On appeal, plaintiffs challenged the trial court’s ruling as to typicality and predominance:
plaintiffs challenge all aspects of the trial court’s ruling. First, they argue that the trial court erred in finding the individual plaintiffs’ claims are not typical of the claims of the TPPs. Second, they argue that the trial court erred in concluding that individual issues prevailed on the element of reliance, because they could establish reliance on a class-wide basis and, in any event, reliance is unnecessary to their UCL and FAL causes of action. Finally, plaintiffs argue that their method of calculating damages is subject to common proof.See Slip Opinion, at 13.
Preliminary to the Court’s substantive evaluation of the trial court’s order, however, the Court laid out some important ground rules designed to guide a trial court’s evaluation of a UCL claim.
First, the Court confirmed that the UCL is a single prong statute which imposes liability based on a “likely to deceive” standard:
In order to obtain a remedy for deceptive advertising, a UCL plaintiff need only establish that members of the public were likely to be deceived by the advertising. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267; Massachusetts Mutual Life Ins. Co. v. Superior Court, supra, 97 Cal.App.4th at p. 1290.) The question has arisen as to which members of the public need be likely to be deceived. The law focusses on a reasonable consumer who is a member of the target population. (Lavie v. Proctor & Gamble Co. (2003) 105 Cal.App.4th 496, 508.) “Where the advertising or practice is targeted to a particular group or type of consumers, either more sophisticated or less sophisticated than the ordinary consumer, the question whether it is misleading to the public will be viewed from the vantage point of members of the targeted group, not others to whom it is not primarily directed.” (Id. at p. 512.)See Slip Opinion, at 18.
Second, the Court confirmed that the “may have been acquired” language of Section 17203 permits recovery without proof that the funds were lost as a result of actual reliance on defendant’s deceptive conduct:
As to restitution, the UCL provides that “[t]he court may make such orders or judgments . . . as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.” (Bus. & Prof. Code, § 17203.) This language, providing restitution of funds which “may have been acquired,” has been interpreted to allow recovery without proof that the funds were lost as a result of actual reliance on defendant’s deceptive conduct. (Tobacco II, supra, 46 Cal.4th at p. 320; Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d at p. 450-451; Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1144.)See Slip Opinion, at 19.
However, the Court concluded that while Section 17203 permits recovery without proof of actual reliance, such language does not permit recovery without any evidentiary support:
“While the “may have been acquired” language of Business and Professions Code section 17203 is so broad as to allow restitution without individual proof of injury, it is not so broad as to allow recovery without any evidentiary support. (Colgan v. Leatherman Tool Group, Inc. (2006) 135 Cal.App.4th 663, 697.).See Slip Opinion, at 19.
As reasoned by the Court, where a plaintiff’s theory of restitution is predicated on a formula involving the value of a product, this evidentiary showing requires evidence of the value received with correlating comparative evidence establishing a basis for restitution:
The difference between what the plaintiff paid and the value of what the plaintiff received is a proper measure of restitution. (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 174.) In order to recover under this measure, there must be evidence of the actual value of what the plaintiff received. When the plaintiff seeks to value the product received by means of the market price of another, comparable product, that measure cannot be awarded without evidence that the proposed comparator is actually a product of comparable value to what was received. (Colgan v. Leatherman Tool Group, Inc., supra, 135 Cal.App.4th at p. 675.)See Slip Opinion, at 19.
This latter finding was material to the Court’s analysis regarding predominance, as the Court reasoned that the trial court did not err in finding that the Plaintiff’s comparative evidence using naproxen as a basis for restitution was incapable of establishing a right to restitution as to the class as a whole:
However, in order to obtain class wide restitution under the UCL, plaintiffs need establish not only a misrepresentation that was likely to deceive (Corbett v. Superior Court, supra, 101 Cal.App.4th 649, 670) but the existence of a “measurable amount” of restitution, supported by the evidence. (Colgan v. Leatherman Tool Group, Inc., supra, 135 Cal.App.4th at p. 698.) The failure of naproxen as a viable class-wide comparator thus defeats the claim for class-wide restitution. The trial court concluded that whether any particular plaintiff’s loss can be measured by the difference in price between Vioxx and generic naproxen depends on issues specific to that individual plaintiff. The evidence supports the trial court’s conclusion in this regard. Even if plaintiffs establish, class-wide, that Merck misrepresented the cardiovascular risks of Vioxx in a manner that was likely to deceive plaintiffs and their prescribing physicians, no plaintiff would be able to recover without first identifying a proper comparator drug, the cost of which would provide the actual value to the patient of the Vioxx received. As the trial court concluded, on the evidence, that the issue of a proper comparator was a patient-specific issue, incorporating the patient’s medical history, treatment needs, and drug interactions, the trial court properly concluded that restitution could not be calculated on a class-wide basis.See Slip Opinion, at 27-28.
However, the Court’s opinion also confirmed that a plaintiff is not required to affirmatively prove the actual amount of restitution available to each individual class member on a common basis:
Although the trial court also mentioned that there was no class-wide evidence of the price paid for Vioxx, we agree with plaintiffs that the actual amounts paid could likely be resolved in a claims process. The trial court’s “[o]verarching” concern was that there was no evidence that any particular NSAID would be a proper comparator for each class member.See Slip Opinion, at 28 n.23.
The Court’s analysis is very dense, and likely will take some time to fully unpack. I will likely provide posts in the coming days examining the Court’s opinion further, including the Court’s analysis concerning the plaintiff’s challenge to typicality.