Bill Introduced to Reform 17200
Friday was the last day to introduce bills for the 2003-2004 legislative session. Not surprisingly, a new bill to amend section 17200 was introduced on that day. AB 2604 would define "unfair competition" as any act outlawed by a state or federal law or regulation, thereby repealing the "unfair" and "fraudulent" prongs; would limit private enforcement actions to persons who suffered actual harm; and would impose onerous new procedural prerequisites to suit. The bill was introduced by Assemblyman Bill Pacheco, a Republican from Southern California. If past history is any indication, the bill won't get far.
- posted by Kim Kralowec @ 6:20 PM  | Comments (0) |

 
UCL Claim Survives SLAPP Challenge
Today the Court of Appeal ordered publication of Rezec v. Sony Pictures Entertainment, Inc., ___ Cal.App.4th ___ (Jan. 27, 2004), in which the UCL claim was based on fake movie reviews by a fictitious film critic that were "quoted" in advertisements for defendant's movies. The majority affirmed denial of the SLAPP motion, finding that the advertisements were non-protected commercial speech. Thus, the majority did not decide whether plaintiffs had made a sufficient showing on the merits, the next step in analyzing a SLAPP motion. The dissent called the lawsuit "the most frivolous case with which I have ever had to deal" (emphasis in original) and expressed the view that no reasonable consumer would ever be misled by the falsely quoted reviews. "[M]oviegoers," the dissent concluded, "are not such morons."
- posted by Kim Kralowec @ 5:57 PM |

 
New UCL Class Certification Decision
In Frieman v. San Rafael Rock Quarry, Inc., ___ Cal.App.4th ___ (Feb. 24, 2004), the Court of Appeal affirmed a trial court's order denying class certification of a UCL claim because plaintiffs failed to show that "substantial benefits would accrue to the litigants or the courts from class treatment." In other words, the "superiority" prong was not met. Plaintiffs conceded that the only potential benefit from certifying the UCL claim was the possibility that under Kraus v. Trinity Management Servs., Inc., 23 Cal.4th 16 (2003), fluid recovery (aka nonrestitutionary disgorgement of profits) could be obtained in a "properly certified" UCL claim. That, the Court of Appeal held, was insufficient reason, by itself, to certify the UCL claim and substitute the potentially "burdensome" class action mechanism for the "streamlined" UCL process. Slip op. at 5-10.
- posted by Kim Kralowec @ 4:50 PM  | Comments (0) |

 
Recorder "Special Report" on 17200
Yesterday's Recorder contained a "special report" on 17200, with articles by, among others, William Stern, the author of The Rutter Group practice guide on 17200. Will's article contains a lot of very informative information about recent UCL decisions and legislative activity. The article mentions Dowhal v. SmithKline Beecham, No. S109306, argued this month before the California Supreme Court, which "presents the question of whether the UCL's prohibition against false advertising can be used to force a manufacturer of nicotine patches to issue warnings about hazards posed to fetuses where the FDA approved the package label without such a warning." Unfortunately, a paid subscription is required to view Recorder articles online.
- posted by Kim Kralowec @ 2:37 PM  | Comments (0) |

 
New "Safe Harbor" Decision
In Ochs v. Pacificare of California, ___ Cal.App.4th ___ (Feb. 9, 2004), the Court of Appeal found an HMO's refusal to pay for emergency healthcare services shielded by a Cel-Tech "safe harbor." A demurrer to the UCL cause of action was therefore properly sustained without leave to amend. (The negligence claim, however, was allowed to proceed.) (Slip op. at 9-10, 15.)
- posted by Kim Kralowec @ 4:27 PM  | Comments (0) |

 
New UCL decision
A new UCL decision issued last week, Bernardo v. Planned Parenthood Federation of America, ___ Cal.App.4th ___ (Jan. 28, 2004), is accessible here. The case was decided in the context of a SLAPP motion, and held that the plaintiff had failed to establish a reasonable probability of success on the merits of her UCL claim. Most interesting is the court's discussion of the "fraudulent" prong. Planned Parenthood's website was not "likely to deceive" the public about whether abortions increase the risk of breast cancer, the court held, because the website "informed visitors that there are two schools of scientific research with opposing points of view on the issue," and "provid[ed] all interested visitors the means to independently view both sides of the controversy for themselves." Slip op. at 46-47.
- posted by Kim Kralowec @ 5:16 PM  | Comments (0) |