BlogHer 2005
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]
- posted by Kim Kralowec @ 9:02 AM  | Comments (0) |

 
New Prop. 64 pending appeal
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.
- posted by Kim Kralowec @ 5:23 AM  | Comments (0) |

 
Philanthropy
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.
- posted by Kim Kralowec @ 5:03 AM  | Comments (0) |

 
Another update for Firefox and Safari users
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.
- posted by Kim Kralowec @ 6:35 AM  | Comments (0) |

 
Are individual claims still viable under the UCL?
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?
- posted by Kim Kralowec @ 6:23 AM  | Comments (0) |

 
Recent 9th Circuit class action/attorney-client privilege opinion: Barton v. District Court
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.]
- posted by Kim Kralowec @ 6:55 AM  | Comments (0) |

 
New class certification decision: Conley v. PG&E
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.
- posted by Kim Kralowec @ 5:50 AM  | Comments (2) |

 
"Class Action & Unfair Competition Litigation"
Bridgeport Continuing Education will present this day-long seminar on August 12, 2005 at the Hyatt Regency in Sacramento.
- posted by Kim Kralowec @ 9:58 AM  | Comments (0) |

 
Off-topic post: Initiative invalidated for November special election
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.
- posted by Kim Kralowec @ 11:34 AM  | Comments (0) |

 
New UCL decision: Bell v. Blue Cross of California
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).
- posted by Kim Kralowec @ 7:38 AM  | Comments (0) |

 
Lists updated to reflect recent developments; new unpublished Prop. 64 opinion
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.)
- posted by Kim Kralowec @ 7:01 AM  | Comments (0) |

 
BREAKING NEWS: Supreme Court grants review in Thornton and depublishes Frey
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.)
- posted by Kim Kralowec @ 3:47 PM  | Comments (0) |

 
Multiple petitions for review filed in Consumer Advocacy Group v. Kintetsu
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.
- posted by Kim Kralowec @ 12:02 AM  | Comments (0) |

 
"Law Students Create Blawgs to Recount Their Experiences"
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.
- posted by Kim Kralowec @ 12:01 AM  | Comments (0) |

 
Off-topic post: U.S. Supreme Court nomination
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.
- posted by Kim Kralowec @ 9:10 AM  | Comments (0) |

 
"The New Wave of Labor Code Litigation: Meal & Rest Period Litigation and the Private Attorney General Act"
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.
- posted by Kim Kralowec @ 8:55 AM  | Comments (1) |

 
Law Practice symposium on law blogs
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."
- posted by Kim Kralowec @ 12:01 AM  | Comments (0) |

 
Another unpublished Prop. 64 opinion
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.
- posted by Kim Kralowec @ 8:46 AM  | Comments (0) |

 
"Intel Lawyers Gear Up for Antitrust Suit"
My colleague, Thomas Dove, is quoted in this article in today's Recorder.
- posted by Kim Kralowec @ 9:01 AM  | Comments (0) |

 
Recent unpublished Prop. 64 opinions
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.
- posted by Kim Kralowec @ 9:00 AM  | Comments (0) |

 
Mervyn's and Branick opening briefs now available online
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.
- posted by Kim Kralowec @ 3:44 PM  | Comments (0) |

 
Update for Firefox and Safari users
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.
- posted by Kim Kralowec @ 8:32 PM  | Comments (0) |

 
"Supreme Court Gets Into Split Over Class-Action Arbitrations"
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]
- posted by Kim Kralowec @ 9:12 AM  | Comments (1) |

 
Law Limits
Jeffrey Lewis, author of the famous So Cal Law Blog, has a new blog called Law Limits. Looks interesting.
- posted by Kim Kralowec @ 6:37 PM  | Comments (0) |

 
"The Class Action Fairness Act: How is it Impacting Employers?"
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.
- posted by Kim Kralowec @ 9:14 AM  | Comments (0) |

 
Blog display problem for Firefox users
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.
- posted by Kim Kralowec @ 5:24 PM  | Comments (0) |

 
Blog page updates and new links
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.
- posted by Kim Kralowec @ 12:01 AM  | Comments (0) |

 
Gilbert Submits
Justice Gilbert has a blog!
- posted by Kim Kralowec @ 6:07 PM  | Comments (0) |

 
Update on O'Grady v. Apple Computer
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.
- posted by Kim Kralowec @ 7:23 AM  | Comments (0) |

 
"Public-Interest Lawyers Manage to Work Around Revised 17200"
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.'"
- posted by Kim Kralowec @ 7:22 AM  | Comments (0) |

 
"Wal-Mart Spurns White Guys? No Problem"
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.
- posted by Kim Kralowec @ 7:21 AM  | Comments (0) |

 
Scope of injunctive relief under the post-Prop. 64 UCL?
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.
- posted by Kim Kralowec @ 1:20 PM  | Comments (0) |

 
Display bug finally fixed!
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.
- posted by Kim Kralowec @ 2:20 PM  | Comments (1) |

 
Class action waivers still unconscionable in California: Discover Bank v. Superior Court
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.)
- posted by Kim Kralowec @ 10:34 AM  | Comments (0) |