Thursday, January 27, 2011

California Supreme Court Holds that Reliance on Alleged Deceptive Promotional Statements May Alone Satisfy UCL Standing: Kwikset Corp. et al. v. Superior Court

On January 27, 2011, the California Supreme Court issued its opinion in Kwikset Corp. et al. v. Superior Court, __ Cal.4th __ (2011), reversing the Fourth District’s determination that UCL standing under the fraud prong was contingent on allegations that the product was overpriced or defective. The Court of Appeal had previously concluded that standing was lacking in that case because the named plaintiff, who purchased a lockset promoted as being made in America, received the benefit of the bargain, and as such was foreclosed from claiming any loss of money or property. The California Supreme Court reversed, concluding that “plaintiffs who can truthfully allege they were deceived by a product’s label into spending money to purchase the product, and would not have purchased it otherwise, have ‘lost money or property’ within the meaning of Proposition 64 and have standing to sue.” See Slip Opinion, at 2.

The Court’s opinion is fairly dense. However, based on my first read, it appears that the Court’s overarching conclusion is that the UCL’s provisions governing standing and restitution are not coterminous, and that equating the two improperly would limit the primary function of the UCL to enjoin deceptive conduct. I will post more on this important opinion in the next few days.

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