The tort of "Trespass to Chattel," by itself, does not support a UCL violation


I just wanted to write “trespass to chattel,” so this case gets a post just for that. In Pneuma International, Inc. v. Cho (June 24, 2019), the Court of Appeal (First Appellate District, Division One) was asked to review an assortment of complaints about the outcome of a trial. One issue was whether the failure to transfer ownership of a domain, the “trespass to chattel” that was at issue, constituted a fraudulent or unfair practice under the UCL. While Pneuma argued that the UCL’s “unlawful” prong is construed broadly, so there should be no resistance to borrowing the tort to serve as the predicate violation, the Court was not persuaded. After noting the dearth of authority on that particular tort, the Court said:

Although not directly relevant to whether Pneuma may “borrow” a tort as a basis for a UCL cause of action, respondents correctly observe that Pneuma may not recover damages under a UCL cause of action because remedies under the act are purely equitable in nature. (E.g., Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1150-1151 [remedies provided under UCL “are limited” and “it is well established that individuals may not recover damages”].) Pneuma does not identify what additional relief it would be entitled to if it prevailed on its UCL cause of action. The trial court already ordered the equitable relief of transferring the website to Pneuma after it prevailed on a cause of action for trespass to chattel.

Slip op., at 15. So, does this mean that, where the UCL could supply some additional relief, a common law tort could serve as a predicate violation of the UCL? More realistically, can you even concoct a scenario where it would make sense to say that a common law tort constituted the predicate violation?

Continuing accrual applies to UCL claims

When does a claim under the UCL accrue?  When the first wrong occurs?  No so, says the California Supreme Court!  Recurring wrongs give rise to continuing accrual.  In Aryeh v. Canon Business Solutions, Inc. (January 24, 2013), the Supreme Court examined continuing accrual, concluding that the theory applies to actions brought under the UCL:

The common law theory of continuous accrual posits that a cause of action challenging a recurring wrong may accrue not once but each time a new wrong is committed. We consider whether the theory can apply to actions under the unfair competition law (Bus. & Prof. Code, § 17200 et seq.; hereafter UCL) and, if so, whether it applies here to save plaintiff Jamshid Aryeh‟s suit from a limitations bar. We conclude: (1) the text and legislative history of the UCL leave UCL claims as subject to the common law rules of accrual as any other cause of action, and (2) continuous accrual principles prevent Aryeh‟s complaint from being dismissed at the demurrer stage on statute of limitations grounds. Accordingly, we reverse the Court of Appeal‟s judgment.

Slip op., at 1.  The plaintiff leased a copier under terms that required montly payments with a copoy cap.  After noting discrepancies between copies made and copies billed, the plaintiff concluded that during service visits, Canon employees were running test copies (at least 5,028 copies over the course of 17 service visits). These copies resulted in the plaintiff exceeding his monthly allowances and owing excess copy charges and late fees to Canon.  The issue was whether the UCL claim accrued at the first instance of plaintiff's discovery of the overcharge, or whether each overcharge was an independent wrong, giving rise to a new claim.  The trial court and a divided court of appeal agreed that the UCL claim accrues with the first wrong.

But it's not how you start, it's how you finish.  Congratulations to my colleagues on this result.  Jennifer L. Connor wrote the appellate briefs while at her prior firm, and J. Mark Moore and Denise Diaz authored portions of an amicus brief on behalf of CAOC, in support of plaintiff.  Jennifer's sister, Sarah, took no part in the briefing due to her demanding project defending humanity from evil, self-aware robots bent on the destruction.

Do NOT cite opinions after review is granted by the California Supreme Court (even if you claim you aren't relying on them). Stop. No. Don't. I see that.

Generally speaking, unpublished cases cannot be cited or relied upon by parties or courts.  California Rules of Court, rule 8.1115 states, in part: "Except as provided in (b), an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action."  Cal. Rules Ct., rule 8.1115(a).  The only exceptions arise when the same parties are involved, or the conduct of a party in one case is relevant in criminal or disciplinary proceedings in another.  When review of a published case is granted by the California Supreme Court, it is depublished: "Unless otherwise ordered under (2), an opinion is no longer considered published if the Supreme Court grants review or the rendering court grants rehearing."  Cal. Rules Ct., rule 8.1105(e).  In The People v. E*Poly Star, Inc. (May 14, 2012), the Court of Appeal (Second Appellate District, Division Seven) let E*Poly and the Trial Court have it for referencing Aryeh v. Canon Business Solutions, Inc. (2010) 185 Cal.App.4th 1159, review granted Oct. 20, 2010 (S184929) (Aryeh).

On the issue of improper citation of an unpublished decision, the Court said:

Supreme Court review in Aryeh was granted on October 20, 2010 (S184929), more than a month prior to the filing of the district attorneys' lawsuit. As of that date any citation to, or reliance upon, that decision was expressly prohibited by rule 8.1115(a) of the California Rules of Court except under the limited circumstances set forth in rule 8.1115(b), none of which appears to be applicable to the case at bar. (See rule 8.1105(e)(1) [“[u]nless otherwise ordered . . ., an opinion is no longer considered published if the Supreme Court grants review”].) Nonetheless, employing something akin to the rhetorical device formally known as paraleipsis or apophasis—that is, mentioning something while disclaiming any intention of mentioning it—E*Poly Star in the trial court and once again in its brief in this court, after noting the Court of Appeal decision in Aryeh is not citable, has discussed the case at length and argues we should defer to its reasoning.  This use of an unpublished, noncitable opinion is a direct violation of rule 8.1115(a) and is wholly unacceptable. (Cf. rule 8.276(a)(4) [authorizing sanctions on the court's own motion for any unreasonable violation of the Rules of Court].)

Slip op., at 12-13 (footnote references omitted).  But the Court wasn't done, stating in a footnote:

E*Poly Star's improper use of Aryeh transcends suggesting we consider the case for its persuasive value. While purporting to recognize the split panel decision by our colleagues in Division Eight is no longer even citable, E*Poly Star contends it is, in fact, binding on us: “It is respectfully submitted that it is not the function of this reviewing court to second-guess itself and re-address a prior published decision, merely and especially because the decision is being reviewed by the State Supreme Court.” That is simply wrong. Even were the case still published, we would not be obligated to adopt its result; there is no “horizontal stare decisis” in the Court of Appeal. (Jessen v. Mentor Corp. (2008) 158 Cal.App.4th 1480, 1489, fn. 10; In re Marriage of Shaban (2001) 88 Cal.App.4th 398, 409.) Although, as E*Poly Star states, we frequently follow a prior decision by another division of this court or another district, we will not do so if there is reason to disagree with the conclusion of that case. (People v. Kim (2011) 193 Cal.App.4th 836, 847; Greyhound Lines, Inc. v. County of Santa Clara (1986) 187 Cal.App.3d 480, 485.)

Slip op., at 12.  "Horizontal stare decisis."  Priceless.  There really ARE some things money can't buy.

Ending its discussion of the use of uncitable authority, the Court also chided the Trial Court:

Similarly, the trial court's reference to the Aryeh opinion and its implicit adoption of its holding with the statement it “agrees with Aryeh's analysis” constitute an impermissible use of a noncitable decision. If the trial court is somehow familiar with an unpublished opinion and finds its analysis persuasive, then it is free to utilize that analysis, just as courts may adopt as their own the analysis contained in the parties' briefs. Any reference to the unpublished case itself, however, violates rule 8.1115(a) even if, as here, accompanied by the qualification, “even though not citable.”

Slip op., at 13.  I saw this happen several times while Brinker was pending.  A number of trial courts observed that Brinker was under review but then said that they agreed with its analysis and were adopting it.  Naughty.

The Court also discusses statute of limitation and accrual issues that may be impacted by Aryeh, but I thought the discussion of uncitable authority was a lot more entertaining than a discussion that could be mooted by Aryeh and might be nullified on a grant and hold pending Aryeh in any event.

Certiorari denied in Ticketmaster, et al. v. Stearns, et al.

On the consumer litigation front, today the United States Supreme Court denied certiorari in Ticketmaster, et al. v. Stearns, et al. (Sup. Ct. Case No. 11-983).  Stearns v. Ticketmaster Corp., 655 F.3d 1013 (9th Cir. 2011) examined a number of consumer law concepts in the class context.  For example, the Ninth Circuit shot down the federal court standing challenge attempted in UCL actions post-Tobacco II.  And, on the issue of reliance in CLRA claims, the Court said:

A CLRA claim warrants an analysis different from a UCL claim because the CLRA requires each class member to have an actual injury caused by the unlawful practice. Steroid Hormone Prod. Cases, 181 Cal.App.4th 145, 155-56, 104 Cal. Rptr.3d 329, 337 (2010). But "[c]ausation, on a classwide basis, may be established by materiality. If the trial court finds that material misrepresentations have been made to the entire class, an inference of reliance arises as to the class." Vioxx, 180 Cal.App.4th at 129, 103 Cal.Rptr.3d at 95; see also Vasquez v. Superior Court, 4 Cal.3d 800, 814, 484 P.2d 964, 973, 94 Cal.Rptr. 796, 805 (1971); Steroid, 181 Cal. App.4th at 156-57, 104 Cal.Rptr.3d at 338. This rule applies to cases regarding omissions or "failures to disclose" as well. See McAdams v. Monier, Inc., 182 Cal.App.4th 174, 184, 105 Cal.Rptr.3d 704, 711 (2010) (holding that because of defendant's failure to disclose information "which would have been material to any reasonable person who purchased" the product, a presumption of reliance was justified); Mass. Mut. Life Ins. Co. v. Superior Court, 97 Cal. App. 4th 1282, 1293, 119 Cal.Rptr.2d 190, 198 (2002) ("[H]ere the record permits an inference of common reliance. Plaintiffs contend Mass Mutual failed to disclose its own concerns about the premiums it was paying and that those concerns would have been material to any reasonable person contemplating the purchase...." If proved, that would "be sufficient to give rise to the inference of common reliance on representations which were materially deficient.").

Stearns, at 1022.