Calabasas A, Inc. v. Moreno, 57 Cal.4th 1109 (2013) (discussed in this blog post).  The federal high court issued a GVR order the last time Sonic-Calabasas filed a cert. petition in this case, which was in 2011.  That time, the case was remanded for further consideration in light of Concepcion.

• On March 10, 2014, the Court invited the Solicitor General to file a brief expressing the views of the United States in Bank of America, N.A. v. Rose, No. 13-662.  The cert. petition seeks to overturn the California Supreme Court's decision in Rose v. Bank of America, N.A., 57 Cal.4th 390 (2013) (discussed here).   See this blog post for links to some of the briefs filed in the federal proceeding.

• On March 10, 2014, the Court granted cert. in Public Employees' Retirement System of Mississippi v. IndyMac MBS, Inc., No. 13-640, after relisting the case twice.  This case involves American Pipe tolling, and this is the question presented according to the U.S. Supreme Court's website: 

In American Pipe & Construction Co. v. Utah, 414 U.S. 538 (1974), this Court held that "the commencement of a class action suspends the applicable statute of limitations as to all asserted members of the class who would have been parties had the suit been permitted to continue as a class action." Id. at 554. Section 13 of the Securities Act of 1933—titled "Limitation of actions"—provides, in relevant part, that "[i]n no event shall" an action under § 11 of that Act "be brought ... more than three years after the security was bona fide offered to the public, or under [§ 12] (a) (2) ... more than three years after the sale." 15 U.S.C. § 77m. 

The question presented is:  Does the filing of a putative class action serve, under the American Pipe rule, to satisfy the three year time limitation in § 13 of the Securities Act with respect to the claims of putative class members?

The Second Circuit held last June that American Pipe tolling did not apply. Police and Fire Retirement System of City of Detroit v. IndyMac MBS, Inc., 721 F.3d 95 (2d Cir. 2013).  The SCOTUSblog case page has links to the briefs filed to date.

Cert. petition in UCL case to be conferenced today: Rose v. Bank of America

Today, the U.S. Supreme Court will be conferencing the cert. petition in Bank of America, N.A. v. Rose, No. 13-662.  The petition, filed in November, asks the U.S. Supreme Court to consider and overturn the California Supreme Court's decision in Rose v. Bank of America, N.A., 57 Cal.4th 390 (2013).     

As explained in this blog post, Rose addressed whether a UCL "unlawful" prong claim could be predicated on violations of the federal Truth in Savings Act ("TISA") (12 U.S.C. §§ 4301 et seq.), even though the Act did not carry a private right of action.  The California Supreme Court's answer was yes, and its analysis rested firmly on long-established principles of UCL jurisprudence.

Stranger things have happened, but it seems unlikely that the U.S. Supreme Court would have any interest in this case.  On Monday, the conference results will be announced.  The petition could be granted or denied or the case might be relisted.  Here are links to the parties' briefs:

• Petition for a Writ of Certiorari (filed Nov. 27, 2013)
• Brief in Opposition (filed on Jan. 30, 2014)
• Reply in Support of Petition (filed Feb. 17, 2014)

(I do not have a copy of the amicus curiae brief of the California Bankers Association, filed on Dec. 31, 2013.)

Supreme Court sets oral argument in UCL case: Loeffler v. Target Corp.

On February 4, 2014, at 10:00 a.m. in Sacramento, the California Supreme Court will hear oral argument in Loeffler v. Target Corp., No. 173972, in which review was granted in 2009. The case arose out of a shopping trip to Target, where the plaintiff was charged sales tax on a cup of hot coffee "to go."

This is the issue on review, according to the docket:

Does article XIII, section 32 of the California Constitution or Revenue and Taxation Code section 6932 bar a consumer from filing a lawsuit against a retailer under the Unfair Competition Law (Bus. & Prof. Code sections 17200 et seq.) or the Consumers Legal Remedies Act (Civ. Code, section 1750 et seq.) alleging that the retailer charged sales tax on transactions that were not taxable?

The Court of Appeal (Second Appellate District, Division Three) held that "plaintiffs are attempting to resolve a sales tax dispute by using consumer and common law remedies rather than the procedure set forth by the Legislature [in the Revenue and Taxation Code]. This they cannot do under article XIII, section 32."  Loeffler v. Target Corp., 173 Cal.App.4th 1229, 1235 (2009).

My original take on this case was that it involved obscure issues involving the state tax code.  The Court of Appeal opinion says almost nothing about the UCL or CLRA.  But the UCL and CLRA issues appear to be moving to the forefront.  On December 16, 2013, the Court ordered supplemental briefing on these issues:

(1) May a cause of action be brought under the UCL (see Bus. & Prof. Code, § 17200 et seq.) or CLRA (see Civ. Code, § 1750 et seq.) based on an allegation that a retailer misrepresented that it was collecting an amount as tax reimbursement when in fact the retailer failed to remit the amount to the Board of Equalization?

(2) If so, do the allegations in plaintiffs' second amended complaint state a cause of action under the UCL or CLRA on this theory, and, if not, should plaintiffs be afforded an opportunity to amend their complaint to state such causes of action?

A few months earlier, on April 11, 2013, the Court ordered supplemental briefing on a very different issue:

The parties are requested to serve and file simultaneous supplemental letter briefs addressing whether and, if so, in what manner the doctrine of primary jurisdiction (see Jonathan Neil & Assoc., Inc. v. Jones (2004) 33 Cal.4th 917, 931-937), appropriately may be invoked and applied in the present case, including whether the issue was preserved in the trial and appellate courts and whether article XIII, section 32 of the California Constitution would be implicated by applying the doctrine.

Here are copies of some of the briefs:

• Opening Brief on the Merits (filed 11-09-09)
• Answer Brief on the Merits (filed 01-11-10)
• Reply Brief on the Merits (filed 02-01-10)
• Amicus Curiae Brief of State Board of Equalization (filed 04-15-10)
• Target's Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
• Plaintiff's Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
• Plaintiff's Request for Judicial Notice in Support of Consolidated Answer to Amicus Curiae Briefs (filed 05-05-10)
• Supplemental Amicus Curiae Brief of State Board of Equalization (filed 07-08-11)
• Plaintiffs' Response to Supplemental Amicus Curiae Brief of State Bd. of Equalization (filed 08-08-11)
• Target's Letter Brief re Primary Jurisdiction (filed 04-22-11)
• Plaintiff's Letter Brief re Primary Jurisdiction (filed 04-22-11)
• Target's Reply Letter Brief re Primary Jurisdiction (filed 04-25-11)
• Plaintiff's Reply Letter Brief re Primary Jurisdiction (filed 04-26-11)
• Target's Supplemental Brief re UCL and CLRA (filed 01-13-14)
• Plaintiff's Supplemental Brief re UCL and CLRA (filed 01-13-14)

There are several "grant and hold" cases also pending in the Supreme Court.  Does anyone know if any cases raising similar issues have been stayed in the lower courts pending resolution of Loeffler?

Also, if anyone plans to attend the argument and would like provide a report for publishing here (with or without attribution), please drop me a line.

UPDATE:  On May 1, 2014, the Supreme Court affirmed the Court of Appeal's judgment, holding that the tax code provides the exclusive remedy for the type of violation asserted in this case.  Loeffler v. Target Corp., 58 Cal.4th 1081 (2014). 

Supreme Court depublishes UCL "unfair" prong opinion: Aspiras v. Wells Fargo Bank

This week, the Supreme Court depublished the Court of Appeal's opinion in Aspiras v. Wells Fargo Bank, N.A., 219 Cal.App.4th 948 (2013), discussed in this blog post.

This is an interesting development.  Aspiras created a split in authority with Jolley v. Chase Home Finance, LLC, 213 Cal.App.4th 872 (2013), regarding the post-Cel-Tech formulation of "unfair" conduct.  There is a longstanding three-way split in authority on the meaning of "unfair," and these two cases created a sub-split. 

Under the post-Cel-Tech formulation, conduct is "unfair" if it contravenes a legislative expression of public policy.  I think of it as violating the spirit, rather than the letter, of the law. 

In Jolley, the defendant's conduct violated a law that the Legislature enacted after the conduct occurred. The Court of Appeal reasoned that by enacting the law, the Legislature had recognized the existence of a public policy, and that the defendant's conduct in contravention of that policy was "unfair" under the UCL. (Jolley is discussed in this blog post.)

The Court of Appeal in Aspiras disagreed with this line of reasoning, and accepted the defendant's argument that so construing the "unfair" prong would "effectuate an improper retroactive application of the [newly-enacted] law." 

I have not seen the depublication request, so it's possible the Supreme Court was concerned with some other aspect of the opinion, which addressed a number of issues.  But at minimum, the Supreme Court's depublication order eliminates this sub-split in authority.