Opinion ID: 2584692
Heading Depth: 2
Heading Rank: 3

Heading: The Unfair Competition Law

Text: In a claim closely related to their Cartwright Act claims, Pharmacies also alleged they had been injured by Manufacturers' unfair business practices and were entitled to relief under the UCL (§ 17200 et seq.). The Court of Appeal affirmed the trial court's grant of summary judgment to Manufacturers on the UCL claims, concluding Pharmacies lacked standing and, additionally, were ineligible for any relief. We consider each ground in turn.
(7) The purpose of a standing requirement is to ensure that the courts will decide only actual controversies between parties with a sufficient interest in the subject matter of the dispute to press their case with vigor. ( Common Cause v. Board of Supervisors (1989) 49 Cal.3d 432, 439 [261 Cal.Rptr. 574, 777 P.2d 610].) In 2004, the electorate substantially revised the UCL's standing requirement; where once private suits could be brought by any person acting for the interests of itself, its members or the general public (former § 17204, as amended by Stats. 1993, ch. 926, § 2, p. 5198), now private standing is limited to any person who has suffered injury in fact and has lost money or property as a result of unfair competition (§ 17204, as amended by Prop. 64, as approved by voters, Gen. Elec. (Nov. 2, 2004) § 3; see Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 227-228 [46 Cal.Rptr.3d 57, 138 P.3d 207]). The intent of this change was to confine standing to those actually injured by a defendant's business practices and to curtail the prior practice of filing suits on behalf of `clients who have not used the defendant's product or service, viewed the defendant's advertising, or had any other business dealing with the defendant ....' ( Californians for Disability Rights, at p. 228, quoting Prop. 64, § 1, subd. (b)(3).) While the voters clearly intended to restrict UCL standing, they just as plainly preserved standing for those who had had business dealings with a defendant and had lost money or property as a result of the defendant's unfair business practices. (Prop. 64, § 1, subds. (b), (d); see § 17204.) Under that standard, Pharmacies have established standing. To distribute their pharmaceuticals, Manufacturers depend on a network of wholesalers and retailers. Pharmacies acted as retailers for Manufacturers' drugs and thus had indirect business dealings with Manufacturers. (See Shersher v. Superior Court (2007) 154 Cal.App.4th 1491, 1499-1500 [65 Cal.Rptr.3d 634] [indirect purchases may support UCL standing].) They lost money: the overcharges they paid. (See Hall v. Time Inc. (2008) 158 Cal.App.4th 847, 854 [70 Cal.Rptr.3d 466] [§ 17204 standard is satisfied when the plaintiff has expended money due to the defendant's acts of unfair competition].) Finally, that loss was the result of an unfair business practice: Pharmacies paid more than they otherwise would have because of a price-fixing conspiracy in violation of state law. The voters' intent that under Proposition 64 suits be limited to those who suffer injury in fact is satisfied here. (See Chattanooga Foundry v. Atlanta, supra, 203 U.S. at p. 396 [A person whose property is diminished by a payment of money wrongfully induced is injured in his property.].) (8) While Manufacturers argue that ultimately Pharmacies suffered no compensable loss because they were able to mitigate fully any injury by passing on the overcharges, this argument conflates the issue of standing with the issue of the remedies to which a party may be entitled. That a party may ultimately be unable to prove a right to damages (or, here, restitution) does not demonstrate that it lacks standing to argue for its entitlement to them. (See Southern Pac. Co. v. Darnell-Taenzer Co., supra, 245 U.S. at p. 534 [The plaintiffs suffered losses ... when they [over]paid. Their claim accrued at once in the theory of the law and it does not inquire into later events.]; Adams v. Mills, supra, 286 U.S. at p. 407 [In contemplation of law the claim for damages arose at the time the extra charge was paid, notwithstanding any subsequent reimbursement].) The doctrine of mitigation, where it applies, is a limitation on liability for damages, not a basis for extinguishing standing. (See Pool v. City of Oakland (1986) 42 Cal.3d 1051, 1066 [232 Cal.Rptr. 528, 728 P.2d 1163] [`The rule of [mitigation of damages] comes into play after a legal wrong has occurred, but while some damages may still be averted ...' (quoting Prosser & Keeton, Torts (5th ed. 1984) § 65, p. 458)].) This is so because mitigation, while it might diminish a party's recovery, does not diminish the party's interest in proving it is entitled to recovery. Nothing in the text of section 17204 or Proposition 64 suggests the voters intended to provide otherwise when they remade the UCL's standing requirements. Rather, section 17204 requires only that a party have lost money or property, and Pharmacies indisputably lost money when they paid an allegedly illegal overcharge. We decline Manufacturers' invitation to turn this facially simple threshold condition into a requirement that plaintiffs prove compensable loss at the outset. [25]
(9) The Court of Appeal affirmed summary judgment on a second, overlapping ground: Pharmacies were not entitled to any remedy. Pharmacies' complaint seeks two forms of relief: restitution and an injunction. We need consider only the latter. If a party has standing under section 17204 (as Pharmacies do here), it may seek injunctive relief under section 17203. (See § 17204 [authorizing without limitation [a]ctions for relief pursuant to this chapter to be brought by parties who satisfy the provision's standing requirement].) Manufacturers' papers identify no obstacle that would preclude Pharmacies from obtaining injunctive relief if they establish Manufacturers were engaged in an unfair business practice. [26] (10) The Court of Appeal held Pharmacies were barred from seeking injunctive relief because, it concluded, they had suffered no monetary loss. To the extent this holding rests on the conclusion Pharmacies lacked standing under section 17204, it is erroneous; as discussed ante, Pharmacies have standing. To the extent the holding rests on the conclusion that even if Pharmacies had standing, they could not seek injunctive relief unless they could also seek restitution, it similarly is erroneous. Section 17203 makes injunctive relief the primary form of relief available under the UCL, while restitution is merely ancillary. ( In re Tobacco II Cases (2009) 46 Cal.4th 298, 319 [93 Cal.Rptr.3d 559, 207 P.3d 20].) Nothing in the statute's language conditions a court's authority to order injunctive relief on the need in a given case to also order restitution. Accordingly, the right to seek injunctive relief under section 17203 is not dependent on the right to seek restitution; the two are wholly independent remedies. (See ABC Internat. Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1268 [61 Cal.Rptr.2d 112, 931 P.2d 290] [§ 17203 contains ... no language of condition linking injunctive and restitutionary relief]; Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1139 [111 Cal.Rptr.2d 296] [plaintiff could pursue injunctive relief even though restitution was unavailable].) As the claim for injunctive relief is sufficient to preclude summary judgment, we need not decide, and express no opinion on, the further question whether Pharmacies may eventually be entitled to restitution.