Monday, October 26, 2009

New Unpublished UCL Restitution Opinion Issued by Second District in In re Baycol Cases I & II

On October 20, 2009, the Second District (Division Seven) issued an unpublished opinion in In re Baycol Cases I & II, reversing the trial court's dismissal of the plaintiff’s individual UCL claim. The opinion is noteworthy, not for the ruling upholding dismissal of the class allegations on technical grounds, but for the court’s approval of a restitionary theory premised on the defendant charging inflated prices for a product through the challenged deceptive advertising. The court’s analysis was as follows:
The focus of the UCL is "on the defendant's conduct, rather than the plaintiff's damages, in service of the statute's larger purpose of protecting the general public against unscrupulous business practices." (In re Tobacco II Cases (2009) 46 Cal.4th 298, 312.)

The trial court sustained the demurrer as to Shaw's individual claims on the ground that he "did not plead that he did not receive health benefits, that he did not get what he paid for, or that he has any basis for injunctive relief." However, Shaw alleged that due to Bayer's unfair, unlawful and deceptive acts in  marketing Baycol, it sold more Baycol at inflated prices than would otherwise have been the case. At a minimum, it is reasonably probable that Shaw could amend his complaint to allege that due to Bayer's unfair, unlawful and deceptive acts in marketing Baycol, he purchased Baycol and he purchased it at a higher price, than would have been the case had Bayer not engaged in unfair, unlawful and deceptive acts. Accordingly, he should have been given the opportunity to amend the complaint to provide more specificity as to his individual claims. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081; City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc., supra, 68 Cal.App.4th at p. 459.)
In re Baycol Cases I & II, 2009 Cal. App. Unpub. LEXIS 8352 (2d Dist. Oct. 20, 2009).

As I previously discussed here (The Scope of Class Restitution in the Wake of In Re Tobacco II Cases), this theory would permit adjudication of a UCL claim on behalf of a class that includes persons who never saw or relied upon the deceptive advertising. 

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