California's 17200: Have rumors of its death been greatly understated?

by Stephen Gardner

Yesterday, the California Supreme Court issued an opinion, Arias v. Superior Court, that seems to have gutted any hopes of a representative action under California Business & Professions Code § 17200, holding:

[W]e construe the statement in section 17203, as amended by Proposition 64, that a private party may pursue a representative action under the unfair competition law "only if the party complies with Section 382 of the Code of Civil Procedure" to mean that such an action must meet the requirements for a class action.

So, to bring a 17200 case, you must have suffered "injury in fact" and must have lost "money or property" (again, thanks to Prop. 64) and you have to bring it as a class action. Which means getting certified, giving notice, etc. The Court decided against a strict reading of Prop. 64, which would have required a rep plaintiff to meet the requisites of a class action without actually bringing the case as a class action.

Thus, I don't see that there is now a lick of difference between a representational plaintiff, who must also bring suit as a class rep, and any other class rep, except to the extent that the standing requirements as a rep plaintiff under 17200 are stricter than those for many class reps. Bummer.

The case was issued  with a companion case, Amalgamated Transit Union v. Superior Court, which holds that representational plaintiff status can't be assigned to another.

But, who would want that, since it confers effectively no benefit?

I gotta go sit shiva for consumer rights in California now.

Comments

[Mark from LA]

The Arias decision wasn't a surprise to those of us who represent class action plaintiffs in consumer and employee cases. Arias aksi contains a good holding, not mentioned in your piece, allowing employees to seek civil penalties under PAGA, the Private Attorney General Act, without satisying the class action rules.

Don't fret too much - suing under 17200 still makes sense in many cases because of the longer statute of limitations afforded by it (vis-a-vis many other claims), and because the substantive standards can provide for liability, and injunctive and restitutionary relief even where other statutory or common law claims might be harder to prove. For example, under the "fraudulent" prong of 17200, one need not actually prove all the elements of common law fraud, but rather only that the defendant engaged in conduct likely to deceive and acquired money by means of such conduct.

[Steve Gardner]

Mark for LA makes good points--it's good that 17200 is still available for individual cases, and it would be a useful statute in a class action. But what made it almost unique among state UDAP laws was that it allowed for private attorneys general actions.

The business groups that put forward Prop 64 found a very few cruddy lawsuits to serve as bastard-step-poster-children for "reform," when in fact 17200 served as an excellent vehicle to address the various depradations of businesses against California consumers.