The UCL Practitioner
Monday, February 28, 2005
"Plaintiff Lawyers Hunt for Partners:
Friday's Recorder had this story, which reports on ongoing discussions between plaintiffs' firms and local DAs and city attorneys about joining forces in UCL cases.
"Wal-Mart Foes Join in Fight Over Court Files"
This morning's Recorder has the story, which reports that "[t]he fight over sealed documents comes in Savaglio v. Wal-Mart, C-835687-7, in which a class of plaintiffs represented by Jessica Grant, a partner with the Furth Firm in San Francisco, alleges that Wal-Mart has failed to pay overtime wages." The Wal-Mart case involves UCL and Labor Code claims.
A Prop. 64 hypothetical
John from The Legal Reader writes in with this hypothetical:
Say on 1/1/2004, Ms. Smith filed a 17200 suit against the manufacturer of Widgets, alleging that some aspect of the Widgets (or their advertising) was unfair, unlawful, fraudulent, etc. Her suit reaches back four years, to 1/1/2000 under the four-year statute of limitations for 17200 actions.

In her complaint, Ms. Smith admitted that she had never personally purchased a Widget, but alleged that she was filing suit as a "private attorney general" on behalf of other Californians who had bought Widgets.

Prop 64 passes, and Widget Co. files a Motion for Judgment on the Pleadings, arguing lack of standing for plaintiff Ms. Smith.

The court agrees and grants the motion, but allows Ms. Smith leave to amend.

Assume that Widget Co. is continuing its allegedly bad practices.

Ms. Smith NOW goes and buys a Widget (sometime in 2005).

Ms. Smith amends her complaint to allege that she now has standing because she was actually harmed by Widget Co., albeit after the date that she filed her original complaint (which alleged that she hadn't been harmed).

Can she do that?

If not, why not?

If she can, what effect does it have on the "class period" engendered by her complaint?

My proposed hypothetical is not a class action. But section 17200 cases generally encompass a limitations period spanning four years back from the date of the filing of the complaint. Would her amendment expand this period? Shift it forward in time?

Any thoughts (from either you or your blog's readers) would be welcome.

Friday, February 25, 2005
"Will Blogs Kill the Law Review Case Comment?"
The Volokh Conspiracy had this interesting post earlier in the week.
More appellate-level developments
Yesterday, the Court of Appeal denied the review petition in Gnesda v. Superior Court (Fourth Appellate District, Division One). On February 14, a rehearing petition was filed in Benson v. Kwikset (Fourth Appellate District, Division Three). And as I previously reported, a rehearing petition has been filed in CDR v. Mervyn's (First Appellate District, Division Four). This means that rehearing petitions are now pending in two out of the five cases in which the Prop. 64 retroactivity question has been decided.

Since we pretty much know where the First, Second, and Fourth Districts are headed, what I'm really looking forward to is the oral argument in Fair Business America, LLC v. Mattel, Inc., which is pending before the Third District. In the Fifth District, the Prop. 64 retroactivity question was raised in Diaz v. Fresno Dodge, but in December the court decided that case without reaching the Prop. 64 question. (On Wednesday, the Supreme Court denied a request to publish the unpublished opinion in that case.) So far, I haven't heard of any Sixth District cases in which the Prop. 64 question has been raised.
Thursday, February 24, 2005
More thoughts on the Class Action "Fairness" Act
I’ve been thinking some more about the so-called Class Action “Fairness” Act, which empowers the federal district courts to hear many civil class actions in which the amount in controversy exceeds $5 million and "any member of a class of plaintiffs is a citizen of a State different from any defendant." 28 U.S.C. §1332(d)(2) (as amended). The Act establishes a two-thirds/one-third rule under which the district court “may” decline to exercise jurisdiction in any case in which “greater than one-third but less than two-thirds of the members of all proposed plaintiff classes in the aggregate and the primary defendants are citizens of the State in which the action was originally filed.” Id. §1332(d)(3) (as amended). The district court “shall” decline to exercise jurisdiction if “greater than two-thirds of the members of all proposed plaintiff classes in the aggregate are citizens of the State in which the action was originally filed” and they seek “significant relief” from a defendant “whose alleged conduct forms a significant basis for the claims asserted” and “who is a citizen of the State in which the action was originally filed,” and "principal injuries resulting from the alleged conduct ... were incurred in the State in which the action was originally filed," and “during the 3-year period preceding the filing of that class action, no other class action has been filed asserting the same or similar factual allegations against any of the defendants on behalf of the same or other persons.” Id. §1332(d)(4) (as amended).

The Class Action “Fairness” Act resembles Proposition 64 in a key respect. Both laws impose changes that are far broader than necessary to fix the “abuses” that the laws were supposedly addressing. That aside, it is interesting to consider how the Class Action “Fairness” Act might impact future UCL claims pleaded as class actions.

The leading case on whether non-California residents may sue for relief under the UCL is Norwest Mortgage, Inc. v. Superior Court, 72 Cal.App.4th 214 (1999), in which the trial court granted nationwide class certification of a UCL claim. The appellate court divided the claim up into three “categories”:
California residents regardless of where [the defendant's] conduct … occurred (Category I members); non-California residents for whom [the defendant's] conduct … occurred in California (Category II members); and non-California residents for whom [the defendant's] conduct … occurred in states other than California (Category III members).
Id. at 222.

The Norwest court was not concerned with the defendant’s “citizenship”—although it observed that Norwest was a California corporation with its principal place of business in Iowa—but only with the fact that much of its conduct emanated from outside California. The court concluded that the UCL was “not intended to regulate conduct unconnected to California,” and that the UCL was therefore “inapplicable to the claims held by Category III members.” Id. at 225-29. The claims of Category I and II class members could proceed, subject to the caveat that California choice-of-law rules might require that other states’ laws govern the claims of Category II class members. (A case now pending before the California Supreme Court, Kearney v. Solomon Smith Barney, no. S124739, will look at the choice-of-law question in the UCL context. The Court of Appeal's opinion in that case is here, and my original post on the Court of Appeal's opinion is here.)

If the Norwest case—or indeed virtually any nationwide class action—were filed today, it would probably be removable to federal court. The Norwest court’s “categories” do not precisely correspond to those of the Class Action “Fairness” Act, but they are useful to illustrate how the "Fairness" Act might impact future UCL cases.

Category I: Because the Category I members are all California residents, and Norwest is a California “citizen” because it is incorporated here, that portion of the case, if filed separately from the rest of the case, would not be removable. If filed together with the claims of too many Category II and III class members, Category I members would be swept up to federal court along with the rest of the case.

Category II: This category is trickier. If the right number of class members from enough other states were joined, the two-thirds/one-third ratio of California class members to non-California class members could be maintained, precluding removal. Quite a few other states might be added to the class definition, depending on relative state populations. For example, suppose hypothetically that the defendant’s alleged conduct affected all the residents of a given state. Since California’s population (as of the 2000 census) was 33.8 million, an additional 16.9 million class members could be added to the case without exceeding the two-thirds/one-third ratio. That would allow inclusion of all the citizens of Florida, for example, which is the fourth largest state. Alternatively, all the citizens of the fifteen smallest states (Wyoming, Vermont, North Dakota, Arkansas, South Dakota, Delaware, Montana, Rhode Island, Hawaii, New Hampshire, Maine, Idaho, Nebraska, West Virginia, and New Mexico) could be included. In theory, a sixteen-state UCL class action could still be brought against a California defendant in California state court and escape removal.

Category III: Out-of-state class members injured by conduct emanating from outside California simply cannot bring a UCL claim in California state court. Under Norwest, they have no UCL claim anyway, and under the “Fairness” Act, if they tried to assert such a claim, their case could be removed to federal court regardless of whether they joined forces with California plaintiffs. In sum, to avoid the risk of removal to federal court, plaintiffs should not bother trying to plead UCL claims on behalf of non-Californians against a defendant that is not a “citizen” of California.
Wednesday, February 23, 2005
Appellate-level developments
I've updated my Prop. 64 appeals list to reflect the five (!) published decisions on the retroactivity question. The list also includes information on two more pending appellate matters, Gnesda v. Superior Court, in which a petition for writ of mandate was recently filed, and Thornton v. Computer Education Institute, in which oral argument is scheduled for March 17. Many thanks to the readers who brought these appeals to my attention, and especially to counsel for the petitioner in Gnesda for citing this blog in his writ petition. If anyone knows of any other pending appeals in which the Prop. 64 retroactivity question has been raised—especially at the Supreme Court level—please drop me a line.
Tuesday, February 22, 2005
New Prop. 64 opinion: Lytwyn v. Fry's Electronics
The Fourth Appellate District, Division One, has issued another published opinion holding that Prop. 64 applies to pending cases. Lytwyn v. Fry's Electronics, Inc., ___ Cal.App.4th ___ (Feb. 22, 2005).

UPDATE: An article in today's Daily Journal quotes counsel for Mr. Lytwyn (who also represents Mr. Bivens) as saying, "I guess we'll all just take a big school bus up to San Francisco." I agree that the plaintiffs' bar should not give up on this issue yet, despite the recent decisions.
Two new trial-level orders
I've updated my list of trial court orders to include these two: The first of these orders holds that Prop. 64 does NOT apply to pending cases. (I've seen the transcript, but I think all court reporters would hate me if I started posting them online.) This one is noteworthy because it is the first order I'm aware of in which a Los Angeles County Superior Court judge held that Prop. 64 does not operate retroactively. Many thanks to the reader who brought it to my attention.

The second order is Judge Sabraw's eagerly-anticipated ruling in the cases argued on February 10. Judge Sabraw held that Prop. 64 does apply to pending cases. His order is noteworthy because it was issued after three of the four recent Prop. 64 published decisions were handed down. Saturday's Monterey Herald had this article on the order as it applies to the Center for Biological Diversity case. UPDATE: The Recorder also had an interesting report last week on Judge Sabraw's February 10th hearing.
Friday, February 18, 2005
Rehearing sought in Californians for Disability Rights v. Mervyn's
On Wednesday, February 16, a petition for rehearing was filed in Californians for Disability Rights v. Mervyn's, LLC, ___ Cal.App.4th ___ (Feb. 1, 2005). Here is the docket.
BREAKING NEWS: Fourth Appellate District, Division One, also holds Prop. 64 applies to pending cases
The Fourth Appellate District, Division One, just issued its opinion in Bivens v. Corel Corp., ___ Cal.App.4th ___ (Feb. 18, 2005). The Court followed Branick and Benson and held that under the "statutory repeal" rule, Prop. 64 does apply to cases filed before its effective date. The Court further held (in contrast to Benson) that the complaint could, theoretically, be amended to substitute a new plaintiff who can meet the Prop. 64 standing requirements. Amendment would not be allowed in that particular case, however, "because ... Corel is entitled to summary judgment on the claims raised in the complaint." Slip op. at 14-15 n.5.
Supreme Court grants review of UCL preemption decision
On Wednesday, the Supreme Court granted review of In re Tobacco Cases II, 123 Cal.App.4th 617 (2004), in which the Court of Appeal held that the Federal Cigarette Labeling and Advertising Act (15 U.S.C. §§ 1331 et seq.) preempted plaintiffs' UCL claim, which asserted that defendants improperly marketed their tobacco products to minors. Here is a link to the docket. My original posts on the Tobacco decision are here and here.
Thursday, February 17, 2005
New UCL decision: In re Firearm Cases
Last Thursday, the Court of Appeal (First Appellate District, Division One) issued a 32-page opinion entitled In re Firearm Cases, ___ Cal.App.4th ___ (Feb. 10, 2005). The Benson decision came down just a few hours earlier on that same day, and it got all the attention, but Firearm Cases shouldn't be overlooked. The opinion discusses the pre- and post-Cel-Tech definitions of "unfair" in detail, and concludes that even under the pre-Cel-Tech definition, the plaintiff must
show some connection between conduct by defendants and the alleged harm to the public. Even in a UCL unfairness case, there must be such a connection. Without evidence of a causative link between the unfair act and the injuries or damages, unfairness by itself merely exists as a will-o'-the-wisp legal principle.
Slip op. at 15. In other words, the Court of Appeal imported a "causation" element into the UCL's "unfair" prong, in part based on post-Cel-Tech decisions rejecting the pre-Cel-Tech definitions of "unfair" for consumer actions. Slip op. at 16-19. (These decisions were recently reviewed in Slaughter, "What is 'Unfair'?: Developments in 17200 Law After Cel-Tech," 13 Competition 29 (Fall 2004/Winter 2005), which is discussed in my post here.) The Court concluded: "Although the weighing test of the pre-Cel-Tech cases remains useful, ... we do not believe a UCL violation may be established without a link between a defendant's business practice and the alleged harm." Slip op. at 18. The Court affirmed summary judgment in the defendant's favor because the plaintiffs had presented insufficient evidence of a causal link.
Wednesday, February 16, 2005
Supreme Court denies review in Virtual Media case
Today, the Supreme Court denied the petition for review in Virtual Media Group, Inc. v. Superior Court, Cal. Supreme Court case no. S129816. I've heard from more than one source that the trial court in Virtual Media did not actually rule on the Proposition 64 retroactivity issue, even though the petition asserts that such a ruling was issued. I don't have personal knowledge one way or the other, but if that's the case, I can understand why the Supreme Court denied the petition. The Prop. 64 issue will arrive at that court soon enough.
New UCL decision: Steinhebel v. Los Angeles Times Communications
On February 7, 2005, the Court of Appeal (Second Appellate District, Division Eight) decided Steinhebel v. Los Angeles Times Communications, ___ Cal.App.4th ___ (Feb. 7, 2005), which is primarily a Labor Code case but concludes with the following sentence:
While an employer’s policy or practice that violates the Labor Code may also be held an “unlawful business practice” under Business and Professions Code section 17200 et seq. [citation], where, as here, an employer’s policy is lawful and permissible, there is no basis for relief under the unfair competition law. (See Olszewski v. Scripps Health (2003) 30 Cal.4th 798, 827-830.)
Slip op. at 16.
Four new trial court orders
I've updated my list of Prop. 64 trial court orders with these four, all of which hold that Prop. 64 does NOT apply to pending cases:

Tuesday, February 15, 2005
Another pending appeal set for oral argument
Another case raising the Prop. 64 retroactivity issue has been set for oral argument in March:

Three other upcoming appellate oral arguments are listed at this post from yesterday.
"The New Unfair Competition Rules"
The February 2005 issue of California Lawyer has an MCLE self-study article and self-assessment test on the UCL as amended by Proposition 64. You can earn an hour of MCLE credit by taking the test and sending in your answers. A subscription to the Daily Journal is required to access the article online.
Monday, February 14, 2005
New Supreme Court review petition raises Prop. 64 retroactivity
Today, a petition for review was filed in Mastercard Int'l v. Superior Court, Cal. Supreme Court case no. S131416, challenging Judge Kramer's December 29 non-retroactivity order in California Law Institute v. VISA USA, Inc. (San Francisco County Superior Court case no. CGC-03-421180). On February 3, 2005, the First District summarily denied the defendants' writ petition. That was two days after the CDR v. Mervyn's decision came down, but about a week before the Branick and Benson decisions were issued.
Two appellate oral arguments involving Prop. 64 retroactivity coming up this Thursday (with new argument time)
The Fourth Appellate District, Division One, has moved its upcoming oral arguments in two cases raising the Prop. 64 retroactivity issue from 1:30 p.m. to 9:00 a.m. The schedule now looks like this:

  • Biven v. Corel, Inc., Fourth Appellate District, Division One, case no. D043407 (Haller, O'Rourke & Aaron, JJ.)
If anyone is able to attend the arguments on Thursday, please send me a report and I will post it here.
Thursday, February 10, 2005
17200 blog hiatus
I hate to leave the party just as the band has started playing, but I will be traveling tomorrow and will not be posting to the blog. Will the appellate courts issue three published Prop. 64 decisions in as many days? If they do, I hope someone will post a comment about it here. Please do continue to send me email with relevant news. Posting will resume on Monday.
MORE BREAKING NEWS: Fourth District comes down in favor of Prop. 64 retroactivity
The Fourth Appellate District, Division Three (Sills, P.J., Rylaarsdam, & Bedsworth, JJ), just issued its opinion on rehearing in Benson v. Kwikset Corp., ___ Cal.App.4th ___ (Feb. 10, 2005). The court held, among other things, that Prop. 64 applies to pending cases. That holding was unanimous, but Justice Sills dissented in part as to other aspects of the opinion. I will endeavor to post more later.

UPDATE: The most salient feature of the Benson decision, as far as Prop. 64 retroactivity is concerned, is its significant divergence from one key part of the Branick court's reasoning. Both courts held that Prop. 64 may apply to pending cases under the "statutory repeal" rule. Branick went on to hold that the trial court had discretion to grant the original plaintiff leave to amend to add a different plaintiff who could satisfy the new "injury" requirement. (Slip op. at 16-17.) Benson, in stark contrast, "disagree[d] with plaintiff's suggestion that, if he cannot satisfy the injury-in-fact or class action requirements, he should be permitted to substitute in another party who could do so." (Slip op. at 18.) Benson, Branick, and CDR v. Mervyn's thus represent a three-way split among the Districts. There's a lot more to be said about Benson, and I'll post more on the decision early next week.
"Court Rules Prop. 64 Curb on Lawsuits is Retroactive"
Today's Los Angeles Times has the story.
Wednesday, February 09, 2005
Miscellaneous developments Wednesday night
Tomorrow's Daily Journal has a story, "Prop. 64 Ruling," on Branick v. Downey Sav. & Loan. Tomorrow's Recorder also has an article: "Second District Has Its Say on Prop 64—Finds it's Retroactive."

Timely enough, today's Recorder had a practice article called "Looking Back, Moving Forward," which vigorously attacks the legal basis for the First District's decision in CDR v. Mervyn's.

The Alameda County Superior Court's website indicates that Judge Sabraw issued another tentative ruling today in at least two of the cases scheduled for hearing tomorrow. (Thanks to the reader who sent me that tip.) I haven't seen a copy of the new tentative, but the docket entry for Foundation Aiding the Elderly v. Covenant Care, Inc. says that the motion for judgment on the pleadings is tentatively denied—which would represent a 180-degree reversal of the prior tentative. I first learned about this development in the morning, before the Branick decision was posted this afternoon, so now I'd say all bets are off. I'm going to try to attend tomorrow morning's hearing. Meanwhile, please feel free to post comments and create a discussion board here about the tentative rulings, the hearing, the relative merits of the courts' reasoning in CDR and Branick, or any other developments.

UPDATE: Here's some food for thought. Suppose a trial judge disagrees with the Branick court's analysis of the "statutory repeal" rule. The trial judge believes, however, that the voters intended Prop. 64 to apply retroactively, and that Prop. 64's amendments are procedural only. Given the split between the Districts, is the trial judge free to embrace Branick's ultimate holding—that Prop. 64 applies to pending cases—but for reasons that Branick did not consider and that the court in CDR v. Mervyn's specifically rejected?

BREAKING NEWS: Second District creates split on Prop. 64 retroactivity
The Court of Appeal, Second Appellate District, Division Five, just issued its opinion in Branick v. Downey Sav. & Loan Assn., ___ Cal.App.4th ___ (Feb. 9, 2005), and held that Prop. 64 DOES apply to pending cases. I will try to post more on the decision later today.

UPDATE: In a nutshell, the Court relied exclusively on the "statutory repeal" rule and did not consider either "the voters' intent" or "whether the amendments are procedural or substantive." (Slip op. at 11.)
First District denies writ petition in CLI v. VISA
Many thanks to the reader who informed me that on February 3, 2005, the First Appellate District, Division Five (Jones, P.J., Simons & Gemello, JJ.) denied a writ petition challenging Judge Kramer's non-retroactivity order in California Law Institute v. VISA USA, Inc., San Francisco County Superior Court case no. CGC-03-421180. The court wrote:
The petition for writ of mandate is denied. The petition fails to articulate compelling circumstances warranting review by extraordinary writ or demonstrate that petitioners will suffer ireparable harm absent writ review. (Babb v. Superior Court (1971) 3 Cal.3d 841, 851; James W. v. Superior Court (1993) 17 Cal.App.4th 246, 252; Omaha Indemnity Co. v. Superior Court (1989) 209 Cal.App.3d 1266, 1269, 1272-1274.) The court observes that the petition no longer raises issues of first impression, given that on February 1, 2005, Division Four of this court issued an opinion in Californians for Disability Rights v. Mervyn's, LLC (Feb. 1, 2005, A106199) __ Cal.App.4th __.
Mastercard Int'l, Inc. v. Superior Court, First Appellate District, Division Five, case no. A108995. I hope to be able to post a copy of the order by tomorrow. UPDATE: The order is available at this link.
CDR v. Mervyn's brief now available online
Many thanks to counsel for Californians for Disability Rights, who sent me a copy of their excellent (and successful) brief opposing Mervyn's motion to dismiss in the CDR v. Mervyn's case. The opposition is now on my list of Prop. 64 appellate briefs. Please write in with any other briefs that should be listed.
Sample Alameda County briefs
Here is a sampling of some of the briefs that were filed in the Alameda County cases set for hearing tomorrow in Judge Sabraw's department. As expected, they all discuss Californians for Disability Rights v. Mervyn's, LLC, ___ Cal.App.4th ___ (Feb. 1, 2005): All of these briefs came from the court's website.
Updates to Prop. 64 orders and appeals lists
I'm informed that on January 24, Judge Beauchesne issued a statement of decision in Paz v. Sanders, Stanislaus County Superior Court case no. 311470, in which he held that Prop. 64 does NOT apply to pending cases. In an order issued November 23, Judge Beauchesne had asked the parties to brief the issue.

I'm further informed that the tentative ruling issued by Judge Prager in In re Tobacco Cases II, JCCP no. 4042, San Diego County Superior Court, was NOT adopted. Instead, on January 21, Judge Prager took the matter under submission. The tentative decision was subsequently removed from the court's website. UPDATE: I just learned that the tentative is still up on the court's website at this link. Thank you to the reader who wrote in with the correction.

Finally, I've received word of another pending appellate case in which the Prop. 64 retroactivity issue has been raised: Branick v. Downey Sav. & Loan Assn., Second Appellate District, Division Five, case no. B172981. That appeal was argued and submitted on February 1.

This information has been added to my Prop. 64 orders list and my Prop. 64 appeals list.
Tuesday, February 08, 2005
"Plaintiff Firms Offer to Take Cases From AG"
This morning's Recorder has a very interesting story about the possibility of private attorneys being deputized or hired by the AG's or DA's offices to handle some of the "general public" 17200 actions that, after Prop. 64, can only be brought by public officials. Most interestingly, the article says that the AG's office is not planning to file a response to Judge Sabraw's invitation in his tentative ruling from January 28 to intervene in some of the pending UCL cases that (at least before the CDR v. Mervyn's decision came down) might be impacted by Prop. 64. One of the speakers at last week's Recorder Roundtable seminar also said that the deputy AG he spoke to was very concerned about the suggestion that the AG's office will be expected to intervene in all these cases. Partnering up with private lawyers (on a contract basis, rather than "deputizing") sounds like one of the better potential solutions to this problem. I know it was done in the litigation against the tobacco companies, so it's not unprecedented.
National Law Journal acknowledges reliance on The UCL Practitioner
On December 21, 2004, the National Law Journal published a story called "Defense Firms Hail Prop. 64" (subscription required). This week, the National Law Journal published a "clarification" acknowledging that the story borrowed material from my blog without proper attribution. I suspected as much, and when I contacted the editors, they dealt with the problem very professionally. It's nice to be acknowledged, even at this late date. I hope that future National Law Journal articles will give credit to bloggers where credit is due. UPDATE: At my request, the National Law Journal made the "clarification" available in the public area of its website, without a subscription, so everyone can read it.
Federal double-whammy: the Class Action "Fairness" Act
As if Proposition 64 weren't enough, plaintiffs' attorneys may soon have to deal with the so-called "Class Action Fairness Act of 2005" (S.5), which appears poised to pass at the federal level. Now that Prop. 64 requires most UCL claims to be pleaded as class actions, many of them may become removable to federal court, if the "Fairness" Act passes. California Wage Law has a good summary of the problems with this proposed legislation. This is another example of legislators using a handful of well-publicized, yet isolated, instances of abuse to justify throwing the baby out with the bathwater, penalizing the good attorneys (and their clients) with the bad. Everyone should write to Senator Feinstein and urge her to (a) withdraw her support from S.5, or (b) support the Bingamen amendment, which could make class certification less daunting after S.5 by dealing with choice-of-law issues. The time to do this is right now.
Monday, February 07, 2005
"Governor is Trying to Block Suits, Labor Lawyers Charge"
An article in this morning's Daily Journal quotes my colleague, "Jessica Grant, a lawyer with San Francisco's Furth Firm." Jessica is running our UCL case against Wal-Mart, which alleges that the retailer systematically prevents its hourly employees from taking their meal and rest breaks.

(A note on linking to Daily Journal articles: I'm going to stop including deep links to articles on the Daily Journal's website. Unfortunately, the site is not set up to send subscribers directly to desired articles. To find a Daily Journal article, subscribers should go the main page, click on "newswire," log in, and scroll down.)
Lists of Prop. 64 orders and pending appeals updated
I've updated my list of Prop. 64 orders. It now includes several additional trial court orders, courtesy of Lisa Perrochet, who included a nice list in her Recorder Roundable seminar materials. I've also updated my list of Prop. 64 pending appeals to include some additional information about the various appellate matters. The most interesting tidbit is that the Supreme Court has given itself until March 8 to grant or deny review in the Virtual Media case.
Friday, February 04, 2005
Publication request filed in Consumer Advocates
The first of what will probably be several requests for publication has just been filed in Consumer Advocates v. DaimlerChrysler Corp., Fourth Appellate District, Division Three, case no. G029811 (unpublished opinion issued 01/31/05). Here's the docket. The UCL issues discussed in the opinion are not particularly noteworthy, so it's not surprising that the Court didn't consider it worthy of publication, but we shall see what happens.
Digression: On Blogging
I just found a very interesting article by a longtime blogger, Rebecca Blood, called "Weblogs: A History and Perspective." In blogging terms, the article is ancient (it's dated September 2000) but it's very insightful and remains more than timely. Last week the San Francisco Chronicle devoted its entire "Technology" section to articles on blogging, including one called "Weblogs come of age as a source of news." As one of the writers put it, "If you don't know what blogging is by now and you're reading this in a newspaper please fold it up and boot up your computer. You're missing a revolution."

This blog topped the 500-hits mark on Tuesday, Wednesday, and Thursday of this week. Tuesday was the blog's highest hits day ever. Thanks to everyone for the positive reinforcement!
"Save Proposition 64"
A couple of weeks ago (on January 10), the Bakersfield Californian had an editorial (free registration required) that starts out by extolling the virtues of Proposition 64 but ends by saying,
[N]ow such corporate interests as Chrysler, Albertsons, Anheuser-Busch, Cingular Wireless and others want the eased provisions to apply to more than 50 major consumer and public health cases filed prior to the initiative's passage. .... Proposition 64 has no retroactive provision and sponsors said during the campaign that it was not retroactive. ... [T]hose cases are different in scope and kind than the so-called 'shakedown' suits that led to the proposition. The state Supreme Court must clarify for lower courts throughout the state that the clear intent of the proposition applies to cases filed after the proposition passed.
It's interesting that even such a conservative paper as the Californian thinks the retroactivity argument amounts to overreaching. The drafters easily could have included express retroactivity language, but purposely chose not to do so for reasons of political expediency. They should be required to live with that decision. Perhaps the First District was recognizing as much when it declined to "exploit the voters' silence on the question of retroactivity." Californians for Disability Rights v. Mervyns, LLC, ___ Cal.App.4th ___ (Feb. 1, 2005) (slip op. at 5).
Thursday, February 03, 2005
Third District to hear oral argument on Prop. 64 in March
The First District fired the first shot, and the Fourth District is expected to enter the battle soon. Now, the Third District is readying its weapons. Oral argument has been scheduled for March 21, 2005 at 9:30 a.m. in Fair Business America, LLC v. Mattel, Inc., Third Appellate District, case no. C044134. The upcoming appellate oral argument schedule looks like this:

  • Biven v. Corel, Inc., Fourth Appellate District, Division One, case no. D043407 (Haller, O'Rourke & Aaron, JJ.)
Once again, I urge those who are planning to attend these arguments to double-check the Court's calendar in case they are rescheduled. I'm still looking for a roving reporter to attend the arguments on February 17 and send me a report (which will be published here with or without credit, at your option). If you would like to be that reporter, drop me a line.
"1st District Rejects Retroactive Use of Initiative on Tort Reform"
This morning's Daily Journal has the story, in which I am quoted: "Plaintiffs' lawyers cited an advantage to having the first opinion on [Prop. 64 retroactivity] go their way. 'On a short-term basis, there's a huge benefit for plaintiffs,' Kralowec said. 'It provides ammunition and clout for plaintiffs in other pending appeals.'" And I believe it. True, other Districts are not bound to follow CDR. However, they will not be able to avoid addressing it, and as Jim Sturdevant said in yesterday's Recorder, "It's a superb opinion, skillfully written with very tight analysis that flows directly from decades of jurisprudence from the California Supreme Court."

UPDATE: I just learned that today's Daily Journal article is only in the Los Angeles edition of the paper, and that yesterday's Daily Journal article was only in the San Francisco edition. Both articles are available online to Daily Journal subscribers. The Los Angeles Times also has a story today: "Court Says Prop. 64 Can't Stop Existing Lawsuits."
Wednesday, February 02, 2005
Press coverage of CDR v. Mervyn's
This morning's Recorder has a story on the CDR decision with a quotation from yours truly. The Daily Journal also reports that "Appeal Court Rules Prop. 64 Does Not Apply Retroactively." UPDATE: The Sacramento Bee and the San Francisco Chronicle picked up the story as well.
Impact of CDR v. Mervyn's on Judge Sabraw's tentative ruling
On Friday, Alameda County Superior Court Complex Litigation Judge Ronald M. Sabraw issued a 28-page tentative ruling on various Prop. 64 motions (mostly demurrers and motions for judgment on the pleadings) pending in eleven cases assigned to his Department, including the lead case, Foundation Aiding the Elderly v. Covenant Care, Inc., no. RG03-087211. (Many thanks to the half-dozen or so people who sent me a copy of the ruling.) The motions are all set for hearing next Thursday, February 10, 2005, at 9:00 a.m. Judge Sabraw's tentative ruling is unique in that it was issued nearly two full weeks before the hearing, and permits supplemental briefing to "allow all potentially affected persons to address the tentative basis for the Court's decision"—which is that Proposition 64 applies retroactively to pending cases. No doubt, the CDR v. Mervyn's decision will be addressed in detail in the supplemental briefing due on Monday, February 7. The tentative ruling will obviously have to be revised to address CDR.

An interesting thing about CDR is that it did not mention (much less follow) the Second District's decision in United Investors Life Ins. Co. v. Waddell & Reed, Inc., ___ Cal.App.4th ___ (Jan. 20, 2005). In both cases, the defendant raised the Prop. 64 retroactivity issue by filing a motion to dismiss a pending appeal. The United Investors court denied the motion based on Code of Civil Procedure section 902, holding that even if the plaintiff lacked trial-level standing after Prop. 64, that did not mean it was stripped of standing to pursue its appeal. The implication is that Prop. 64 might be an alternative ground that the defendant could advance for affirmance on the merits, but Prop. 64 did not, by itself, eliminate the appeal. By contrast, the CDR court decided the motion to dismiss on the substantive ground that Prop. 64 did not apply to the case at any level, trial or appellate. If the CDR court believed that the Prop. 64 retroactivity issue should be analyzed differently at the appellate level than at the trial level, then presumably it would have acknowledged the distinction that the United Investors court perceived, and decided the case on the same narrow basis. In any event, the end result—denial of the motion to dismiss—is identical.
Tuesday, February 01, 2005
BREAKING NEWS: Court of Appeal holds that Prop. 64 does NOT apply to pending cases
The Court of Appeal, First Appellate District, Division Four, just issued its published opinion in Californians for Disability Rights v. Mervyn's, LLC, ___ Cal.App.4th ___ (Feb. 1, 2005), in which it held that Proposition 64 does NOT apply to pending cases filed before its effective date. I will post more on the decision later.

UPDATE: In brief, the Court of Appeal found that Proposition 64 contains no clear statement of the electorate's intent on retroactivity; that the presumption against retroactivity therefore applies; that the so-called "statutory repeal" rule is simply an application of the electoral intent doctrine in the context of a repeal; and that the amendments "substantially affect existing rights and obligations." The opinion recognizes that the voters' intent is paramount (a recognition sorely lacking from the trial court decisions going the other way):
When read as a whole, the only fair conclusion is that the question of whether Proposition 64 applies to pending lawsuits was not presented to, nor considered by, the electorate. .... Nor is it proper for this court to exploit the voters' silence on the question of retroactivity and impose its own view as to whether the remedial purposes of Proposition 64 warrant disrupting pending litigation. .... Had the drafters, and voters, intended the initiative to apply retroactively, they could have so provided. They did not. The voters' silence on the issue of whether Proposition 64 is meant to have retroactive effect implicates the general presumption, unrebutted here, that the initiative applies prospectively.
Slip op. at 4-6. On the "statutory repeal" issue, the Court observed:
A case holding that the repeal of a statute terminates pending actions is not an exception to the prospectivity presumption, but an application of it. In those cases, the repeal of a statute indicated legislative intent that the repeal legislation apply retroactively, thus rebutting the presumption of prospectivity. Such cases also reflect an analytically distinct determination that the legislature had the power to retroactively affect pending litigation, because the rights being prosecuted were contingent statutory rights rather than vested rights, which implicate constitutional concerns.
Id. at 7. The Court also recognized that the voters' intent should be considered in assessing an amendment's impact on litigants' existing rights:
The relevant question is whether the law substantially affects existing rights and remedies. Dismissal of [this] appeal would substantially affect CDR's rights [because it would] foreclose consideration of CDR's claims .... It does not lessen the effect upon CDR's rights to observe, as Mervyn's does, that another plaintiff might be able to file an action against it for alleged unlawful business practices. .... Retroactive application of a statute often entails difficulties in enforcement and unanticipated consequences, and should not be embarked upon where, as here, there is no indication that retroactivity was even considered or intended by the voters.
Id. at 8-9. In other words, the Court is focusing on the rights of the plaintiff who filed the suit, rather than the rights of some hypothetical non-party who might be able to re-file a similar case in the future (another point on which many trial courts, in my view, tripped up). This decision is a victory all around for plaintiffs. Congratulations to counsel for CDR on your win.
Consumer Advocates opinion is now up
The unpublished Consumer Advocates opinion is now online at this link. In a nutshell, the Court did not decide the Prop. 64 retroactivity issue. Footnote 2 ends as follows:
[I]n view of our conclusion the judgment must be reversed for other reasons, we need not decide the issue of Proposition 64’s applicability to the facts in this case and leave that question for another day.
Another day might come very soon, as a number of appeals are still pending in which this District and Division requested supplemental briefing on Proposition 64.
Three more Prop. 64 rulings
Here are three more rulings, all favoring retroactive application of Proposition 64: Last night I updated my list of Prop. 64 orders as well as my list of Prop. 64 pending appeals.

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