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Representative
H & L Unfair Competition Law (UCL) Cases
Cases establishing equitable and
procedural
bars to UCL claims
In the following cases, Horvitz & Levy
LLP persuaded appellate courts to limit the reach of the
Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200
et seq.) by applying various equitable defenses and procedural
limitations to unfair competition actions.
- Consumer Advocates v. Daimler
Chrysler Corporation (2005) [unpublished].
Consumer Advocates
brought a representative UCL action against
DaimlerChrysler Corporation, claiming DaimlerChrysler violated
the UCL in its handling of new
vehicle warranty repairs under the Song-Beverly Consumer Warranty Act (Song-Beverly)
(Civ. Code, § 1790 et seq.). The trial court had found DaimlerChrysler
committed certain “unfair” business practices and issued a judgment
permanently enjoining DaimlerChrysler from engaging in those practices. Representing
DaimlerChrysler on appeal, Horvitz & Levy LLP persuaded the Court of Appeal
to reverse the judgment in full based on equitable considerations: (1) that
injunctive relief was inappropriate because consumers have an adequate remedy
at law under Song-Beverly, including damages, costs and attorney fees, and
a civil penalty in egregious cases; and (2) the injunction would improperly
place the trial court in the position of ongoing supervision of all of DaimlerChrysler’s
new car warranty practices within the state and would lead to a multiplicity
of suits.
- Tutor-Saliba-Perini
v. Metropolitan Transit Authority (2005)
[unpublished].
Shortly
after the Red Line Subway project connecting
downtown Los Angeles and Hollywood was completed, a controversy arose between
the Los Angeles County
Metropolitan Transit Authority (MTA) and Tutor-Saliba-Perini (TSP), which acted
as prime contractor for much of the project. TSP sued MTA to recover $16 million
for unpaid work, and four years later MTA cross-claimed for alleged breaches
of contract, false claim violations, and violations of the Unfair Competition
Law. The trial court entered a judgment of more than $60 million against TSP.
On appeal, Horvitz & Levy LLP persuaded the Court of Appeal to reverse
virtually the entire judgment. Specifically, the court ruled that MTA’s
UCL claim was untenable as a matter of law because MTA, as a government entity,
had no standing to pursue that claim.
- Textron
Financial Corp. v. National Union
Fire Ins. Co. (2004)
118 Cal.App.4th 1061.
Horvitz & Levy
LLP represented National Union in this matter,
which was before the Court of Appeal on remand
from the U.S. Supreme Court for the second
time. Textron sued defendant National Union for, among other things, unfair
competition arising from defendant’s refusal to honor a claim for insurance
benefits concerning property damage to a commercial bus in which plaintiff
held a security interest. The Court of Appeal affirmed the trial court’s
order sustaining National Union’s demurrer to the UCL claim, holding
Textron’s allegations “are the type of activities covered by the
[Unfair Insurance Practices Act],” which does not create a private right
of action. The court explained that a plaintiff cannot plead around this procedural
bar “by merely relabeling their cause of action as one for unfair competition.” The
court further held that, following the Supreme Court’s recent decision
in Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999)
20 Cal.4th 163, “reliance on general common law principles to support
a cause of action for unfair competition is unavailing.”
- Sokol,
et al. v. 20th Century Insurance
Company, Hartka & Company, Inc.,
et al. (2003) [unpublished].
Plaintiffs sued 20th
Century, Hartka & Company, and others for unfair
business practices arising from defendants’ handling of their claims
for property damage from the 1994 Northridge earthquake. Horvitz & Levy
LLP represented Hartka & Company on appeal after the trial court dismissed
the plaintiffs’ UCL cause of action. The Court of Appeal affirmed, holding
that plaintiffs failed to establish either that Hartka’s allegedly unfair
conduct was ongoing or that they were entitled to restitution of money or property
given to Hartka. The court explained that by not proving a need for an injunction
or restitution, plaintiffs could not prove entitlement to a UCL remedy.
Defining the scope of the UCL
In each of the following cases, Horvitz & Levy LLP persuaded the appellate
court that the defendant’s conduct did not violate the UCL.
- Nicola International, Inc. v. Farmers Group,
et al., Inc. (2004) [unpublished].
Horvitz & Levy LLP represented Farmers Group
on appeal in this insurance bad faith action. In affirming the summary judgment
entered by the trial court
in favor of Farmers, the Second District Court of Appeal held that an unfair
competition claim cannot survive summary judgment if it is predicated on an
insurance bad faith cause of action that itself fails to raise a triable issue
of fact.
- Bernadette Rojas v. Walker et al. (2004)
[unpublished].
Horvitz & Levy LLP represented defendant, the owner of an apartment building,
on appeal in this premises liability action. The Court of Appeal affirmed summary
adjudication in favor of defendant on plaintiffs’ UCL claim. Plaintiff
claimed that defendant violated the “unlawful” prong of the UCL
by failing to install a working lock on her apartment window, in violation
of California Civil Code section 1941.3. The court rejected this argument,
holding that defendant had maintained operable locking devices on plaintiff’s
windows and therefore did not violate section 1941.3.
- Chatton v. National Union Fire Insurance Company
(1992) 10 Cal.App.4th 846.
Investors in a company that collapsed sued the company’s directors and
officers, as well as National Union, the insurance company that had issued
comprehensive general liability, umbrella, and D&O liability policies to
the company. The trial court granted a declaratory judgment in favor of the
investors on the ground that the definition of “occurrence” under
the general liability policy included any conduct actionable under section
17200. On appeal, Horvitz & Levy LLP persuaded the Court of Appeal to reverse
the declaratory judgment, and hold that the policy’s reference to “unfair
competition” concerned only the common-law tort of unfair competition
(i.e., passing off one’s goods as those of another) and not any business
practice that may potentially violate the UCL. Because the investors had sued
the directors and officers only under the UCL, they were not entitled to coverage
under the general liability policy.
Setting limits on available UCL remedies: amicus curiae briefs in the California
Supreme Court
Horvitz & Levy LLP has considerable experience preparing amicus curiae
briefs to the California Supreme Court on behalf of clients with a vested interest
in the outcome of a particular case. For example, in Korea Supply Co. v.
Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1145, the court cited an amicus brief
filed by Horvitz & Levy LLP as support for its holding that non-restitutionary
disgorgement of profits is not an available remedy under section 17200.
Opposing class and representative UCL actions
Many cases brought under the UCL are representative
actions in which plaintiffs seek relief on behalf of themselves and others
similarly situated. Plaintiffs
often seek to certify a class action in order to obtain additional remedies
not otherwise available. Horvitz & Levy LLP has significant experience
opposing certification of class and/or representative UCL actions.
-
Karasik v. Superior Court (2001)
[unpublished] (writ petition opposing trial court order requiring thousands
of individual
insurance claims to be reviewed to determine appropriate remedy under
UCL).
- Ameriquest v. Superior Court (2003)
[unpublished] (writ petition challenging class certification order in section 17200
action).
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