Recent federal Prop. 64 order: Anunziato v. eMachines, Inc.

Thanks to the readers who alerted me to an important federal order interpreting Prop. 64, Anunziato v. eMachines, Inc., 2005 U.S. Dist. LEXIS 28213 (Nov. 10, 2005). (It might actually be Annunziato v. eMachines, Inc., since the name is spelled one way in the caption but differently in the body.) In this order, Judge James V. Selna of the Central District of California "decline[d] to read a reliance requirement into the 'as a result of' language in either Section 17200 or Section 17500." Slip op. at 8. The Court noted that the plain language of Prop. 64 makes no mention of "reliance," then considered a variety of hypothetical fact patterns and the potential impact of imposing a "reliance" requirement. Id. at 2-8, passim. In "numerous situations ... the addition of a reliance requirement would foreclose the opportunity of many consumers to sue under the UCL and the FAL." Id. at 5. The Court concluded:

The goal of consumer protection is not advanced by eliminating large segments of the public from coverage under the UCL or the FAL where they suffer actual harm merely because they were inattentive or for one reason or another lacked the language skills to appreciate the particular unfair or false representation in issue. A construction of these statutes that reduced them to common law fraud would not only be redundant, but would eviscerate any purpose that the UCL and the FAL have independent of common law fraud. .... The Court finds that the remedial purposes of Proposition 64 are fully met without imposing requirements which go beyond actual injury.

Id. at 6-7.