The UCL Practitioner
Monday, April 04, 2005
UCL statutory penalties as a cross-check for punitive damages
In Boeken v. Philip Morris, Inc., ___ Cal.App.4th ___ (Apr. 1, 2005), the Court of Appeal (Second Appellate District, Division Four) referred to the UCL by analogy in assessing the appropriate measure of punitive damages in a products liability case:
California also imposes civil fines for “any unlawful, unfair or fraudulent business act or practice.” (Bus. & Prof. Code, § 17200.) Although the record contains no evidence of typical fines for unlawful or unfair business practices, we may consider not only civil penalties that are actually imposed, but those that are authorized in comparable cases. (State Farm, supra, 538 U.S. at p. 418.) A $2,500 civil penalty may be assessed for each violation. (Bus. & Prof. Code, § 17206, subd. (a).) Boeken smoked two and one-half packs of Marlboros per day for 43 years, approximately 40,000 packs, as a result of Philip Morris’s continuing fraud. If the sale of each pack to Boeken were considered a violation, fines authorized by statute could amount to nearly twice the $100 million in reduced punitive damages confirmed by the trial court in this case.
(Slip op. at 70.) The Court of Appeal reduced the jury's $3 billion punitive damages award to $50 million, sticking with the "single-digit multiplier" limit adopted by the federal Supreme Court in State Farm. I think this language also suggests that the defendant's fraudulent marketing of its cigarettes violated the UCL as well the common-law theories that the plaintiff raised. The common-law remedies are far broader than those available under the UCL, so that was definitely the best route for the plaintiff to take here. If this had been a UCL case, the purchase price of the cigarettes (or at least the portion of the purchase price that Philip Morris received) would have been restored to the plaintiff as "restitution."
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