Court Opinion

ID: 5664279
Source: CourtListenerOpinion
Date Created: 2022-01-12 03:34:39.57689+00
Date Added: 2024-06-11T08:38:11.632940
License: Public Domain

TURNER, P. J., Dissenting.
I would deny the mandate petition. The respondent court correctly decided that there is a triable issue as to whether *1080plaintiff, Jose Serrano, has standing to pursue the Unfair Practices Act claim against defendant, Rosenbluth International, Inc. Further, the trial court could conclude that defendant’s unreasonable refusal to respond to interrogatories, production demands, and admissions requests warranted denial of the summary judgment motion.
First, in terms of the merits, my views in this regard are premised on the express language of the Unfair Practices Act. Business and Professions Code section 17204 expressly provides, “Actions for any relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by . . . any person acting for the interests of . . . the general public.” (Italics omitted; Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 560-567 [71 Cal.Rptr.2d 731, 950 P.2d 1086]; AICCO, Inc. v. Insurance Co. of North America (2001) 90 Cal.App.4th 579, 591-592 [109 Cal.Rptr.2d 359].) The purpose of the Unfair Practices Act is described in pertinent part as follows: “The Legislature declares that the purpose of this chapter is to . . . foster and encourage competition, by prohibiting unfair, dishonest, deceptive, destructive, fraudulent and discriminatory practices by which fair and honest competition is destroyed or prevented.” (Bus. & Prof. Code, § 17001; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179 [83 Cal.Rptr.2d 548, 973 P.2d 527]; ABC Internat. Traders, Inc. v. Matsushita Electric Corp. (1997) 14 Cal.4th 1247, 1256 [61 Cal.Rptr.2d 112, 931 P.2d 290].) The Unfair Practices Act is to be liberally construed. (Bus. & Prof. Code, § 17002; ABC Internat. Traders, Inc. v. Matsushita Electric Corp., supra, 14 Cal.4th at p. 1256; People v. Centr-O-Mart (1950) 34 Cal.2d 702, 704 [214 P.2d 378].) Under the Unfair Practices Act, a private person may pursue a claim based on “6 “any unlawful business practice.” ’ ” (Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 603 [89 Cal.Rptr.2d 370], citing Stop Youth Addiction, Inc. v. Lucky Stores, Inc., supra, 17 Cal.4th at p. 562.)
The issues before us are framed by the pleadings. (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1252 [32 Cal.Rptr.2d 223, 876 P.2d 1022] overruled on another ground in Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 498 [59 Cal.Rptr.2d 20, 926 P.2d 1114]; Oates v. City of Lincoln (2001) 93 Cal.App.4th 25, 30 [112 Cal.Rptr.2d 790].) The complaint alleges: defendant, the second largest travel agency in the United States, falsely promises its customers that they will receive rebates from airlines who provide air transportation; defendant falsely agrees to refund to its customers 100 percent of rebates that their employees earn while flying on business; defendant in fact prepares “a phony spreadsheet calculation that significantly understates the amount of rebates” that are owed to its customers; and all of defendant’s customers are misled in this regard. If this is true, and it bears *1081emphasis that no definitive evidence has been received on the issue of whether defendant has engaged in the alleged accounting fraud, this is a case where plaintiff has standing to sue on behalf of the general public. The general public is prejudiced by the alleged misconduct, if it is true, because: corporations which are victims of the alleged misuse of the spreadsheet, which frankly amounts to theft by defendant, are necessarily going to pass on the added costs to their customers—the public; companies doing business with defendant will be less able to efficiently compete because they have been defrauded by the purported misappropriation of rebates; and the Unfair Practices Act is premised on the demonstrably accurate assumption that fair and honest competition is hindered by “unfair, dishonest, deceptive, destructive, [and] fraudulent” practices. (Bus. & Prof. Code, § 17001.) Further, the evidence in support of the summary judgment motion indicates that many of defendant’s customers are Fortune 1000 companies. In my opinion, protecting not only small businesses or individuals from accounting fraud, but also large corporations, furthers the public interest.
I agree though with my colleagues’ observations concerning possible due process problems. (Bronco Wine Co. v. Frank A. Logoluso Farms (1989) 214 Cal.App.3d 699, 716-721 [262 Cal.Rptr. 899] [class action decision expressly refusing to address due process issue in representative lawsuit context].) There are likewise potential confidentiality issues which will probably arise in connection with disclosure of individual agreements with defendant’s customers. However, neither of these considerations warrants a grant of summary judgment. Putting aside the fact that neither issue is definitively resolved in defendant’s brief four-page separate statement listing only 15 undisputed facts, questions of due process can be resolved including giving notice to its customers. Further, without affecting current contracts, the respondent court could issue injunctive relief concerning future misuse of spreadsheets by defendant. If the as-yet unproven claims of misuse of the spreadsheets are true, morality, reason, the public interest, and the law impel the conclusion that, at least in terms of fiiture contracts, such accounting fraud should be enjoined. Likewise, questions of disclosure of contractual terms can be resolved as part of the discovery process. It may very well be that ultimately plaintiff will not have access to the contracts at issue because of trade secret considerations and his case will fail. It also may be the case that issue or evidence sanctions will be imposed against defendant because of its privilege claims thereby leading to a potential legal victory for plaintiff. (Code Civ. Proc., § 2023, subds. (b), (c); Fuller v. Superior Court (2001) 87 Cal.App.4th 299, 305-308 [104 Cal.Rptr.2d 525]; A & M Records, Inc. v. Heilman (1977) 75 Cal.App.3d 554, 564-565 [142 Cal.Rptr. 390].) Nonetheless, neither the due process question nor discovery disputes have been resolved nor were they susceptible to resolution as part of the present summary judgment litigation.
*1082Second, defendant has refused, with one exception, to respond to plaintiffs interrogatories, document production demands, and admissions requests. With one exception, defendant has objected to every interrogatory, document demand, and admission request. Some of the objections are frivolous. In response to an admission request, defendant has even refused to deny the allegation it failed to pass on the rebates to its customers. The respondent court acted well within its discretion in refusing to grant summary judgment in the face of such discovery abuses by defendant. (Code Civ. Proc., § 437c, subd. (h); Stationers Corp. v. Dun & Bradstreet, Inc. (1965) 62 Cal.2d 412, 421 [42 Cal.Rptr. 449, 398 P.2d 785]; People v. $4,503 United States Currency (1996) 49 Cal.App.4th 1743, 1748-1749 [57 Cal.Rptr.2d 467].)
Finally, it bears emphasis that plaintiff has introduced no evidence to support his serious allegations of corporate misconduct. My analysis in this opinion, apart from the discussion of very serious discovery abuses, is based entirely upon the issues as posited by the pleadings and the limited evidence introduced during the summary judgment litigation. The legal and factual underpinnings of my analysis, that defendant has engaged in what amounts to theft from major corporations in this country thereby prejudicing the public interest, have yet to be proven.
On September 11, 2002, the opinion was modified to read as printed above. The petition of real party in interest for review by the Supreme Court was denied December 11, 2002. Kennard, J., was of the opinion that the petition should be granted.