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 limitationsurged by [defendant] in the present case, that “section 17500 [the FAL]incorporates the concept of principal-agent liability.”  (FordDealers 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 establishesthat persons can be found liable formisleading advertising and unfair business practices under normal agencytheory.  To the extent that Toomey, supra, 157 Cal.App.3d 1, or Emery,supra, 95 Cal.App.4th 952 hold otherwise, which defendant implies withoutstating outright in the course of arguing its limiting theories, these casesare 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.