California Attorney Tom Martin’s Law Blog

Proposition 64 placed certain new restrictions on standing to bring a UCL action. A private UCL plaintiff now must show she has suffered “injury in fact.” Amended section 17204 provides, in pertinent part:

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 itself, its members or the general public who has suffered injury in fact and has lost money or property as a result of such unfair competition.

One question presented by the amendment has been whether the UCL now requires “injury in fact” AND a “loss of money or property” to establish standing, or whether the two concepts are disjunctive, i.e., “injury in fact” OR a “loss of money or property.”

Federal authority on Article III standing, on which the amendment is based, sometimes uses the two concepts interchangeably, implying that “injury in fact” and “loss of money or property” are two sides of the same coin.

In Buskirk v. Greenlight Financial Services, B189857 (Cal. App. 12/12/2006), the Second District of the Court of Appeal agreed with this latter view and provided much needed guidance regarding the UCL’s new standing requirement:

Turning to the question whether appellant demonstrated standing, section 17204 and section 17535 provide that actions may be prosecuted by a person “who has suffered injury in fact and has lost money or property.” Neither party offers any particular insight into the meaning of that phrase, and there is little in the published authority.

An indication of the proper interpretation is revealed in the “findings and declarations of purpose” contained in the introduction to Proposition 64. There, it stated that the people of the State of California had made certain findings, including: (1) the unfair competition laws [defined as both section 17200 et seq. and section 17500 et seq.] “are intended to protect California businesses and consumers from unlawful, unfair, and fraudulent business practices” and (2) “[f]rivolous unfair competition lawsuits clog our courts and cost taxpayers” and also “cost California jobs and economic prosperity, threatening the survival of small businesses and forcing businesses to raise their prices or to lay off employees to pay lawsuit settlement costs or to relocate to states that do not permit such lawsuits.” (§ 17203, Historical and Statutory Notes.) The introduction further stated that “[i]t is the intent of California voters in enacting [Proposition 64] to eliminate frivolous unfair competition lawsuits while protecting the right of individuals to retain an attorney and file an action for relief” and “to prohibit private attorneys from filing lawsuits for unfair competition where they have no client who has been injured in fact under the standing requirements of the United States Constitution.” (Ibid.)

….

Federal authorities provide guidance concerning a plaintiff’s responsibilities when issues of standing arise. A plaintiff must demonstrate (1) that he or she has suffered an injury in fact; (2) that the injury is traceable to the challenged actions of defendant, and (3) that the injury can be redressed by a favorable decision. [citation omitted] An injury in fact is “an invasion of a legally protected interest which is (a) concrete and particularized [citations] and (b) ‘actual or imminent, not, ‘conjectural’ or ‘hypothetical.’” [citation omitted] Standing is subject to attack at any point in the litigation, and the plaintiff bears the burden of supporting standing “in the same way as any other matter on which the plaintiff bears the burden of proof, i.e., with the manner and degree of evidence required at the successive stages of the litigation.” [citation omitted] To withstand a motion for summary judgment, the plaintiff must demonstrate that evidence exists to permit a factual finding that he or she has standing. [citation omitted] (emphasis added.)

Thus, a demonstration of an injury in fact, traceability, and redressability is sufficient to establish standing under Article III and the UCL.

This entry was posted on Wednesday, March 28th, 2007 at 9:11 pm and is filed under Consumer Protection, General Legal, Informational . You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.