The California Court of Appeal, Second Appellate District, Division Seven, has been in the thick of many a difficult class action or class-related question. Why should today be any different? After all, I spent an hour and half driving about 8 miles to work, so everything seems to be functioning as intended in our fine City and State. But I digress. Today, the Division Seven, in Clark v. Superior Court (May 21, 2009) was asked to reconcile statutes with similar purposes (consumer protection) but very different means of implementing those purposes. The question presented to the Court makes the challenge clear:
Civil Code section 3345 (section 3345) authorizes the award of an enhanced remedy—up to three times greater than the amount of a fine, civil penalty "or any other remedy the purpose or effect of which is to punish or deter" that would otherwise be awarded—in actions by or on behalf of senior citizens or disabled persons seeking to "redress unfair or deceptive acts or practices or unfair methods of competition." Is this enhanced remedy available in a private action by senior citizens seeking restitution under California’s unfair competition law (Bus. & Prof. Code, § 17200 et seq.)?
(Slip op., at p. 2.) Can the protected classification of senior citizens receive triple UCL restitution? That's quite a question. What might be more suprising at first blush is that the Court of Appeal said, "Yes."
Procedurally, after a class was certified, defendant National Western filed a motion for judgment on the pleadings, asserting section 3345’s enhanced, "treble damages" remedy was inapplicable to a private action under the unfair competition law. The trial court granted the motion. Plaintiffs filed a petition for a writ, and the Court of Appeal granted the petition, issuing the writ. By necessity, the Court of Appeal reviewed the two laws:
Since 1977 the unfair competition law has prohibited unlawful, unfair or fraudulent business practices or unfair, deceptive, untrue or misleading advertising (Bus. & Prof. Code, § 17200) and subjected violators in actions prosecuted by public prosecutors to civil penalties not exceeding $2,500 for each violation (Bus. & Prof. Code, § 17206), as well as to injunctions and restitution orders (Bus. & Prof. Code, § 17203). Private plaintiffs may also prosecute actions under the unfair competition law, but their remedies are limited to orders for injunctions and restitution. (Bus. & Prof. Code, § 17203.) Damages and penalties, whether compensatory or punitive, are prohibited. (Korea Supply, supra, 29 Cal.4th at p. 1148 [only monetary relief available to private plaintiffs under unfair competition law is restitution; compensatory and punitive damages are not authorized]; Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 950 ["[i]n a suit under [unfair competition law], a public prosecutor may collect civil penalties, but a private plaintiff’s remedies are ‘generally limited to injunctive relief and restitution’"]; Cel-Tech, supra, 20 Cal.4th at p. 179 [under unfair competition law "[p]laintiffs may not receive damages, much less treble damages, or attorney fees"].)
(Slip op., at pp. 5-6.) Many years later, the legislature determined that senior citizens were regular targets of unfair competition schemes and required additional protection. A variety of potential statutes and amendments to existing laws were considered, including revisions to the UCL and the CLRA. (Slip op., at pp. 6-10.) Sweeping legislation was finally passed.
As finally enacted the legislation effected three major changes to California’s consumer protection laws relating to senior citizens and disabled persons. First, it amended the unfair competition law by adding Business and Professions Code section 17206.1,8 which authorizes the Attorney General and prosecutors in civil enforcement proceedings to recover an added civil penalty up to $2,500 (in addition to the $2,500 civil penalty available under Business and Professions Code section 17206) when the unfair practice is perpetrated against a senior citizen or disabled person. (See Bus. & Prof. Code, § 17206.1; Stats. 1988, ch. 823, § 1, pp. 2665-2666.)
Second, it amended the CLRA to authorize private litigants to recover, in addition to other remedies available under the act, including compensatory and punitive damages, an additional monetary award—up to $5,000—when the unfair practice prohibited by the act is perpetrated against a senior citizen or disabled person. (Civ. Code, § 1780, subd. (b)(1)(A)-(C); Stats. 1988, ch. 823, § 3, pp. 2667-2668.)
Third, it added section 3345 to the Civil Code, authorizing an enhanced remedy in actions brought by or on behalf of senior citizens seeking redress for "unfair or deceptive acts or practices or unfair methods of competition." (§ 3345, subd. (a).) Section 3345, subdivision (a), limits the new provision to actions "brought by, or on behalf of, or for the benefit of senior citizens or disabled persons, as those terms are defined in subdivisions (f) and (g) of [Civil Code] Section 1761 to redress unfair or deceptive acts or practices or unfair methods of competition." Section 3345, subdivision (b), provides the enhanced remedy: "Whenever a trier of fact is authorized by a statute to impose either a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter, and the amount of the fine, penalty, or other remedy is subject to the trier of fact’s discretion, the trier of fact shall consider all of the following factors, in addition to other appropriate factors, in determining the amount of fine, civil penalty or other penalty, or other remedy to impose. Whenever the trier of fact makes an affirmative finding in regard to one or more of the following factors, it may impose a fine, civil penalty or other penalty, or other remedy in an amount up to three times greater than authorized by the statute, or, where the statute does not authorize a specific amount, up to three times greater than the amount the trier of fact would impose in the absence of that affirmative finding."
(Slip op., at pp. 12-13.) The Court then turned to the question:
Under the plain language of section 3345 two prerequisites must be satisfied before its enhanced remedy may apply: (1) The action must be brought by or on behalf of senior citizens or disabled persons seeking redress for "unfair or deceptive acts or practices or unfair methods of competition"—plainly satisfied here; and (2) the action must be one in which the trier of fact is authorized by a statute to impose a fine, civil penalty or any other penalty the purpose or effect of which is to punish or deter.
(Slip op., at p. 14.) The Court then concluded that the enhanced restitution remedy was available:
Unlike Korea Supply and Cel-Tech, in this case the plaintiffs do not seek to justify monetary relief other than restitution under the unfair competition law: The enhanced remedy is sought under section 3345, a separate statute, which specifically authorizes such an enhanced remedy in unfair competition actions brought by senior citizens. We simply must presume the Legislature meant what it said when it provided section 3345 applied in unfair competition actions involving a fine, civil penalty or "any other remedy" the purpose of which is to punish or deter. (See People v. Toney (2004) 32 Cal.4th 228, 232 ["[i]f the statutory language is unambiguous, ‘we presume the Legislature meant what it said, and the plain meaning of the statute governs’"]; accord, Genlyte Group, LLC v. Workers’ Comp. Appeals Bd. (2008) 158 Cal.App.4th 705, 714; see also Hood v. Hartford Life & Accident Insurance Co. (E.D. Cal. 2008) 567 F.Supp.2d 1221, 1227 ["[t]he text of the statute clearly indicates that section 3345 applies to the UCA [unfair competition law] and the CLRA, as both Acts prohibit ‘unfair practices’"].)
(Slip op., at p. 16-17.) I can't imagine that this ruling won't at least generate a Petition for Review.
Update on 2009-05-22 04:52 by The Complex Litigator
UPDATE: The Court of Appeal issued a modification to the opinion, adding a footnote with no change in the judgment.