Opinion ID: 1801796
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Heading Rank: 3

Heading: Class Actions and the UCL; Impact of Proposition 64

Text: (4) Class actions have often been the vehicle through which UCL actions have been brought. Code of Civil Procedure section 382 has been judicially construed as the authorizing statute for class suits in California. ( Washington Mutual Bank v. Superior Court (2001) 24 Cal.4th 906, 913 [103 Cal.Rptr.2d 320, 15 P.3d 1071].) [9] It provides, in pertinent part, that when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court, one or more may sue or defend for the benefit of all. Class certification requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-defined community of interest, and (3) that certification will provide substantial benefits to litigants and the courts, i.e., that proceeding as a class is superior to other methods. [Citations.] In turn, the `community of interest requirement embodies three factors: (1) predominant common questions of law or fact; (2) class representatives with claims or defenses typical of the class; and (3) class representatives who can adequately represent the class.' ( Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089 [56 Cal.Rptr.3d 861, 155 P.3d 268].) (5) `[A] trial court may certify a UCL claim as a class action when the statutory requirements of section 382 of the Code of Civil Procedure are met.' ( Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1015 [36 Cal.Rptr.3d 592].) As we commented in Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116 [96 Cal.Rptr.2d 485, 999 P.2d 718], consumer class actions and representative UCL actions serve important roles in the enforcement of consumers' rights. [They] make it economically feasible to sue when individual claims are too small to justify the expense of litigation, and thereby encourage attorneys to undertake private enforcement actions. Through the UCL a plaintiff may obtain restitution and/or injunctive relief against unfair or unlawful practices in order to protect the public and restore to the parties in interest money or property taken by means of unfair competition. These actions supplement the efforts of law enforcement and regulatory agencies. This court has repeatedly recognized the importance of these private enforcement efforts. ( Id. at p. 126, fn. omitted.) Thus, the UCL class action is a procedural device that enforces substantive law by aggregating many individual claims into a single claim, in compliance with Code of Civil Procedure section 382, to achieve the remedial goals outlined above. It does not change that substantive law, however. ( City of San Jose v. Superior Court (1974) 12 Cal.3d 447, 462 [115 Cal.Rptr. 797, 525 P.2d 701] [Class actions are provided only as a means to enforce substantive law.].) (6) This remains true even after passage of Proposition 64. Proposition 64 wrought certain procedural changes with respect to standing to bring a UCL action, and it now also explicitly mandates that a representative UCL action comply with Code of Civil Procedure section 382. These procedural modifications to the statute, however, left entirely unchanged the substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted. ( Mervyn's, supra, 39 Cal.4th at p. 232.) (7) As we explained in Mervyn's, prior to passage of Proposition 64 the UCL authorized any person acting for the general public to sue for relief from unfair competition. ( Mervyn's, supra, 39 Cal.4th at p. 227.) Standing to bring such an action did not depend on a showing of injury or damage. ( Id. at p. 228.) After Proposition 64, which the voters approved at the November 2, 2004, General Election, a private person has standing to sue only if he or she `has suffered injury in fact and has lost money or property as a result of such unfair competition.' (§ 17204, as amended by Prop. 64, § 3; see also § 17203, as amended by Prop. 64, § 2.) ( Mervyn's, supra, 39 Cal.4th at p. 227.) Proposition 64 accomplishes its goals in relatively few words. The measure amends section 17204, which prescribes who may sue to enforce the UCL, by deleting the language that had formerly authorized suits by any person `acting for the interests of itself, its members or the general public,' and by replacing it with the phrase, `who has suffered injury in fact and has lost money or property as a result of such unfair competition.' The measure also amends section 17203, which authorizes courts to enjoin unfair competition, by adding the following words: `Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 and complies with Section 382 of the Code of Civil Procedure, but these limitations do not apply to claims brought under this chapter by the Attorney General, or any district attorney, county counsel, city attorney, or city prosecutor in this state.' (§ 17203.) ( Mervyn's, supra, 39 Cal.4th at pp. 228-229.) Thus, the effect of Proposition 64 is to prevent uninjured private persons from suing for restitution on behalf of others. (39 Cal.4th at p. 232, italics omitted.) With this background in mind, we turn to the questions before us.