Let's review briefly for those who haven't had the privilege of dancing in the UCL mosh pit:
Long ago, there was California's Unfair Competition Law, or "UCL," which allowed any person to bring suit seeking an injunction or other equitable relief against any business engaged in a business practice that was unlawful, unfair or fraudulent. It mattered not whether the plaintiff had ever himself been victimized by the business practice. Indeed, it mattered not whether the plaintiff had ever set foot in the defendant business's premises. The UCL deputized every citizen of California as a bounty hunter private attorney general.
In the 1990s, UCL suits mushroomed (or at least, so it seemed), and the law was often used to enforce compliance with technical requirements of consumer protection laws that various industries hadn't paid much attention to. Plaintiff attorneys would target industry practices and cut a swath through those industries, creating some angry, and fairly well-financed, industry groups.
Then, a law partnership known as the Trevor Law Group overreached, and started using the UCL to shake down small mom and pop, recent immigrant-owned dry cleaners and other businesses, and became the poster child for UCL abuse. And when California business organizations floated a ballot initiative, Proposition 64, to scale back the use of the UCL, it caught fire, winning handily in 2004.
Proposition 64 eliminated citizen suits under the UCL except by plaintiffs who had suffered "injury in fact " and "lost money or property as a result" of the unfair business practice in question. The idea, clearly, was to eliminate the use of nominal plaintiffs who had no business relationship with, had never done business with, and had never been harmed by, the defendant businesses.
Before and after Proposition 64, a UCL action could be the basis for a class suit. As amended by Proposition 64, the UCL provides that:
So, just who is it that has to have standing? The class representative or all the class members? According to today's 4-3 opinion by the Cal Supremes ( In Re Tobacco II Cases (May 17, 2009) ___Cal.4th___ (S147345)), only the class representative has to have standing. Class members who otherwise qualify for membership don't have to have suffered injury in fact, and don't have to have lost money or property as a result of the predicate act.
In a concurring (slightly) but dissenting (mostly) opinion, Justice Baxter has, in my view, the better argument:
How much of a difference will this ruling make? Conceiveably a big difference. To the extent a UCL action seeks injunctive relief, it seems to matter little whether there is one plaintiff or a class of plaintiffs.
On the other hand, the UCL also allows restitution -- the restoration of funds or property wrongfully taken by another. And the restitution sought here, apparently, will be the money class members paid for their cigarettes. The opinion makes it clear there will be a much relaxed standards for class members seeking resitution in class action UCL cases. Justice Baxter seems to believe that the majority's ruling will allow
Consider this: As it allows both injunctive relief and other equitable relief as appropriate, the UCL likely allows rescission in an appropriate case. So imagine a scenario where an automobile manufacturer carries on an extensive fraudulent advertising campaign. Can rescission be obtained by a class of persons who bought the car and saw or heard an ad, even if there is no evidence that the ad had anything to do with the purchase?
Looks a lot like the same kind of mischief we saw before. Only time will tell.