More thoughts on First American Title Ins. Co. v. Superior Court (Sjobring)

I was taking another look at First American Title Insurance Co. v. Superior Court (Sjobring), ___ Cal.App.4th ___ (Jan. 25, 2006) (see my original post here), and came across this paragraph:

California law is clear that a representative plaintiff must be a member of the class he seeks to represent. Indeed, Proposition 64 was enacted to prevent abuses of the class action system by “ ‘prohibit[ing] private attorneys from filing lawsuits for unfair competition where they have no client who has been injured in fact.’ ” (Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th 223, 228.) We cannot permit attorneys to make an “end-run” around Proposition 64 by filing class actions in the name of private individuals who are not members of the classes they seek to represent and then using precertification discovery to obtain more appropriate plaintiffs.

Slip op. at 19 (emphasis added). This paragraph does not accurately capture the purpose of Proposition 64. Proposition 64 was not enacted "to prevent abuses of the class action system." Rather, it was enacted to prevent purported abuses of the "non-class" (to borrow a term from Will Stern) representative action system, which allowed unaffected plaintiffs to seek relief on behalf of the general public without class certification. The actions filed by the Trevor Law Group and others were not class actions; they were non-class, private attorney general actions. In fact, as the 1999 edition of Will's treatise noted, "these cases typically are not brought as class actions." William L. Stern, Unfair Business Practices and False Advertising: Bus. & Prof. Code §17200, para. 7:28 (Rutter Group 1999). Proposition 64 sought to prevent abuses of the non-class, representative action system by bringing UCL actions into the ambit of the class action system, a system of which such actions were not previously a part. Therefore, it is not correct to say that Proposition 64 was intended to prevent "abuses of the class action system."

If a plaintiff files a putative class action (as distinct from a pre-Prop. 64, non-class, representative action) knowing that he or she is not a putative class member, that really doesn't have anything to do with Proposition 64. Perhaps the plaintiff has abused the court system, or violated Code of Civil Procedure section 128.7, but Proposition 64 is not implicated. The First American Title case bears this out. In that case, the plaintiff pleaded causes of action for violation of the CLRA, breach of fiduciary duty, constructive fraud, and unjust enrichment, in addition to a UCL claim. Slip op. at 4. The Court of Appeal basically held that it was improper for the plaintiff to continue to pursue the class claims once he realized he was not a member of the class he sought to represent, and that such a plaintiff should not be allowed to conduct discovery to identify an appropriate class representative. Id. at 18-21, passim. That conclusion would obtain regardless of what causes of action the plaintiff was pursuing. In fact, the Court could simply delete the paragraph quoted above without altering the import of its holding. It should consider doing so, because the paragraph is misleading.