The UCL Practitioner

Moving Day!

2005-09-22T00:01:00.000-07:00

I'm pleased to announce that, effective immediately, The UCL Practitioner has moved to a new home: http://www.uclpractitioner.com. Please update your bookmarks and continue to visit often! No further posts will be added to this site, but the archives will remain here for as long as Blogger continues to host them. UPDATE: In order to halt spam comments, I've disabled the comments feature of this site. Please visit the new site and post your comments there.

Supreme Court denies review in McCann v. Lucky Money

2005-09-21T16:27:00.000-07:00

Today, the Supreme Court denied review in McCann v. Lucky Money, Inc., no. S134874. As I reported on September 9, the Supreme Court had previously given itself an extension of time to decide whether to grant or deny review, leading to speculation that review might be granted even though the Court of Appeal's discussion of Prop. 64 retroactivity was unpublished.

New UCL "unlawful" prong decision: CPF Agency Corp. v. R&S Towing

2005-09-21T11:35:00.000-07:00

In CPF Agency Corp. v. R&S Towing Service, ___ Cal.App.4th ___ (Sept. 16, 2005), the plaintiff's UCL claim was predicated on the defendant's alleged violation of Vehicle Code section 22658, subd. (i)(2). The Court of Appeal reversed the trial court's order granting the defendant's motion to strike, holding that the Vehicle Code provision, and therefore the UCL claim, was not preempted by federal law.

"Trial Over Wal-Mart Lunch Breaks Begins"

2005-09-20T12:42:00.000-07:00

Since I'm taking a lunch break myself, I thought I'd report that my firm's Wal-Mart case went to trial last week. Opening statements were yesterday. The Washington Post has the story, and here are some more. I've assisted with some of the UCL and appellate briefing, but I'm not working directly on the trial. The trial team is working as hard as I've ever seen any lawyers work. Go Fred and Jessica! UPDATE: Jessica's picture is in the Chronicle today on page D3! Unfortunately, the online version of the article has no photo.

New class action decision: Shapell Industries v. Superior Court

2005-09-20T09:24:00.000-07:00

In Shappell Industries, Inc. v. Superior Court, ___ Cal.App.4th ___ (Sept. 19, 2005), the Court of Appeal (Second Appellate District, Division Four) addressed an interesting and somewhat abstract question. What happens to a putative class action when the claims of the sole named class representative are voluntarily dismissed without prejudice? Does a case still exist? The Court of Appeal concluded that it does:

[The fact that the named class representative] dismiss[ed] himself as an individual party to the action meant that there was no named representative plaintiff of the putative class. But in our view the putative class remained extant, awaiting proper amendment of the complaint to add a new representative plaintiff. A dismissal by only some of the plaintiffs means the court is not divested of subject matter jurisdiction and the suit continues. .... California courts recognize and preserve the rights of absent class members, even before the issue of certification has beeen determined.

(Slip op. at 8-9.) Until class certification is denied, "[t]he alleged putative class members are the parties interested in prosecuting the action, such that an actual, justiciable controversy exists, pending amendment to add a named representative plaintiff." (Slip op. at 11.) The Court concluded:

The trial court did not err in permitting [the new plaintiff] to amend the complaint, where [he] came forward promptly as the proposed representative plaintiff, and where no attempt was made to state a new cause of action against [the defendant], but rather the intent was to substitute an unsuitable representative plaintiff for an apparently suitable one.

(Slip op. at 12-13.) This decision could have ramifications for Prop. 64 litigation in which leave to amend is sought to add an affected class representative. I also wonder what happens if the trial court finds the case suitable for class treatment in every respect except the typicality or adequacy of the particular class representative. Shouldn't leave to amend to substitute a new class representative be granted there as well? Cf., e.g., Lazar v. Hertz Corp., 143 Cal.App.3d 128, 144 (1983) (conditionally granting class certification to permit substitution of a suitable class representative).

Supreme Court might take up UCL "restitution"

2005-09-19T08:42:00.000-07:00

The Supreme Court is showing some interest in reviewing the Court of Appeal's decision in Madrid v. Perot Systems Corp., 130 Cal.App.4th 440 (2005), which addressed the scope of restitutionary relief under the UCL. According to the docket, the Supreme Court has given itself an extension of time, through October 19, to grant or deny review. My original post on Madrid is here. Thanks to the reader who emailed me with this tip.

Supreme Court gives itself more time to grant or deny review in Kintetsu case

2005-09-16T08:57:00.000-07:00

On Monday, September 12, the Supreme Court extended its time to grant or deny review in Consumer Advocacy Group v. Kintetsu Enterprises, case no. S135587. The Supreme Court now has until October 27 to act.

Kintetsu is one of the two remaining published opinions on the Prop. 64 retroactivity question. Compare Consumer Advocacy Group, Inc. v. Kintetsu Enterprises of America, 129 Cal.App.4th 540 (2005) (Prop. 64 does not apply to pending cases) with Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc., 129 Cal.App.4th 1228 (2005) (Prop. 64 does apply to pending cases). To the best of my knowledge, no review petition was filed in Huntingdon.

Petrini opinion now on Court of Appeal's website

2005-09-15T17:54:00.000-07:00

The Petrini opinion appeared on the Court of Appeal's website yesterday afternoon. See this post for more info.

First District, Division Five goes the other way on Prop. 64 retroactivity

2005-09-13T08:55:00.000-07:00

In an opinion issued yesterday, most of which is unpublished, the First Appellate District, Division Five, parted company with its brethren in Division ~~One~~ Four, and held: "We agree with the reasons articulated in those cases that have concluded that Proposition 64 applies to pending cases because it repeals a right of action created wholly by statute and does not contain a saving clause." Wise v. Pacific Gas & Elec. Co., ___ Cal.App.4th ___ (Sept. 12, 2005) (slip op. at 23). Proposition 64 did not destroy the plaintiffs' case, however. They alleged actual harm, and would also be permitted to amend their complaint (which was filed long before Prop. 64 was enacted) to seek class certification. (Slip op. at 23.) Somehow it seems that the defendant was better off before, but maybe that's just me.

The panel's (unpublished) discussion of UCL "restitution" is also interesting:

The essence of plaintiffs’ action is that PG&E charged ratepayers for services it failed to deliver, to wit, replacement of obsolete gas regulators. In other words, plaintiff ratepayers paid for something they did not get after PG&E deceptively obtained a rate increase from the PUC on the representation the increase was necessary to carry out the replacement project. Plaintiffs have alleged a valid claim for restitutionary relief: through a deceptive business practice, PG&E obtained from plaintiffs money in which they have an ownership interest.

(Slip op. at 21 (citation omitted).) In other words, the UCL authorizes restitution to a plaintiff who paid for something that the defendant failed to deliver. The next question, which the opinion did not address, is how that something is valued for purposes of awarding restitution. In this case, the plaintiffs seem to be alleging that PG&E obtained a rate increase from the PUC by promising to replace old gas regulators, which it did not do. The restitution would simply be the amount of the rate increase, rather than, say, the value of the regulators.

Off-topic post: Roberts confirmation hearings

2005-09-12T11:33:00.000-07:00

SCOTUSblog is live-blogging the hearings as we speak (or, I should say, type). That's something I'd love to be able to do for the Mervyn's and Branick arguments next year. However, the technical hurdles (not to mention the Court's rule against electronic devices in the courtroom) might make it impossible.

Did Prop. 64 resuscitate "damages" as a UCL remedy?

2005-09-12T11:10:00.000-07:00

Reader Jeffery L. Fazio posted this thoughtful analysis as a comment to my August 26th post. I'm re-posting it here in full because I think it is worthy of serious discussion:

I’ve been doing some thinking about one of the anomalies created by Proposition 64: Its requirement that plaintiffs demonstrate they have suffered damages (i.e., a loss of money or property) before they’re permitted to bring a UCL action, even though they’re not allowed to actually recover those damages if they prove their claim.

The asymmetry — not to mention the inherent unfairness — of that result has led me to reexamine the underpinnings of the rule that prohibits courts from awarding damages under the UCL, and although I’ve yet to complete that task, it seems that the prohibition against the award of damages in a UCL action needs to be reconsidered.

Before the California Supreme Court addressed the issue in Bank of the West v. Superior Court, damages were recognized as one of the remedies available to plaintiffs in UCL cases. That was so because the ability to award damages was deemed an essential part of the courts’ equitable powers to do justice by whatever means were necessary.

Justice Bird made that observation in her concurring and dissenting opinion in Committee on Children’s Television, in which she cited to a number of cases in which California appellate courts had affirmed the propriety of damage award in statutory unfair competition cases that were brought under Civil Code section 3369 (which was later recodified at Business & Professions Code § 17200, et seq.). More specifically, Justice Bird made the following observation:

"As originally enacted, the law expressly provided for injunctive relief, but was silent on damages. (Stats.1933, ch. 953, § 1, p. 2482.) Nevertheless, the courts, exercising their inherent equitable powers, consistently ruled that competitors could recover compensatory damages in actions for unfair competition. (See, e.g., Western Electro-Plating Co v. Henness (1961) 196 Cal. App. 2d 564, 572-574; Southern Cal. Disinfecting Co. v. Lomkin (1960) 183 Cal.App.2d 431, 448-449; Ojala v. Bohlin (1960) 178 Cal.App.2d 292, 302-304; Reid v. Mass Co., Inc. (1957) 155 Cal.App.2d 293, 307-308; Hesse v. Grossman (1957) 152 Cal.App.2d 536, 542.) In so ruling, the courts implicitly rejected the notion that the unfair competition law, by authorizing injunctive relief, precluded the award of compensatory damages."

Committee on Children’s Television v. General Foods Corp., 35 Cal. 3d 197, 226 (1983) (footnotes and parallel citations omitted).

In short, Justice Bird dissented from the majority in Children’s TV to the extent that the majority had side-stepped the damages issue, and because she believed that the Court of Appeal got it right in United Farm Workers v. Superior Court by ruling that damages were available under the UCL, which conflicted with the Supreme Courts’ prior ruling — without any analysis of the issue — that damages were not available under the False Advertising Law (a companion to the UCL) several years earlier in Chern v. Bank of America.

In the wake of Chern, the question about whether damages were available under the UCL had divided the California Courts of Appeal. One District had ruled (in the United Farm Workers case) that damages are available as one of the many remedies courts of equity have to right a wrong. And another District had ruled (in the Dean Witter case) that damages are not available because their imposition would impede the Legislative objective of administrative speed and efficiency built into the private AG standing provisions of the UCL.

In other words, the Dean Witter court (and a few others) rejected the United Farm Workers decision by pointing out that it conflicted with the Supreme Court’s ruling in Chern, and then added the analysis and the rationale that was missing in Chern itself: According to the Dean Witter court, damages could not be awarded in the context of a UCL action because their inclusion would overly complicate the litigation, and thereby undermine the ease and simplicity that informed the Legislature’s decision to allow representative actions to proceed on behalf of the general public without the need for class certification.

The court’s discussion of the issue is set forth below:

"At our request the parties have briefed issues concerning the availability of civil damages on the first cause of action under Abascal's unfair competition theory. Despite one case holding otherwise (United Farm Workers of America v. Superior Court (1975) 47 Cal.App.3d 334, 344) we are satisfied that the better rule denies compensatory damages as distinct from the equitable remedy of restitution. (See Little Oil Co, Inc. v. Atlantic Richfield Co. (9th Cir. 1988) 852 F.2d 441, 445; Kates v. Crocker Nat. Bank (9th Cir. 1985) 776 F.2d 1396, 1398; Meta-Film Associates, Inc. v. MCA, Inc. (C.D. Cal. 1987) 586 F. Supp. 1346, 1363; Newport Components v. NEC Home Electronics (C.D.Cal. 1987) 671 F.Supp. 1525, 1550-1551; Chern v. Bank of America (1976) 15 Cal.3d 866, 875 [false advertising statutes 'do not authorize recovery of damages by private individuals'; private relief 'is limited to the filing of actions for an injunction']; Committee on Children’s Television, Inc. v. General Foods Corp., supra 35 Cal.3d at p. 215 [acknowledging butnot addressing issue].) We believe this interpretation is consistent with the legislative history of congruent 1972 amendments to the false advertising law. Both Senate and Assembly sources indicate that the Legislature was concerned to affirm the 'general equity power' of the courts, particularly the power to order restitution. (Assem.Com. on Judiciary, Analysis of Assem.Bill No. 1763 (1972 Reg.Sess.) May 1, 1972; see Sen.Com. on Judiciary, Analysis of Assem.Bill No. 1763 (1972 Reg.Sess.) undated.) The exclusion of claims for compensatory damages is also consistent with the overarching legislative concern to provide a streamlined procedure for the prevention of ongoing or threatened acts of unfair competition. To permit individual claims for compensatory damages to be pursued as part of such a procedure would tend to thwart this objective by requiring the court to deal with a variety of damage issues of a higher order of complexity."

Dean Witter Reynolds, Inc. v. Superior Court, 211 Cal. App. 3d 758, 774 (1989).

Ultimately, the Supreme Court resolved the “tension” between the Chern and United Farm Workers in Bank of the West by adopting the reasoning of the Dean Witter court. In Bank of the West, the Supreme Court confirmed that “the Legislature deliberately traded the attributes of tort law for speed and administrative simplicity” (a statement that the court has reiterated many times since then), just as the court had found in Dean Witter. Aside from the court’s discussion of the policy implications of requiring insurers to cover damage claims for violations of the UCL (which could have the effect of letting the wrongdoer off the hook), however, the Bank of the West court offered no further explanation about why damages should not be recoverable in a UCL action.

Proposition 64 has knocked out the very underpinnings of these decisions. That is, now that Prop 64 has eliminated private AG standing to pursue speedy and simple representative actions, it seems that the issue must be reconsidered in that light: the courts’ equitable power to award damages was sacrificed to the administrative simplicity of representative, non-class actions, so the rationale that informed the prohibition against courts utilizing the entire range of their equitable powers in a UCL action — including the ability to award damages in appropriate cases — has disappeared along with the private AG standing provision that led to that prohibition in the first place.

And in light of Prop 64’s requirement that plaintiffs show they have suffered what amounts to damages (i.e., a loss of money or property), there doesn’t appear to be any valid reason to prohibit them from actually recovering the damages that form the basis of their standing to pursue a claim.

This is a very persuasive argument. Bank of the West states in no uncertain terms that tort-like damages remedies were traded away for streamlined "non-class" procedures. Now that those streamlined procedures have been eliminated, why shouldn't that trade-off be reexamined? A damages remedy is no longer procedurally inconsistent with the UCL, and the courts have always enjoyed equitable powers broad enough to afford such a remedy. Any other thoughts?

Third District holds Prop. 64 retroactive in unpublished opinion

2005-09-10T13:05:00.000-07:00

On Thursday, the Third District Court of Appeal issued its eagerly-awaited opinion in Petrini Van & Storage v. Superior Court (no. C049042). The opinion, which is unpublished, is not yet available on the Court of Appeal's website, but I'm happy to be able to say that a reader sent me a copy of it yesterday afternoon.

Another reader, who attended the oral argument, correctly predicted that the Court would hold that Prop. 64 applies retroactively to pending cases. Justice Sims filed a concurrence expressing the view that "the plain meaning of language enacted by Proposition 64 says that its standing requirement applies to pending actions." Slip op., concurrence at 1. For reasons I've already explained, I respectfully disagree. The concurrence quotes a single word from Prop. 64—"prosecuted"—without mentioning the other language in Prop. 64 that creates doubt and ambiguity about the electorate's intent. It would be as logical to isolate the word "bringing" and conclude therefrom that the electorate expressly intended prospective application.

Supreme Court extends its deadline to grant review in McCann v. Lucky Money

2005-09-09T10:40:00.000-07:00

On August 25, the Supreme Court gave itself additional time—through October 5—to decide whether to grant review in McCann v. Lucky Money, Inc., no. S134874. McCann is another case in which the Court of Appeal's discussion of Proposition 64 was unpublished. This activity leads me to wonder why in the world didn't the Supreme Court also grant review in Frey v. Trans Union Corp. (no. S133272) (which it depublished instead), Duran v. Superior Court (May Dept. Stores) (no. S132689), MasterCard Int'l, Inc. v. Superior Court (no. S131416), and Foundation Aiding the Elderly v. Superior Court (no. S133293)? Maybe the Court likes to be enigmatic.

Supreme Court grants review in Cohen v. Health Net

2005-09-08T00:01:00.000-07:00

As I previously reported, on August 19, the Supreme Court gave itself more time—until September 23—to grant or deny review in Cohen v. Health Net of California, Inc., no. S135104. Last week, on August 31, the Court issued a "grant and hold" order, granting review but deferring all further activity in the case until Mervyn's and Branick are resolved. So, we now know that it was, indeed, the Prop. 64 retroactivity issue that piqued the court's interest. This is the second case that the Supreme Court has taken up in which the Court of Appeal's Prop. 64 retroactivity discussion was unpublished.

First District does not address Prop. 64 in Wilson v. Brawn of California

2005-09-06T09:20:00.000-07:00

An eagerly-anticipated decision from the First Appellate District, Division One did not reach the Prop. 64 retroactivity question, despite the parties' supplemental briefing on the question. Wilson v. Brawn of California, Inc., ___ Cal.App.4th ___ (Sept. 2, 2005).

New Ninth Circuit UCL decision: Arizona Cartridge Remanufacturers Assn. v. Lexmark Int'l

2005-09-02T09:01:00.000-07:00

In Arizona Cartridge Remanufacturers Assn., Inc. v. Lexmark Int'l, Inc., ___ F.3d ___ (9th Cir. Aug. 30, 2005), the Ninth Circuit addressed the UCL's "unfair" and "fraudulent" prongs, and affirmed an order granting summary judgment in the defendant's favor.

Additional Mervyn's and Branick briefs now online

2005-09-02T00:01:00.000-07:00

I obtained these additional briefs from the Supreme Court. Again, these are large files and may take a while to download. Patience is a virtue when downloading large files.

Californians for Disability Rights v. Mervyn's:
Answer Brief on the Merits
Reply Brief on the Merits
Branick v. Downey Sav. & Loan:
Answer Brief on the Merits
Amicus Curiae Brief of AARP
Reply to AARP Amicus Curiae Brief

I was unable to obtain a copy of the reply brief on the merits in Branick. That reply brief was submitted for filing on Wednesday, along with a request for leave to file an overlength brief. Presumably, that brief will become available after the Supreme Court acts on the overlength brief request. Meanwhile, the other briefs have been added to my list of Prop. 64 appellate briefs. UPDATE: There was a typographical error in the link to the reply brief on the merits in Mervyn's. The error has been fixed. Thanks to the reader who brought it to my attention.

With sympathy for our compatriots in Louisiana

2005-09-01T10:29:00.000-07:00

Through the grapevine, I received the following email, which originated from a law professor in the affected area:

I know your hearts, in particular, are for lawyers. Think of this...

5,000 - 6,000 lawyers (1/3 of the lawyers in Louisiana) have lost their offices, their libraries, their computers with all information thereon, their client files - possibly their clients, as one attorney who e-mailed me noted. As I mentioned before, they are scattered from Florida to Arizona and have nothing to return to. Their children's schools are gone and, optimistically, the school systems in 8 parishes/counties won't be re-opened until after December. They must re-locate their lives.

Our state supreme court is under some water - with all appellate files and evidence folders/boxes along with it. The 5th Circuit Court of Appeals building is under some water - with the same effect. Right now there may only be 3-4 feet of standing water but, if you think about it, most files are kept in the basements or lower floors of courthouses. What effect will that have on the lives of citizens and lawyers throughout this state and this area of the country? And on the law?

The city and district courts in as many as 8 parishes/counties are under water, as well as 3 of our circuit courts - with evidence/files at each of them ruined. The law enforcement offices in those areas are under water - again, with evidence ruined. 6,000 prisoners in 2 prisons and one juvenile facility are having to be securely relocated. We already have over-crowding at most Louisiana prisons and juvenile facilities. What effect will this have? And what happens when the evidence in their cases has been destroyed? Will the guilty be released upon the communities? Will the innocent not be able to prove their innocence?

Our state bar offices are under water. Our state disciplinary offices are under water - again with evidence ruined. Our state disciplinary offices are located on Veteran's Blvd. in Metairie. Those of you who have been watching the news, they continue to show Veteran's Blvd. It's the shot with the destroyed Target store and shopping center under water and that looks like a long canal. Our Committee on Bar Admissions is located there and would have been housing the bar exams which have been turned in from the recent July bar exam (this is one time I'll pray the examiners were late in turning them in - we were set to meet in 2 weeks to go over the results). Will all of those new graduates have to retake the bar exam?

Two of the 4 law schools in Louisiana are located in New Orleans (Loyola and Tulane - the 2 private ones that students have already paid about $8,000+ for this semester to attend). Another 1,000+ lawyers-to-be whose lives have been detoured. I've contacted professors at both schools but they can't reach anyone at those schools and don't know the amount of damage they've taken. Certainly, at least, this semester is over. I'm trying to reach the Chancellor's at Southern and LSU here in Baton Rouge to see if there's anything we can do to take in the students and/or the professors. I think I mentioned before, students from out of state have beens stranded at at least 2 of the other universities in New Orleans - they're moving up floor after floor as the water rises. Our local news station received a call from some medical students at Tulane Medical Center who were now on the 5th floor of the dormitories as the water had risen.&nbs p; One of them had had a heart attack and they had no medical supplies and couldn't reach anyone - 911 was busy, local law enforcement couldn't be reached, they were going through the phone book and reached a news station 90 miles away!! It took the station almost 45 minutes to finally find someone with FEMA to try to get in to them!!

And, then, there are the clients whose files are lost, whose cases are stymied. Their lives, too, are derailed. Of course, the vast majority live in the area and that's the least of their worries. But, the New Orleans firms also have a large national and international client base. For example, I received an e-mail from one attorney friend who I work with on some crucial domestic violence (spousal and child) cases around the nation - those clients could be seriously impacted by the loss, even temporarily, of their attorney - and he can't get to them and is having difficulty contacting the many courts around the nation where his cases are pending. Large corporate clients may have their files blowing in the wind where the high rise buildings had windows blown out.

I woke up this morning to the picture of Veteran's Blvd which made me think of my students who just took the bar. My thoughts wandered from there to the effect on the Disciplinary Offices. Then my thoughts continued on. I'm sure I'm still missing a big part of the future picture. It's just devastating. Can you imagine something of this dimension in your state?

Michelle

Professor Michelle Ghetti
Southern University Law Center
Baton Rouge, LA 70813

UPDATE: Ernest Svenson, who writes the blog Ernie the Attorney, is from the affected area and has more on his site. Thankfully, he is in a safe place.

Blog hiatus

2005-08-26T17:39:00.000-07:00

The blog will be on hiatus until Thursday or Friday of next week. Please keep those emails coming!

Report on this morning's Prop. 64 oral argument and some thoughts on retroactivity

2005-08-26T13:27:00.000-07:00

My sincere and eternal thanks to the reader who attended this morning's oral argument in the Petrini Van & Storage case, and provided this detailed summary:

Petrini Van & Storage v. Superior Court,
Third Appellate District, case no. C049042

Oral argument on Friday, August 26, 2005, 9:30 a.m.

Panel: Justices Richard Sims, Rod Davis, Tani Cantil-Sakauye

Attorneys: Stephen C. Tedesco, Littler Mendelson, San Francisco argued for Petitioner. Kimberley Owens appeared only for Petitioner. Matthew J. Gauger, Weinberg Roger & Rosenfeld, Sacramento, argued for Real Party in Interest.

Writ from Sacramento Superior Court, Judge Loren McMaster's denial of defendant Petrini Van and Storage's Motion for Judgment on the Pleadings.

Summary of Oral Argument:

Justice Sims expressed awareness that whomever loses the decision by the Third District Court would petition for review before the Supreme Court, which counsel for petitioner acknowledged.

The sole issue addressed was whether Prop. 64 was applicable to pending cases. The focus was on whether it affected a vested right. Petitioner contended that the right to bring a representative action was purely statutory, and did not exist at common law. Tedesco contended that the substantive rights in this action, the prevailing wage laws, were not affected by Prop. 64.

Each of the three Justices suggested that the matter might be returned to the trial court to cure the standing defect by allowing the Union or a plaintiff with a cognizable injury to substitute in as plaintiff. Tedesco said that is a different lawsuit, the public withdrew this plaintiff's right to proceed with this suit by enacting Prop. 64.

Gauger, attorney for real party plaintiff/respondent Munoz, contended that the trial court's tentative ruling was well reasoned. Munoz had arranged his affairs to pursue a Business & Professions Code section 17200 suit. Justice Cantil questioned how an uninjured plaintiff could "arrange his affairs". Gauger responded that he did so by deciding to file individually, as a representative of the public, rather than as the carpenter's union, to make sure that the carpenters are paid the prevailing wage. He asked that the stay be lifted, and Munoz be permitted leave to amend, or alternatively, that another individual replace Munoz as the plaintiff.

Justice Sims interjected that everyone in the lawsuit has a substantive right at stake. He stated that this was "just a procedural standing issue". It was very hard for him to believe that the people of California cannot change standing in the middle of a suit. He read portions of Prop. 64, which referred to cases being "prosecuted", stating he understood the use of the word "prosecuted" to meant that the voters intended to change standing midstream. If Prop. 64 was only intended to apply in the future, the drafters would not have to say "and prosecuted", just writing "filed" would be enough.

Justice Davis inquired at the end of the argument, whether the case could be remanded to secure the cooperation of a public prosecutor. Tedesco responded that the prosecutor has not filed, and the right to bring a suit, includes the right not to sue.

Conclusion:

It appears that the Third District will find that Prop. 64 is procedural only, and does not affect substantive rights, and it was written to reflect an intent that it be applied to pending cases. The Court may reverse and remand, to permit plaintiff leave to amend.

Here are my initial impressions based wholly on the above summary. I'm not sure that the language of Prop. 64 that Justice Sims identified means the electorate intended that the amendments apply to pending cases. Defendants have relied on certain words in Proposition 64’s preamble to support an inference of retroactivity, including these:

“It is the intent of California voters in enacting this act to eliminate frivolous unfair competition lawsuits ….” Prop. 64, §1(d) (emphasis added).
“It is the intent of California voters in enacting this act that only the California Attorney General and local public officials be authorized to file and prosecute actions on behalf of the general public.” Id. §1(f) (emphasis added).
“Frivolous unfair competition lawsuits clog our courts and cost taxpayers.” Id. §1(c) (emphasis added).

However, Proposition 64 also contains language suggesting that it was intended to apply prospectively only, including the following:

“It is the intent of California voters in enacting this act to prohibit private attorneys from filing lawsuits for unfair competition where they have no client who has been injured in fact under the standing requirements of the United States Constitution.” Prop. 64, §1(e) (emphasis added).
“This measure prohibits any person, other than the Attorney General, from bringing a lawsuit for unfair competition unless the person has suffered injury and lost money or property.” Prop. 64, Analysis by the Legislative Analyst (emphasis added).
Proposition 64 “[a]llows only the Attorney General, district attorneys, and other public officials to file lawsuits on behalf of the People of the State of California to enforce California’s unfair competition law.” Prop. 64, Argument in Favor (emphasis added).

Read in context, any “retroactivity” language in Proposition 64 is ambiguous, at best, which means the Proposition was not intended to apply retroactively. As the Supreme Court has put it, “‘a statute that is ambiguous with respect to retroactive application is construed … to be unambiguously prospective.’” Myers v. Philip Morris Cos., 28 Cal.4th 828, 841 (2002) (quoting INS v. St. Cyr, 533 U.S. 289, 320-21, fn.45 (2001)) (emphasis added); see also id. at 843 (noting that Evangelatos requires an “unequivocal and inflexible statement of retroactivity”). Here, as in Myers, “the time-honored presumption against retroactive application of a statute … would be meaningless if the vague phrases relied on by [defendants] were considered sufficient to satisfy the test of a ‘clear[] manifest[ation], or an ‘unequivocal and inflexible’ assertion of … retroactivity.” Myers, 28 Cal.4th at 843 (quoting Hughes Aircraft Co. v. United States ex rel. Schumer, 520 U.S. 939, 946 (1997); Evangelatos v. Superior Court, 44 Cal.3d 1188, 1207 (1988)).

Prop. 64 oral argument tomorrow in Sacramento

2005-08-25T09:03:00.000-07:00

Tomorrow at 9:30, the Third District will hear oral argument in Petrini Van & Storage v. Superior Court, no. C049042. As you may recall, the trial judge in this case (Loren McMaster) issued one of the most detailed and best-reasoned orders holding that Prop. 64 does NOT apply retroactively to pending cases. The order specifically invited appellate review under Code of Civil Procedure section 166.1, and the Third District issued an alternative writ in March. With all the recent activity in the Supreme Court, the Prop. 64 question might not be as important to the appellate panel as it would have been a few months ago, but the argument should still be quite interesting. This will be the first ruling from the Third District on Prop. 64 retroactivity. Calling all Sacramento practitioners: if you attend and send me a report, I'd love to put it up.

Supreme Court gives itself more time to grant or deny review in another Prop. 64 case

2005-08-24T17:25:00.000-07:00

Last week, on August 19, 2005, the Supreme Court gave itself until September 23, 2005 to grant or deny review in Cohen v. Health Net of California, Inc., no. S135104. The appellate opinion, Cohen v. Health Net of California, Inc., ___ Cal.App.4th ___ (Apr. 27, 2005) (Fourth Appellate District, Division Three) was only partially published. The portion addressing Prop. 64 was not published. We know that the petition for review concerns issues addressed in both the published and the unpublished portions of the opinion, including Prop. 64 retroactivity. Either the Supreme Court is breaking away from its prior pattern of reviewing only the published retroactivity cases, or it found something interesting in the non-Prop. 64 parts of the case.

Golden State Antitrust and Unfair Competition Law Institute

2005-08-23T12:15:00.000-07:00

This year's Golden State Antitrust and Unfair Competition Law Institute, presented by the State Bar Antitrust and Unfair Competition Law Section, will be held on Thursday, October 20 at the Westin St. Francis Hotel in San Francisco. It will include a segment entitled "Fresh Perspectives on Class Action Litigation in the Wake of the Class Action Fairness Act and Proposition 64." Sign up by October 1 and get a discount on your fees.

More on California v. Altus Finance, S.A.

2005-08-22T07:32:00.000-07:00

As promised, here are some more thoughts on California v. Altus Finance, S.A., ___ Cal.4th ___ (Aug. 15, 2005).

The case involved the scope of the Attorney General's power to obtain UCL remedies against an insolvent insurance company whose assets were under control of the Insurance Commissioner. In 1999, the AG intervened in a qui tam action against the insolvent insurer, which was later removed to federal court. The Ninth Circuit asked the California Supreme Court to decide whether the AG's suit could proceed concurrently with another action (also removed to federal court) that the Insurance Commissioner was pursuing. (Slip op. at 1-5.) The Supreme Court separately addressed each UCL remedy that the AG sought (restitution, civil penalties, and injunctive relief).

The opinion (authored by Justice Moreno) mentions Prop. 64 several times, but does not breathe a word about retroactivity, which is logical, since Prop. 64 did not really change anything for public prosecutors. A few things are interesting about the opinion from the perspective of private UCL litigation.

First, the Court quotes the post-Prop. 64 language about "injury in fact" even though there was no reason to mention it given that the AG's suit was based, of course, on the public prosecutor provisions:

"Through the UCL a plaintiff may obtain restitution and/or injunctive relief against unfair or unlawful practices in order to protect the public and restore to the parties in interest money or property taken by means of unfair competition." (Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116, 126 (Kraus); see Bus. & Prof. Code, § 17204.) A UCL action may be prosecuted by the Attorney General, by certain specified local law enforcement officials, "or by any person who has suffered injury in fact and has lost money or property as a result of such unfair competition.” (Ibid.)

(Slip op. at 19-20; see also id. at 25-26 (also quoting Prop. 64).) The quotation from Kraus suggests that the Court believes that the underlying definition of "restitution" is unchanged, and that Prop. 64 only affected who can file the suit.

Next, the Court held:

Business and Professions Code section 17205 provides: "Unless otherwise expressly provided, the remedies or penalties provided by [the UCL] are cumulative to each other and to the remedies or penalties available under all other laws of this state." Therefore, the fact that there are alternative remedies under a specific statute does not preclude a UCL remedy, unless the statute itself provides that the remedy is to be exclusive. (See Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 573 (Stop Youth Addiction).) We conclude that Insurance Code section 1037, subdivision (f) is such an express limit on the authority of the Attorney General to seek a restitutionary remedy under the UCL.

(Slip op. at 20.) Such express limits are relatively rare; most published cases involve less clear-cut situations. As the Court observed: "We have left open the question whether Business and Professions Code section 17205 precludes the Legislature from impliedly repealing a UCL remedy if the two are 'clearly repugnant and so inconsistent that the two cannot have concurrent operation.' (Stop Youth Addiction, supra, 17 Cal.4th at p. 574.) Because we decide the limit on UCL remedies is express in the present case, we need not decide that question." (Slip op. at 20 n.6.)

The Court also addressed disgorgement of profits as a form of UCL remedy. It reiterated the possibility that, in a certified class action, such a remedy is available:

The Attorney General refers in his complaint to “restitution/disgorgement” remedies. As we explained, “[a]n order that a defendant disgorge money obtained through an unfair business practice may include a restitutionary element, but is not so limited . . . . [S]uch orders may compel a defendant to surrender all money obtained through an unfair business practice of all unlawfully obtained profits even though not all is to be restored to the person from whom it was obtained or those claiming under those persons.” (Kraus, supra, 23 Cal.4th at p. 127.) In this case, although the Attorney General refers to a disgorgement remedy, we understand his claim as essentially one for restitution, i.e., to return the money to the insurer’s creditors. Moreover, outside the class action context, a disgorgement remedy in the sense described above is not authorized. (Id. at p. 137.)

(Slip op. at 7 (emphasis added).) As I've pointed out before, we still await a published appellate opinion squarely holding that in a certified UCL class action, the available remedies include disgorgement of profits. Meanwhile, the courts keep dropping very strong hints (such as this one) in favor of such a remedy. Now that most private UCL cases must be pursued as class actions, we will probably see a lot more litigation over this issue.

Finally, the Court had this to say about injunctive relief under the UCL:

As we have recognized, injunctive relief may fall into two categories: injunctions intended “to remedy a public wrong” (Broughton v. Cigna Healthplans (1999) 21 Cal.4th 1066, 1080) and injunctions primarily intended to resolve “a conflict between the parties and rectify[] individual wrongs” (id., at p. 1080, fn. 5). Injunctions sought under the UCL may fall into either category. (See Cruz v. PacifiCare Health Systems, Inc. (2003) 30 Cal.4th 303, 315.)

(Slip op. at 27.) This is interesting. I'm still cogitating about its implications (if any) for private UCL plaintiffs.

New Supreme Court UCL opinion: California v. Altus Finance, S.A.

2005-08-17T09:10:00.000-07:00

The Supreme Court discusses UCL remedies in interesting detail in California v. Altus Finance, S.A., ___ Cal.4th ___ (Aug. 15, 2005). I'll try to put up more about the decision later.

Is Prop. 64 an unconstitutional bill of attainder?

2005-08-15T00:01:00.000-07:00

Consider the following fact pattern. An unaffected plaintiff filed a UCL "general public" action several years ago and has been litigating it ever since. After the November election, the defendant moved for judgment on the pleadings based on Prop. 64. The trial court held that Prop. 64 applies retroactively to pending cases, granted the motion, and dismissed the action with prejudice. The defendant, as the prevailing party, filed a memorandum of costs, seeking several thousand dollars in expenses incurred litigating the case over the past few years. Assume the case was meritorious when filed. The trial court denies the plaintiff's motion to tax, and makes a significant costs award.

A reader has suggested to me that Prop. 64, so applied, is an unconstitutional bill of attainder. The argument would go like this. If Prop. 64 applies to cases filed before its effective date, then it simply amounts to a decree that unaffected UCL plaintiffs shall lose their cases and shall become liable for the prevailing parties' costs. Moreover, the ballot materials and the proponents' advertising demonstrate that the intent of the amendment was to single out unaffected plaintiffs (and their lawyers) and punish them for the UCL cases they filed in the past. Once the amendment passed, there was nothing they could do to avoid becoming liable for costs.

I have to reserve final judgment on this until I look more closely at the caselaw on bills of attainder, but it does sound compelling. What do others think?

"What RSS can do for lawyers"

2005-08-14T08:03:00.000-07:00

This article begins: "If you are not yet using RSS, you are missing out on the single best way to get news and updated information via the Internet. An acronym for really simple syndication, RSS is a standard that enables delivery of Web content directly to your desktop." The article is by Robert Ambrogi, author of the blog LawSites. My blog's RSS feed is here.

"The Baby and the Bathwater"

2005-08-12T09:07:00.000-07:00

California Wage Law has an interesting post about Prop. 64 this week. It says that the amendments to the UCL have not stopped so-called "shakedown" suits. Coincidentally, a reader emailed me a copy of the complaint in the new 17200 case that is mentioned in that post. I'll see if I can put it up over the weekend. UPDATE: The pdf file includes the complaint itself but also some handwritten notes, which I can't really post online. In any event, the complaint is well-described in the Wage Law post. I express no view on whether it's a "shakedown" suit or not, but I do agree that Prop. 64 was far broader than necessary to remedy the problems it was meant to fix. A simple amendment requiring court approval of all settlements in UCL cases would have done the trick.

Supreme Court grants review in another Prop. 64 retroactivity case

2005-08-12T00:01:00.000-07:00

On Wednesday, the Supreme Court issued a "grant and hold" order in Schulz v. Neovi Data Corp. (case no. S134073) (previously published at 129 Cal.App.4th 1 (2005)). What's interesting about this is that the discussion of Prop. 64 retroactivity is in the unpublished portion of the Schulz opinion. Regular readers may recall that I filed (as did counsel for Mr. Schulz) a request for partial publication of other parts of the Schulz opinion, relating to aider and abettor liability under the UCL. This is the first case in which the Supreme Court granted review of an intermediate appellate ruling in which the Prop. 64 retroactivity analysis was unpublished. It could be that the Court granted review because of two explanatory sentences in the introduction and in the conclusion that reveal the outcome of the unpublished Prop. 64 analysis (which was that Prop. 64 applies to pending cases). Many thanks to the reader who alerted me to this development. The case has been added to my list of pending Prop. 64 appeals.

In appellate advocacy, where do you draw the line?

2005-08-11T09:34:00.000-07:00

Yesterday's Daily Journal reported on an oral argument before the Ninth Circuit on Monday in which Judge Harry Pregerson rebuked the appellant's counsel for filing an "arrogant" brief that insulted the district judge. Thanks to über-blogger Howard Bashman, the brief in question is available online, along with a further summary of press coverage of the oral argument. According to the Daily Journal:

"Do you regard this as an effective way to present written advocacy?" Circuit Judge Harry Pregerson asked nationally recognized appellate specialist Theodore J. Boutrous Jr. of Gibson, Dunn & Crutcher in Los Angeles. "You slam the district judge?" .... "I was a district judge for 12 years and if I read all that, I wouldn't like it," said Pregerson .... "I think you ought to apologize to the district judge."

Sometimes the line between advocacy and insult can be a fine one (although apparently not in this case). When you represent the appellant, your job is to argue that the trial judge made a mistake, plain and simple. I've always assumed that trial judges understand this reality, and won't take it personally (or retaliate against your client later) if you forcefully argue for reversal. It will be interesting to read a brief that Judge Pregerson believes crosses the line. You can also listen to the oral argument at this link (thanks again to Howard Bashman).

New CAFA decision: Pfizer, Inc. v. Lott

2005-08-11T08:50:00.000-07:00

In Pfizer, Inc. v. Lott, ___ F.3d ___ (7th Cir. Aug. 4, 2005), the Seventh Circuit rejected another attempt to remove a case to federal court based on the Class Action "Fairness" Act. But before getting to the CAFA issues, the court (Judge Posner) neatly explained the Supreme Court's holding in Exxon Mobil Corp. v. Allapattah Service, Inc., 125 U.S. 2611 (2005) in a single sentence:

The named plaintiffs stipulated that they would not seek or even accept damages in excess of $75,000, and while the stipulation would not bind the other members of the class, the likelihood that [any class member] had damages in excess of $75,000 was sufficiently remote to cast on [the defendant] the burden of presenting some evidence or argument to establish the plausibility of an inference that at least one member of the class could cross the $75,000 threshold, which would establish jurisdiction over the entire class.

Slip op. at 2 (citations omitted). (I'm glad to find I got it right after my quick read of Exxon when it came down in late June.) (UPDATE: An anonymous commenter points out that I was too quick to endorse Judge Posner's reading of Exxon. Exxon held that if "at least one named plaintiff" (not just any class member) meets the $75,000 jurisdictional threshold, then diversity jurisdiction is present. Thanks to Mr./Ms. Anonymous for pointing this out.)

After determining that diversity jurisdiction was not present under Exxon, the court turned to CAFA. The case was filed in state court on the day before CAFA was enacted, and was removed within thirty days after that. The court rejected the argument that the word "commenced" in CAFA meant the date of removal. Slip op. at 3. It's interesting that the court employed the state-law definition of the word "commenced" in determining its meaning for purposes of CAFA. In Illinois, the filing of the complaint "commenced" the case, so CAFA did not apply. Slip op. at 3. This means that, potentially, CAFA might operate differently in some states than in others. The opinion ended with these words:

This is not to belittle Pfizer's indignation at the plaintiffs' having beat the statute by one day, but their gamesmanship actually hurts its argument. Pharmaceutical and other companies that pressed for the enactment of the Class Action Fairness Act were doubtless acutely aware, as the bill that became the statute was wending its way through Congress en route to enactment, that the prospect of its enactment would spur the class action bar to accelerate the filing of state-law class actions in state courts. Doubtless the companies made their concerns known to Congress. The fact that Congress did not respond by writing "removed" (or "removed after the date of enactment but within 30 days of the orignal filing") instead of "commenced" is telling.

Slip op. at 4. Is it "gamesmanship" to file suit based on the law in effect on the filing date? I would argue not. As the opinion observes, Congress could have made CAFA retroactive if it wished to. Nor should a defendant be "indignant" about being sued if, in fact, it violated the law. But in any event, thanks to the reader who forwarded this case to me. And for more interesting reading, check out the Becker-Posner Blog, which Judge Posner writes with Professor Gary Becker (winner of the Nobel Prize in Economics).

Upcoming MCLE conference on the UCL

2005-08-08T09:12:00.000-07:00

On November 10-11, 2005, Mealey's will present "California Section 17200 Conference: A New Era" at the Four Seasons Resort in Santa Barbara. I was invited to be a speaker, but I have a case scheduled for trial on November 7, three days before the conference begins. That means I won't be able to attend the conference at all, much less speak. I'm disappointed, because it looks like it will be a great event. Many thanks to the organizers, especially co-chair Kirk Patrick, for the invitation.

"California Consumers Notch Win"

2005-08-05T09:39:00.000-07:00

The Business Section of today's Chronicle has this article on Discover Bank v. Superior Court, ___ Cal.4th ___ (Jun. 27, 2005), which addressed the unconscionability of no-class-action arbitration clauses in consumer contracts. My original posts on Discover Bank are here and here. The article also discusses yesterday's Supreme Court opinion in Grafton Partners, L.P. v. Superior Court, ___ Cal.4th ___ (Aug. 4, 2005), which held that contractual agreements to waive the right to a jury trial are void as contrary to public policy (except in the context of arbitration clauses or other statutorily authorized waivers).

"Calif. Trial Judge Rules Prop. 64 Is Not Retroactive In Case Against State Fund"

2005-08-05T00:01:00.000-07:00

This article appeared last week (July 27) in the Insurance Journal (not a publication I normally read). The docket for the case cited in the article is accessible here.

New UCL/class certification decision: Alan v. American Honda Motor Co.

2005-08-04T00:01:00.000-07:00

In the published portion of Alan v. American Honda Motor Co., ___ Cal.App.4th ___ (Aug. 2, 2005), the Court of Appeal (Second Appellate District, Division Three) reaffirmed the rule that an order denying certification of an entire class is appealable.

The unpublished portion of the opinion is much more interesting. There, the Court addressed the plaintiff's argument that, given the passage of Proposition 64, a pre-Prop. 64 order denying certification of the CLRA claim, but not the UCL claim, was only a partial denial of class certification, and therefore not appealable:

Plaintiff asserts ... that the order denying plaintiff’s motion for class certification was not the death knell of the class action allegations. According to plaintiff, the trial court’s order was tantamount to a partial denial of class certification, and therefore was not appealable. (See, e.g., Shelley v. City of Los Angeles, supra, 36 Cal.App.4th 692; General Motors Corp. v. Superior Court (1988) 199 Cal.App.3d 247.)

Specifically, plaintiff asserts ... that the recently enacted Proposition 64 transformed the cause of action under Business and Professions Code section 17200 from a representative action to a class action.

Based upon these considerations, plaintiff claims the trial court order denying class certification was only a partial denial of certification, and therefore not immediately appealable. Plaintiff explains that this was a cautionary appeal and that this court should exercise its discretion to consider the premature appeal as a petition for a writ of mandate. (See Szetela v. Discover Bank (2002) 97 Cal.App.4th 1094, 1098.) We reject these assertions.

On this record, the trial court order denying certification cannot be construed as a partial denial of class certification. ....

[A]t the time the trial court ruled on plaintiff’s motion for certification, Proposition 64 had not been approved by the electorate. (Berger v. California Ins. Guarantee Assn. (2005) 128 Cal.App.4th 989, 1007, fn. 17 [Proposition 64 took effect on November 3, 2004.].) Thus, none of the class claims were based upon Proposition 64’s modifications of Business and Professions Code section 17200. In any event, plaintiff has offered no explanation as to how the newly-enacted Proposition 64 would broaden the potential class. Plaintiff has offered no explanation as to whether a proposed class under section 17200 of the Business and Professions Code would be comprised of a different class of persons or whether such a class would present different claims.

The trial court’s January 2, 2003, order was the final disposition of all class claims at issue and presented in this litigation. Thus, the trial court order denying plaintiff’s motion for class certification was the death knell of the class claims presented under the Consumer Legal Remedies Act. The order was therefore immediately appealable.

Slip op. at 6-7.

New UCL decision: People's Choice Wireless, Inc. v. Verizon Wireless

2005-08-01T10:00:00.000-07:00

Last Thursday, the Court of Appeal (Second Appellate District, Division Two) handed down People's Choice Wireless, Inc. v. Verizon Wireless, ___ Cal.App.4th ___ (July 28, 2005), and held that the trial court properly sustained the defendant's demurrer to the plaintiff's UCL claim. Because it was an action between competitors, the Court applied the post-Cel-Tech formulation of "unfair." This case probably represents the most detailed exposition of the post-Cel-Tech formulation in a competitor action since Cel-Tech itself was decided.

Boston University law journal seeks articles on legal ramifications of blogging

2005-08-01T09:28:00.000-07:00

The Boston University Journal of Science and Technology Law will be publishing a symposium issue in 2006 on the legal ramifications of blogging. Its call for submissions is here. [A hat tip goes to BlogHer, because I picked up a hard copy of the flyer (how twentieth century) at Saturday's conference.]

BlogHer 2005

2005-07-31T09:02:00.000-07:00

I attended the BlogHer conference in Santa Clara yesterday, and it was great! I met Carolyn Elefant, Denise Howell, Matthew Homann (yes, men were invited to BlogHer), and Cathy Kirkman was also there. It got me thinking about women law bloggers and the fact that most law bloggers are men. Of the California Law Blogs listed in my sidebar, only three are by women (including mine, and not including anonymously-authored blogs). It was wonderful to be part of a group of enormously smart and talented women bloggers yesterday, but where are the rest of the female law bloggers?

UPDATE: The front page of yesterday's Chronicle had an article on BlogHer (written before it began): "The Feminine Blogstique."

[Technorati tag: BlogHer]

New Prop. 64 pending appeal

2005-07-29T05:23:00.000-07:00

Many thanks to the reader who sent me this information:

[A] notice of appeal [was filed] on 7/26 in the case of Guzman v. JK Harris & Company et al., Case No. RG04-179762, Superior Court of CA for the County of Alameda. The court concluded that Prop 64 applied and threw out the 17200 cause of action for, among other reasons, because plaintiffs had previously filed a claim in arbitration in which they were awarded what amounted to full restitution, and -- having been compensated already -- they lacked standing to pursue a 17200 claim for restitution and injunctive relief on behalf of a class because they had no "injury in fact."

The Guzman case will be added to my list of pending Prop. 64 appeals. Meanwhile, you can search for more trial-level information (including a copy of the trial court's order) at the Alameda County Superior Court's website.

Philanthropy

2005-07-29T05:03:00.000-07:00

Yesterday's Chronicle reports that Fred Furth, the proprietor of my firm, gave $5 million to save the Sacred Heart Academy in the Western Addition neighborhood of San Francisco. I find myself very touched by that and proud to be his colleague.

Another update for Firefox and Safari users

2005-07-28T06:35:00.000-07:00

I am still getting a very unsatisfactory response from Blogger concerning the display problem that the blog is experiencing with these browers. So, I consulted a friend of mine who is an expert web designer. He said that there is nothing wrong with my code, and that it is a Blogger problem that has to be corrected by Blogger. I apologize for the difficulties my readers with Firefox and Safari are obviously having reading the blog. All I can do is continue to bother Blogger Support about it. Meanwhile, please view the blog using Explorer, if that's an option for you.

Are individual claims still viable under the UCL?

2005-07-28T06:23:00.000-07:00

A reader emailed me with this question:

[If class certification is denied, c]an the individual claimants still maintain a 17200 claim? Does Prop. 64 now essentially limit 17200 claims to class actions only, such that individuals can no longer bring 17200 claims? Is there any decision regarding this issue--or even orders you know of from local trial courts?

My response was:

17200 claims could always be brought by individuals on behalf of themselves and I don't see anything in Prop. 64 that would change that. The text of Prop. 64 says that you have to obtain class certification only if you intend to seek relief on behalf of others.

After I wrote back to the reader, I remembered this post-Prop. 64 case involving an individual UCL claim. Any other thoughts?

Recent 9th Circuit class action/attorney-client privilege opinion: Barton v. District Court

2005-07-27T06:55:00.000-07:00

In Barton v. District Court, ___ F.3d ___ (9th Cir. June 9, 2005), the Ninth Circuit held (applying California law) that the attorney-client privilege protected interview "intake" forms created by plaintiffs' counsel when interviewing potential clients who contacted them via their website, even though the interviews did not create a formal attorney-client relationship that would, for example, require counsel to file suit on the potential client's behalf before the statute of limitations ran. The Ninth Circuit decided to review the issue in the context of a petition for a writ of mandamus, explaining the potentially broad importance of the issue:

[A]lthough only four questionnaires are before us, thousands more are waiting in the wings because this is a consolidated multidistrict litigation with thousands of plaintiffs. Of even greater salience is the fundamental importance of the attorney-client privilege to our adversarial system of justice. What is "new" about the case is attorneys trolling for clients on the internet and obtaining there the kind of detailed information from large numbers of people that used to be provided only when a potential client physically came into a lawyer's office. Two things had to happen to bring this about: the change in law in the 1970s that permitted attorney advertising, and the sufficiently widespread use of the internet, within the past five or ten years, that makes internet advertising worthwhile.

Slip op. at 6746 (footnotes omitted). The Court then concluded: "Prospective clients' communications with a view to obtaining legal services are plainly covered by the attorney-client privilege under California law, regardless of whether they have retained the lawyer, and regardless of whether they ever retain the lawyer." Id. at 6749.

This is a significant victory for plaintiffs' class action firms, as such "intake" forms are frequently the subject of heated discovery disputes. The forms should be protected whether or not they exist due to internet "trolling," a pejorative term I don't think the Court needed to use. (If a potential client contacts me as a result of this blog (which has happened), am I "trolling"?) Congratulations to Karen Barth. [And a hat tip to Wage Law.]

New class certification decision: Conley v. PG&E

2005-07-26T05:50:00.000-07:00

In Conley v. Pacific Gas & Electric Co., ___ Cal.App.4th ___ (July 21, 2005), the Court of Appeal addressed the narrow circumstances in which a trial court may consider the substantive merits of the plaintiff’s underlying claims at the class certification stage. The trial court had denied certification:

on the basis of American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 1291, which held that “[f]or a class to be considered ascertainable [for the purposes of class certification], its members must have a plausible cause of action against the defendant. [Citation.]” (Id. at pp. 1294-1295.) The trial court’s order made clear that the holding in American Suzuki “requiring a viable cause of action is the only basis for denying class certification of the salary basis class.” (Italics added.)

Slip op. at 7. The Court of appeal agreed that “the holding in American Suzuki on which the trial court relied has been placed in serious question, if not overruled, by Linder’s holding that class certification generally should not be ‘conditioned upon a showing that class claims for relief are likely to prevail.’” Slip op. at 7 (quoting Linder v. Thrifty Oil Co., 23 Cal.4th 429, 443 (2000)).

Despite Linder, the Court of Appeal decided to address the merits of one legal question raised by the plaintiff's claims: “Class certification normally should not be decided on the basis of a perceived lack of merit in the claims asserted on behalf of the proposed class. In this case, however, appellants have invited us to address the merits of their claims.” Slip op. at 2. Linder, the Court observed, held that “there is ‘nothing to prevent a court from considering the legal sufficiency of claims when ruling on certification where both sides jointly request such action.'” Id. at 8 (quoting Linder, 23 Cal.4th at 443). Linder also “expressly declined to ‘foreclose the possibility that, in the exceptional case where the defense has no other reasonable pretrial means to challenge the merits of a claim to be asserted by a proposed class, the trial court may, after giving the parties notice and an opportunity to brief the merits question, refuse class certification because the claims lack merit as a matter of law.’” Id. (quoting Linder, 23 Cal.4th at 443). In this case, the “defense has no other reasonable pretrial means to challenge the merits” because its summary adjudication motion was denied based on the procedural technicality that it did not “completely dispose of a cause of action.” Id. at 8 & n.7 (quoting Code Civ. Proc. §437c(f)).

It is nice to see an appellate court recognize that the quoted language from American Suzuki has probably been overruled. Defendants frequently rely on that case, and it can be difficult to convince trial courts that it is inconsistent with Linder. On the other hand, I hope that this new decision does not become a means for defendants to circumvent Code of Civil Procedure section 437c(f), and seek summary adjudication of partial causes of action in the guise of opposing class certification. It sounds like this limited exception to the “no-merits” rule of class certification applies only when both parties “jointly request” that a particular merits question be decided. Wage Law has a nice summary of this opinion as well, focused more on the labor law issues it raises.

"Class Action & Unfair Competition Litigation"

2005-07-25T09:58:00.000-07:00

Bridgeport Continuing Education will present this day-long seminar on August 12, 2005 at the Hyatt Regency in Sacramento.

Off-topic post: Initiative invalidated for November special election

2005-07-22T11:34:00.000-07:00

This post is way off-topic, but the Court of Appeal (Third Appellate District in Sacramento) has just today invalidated Proposition 80 and declared that it will not appear on the ballot for the November 2005 special election. Independent Energy Producers Assn. v. MacPherson, ___ Cal.App.4th ___ (July 22, 2005). I've heard about at least one other court challenge to one of the initiatives, so I wonder how this bodes for the special election generally. UPDATE: I just learned that yesterday, a Sacramento County Superior Court judge threw Proposition 77 (the redistricting measure) off the ballot as well. Much more on that development at SoCalLawBlog. UPDATE: On July 27, the Supreme Court granted review and ordered Proposition 80 back on the ballot. Again, SoCalLawBlog has more.

New UCL decision: Bell v. Blue Cross of California

2005-07-22T07:38:00.000-07:00

Yesterday, the Court of Appeal (Second Appellate District, Division One), decided Bell v. Blue Cross of California, ___ Cal.App.4th ___ (July 21, 2005). In reversing the trial court's order sustaining the defendant's demurrer to the plaintiff's UCL class action complaint, the Court: (a) rejected the defendants' "primary jurisdiction" argument (which was predicated on Samura v. Kaiser Foundation Health Plan, Inc., 17 Cal.App.4th 1284 (1993)) and followed Coast Plaza Doctors Hospital v. UHP Healthcare, 105 Cal.App.4th 693 (2002) instead; (b) applied the ordinary "likely to deceive" formulation of the "deceptive" prong, despite Proposition 64 (slip op. at 13); and (c) found a way to avoid addressing the defendant's contention that "the UCL claim fails because there must be an allegation that an act violated a specific statute" (slip op. at 13 n.9). The latter contention is ridiculous. The Supreme Court's holding in Cel-Tech Communications, Inc. v. Los Angeles Cellular Tel. Co., 20 Cal.4th 163 (1999) is unequivocal:

The statutory language referring to "any unlawful, unfair or fraudulent" practice (italics added) makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law. "Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent. 'In other words, a practice is prohibited as "unfair" or "deceptive" even if not "unlawful" and vice versa.' "

Id. at 180 (citations omitted).

Lists updated to reflect recent developments; new unpublished Prop. 64 opinion

2005-07-21T07:01:00.000-07:00

I've updated my list of Prop. 64 pending appeals and my list of Prop. 64 appellate opinions to reflect yesterday's developments.

Also, another new unpublished opinion, Quatman v. Raceway Ford, Inc. (Fourth Appellate District, Division Two) (July 20, 2005), was handed down yesterday. In Quatman, the unaffected plaintiff's UCL claim was reduced to judgment before Proposition 64 passed. The defendant's appeal was pending, but only from the attorneys' fees award, not from the underlying judgment itself. The Court of Appeal explained:

Here, Quatman’s claims under the Unfair Competition Law progressed to final judgment on the merits. No appeal was taken from such judgment. Instead, this appeal is limited to the amount which the trial court awarded to Quatman for his attorney fees and costs. Because there has been no challenge to the merits of the judgment, it stands. While it is true that, in an appeal from a postjudgment order awarding attorney fees we may review the entitlement to, as well as the amount of, the fees awarded [citation], here, the entitlement to the fees vested upon the vesting of Quatman’s claims under the Unfair Competition Law. [citation] Accordingly, the passage of Proposition 64 has not affected Quatman’s standing to continue his pursuit of attorney fees and costs.

(Slip op. at 4-5.)

BREAKING NEWS: Supreme Court grants review in Thornton and depublishes Frey

2005-07-20T15:47:00.000-07:00

Today, the Supreme Court granted review in Thornton v. Career Training Center, Inc., 128 Cal.App.4th 116 (2005) (link to the docket) and depublished Frey v. Trans Union Corp., 127 Cal.App.4th 986 (2005) (link to the docket). Its order in Thornton reads:

Petition for review GRANTED. Further action in this matter is deferred pending consideration and disposition of a related issue in Californians for Disability Rights v. Mervyn's, S131798, and Branick v. Downey Savings & Loan, S132433 (see Cal. Rules of Court, rule 28.2(d)(2)), or pending further order of the court. Submission of additional briefing, pursuant to California Rules of Court, rule 29.1, is deferred pending further order of the court. The request for an order directing depublication of the opinion is denied as moot.

That means that as of today, the only citable precedents on Prop. 64 retroactivity are Kintetsu and Huntingdon Life Sciences. (Many thanks to the reader who brought these developments to my attention.)

Multiple petitions for review filed in Consumer Advocacy Group v. Kintetsu

2005-07-20T00:02:00.000-07:00

Petitions for review were filed on July 15, 18, and 19 in Consumer Advocacy Group, Inc. v. Kintetsu Enterprises, ___ Cal.App.4th ___ (May 17, 2005) (Second Appellate District, Division Eight). Here is a link to the Supreme Court's docket. The Kintetsu opinion addressed a variety of issues, but its probably safe to assume that the review petitions raise the Prop. 64 retroactivity question, which was decided in the plaintiff's favor.

"Law Students Create Blawgs to Recount Their Experiences"

2005-07-20T00:01:00.000-07:00

Today's Daily Journal has the story, with links to Nuts and Boalts, Prettier Than Napoleon (fka Class Maledictorian), and Sua Sponte (which has an enormous blogroll of other law student blawgers). "I've seen people reading my blog in class, and it's just flattering that I am more interesting than law professors," the article quotes one law student blawger as saying.

When I was in law school (1989-1992), there was no internet. And only one person ever brought a laptop to class. I recall hearing that she needed it due to some kind of physical disability, and I remember the vociferous controversy over whether laptops should be permitted in class, the distraction of the clicking sounds, etc. She was relegated to the very back of the room, where there was an outlet. But we did have Westlaw. And I wrote my law review article on an original 128K Macintosh.

Off-topic post: U.S. Supreme Court nomination

2005-07-19T09:10:00.000-07:00

If you're not familiar with SCOTUSblog and its sister, the Supreme Court Nomination Blog, please visit them. The latter is buzzing this morning that "our best information is that the President will appoint [Fifth Circuit Judge] Edith Clement within the next forty-eight hours." UPDATE: The Associated Press reported within the past 15 minutes that the nomination might happen as early as this afternoon (via How Appealing). UPDATE: CNN is now reporting that D.C. Circuit Judge John Roberts, Jr. will be the nominee. The Supreme Court Nomination Blog has a similar report.

"The New Wave of Labor Code Litigation: Meal & Rest Period Litigation and the Private Attorney General Act"

2005-07-19T08:55:00.000-07:00

My colleague, Jessica Grant, will be speaking at this seminar tomorrow at noon in San Francisco. As I've mentioned before, Jessica is handling our firm's UCL and Labor Code case against Wal-Mart, which alleges that Wal-Mart fails to provide proper meal and rest breaks to its sales associates as required by law. The seminar is sponsored by the Labor and Employment Law Section of the Bar Association of San Francisco. The other speakers are Miles Locker of the Division of Labor Standards Enforcement and Eric Tate of Morrison & Foerster. This should be an interesting seminar.

Law Practice symposium on law blogs

2005-07-19T00:01:00.000-07:00

The July/August 2005 issue of Law Practice, the magazine of the ABA Law Practice Management Section, is a symposium on law blogging. Articles include "It's Not Your Father's Web Site: Lawyers in the Blogosphere"; "Ethics and Lawyer Blogs"; and "How to Start Your Own Weblog and Make the Most of It."

The July 2005 issue of the ABA Journal has also an article on blogging, called "Fear of Blogging: As the Law Catches Up to the Technology, Bloggers Look for a Few Good Attorneys."

Another unpublished Prop. 64 opinion

2005-07-18T08:46:00.000-07:00

In Tyquiengco v. Cal. Assn. of Realtors (First Appellate District, Division Four) (July 15, 2005), the panel that authored Californians for Disability Rights v. Mervyn's LLC wrote:

[Plaintiffs] contend that they have standing to bring this unfair competition action ... on behalf of all California consumers. In so doing, they challenge the trial court’s ruling that Proposition 64 applies retroactively to bar their lawsuit. We have already considered this issue in an unrelated case and have concluded that Proposition 64 does not apply retroactively to cases such as the one before us that were filed before its November 3, 2004 effective date. (See Californians for Disability Rights v. Mervyn’s (2005) 126 Cal.App.4th 386, 390-397, review granted Apr. 27, 2005, S131798.) The California Supreme Court has granted review in that case and we base our decision in the case at bar on another ground.

Slip op. at 4 n.4 (hyperlink added). The opinion goes on to include an interesting melding of the pre- and post-Cel-Tech formulations of "unfair":

A business practice is unfair and thus violates the UCL if it offends an established public policy or is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers. (Gregory v. Albertson’s, Inc. [(2002)] 104 Cal.App.4th [845,] 854.) A business practice may be unfair even if it is not unlawful. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180.) If the Legislature has not proscribed a business practice, courts may properly make a judicial determination that it is unfair under the UCL. (Id. at p. 183.) When a UCL allegation of unfair business practice is predicated on an assertion that the practice violates public policy, courts may not apply purely subjective notions of fairness. Instead, the violation of public policy must be linked to some specific constitutional, statutory or regulatory provision. (Id. at pp. 184-185; Gregory v. Albertson’s, Inc., supra, 104 Cal.App.4th at p. 854.)

Slip op. at 6-7 (hyperlinks added). What this paragraph seems to be saying is that the post-Cel-Tech formulation of "unfair" applies in consumer actions only when the plaintiff asserts that the defendant's conduct violates "public policy." Presumably, the pre-Cel-Tech formulation would apply when the "unfair" claim is based on some other theory, such as the argument that the conduct is oppressive or unscrupulous or that its benefits are outweighed by its potential for harm. Finally, the court applied (without any mention of Prop. 64) the ordinary "likely to deceive" standard for "fraudulent" conduct. Slip op. at 7.

"Intel Lawyers Gear Up for Antitrust Suit"

2005-07-15T09:01:00.000-07:00

My colleague, Thomas Dove, is quoted in this article in today's Recorder.

Recent unpublished Prop. 64 opinions

2005-07-15T09:00:00.000-07:00

Prop. 64 retroactivity continues to come up in unpublished appellate opinions. Some recent ones include:

Zamora v. CFN Investment Holdings, LLC (July 8, 2005) (Fourth Appellate District, Division One)
Mabie v. Kaplan Higher Education Corp. (June 10, 2005) (Fourth Appellate District, Division One)
Boling v. Trendwest Resorts, Inc. (May 19, 2005) (Fourth Appellate District, Division Three)

My thanks to JS for poring through the unpublished opinions to find these.

Mervyn's and Branick opening briefs now available online

2005-07-14T15:44:00.000-07:00

I've put up copies of the Mervyn's opening brief on the merits (filed 05/31/05) and the Branick opening brief on the merits (filed 06/13/05), which I got from the Supreme Court clerk's office earlier this week. Please be aware that these are large files and might take a while to download. They have been added to my list of Prop. 64 appellate briefs.

Update for Firefox and Safari users

2005-07-13T20:32:00.000-07:00

The display problem is not yet corrected, despite multiple messages to Blogger Support. Please view the blog using Explorer, if that is an option for you, as there is no display problem with that browser.

"Supreme Court Gets Into Split Over Class-Action Arbitrations"

2005-07-13T09:12:00.000-07:00

Yesterday's Daily Journal had an article on Discover Bank v. Superior Court, ___ Cal.4th ___ (Jun. 27, 2005) (see my prior post on the case). The article mentions some of the opinions from other courts on class action waiver unconscionability, summarizes the Discover Bank opinion, then criticizes it roundly. The article concludes by saying that "[i]n the end, regardless of whether the California Supreme Court reached the correct result, the debate is sure to rage on until the U.S. Supreme Court issues its pronouncement on the matter."

I cannot agree. The U.S. Supreme Court may someday decide Federal Arbitration Act preemption, but unless its pronouncement is that all state laws relating in any way to arbitration are preempted, Discover Bank resolves any debate concerning the enforceability of class action waivers in consumer contracts of adhesion in California. This is particularly true since, as the Supreme Court observed, many class action waivers simply "waive the right to class action litigation" and have nothing to do with arbitration. (Slip op. at 2.) To the extent Discover Bank resolved the unconscionability of that kind of waiver, the issue is purely a matter of state law and will be unaffected by any U.S. Supreme Court holding.

Here's another interesting development. As I previously reported, the Court of Appeal went the other way on the unconscionability issue in Parrish v. Cingular Wireless, ___ Cal.App.4th ___ (May 18, 2005). A petition for rehearing was denied on June 17, ten days before Discover Bank was issued on June 27 (Court of Appeal docket). A petition for review was filed on June 27, the very date of the Discover Bank opinion (Supreme Court docket). [Hat tip: California Wage Law]

Law Limits

2005-07-12T18:37:00.000-07:00

Jeffrey Lewis, author of the famous So Cal Law Blog, has a new blog called Law Limits. Looks interesting.

"The Class Action Fairness Act: How is it Impacting Employers?"

2005-07-12T09:14:00.000-07:00

The Labor & Employment Law Section of the Bar Association of San Francisco will present this MCLE program on July 27, 2005 at noon at the CLE Auditorium, 465 California Street, 12th Floor.

Blog display problem for Firefox users

2005-07-11T17:24:00.000-07:00

I'm being told that the blog is suffering another display problem when viewed using Firefox. Have contacted Blogger Support concerning this. UPDATE: This problem hasn't gone away as of Tuesday evening. If you have Explorer, please use that as the problem doesn't manifest with that browser.

Blog page updates and new links

2005-07-11T00:01:00.000-07:00

Over the weekend, I had time to update my lists: Prop. 64 opinions, Prop. 64 pending appeals, and Prop. 64 appellate briefs. I also updated my list of pending Supreme Court appeals involving the UCL. Finally, I added quick links in the right-hand column to the CLRA and the class action statutes (just below the Prop. 64 links). I hope you will find these useful.

Gilbert Submits

2005-07-10T18:07:00.000-07:00

Justice Gilbert has a blog!

Update on O'Grady v. Apple Computer

2005-07-08T07:23:00.000-07:00

It's been a while since my last post on O'Grady v. Apple Computer, Inc. (Sixth Appellate District, case no. H028579), the blogger/journalist case. As I previously reported, the Court of Appeal issued an OSC on June 2. On Monday of this week, Apple filed its "return by way of answer and demurrer to petition for a writ of mandate," in which it incorporated by reference its preliminary opposition to the writ petition. The same day, it filed a request for oral argument. The Court of Appeal put the case on yesterday's conference list, but the docket does not yet indicate any action.

"Public-Interest Lawyers Manage to Work Around Revised 17200"

2005-07-08T07:22:00.000-07:00

This morning's Daily Journal has the story, which quotes my friend Michael Mallow as saying that "he's seen a dramatic drop in filings by 'dummy' associations created especially to serve as public attorneys general. 'There were a significant number of entities that were created for the purposes of filing unfair-competition claims under 17200,' he said. 'Those are now, for the most part, gone.'"

"Wal-Mart Spurns White Guys? No Problem"

2005-07-08T07:21:00.000-07:00

My colleague, Jessica Grant, is quoted in this article in today's Recorder. She's the lead attorney in our firm's wage & hour case against Wal-Mart, which includes UCL and Labor Code claims.

Scope of injunctive relief under the post-Prop. 64 UCL?

2005-07-07T13:20:00.000-07:00

Recently, the Court of Appeal issued an opinion that touches on that question in a very tangential way. Thompson v. 10,000 RV Sales, Inc., ___ Cal.App.4th ___ (Jun. 28, 2005) is a relatively technical decision involving "negative equity" in a retail installment contract. "Negative equity" (a subject dear to my heart after my days at Severson) exists when the trade-in vehicle is worth less than the amount still owed on it. The presence of negative equity complicates the financing arrangement for the new vehicle, and TILA and Regulation Z extensively regulate the handling of negative-equity trade-ins. In any event, the Fourth Appellate District, Division One, agreed with the trial court that the defendant had handled the negative-equity trade-in improperly, in violation of a variety of statutes including all three prongs of the UCL and the Consumers Legal Remedies Act ("CLRA") (Civ. Code §§1750 et seq.). It affirmed the issuance of a permanent injunction requiring the defendant to "stop including trade-in over-allowances in the cash price of the vehicles it sells." Slip op. at 11.

In the last section of the opinion, the Court had this to say about the UCL after Prop. 64:

In its amicus curiae brief, California Motor Car Dealers Association suggests the injunction is improper under the UCL following the recent passage of Proposition 64 because Thompson did not comply with class action procedures. However, we need not decide whether Proposition 64 applies here because the court's injunction was proper under the CLRA.

Id. at 37. What's odd about this is the opinion doesn't indicate anywhere that the CLRA claim had been certified for class treatment. So the Court of Appeal seems to be recognizing that the CLRA does not require formal class certification as a prerequisite to broad injunctive relief. And if the CLRA does not, why should Code of Civil Procedure section 382, under which UCL claims would be certified? The short answer is, it doesn't. This case also illustrates the power of the CLRA as an alternative to the post-Prop. 64 UCL.

Finally, it's interesting that the trial court ordered "restitution" in favor of the other customers whose negative-equity trade-ins had been improperly handled, presumably under the UCL and presumably without class certification. Id. at 12, fn.11. That part of the order was, apparently, not appealed.

Display bug finally fixed!

2005-07-05T14:20:00.000-07:00

It's about time. No thanks to Blogger. It appears they created a way to fix this problem some time last week and did not (a) implement it for my blog or (b) bother to email me about it. It's at times like this that I seriously consider switching to Typepad.

Class action waivers still unconscionable in California: Discover Bank v. Superior Court

2005-07-05T10:34:00.000-07:00

Last Monday, June 27, the Supreme Court held that "at least under some circumstances, the law in California is that class action waivers in consumer contracts of adhesion are unenforceable, whether the consumer is being asked to waive the right to class action litigation or the right to classwide arbitration." Discover Bank v. Superior Court, ___ Cal.4th ___ (June 27, 2005) (slip op. at 2). The Court went on to explain:

We do not hold that all class action waivers are necessarily unconscionable. But when the waiver is found in a consumer contract of adhesion in a setting in which disputes between the contracting parties predictably involve small amounts of damages, and when it is alleged that the party with the superior bargaining power has carried out a scheme to deliberately cheat large numbers of consumers out of individually small sums of money, then, at least to the extent the obligation at issue is governed by California law, the waiver becomes in practice the exemption of the party “from responsibility for [its] own fraud, or willful injury to the person or property of another.” (Civ. Code, § 1668.) Under these circumstances, such waivers are unconscionable under California law and should not be enforced.

(Id. at 17.) The opinion has some very strong language concerning the importance of class actions in California. Among other things, the Court observed:

[A]s the above-cited cases of this court have continually affirmed, class actions and arbitrations are, particularly in the consumer context, often inextricably linked to the vindication of substantive rights. Affixing the "procedural" label on such devices understates their importance and is not helpful in resolving the unconscionability issue.

(Id. at 15.) If the Supreme Court reaches the procedural/substantive question in the Prop. 64 retroactivity cases, this language supports the argument that the new class certification requirement is a substantive, rather than a procedural, change in the law.

(I'm back from a wonderful vacation but very annoyed with Blogger for not fixing the problem with the way the blog is displaying. At least now I'll be here to hound them about it.)

17200 blog hiatus; please scroll down

2005-06-24T22:30:00.000-07:00

Well, the bug still isn't fixed, and I'm going to be away on vacation for the next week. I won't be monitoring the blog and I hope the people at Blogger are able to get this fixed in my absence. Please do continue to email me with news about the UCL and/or Proposition 64. In the meantime, here are a few new items:

The Court of Appeal scheduled oral argument in Petrini Van & Storage, Inc. v. Superior Court, Third Appellate District, case no. C049042, for August 26, 2005 at 9:30 a.m. It will be quite interesting to see what the Third District does with Prop. 64 retroactivity.

The Court of Appeal also scheduled oral argument in Wilson v. Brawn of California, First Appellate District, Division One, case no. A106368, for July 15, 2005 at 9:00 a.m.

A petition for review was recently filed in Cohen v. Health Net of California, Inc., ___ Cal.App.4th ___ (Apr. 27, 2005), which the Court of Appeal ordered partially published on May 25. The discussion of Prop. 64 was not published, but the petition for review addresses it. Many thanks to counsel for Mr. Cohen for providing a copy of his brief.

The most recent issue of Mealey's California Section 17200 Report is now available. I hope that Mealey's will do a profile of me and my blog one of these days (hint, hint).

I think I set a new career record for billable hours this month (and yes, it's only the 24th). I'm hoping that my average weekly blog posts will go back up to normal in July. I'm feeling good and very ready for my vacation as I just got class certification granted in one of my cases today! Posting will resume during the week of July 5th so I'll talk to you then.

Update on blog display problem; please scroll down

2005-06-24T13:37:00.000-07:00

I just received this email from Blogger Support:

Thanks for your patience. A bug is being addressed by the development team to resolve the issue you're having. Please be assured that the bug will be fixed soon. I apologize for any inconvenience it may have caused.

Sincerely,
Andrea
Blogger Support

Blog display problem; please scroll down

2005-06-23T16:09:00.000-07:00

There's a problem with the way the blog is displaying right now. The text isn't wrapping alongside the right-hand column. This has never happened before and I have no idea why it's happening now. I've put in an urgent request for help to Blogger Support.

U.S. Supreme Court rules on class action issue

2005-06-23T15:35:00.000-07:00

Today, the U.S. Supreme Court issued its opinion in Exxon Mobil Corp. v. Allapattah Services, Inc., ___ U.S. ___ (June 23, 2005). The opinion is 54 pages long and seems to be saying that in a diversity action, if one plaintiff's claim is over $75,000, the federal court has supplemental jurisdiction over the rest of the class members' claims. UPDATE: There appears to be a problem with the way the main page of the blog is loading. I don't know why it's doing this and have contacted Blogger Support.

New UCL decision: Buchanan v. Maxfield Enterprises, Inc.

2005-06-22T11:32:00.000-07:00

In Buchanan v. Maxfield Enterprises, Inc., ___ Cal.App.4th ___ (June 20, 2005), plaintiff's "seventh cause of action, based on Business and Professions Code section 17200 et seq., alleges that the defendants unlawful practices include 'the arbitrary discrimination against and refusal to serve customers whom defendants deem "unworthy" of shopping at their Melrose Avenue store, and the false arrest and imprisonment of such customers at defendants’ Melrose Avenue store.'" Apparently, the plaintiff was shopping at a fancy boutique in LA when, unbeknownst to him, Jennifer Lopez and Ben Affleck came in. The manager forcibly ejected the plaintiff so that Ms. Lopez and Mr. Affleck could have the store to themselves. Plaintiff sued under the UCL and a variety of other theories. The trial court sustained the defendant's demurrer without leave to amend based on the ground that the defendant's conduct was "privileged" under Civil Code section 47. The Court of Appeal reversed, holding that the store's "non-communicative" conduct was not privileged. What's instructive about this from a UCL point of view is that Civil Code section 47 is one of the rare statutes that have been interpreted to provide a statutory "safe harbor" for UCL violations. Rubin v. Green, 4 Cal.4th 1187 (1993) also addresses the interplay between the UCL and section 47.

New UCL "restitition" decision: Madrid v. Perot

2005-06-21T09:07:00.000-07:00

The Court of Appeal (Third Appellate District) addresses UCL "restitution" in Madrid v. Perot, ___ Cal.App.4th ___ (June 20, 2005).

Recent UCL/Prop. 64 decision: Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc.

2005-06-16T08:27:00.000-07:00

In Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc., ___ Cal.App.4th ___ (June 1, 2005), the Court of Appeal (Fourth Appellate District, Division One) announced in another published opinion that Proposition 64 applies retroactively to pending cases. See page 38 of the slip opinion. Many thanks to the reader who wrote in to alert me to this. So, as of right now, we still have a split among the published opinions on the retroactivity issue.

A recent Class Action "Fairness" Act order

2005-06-13T09:29:00.000-07:00

See especially the footnote on page 2. If you ask me, fees should have been awarded in this one. [Hat tip: Notes from the (Legal) Underground]

Supreme Court denies two more petitions for review raising Prop. 64 retroactivity

2005-06-10T15:29:00.000-07:00

A reader writes in:

FYI the Supreme Court denied two Prop 64 writs yesterday [June 8] in S134150 (Dowhal v. Amazon – original writ to Supreme Court from Judge Kramer ruling denying JOP on Prop 64) and FATE v. Covenant (S133293) (writ challenging Court of Appeal ruling overturning Judge Sabraw’s trial court ruling applying Prop 64 to pending cases).

Thanks for that update. I've been swamped with work lately and have had almost no time for blogging. Unfortunately, I don't think it's going to let up for several more weeks.

Court of Appeal partially publishes McCann v. Lucky Money, Inc.

2005-06-09T08:31:00.000-07:00

On Monday, June 6, the Court of Appeal (Fourth Appellate District, Division Three) partially published its opinion in McCann v. Lucky Money, Inc., ___ Cal.App.4th ___ (May 9, 2005). The section of the opinion discussing Proposition 64 has not been published. The rest of the opinion involves the application of the Cel-Tech "safe harbor" to a rather case-specific set of facts.

Supreme Court affirms exercise of jurisdiction in Snowney v. Harrah's Entertainment, Inc.

2005-06-06T17:49:00.000-07:00

Today, the Supreme Court issued its opinion in Snowney v. Harrah's Entertainment, Inc., ___ Cal.4th ___ (June 6, 2005). It affirmed the Court of Appeal's conclusion that California had personal jurisdiction over certain Nevada-based hotels that allegedly engaged in false advertising and UCL violations directed at California residents.

50,000 and counting

2005-06-03T20:03:00.000-07:00

Wow. My site meter passed 50,000 hits today. I'm humbled and proud all at once. Thanks to my loyal readers!

Court of Appeal issues OSC in Apple blogger case

2005-06-03T19:40:00.000-07:00

Many thanks to the reader who informed me that yesterday, the Court of Appeal issued an order to show cause in O'Grady v. Apple Computer, Inc. (Sixth Appellate District, case no. H028579). For more information on the case, see the Electronic Frontier Foundation's website as well as these prior posts.

New class action arbitration decision: Parrish v. Cingular Wireless, LLC

2005-06-03T05:10:00.000-07:00

On May 18, the Court of Appeal (First Appellate District, Division Five) declined to follow Szetela v. Discover Bank, 97 Cal.App.4th 1094 (2002), and enforced a "no-class-action" arbitration clause in a consumer contract. It determined that the specific clause in question was "not unduly one-sided, harsh, or in violation of public policy." Parrish v. Cingular Wireless, LLC, ___ Cal.App.4th ___ (May 18, 2005). The case involved claims under the UCL and the Consumers Legal Remedies Act, and as a notable exception to its holding, the Court refused to enforce the arbitration clause as to the UCL and CLRA claims for injunctive relief (following Cruz v. PacifiCare Health Systems, Inc., 30 Cal.4th 303 (2003)), and as to the plaintiff who sought relief solely as a private attorney general under the UCL. (Slip op. at 5-7.) The Court also held: "Although we asked the parties for supplemental briefing, we find it unnecessary to examine the effect of Proposition 64 upon the present appeal." (Slip op. at 5 n.7.)

According to the docket, a rehearing petition was filed in the case on June 1, and I would imagine we will see a petition for review, if rehearing is denied. The validity of "no-class-action" arbitration clauses is the subject of conflicting appellate opinions not only in California, but in federal and state courts across the country, and is presently before the California Supreme Court in Discover Bank v. Superior Court, case no. S113725, which was orally argued on April 7. The docket in Discover Bank indicates that "new authorities" were presented to the Court by letter on May 20, two days after the Parrish opinion was issued.

New pending Prop. 64 appeal: Philips v. Huntington Memorial Hospital

2005-06-01T12:03:00.000-07:00

Many thanks to the reader who informed me of another pending appeal raising the Prop. 64 retroactivity issue:

Philips v. Huntington Memorial Hospital, Second Appellate District, Division One, case no. B167052 (order inviting supplemental briefing on Prop. 64 issued 03/01/05; supplemental briefing completed 04/01/05; oral argument scheduled for 06/22/05, 9:00 a.m.)

This case will be added to my Prop. 64 appeals list. Incidentally, I've added the Kintetsu case to my list of published Prop. 64 opinions, now that the portion of the opinion holding that Prop. 64 does not apply to pending cases has been published.

"Unfair Competition After Proposition 64—What's In, What's Out, and Is Anything Old?"

2005-05-31T09:26:00.000-07:00

The most recent issue of FORUM, the magazine of Consumer Attorneys of California, has a good article on Proposition 64 from the plaintiffs' point of view. The article is available online only to CAOC members. Among other things, it points out that "the common law includes a public interest exception to traditional standing requirements," and that this common-law formulation should satisfy Prop. 64:

The courts have long permitted plaintiffs, who cannot otherwise demonstrate standing for want of any personal interest in the issue presented, to obtain equitable relief where their action is brought in the public interest. Such common law standing is not affected by Proposition 64. In essence, even without the benefit of section 17200's provision authorizing equitable relief, a plaintiff who has sutained no injury may, in many cases, have standing to claim declaratory and injunctive relief where the issue presented is of public interest.

Russell Balisok and Dawn Hassell, "Unfair Competition after Proposition 64—What's In, What's Out, and Is Anything Old?" FORUM 26, 27 (April 2005) (citing California Water & Tel. Co. v. Los Angeles, 253 Cal.App.2d 16, 26 (1967)). I must say I've found my CAOC membership more valuable than those of other attorney associations of which I've been a member in the past, including the ABA and ATLA. CAOC really does good work for its members.

Supreme Court denies review in Consumer Advocates v. DaimlerChrysler

2005-05-27T06:19:00.000-07:00

Also last week, the Supreme Court denied the petition for review and the publication requests in Consumer Advocates v. DaimlerChrysler Corp., case no. S131861. As you may recall, this was one of the first cases in which the Prop. 64 retroactivity issue was raised at the appellate level. The Court of Appeal (Fourth Appellate District, Division Three) found it unnecessary to decide the issue, and handed down an unpublished opinion that resolved the case on other, UCL-related grounds. The many publication requests that followed were opposed by the Attorney General and a District Attorney.

Supreme Court broadens issues to be reviewed in Branick

2005-05-26T05:19:00.000-07:00

Last week, the Supreme Court issued this order in Branick v. Downey Savings & Loan, no. S132433:

The court directs the parties to brief, in addition to the issue designated in its order of April 27, 2005, the following issue: Does Business and Professions Code section 17204 (as amended by Prop. 64, Gen. Elec. (Nov. 2, 2004)), which limits standing to bring an action under the Unfair Competition Law (Bus. & Prof. Code §17200 et seq.) to "any person who has suffered injury in fact and has lost money or property as a result of such unfair competition" (id., § 17204), apply to actions filed before November 3, 2004, the date on which Proposition 64 took effect?

It is interesting that the Court did not also order briefing on the question of whether the new class certification language applies retroactively. In any event, as of now, all issues will be addressed in Mervyn's, while the retroactivity of the "standing" language and the plaintiff's right to amend to add a new party that meets those requirements will be addressed in Branick.

BREAKING NEWS: Second District holds Proposition 64 does NOT apply to pending cases

2005-05-25T06:15:00.000-07:00

In an opinion issued on May 18, but ordered published yesterday, the Second Appellate District, Division Eight, held that Proposition 64 does NOT apply retroactively to pending cases. Consumer Advocacy Group v. Kintetsu Enterprises, ___ Cal.App.4th ___ (May 18, 2005) (slip op. at 30-35).

... Proposition 64 should not be applied retroactively absent an express intent to do so. Regardless of whether Proposition 64 is described as a substantive, procedural or jurisdictional change, it affects whether litigation may be brought at all. It does not simply regulate the conduct of litigation. It therefore should not be applied retroactively absent an express intent.

(Slip op. at 35.) Originally, the portion of the opinion dealing with Prop. 64 was unpublished, but yesterday, the Court of Appeal modified the opinion to indicate that that portion was to be published. It is unclear why the Court of Appeal did this, as the docket does not indicate that any modification or publication requests were filed. This development recreates the split in binding appellate authority on whether Prop. 64 applies to pending cases.

17200 blog hiatus

2005-05-16T07:21:00.000-07:00

The blog will be on hiatus for the rest of the week. Posting will resume next week. Thanks for reading, and please continue to email me with UCL and Prop. 64 news and developments.

PLI seminar materials now available online

2005-05-16T07:20:00.000-07:00

The powerpoint presentation that Emily Maxwell and I prepared for last week's PLI seminar is now online. Also, Bruce Simon gets credit for finding this excellent memo by the Public Citizen Litigation Group on the Class Action "Fairness" Act. It is recommended reading, especially for plaintiffs' lawyers. UPDATE: The broken link to the powerpoint presentation has been fixed. Thanks to Larry S. for pointing it out. And if Will (or anyone else who spoke in San Diego last Friday) sends me his powerpoint, I'll put it up next week.

"The Future of Legal Blogging"

2005-05-14T15:16:00.000-07:00

Check out the great series of posts over at Between Lawyers. I especially like Denise Howell's list of the common characteristics of most lawyer-bloggers. Dennis Kennedy writes that blogging "has to become part of who you are in the same way that regular exercise or a hobby must be for you to stick with it." Isn't that the truth. I highly recommend this article/collection of posts to anyone who's thinking about starting a law blog. [Hat tip: How Appealing.]

Review petition filed in Thornton v. Career Training Center

2005-05-13T16:53:00.000-07:00

Many thanks to the reader who informed me that a petition for review was filed today in Thornton v. Career Training Center, Cal. Supreme Court case no. S133275. The petition does not appear on the Supreme Court's docket yet, but what's interesting is that the main case screen lists Lytwyn v. Fry's Electronics and Frey v. Trans Union Corp. as "cross-referenced" cases. Lytwyn is, of course, one of the "grant and hold" cases, and Frey is the only other remaining published appellate opinion on Prop. 64 retroactivity.

Supreme Court survey on rules for publication of appellate opinions

2005-05-13T08:31:00.000-07:00

I'm told that today is the last day for attorneys to take the California Supreme Court's survey (scroll down) on the rules of publication of appellate opinions:

The Supreme Court Advisory Committee on Rules for Publication of Court of Appeal Opinions is charged with reviewing the current standards used by the Courts of Appeal and the Supreme Court in determining which Court of Appeal opinions should be certified for publication and with making recommendations to the Supreme Court on what changes, if any, should be instituted to better ensure that appropriate cases are published. The 13-member committee is chaired by Supreme Court Justice Kathryn M. Werdegar. The committee's report to the Supreme Court is due by June 2005.

Here is the official charge to the committee and the list of committee members.

State Bar's annual UCL seminar tomorrow in San Diego

2005-05-12T09:06:00.000-07:00

Don't forget that tomorrow is the State Bar Antitrust and Unfair Competition Law Section's annual day-long seminar on the UCL. This year, the seminar is in San Diego, and will feature Judges Kramer, Sabraw, and Quinn as well as a number of prominent practitioners. This seminar is always very good, and I would encourage people to attend, assuming space is still available.

New unpublished Prop. 64 opinion: McCann v. Lucky Money

2005-05-12T09:04:00.000-07:00

On Monday, the Court of Appeal (Fourth Appellate District, Division Three) issued its unpublished opinion in McCann v. Lucky Money, Inc. (no. G032727), in which it stated:

We invited supplemental briefing on the applicability of the amendments to the UCL and FAL to pending cases. The California Supreme Court has recently granted review of several appellate decisions addressing this issue. (Lytwyn v. Fry’s Electronics, Inc., review granted Apr. 27, 2005, S133075; Bivens v. Corel Corp., review granted Apr. 27, 2005, S132695; Benson v. Kwikset Corp., review granted Apr. 27, 2005, S132443; Branick v. Downey Savings and Loan Assn., review granted Apr. 27, 2005, S132433; Californians for Disability Rights v. Mervyn’s, review granted Apr. 27, 2005, S131798.) Because we affirm the trial court’s judgment dismissing McCann’s action, we need not address the effect of Proposition 64 on this case.

(Slip op. at 19-20.)

When will the Supreme Court rule?

2005-05-11T00:01:00.000-07:00

Here's the latest $64,000 question: When will the Supreme Court rule on Prop. 64 retroactivity? I was hoping we'd see a ruling by the end of the year, but now I'm not so sure. In an article in the April 2005 issue of California Lawyer, Boalt Law Professor Stephen R. Barnett wrote that the Supreme Court takes an average of 1.6 years to issue a decision after granting review. If that average holds true in these cases, we won't see a decision until November 2006—unless the Supreme Court decides the issue in Kids Against Pollution, in which review was granted in September 2003.

In my capacity as a journalist, I asked two appellate experts, Lisa Perrochet and Will Stern, what they thought about this. Lisa said:

I'd guess it depends on whether the Supremes address the Prop 64 issue in the Kids Against Pollution case. If so, that could be this year. Of course, one could surmise that the recent grants of review in the "real" Prop 64 cases suggests they won't reach the issue in K.A.P., but I don't think you can read that much into it. Their time was running out for ruling on the petitions in the other cases so, by granting review, they kept their options open. If they haven't quite nailed down what they're going to do with K.A.P., they'd logically want to have those other cases pending before them in the event they end up ducking the issue in K.A.P.

As for timing a decision in the recent slew of cases (assuming they don't just get remanded in light of some ruling in K.A.P.), I think your instincts are right that it's far too optimistic to hope for this year. It's not too meaningful, in my mind, to talk about "averages" in other cases because the time is so variable. .... Bottom line is that making a prediction more precise than a broad range (1-2 years for this, I'd wager) is pretty futile.

Will guessed about 18 months before we'll see a ruling, and had this to say about Kids Against Pollution:

It's unlikely they'll decide the Prop 64 issue in KAP, for procedural reasons. KAP is an anti-SLAPP case that got re-briefed after the election w/r/t the Prop 64 arguments. There are lots of grounds on which KAP could turn that wouldn't require them to reach the Prop 64 issue, e.g., the "retroactivity" of CCP 425.17 (the 1/1/04 anti-SLAPP amendments). Plus, KAP doesn't raise the "amendment" issue of Branick, which strongly suggests to me that they will use Mervyn's to decide "retroactivity" and Branick to decide "amendment."

There we have it, from the mouths of those who should know.

Thanks for coming!

2005-05-10T21:13:00.000-07:00

Thanks to everyone who attended the PLI seminar today. A few snaps by the president of my fan club (aka my husband):

New pending appeal involving Prop. 64: Quatman v. Raceway Ford

2005-05-10T00:01:00.000-07:00

Many thanks to the reader who informed me of another pending Prop. 64 appeal:

Quatman v. Raceway Ford, Fourth Appellate District, Division Two, case no. E035830 (order requesting supplemental briefing on Prop. 64 filed 03/07/05; supplemental letter briefs filed 03/22/05 and 03/23/05; tentative opinion issued 05/06/05)

The Fourth Appellate District, Division Two, has a unique procedure whereby it issues tentative opinions before oral argument. It is the only appellate court that I've heard of that does this, and I mean nationally. It's actually quite helpful in preparing for oral argument before this Division, as other appellate practitioners have acknowledged. I haven't seen a copy of the tentative opinion in this case, but the appeal has been added to my list of Prop. 64 pending appeals.