Chronicle article on Prop. 1016
An article in today's San Francisco Chronicle is called "Measure would limit public interest suits: Private attorneys' standing to sue businesses at issue."
- posted by Kim Kralowec @ 2:32 PM  | Comments (0) |

 
UCL/class certification redux
Yesterday, the Court of Appeal handed down a decision, Prince v. CLS Transportation, Inc., ___ Cal.App.4th ___ (May 26, 2004), that stands in sharp contrast to Newell v. State Farm General Ins. Co., ___ Cal.App.4th ___ (April 26, 2004), which was ordered published last Friday and is discussed in my post here. In Prince, the court took quite a different view of the propriety of disposing of class action allegations on demurrer, and reversed a trial court order doing just that. Like Newell, Prince also involved a UCL claim, but notably, the court found no need to consider the UCL claim separately from the other claims. Nor did the Prince court cite Newell. After exhaustively cataloging the other relevant cases, the court concluded: "it is only in mass tort actions (or other actions equally unsuited to class action treatment) that class suitability can and should be determined at the pleading stage. In other cases, ... class suitability should not be determined by demurrer." That is quite a statement. It should apply broadly to most UCL actions.
- posted by Kim Kralowec @ 6:48 PM  | Comments (0) |

 
And then there were seven ...
On Monday, the Court of Appeal issued its SEVENTH decision since November involving the interplay between the UCL and the anti-SLAPP statute. Metcalfe v. U-Haul Int'l, Inc., ___ Cal.App.4th ___ (May 24, 2004) holds that new Code of Civil Procedure section 425.17 is a procedural statute and that applies retroactively to pending litigation. The new statute barred the defendant's SLAPP motion even though it became effective after the motion was filed, after the trial court ruled on the motion, and after an appeal was initiated. Citing Brenton v. Metabolife Int'l, Inc., 116 Cal.App.4th 679 (2004) (discussed in my post here), the court also held that the new statute passed constitutional muster.
- posted by Kim Kralowec @ 7:21 PM  | Comments (0) |

 
UCL class action decision
Last Friday, the Court of Appeal ordered publication of Newell v. State Farm General Ins. Co., ___ Cal.App.4th ___ (April 26, 2004). The case alleged that the defendant insurance companies mishandled various homeowners' insurance claims stemming from the Northridge earthquake, and claimed breach of contract, insurance bad faith, and UCL violations. The trial court sustained the defendants' demurrer to the complaint's class action allegations, holding that common questions did not predominate, and the Court of Appeal affirmed. Respecting the UCL claim, the court observed: "The unfair business practices cause of action is premised on the improper denial of policy benefits; and plaintiffs ultimately seek restitution for the amount of benefits State Farm and Farmers failed to pay. Thus, the individualized assessments necessary for the breach of contract and bad faith causes of action also are necessary to establish liability for unfair competition."

That conclusion is highly fact-specific, in my view. Caselaw makes clear that UCL claims are legally distict from other claims, with unique elements and remedies, so they will rarely track other causes of action so closely as they apparently did in this case. A complaint-drafting lesson can be learned here: find a way to differentiate your UCL claim from your other causes of action, and be sure the complaint makes the distinction plain.
- posted by Kim Kralowec @ 7:32 AM  | Comments (0) |

 
It's official
The Secretary of State now reports that Proposition 1016, the UCL "reform" measure, will be on the November ballot.
- posted by Kim Kralowec @ 1:26 PM  | Comments (0) |

 
Small press news on 17200
An editorial in today's Victorville Daily Press is entitled "Another View: Forcing Lawyers to Quit Extorting." The editorial describes the Trevor Law Group's antics as if every lawyer handled 17200 actions the way that firm did, and urges readers to support Proposition 1016. The editorial never acknowledges that this kind of behavior is actually very rare, or that lawyers who engaged in it would probably be subject to disciplinary action. It also contains the grossly false statement that "attorneys get to keep the proceeds from [17200] lawsuits." Personally, I worry that misinformed editorials like this one will irrevocably sway public opinion, and that it will soon be too late to correct false impressions about how 17200 works.
- posted by Kim Kralowec @ 7:42 AM  | Comments (0) |

 
17200 blog hiatus
I will be away on vacation next week, so will not be posting to the blog. I'll be back and posting again during the week of May 24. Best regards to anyone who may be watching this space.
- posted by Kim Kralowec @ 7:21 PM  | Comments (0) |

 
Environmental groups oppose Proposition 1016
The Redlands Daily Facts reports here that various consumer and environmental groups, including the Sierra Club California, the California League for Environmental Enforcement Now, and the Foundation for Taxpayer & Consumer Rights, have all announced their opposition to Proposition 1016--the UCL "reform" initiative. Those organizations' press releases can be accessed here and here.

The Foundation for Taxpayer & Consumer Rights reports that "A Litigious Schwarzenegger Wants to Close the Door on Others": "If a plastic likeness of a public figure is important enough for a lawsuit, shouldn't pollution of our drinking water and air be?"

As of today, Proposition 1016 is still "pending verification of signature count," according to the Secretary of State's website.
- posted by Kim Kralowec @ 3:59 PM  | Comments (0) |

 
Still more on UCL "reform" efforts
At the UCL conference last Friday, Tom Papageorge from the Los Angeles District Attorney's office (and a well-known UCL expert) led a panel entitled "What Changes Are In Store For 17200: The Initiative Process and Beyond." He reviewed the history of legislative amendments to the UCL, and noted that in 2003, eleven bills were introduced to reform the UCL. Only three of them got out of committee. In 2004, only two bills had strong prospects, and one of them (as I observed here) was gutted by its author two weeks ago, when negotiations for bipartisan reform broke down. Papageorge observed that this bill could still be amended later and used as a vehicle for UCL amendments, as originally intended. According to Papageorge, the "reform" camp's strategy seems to be to start the initiative process but work behind the scenes for legislative change.
- posted by Kim Kralowec @ 8:18 PM  | Comments (0) |

 
More on legislative efforts to amend the UCL
Another bill is now pending in the Legislature to amend the UCL. AB 2369, introduced by Assemblyman Lou Correa (D-Orange County), is more narrowly tailored than former AB 2604 (discussed at my posts here, here, and here). It would add a new chapter to the Business & Professions Code, and is clearly designed to prevent the kinds of abuses the Trevor Law Group became infamous for. It would require all UCL complaints to be verified and served on the Attorney General's office, the local DA's office, and the agency (if any) that regulates the defendant's conduct. It would impose new court approval requirements for settlements and attorney's fees awards, and would prohibit pre-filing settlements (such as those the Trevor Law Group is said to have extracted). Most interestingly, it attempts to make clear that UCL claims are intended to have res judicata effect: "The determination of a representative cause of action in a judgment approved by the court is conclusive and bars any further actions or causes of action brought by any private plaintiff against the same defendant based on substantially similar facts and theories of liability." New sections 17300-17316 would apply to all actions brought on or before January 1, 2005. The bill is now pending before the Assembly Judiciary Committee.
- posted by Kim Kralowec @ 7:41 AM  | Comments (0) |

 
Bowen revisited
During last Friday's UCL conference, there was a lot of discussion of Bowen v. Ziasun Technologies, 116 Cal.App.4th 777 (2004). One of the speakers, a prosecutor from the San Francisco District Attorney's office, expressed the view that the question Bowen decided--whether the UCL applies to securities transactions--was not, as the Bowen court described it and as I reported here, a "question of first impression." That issue was addressed and decided in the plaintiffs' favor in Roskind v. Morgan Stanley Dean Witter & Co., 80 Cal.App.4th 345 (2004). Hence, Bowen merely creates a split in authority that the California Supreme Court must eventually resolve. A law professor on one of the panels also opined that Bowen would not apply to UCL actions brought by public prosecutors to rectify securities violations.

My other post on Bowen is here.
- posted by Kim Kralowec @ 7:24 AM |

 
Yet another new UCL/SLAPP decision
In People ex rel. Lockyer v. Brar, 115 Cal.App.4th 1315 (Feb. 24, 2004), the Fourth District dismissed an appeal from an order denying a SLAPP motion, finding it "about as patently frivolous an appeal taken for purposes of delay as imaginable," since "[t]he anti-SLAPP statute specifically exempts actions brought by public prosecutors." Id. at 1318 (emphasis in original). The SLAPP motion was filed by an attorney, Harpreet Brar, whom the attorney general sued "to obtain an order to make him stop filing lawsuits under California's unfair competition law (Bus. & Prof. Code, §17200). Allegedly, Brar has engaged in the sort of abuse of California's unfair competition law which made the Trevor Law Group a household name in California in 2002 and 2003." Id. at 1317.

I believe that brings to SIX the number of published UCL decisions involving SLAPP motions issued since the end of last November.
- posted by Kim Kralowec @ 1:54 PM  | Comments (0) |

 
Unfair Competition Law Conference
Yesterday, I attended the second annual Unfair Competition Law Conference organized by the State Bar's Antitrust and Unfair Competition Law Section. It was extremely interesting, with three impressive and very knowledgeable panels of speakers--including judges, private practitioners, and public prosecutors. Over the next few days, I will be posting information on some of the more intriguing things that were discussed at the conference.
- posted by Kim Kralowec @ 9:32 AM  | Comments (0) |

 
Schwarzenneger supports UCL "reform" initiative
Governor Schwarzenegger returned from his trip abroad to visit Victorville, California on Tuesday. An article in yesterday's Victorville Daily Press discusses his support for Proposition 1016--the number assigned by the Secretary of State to the UCL "reform" initiative--in rather strong terms. According to the Secretary of State's website, the initiative has not yet qualified for the ballot but is still "pending signature verification."
- posted by Kim Kralowec @ 5:13 PM  | Comments (0) |

 
17200 in today's legal papers
An article in today's Daily Journal (subscription required) on California's new Online Privacy and Protection Act (Bus. & Prof. Code secs. 22575-22579, eff. 7/1/04) warns that the UCL might be used to enforce violations of that Act, since it has no private enforcement mechanism of its own.

And today's Recorder has a detailed and interesting article on the Supreme Court's Dowhal decision. Again, the article does not mention the UCL component of the case, focusing instead on the product-labeling implications. The article is called "Warning on Warnings: A Ruling on Federal Pre-emption Provides Prop 65 Relief to Companies" and is not yet available online.
- posted by Kim Kralowec @ 8:07 AM  | Comments (0) |