Herrera applauds California Supreme Court ruling that protects consumer rights

Decision allows local prosecutors to continue enforcing CA’s unfair business competition law statewide

City Attorney Dennis Herrera

SAN FRANCISCO (June 25, 2020) — City Attorney Dennis Herrera commended today’s unanimous decision by the California Supreme Court that affirms the powers of local public law offices to protect consumers statewide under California’s unfair business competition law in the following statement:

“I’m pleased that today’s ruling reinforces the authority of city attorneys and district attorneys to pursue cases statewide under California’s Unfair Competition Law. Local prosecutors play a crucial role in enforcing this law and act as a force multiplier in defending consumer rights and protecting Californians from crooked businesses. We have been defending consumers for more than two decades with a proven record of success. Our office has taken on national banks, insurance companies, and multinational corporations on behalf of Californians and recovered millions of dollars. We look forward to continuing to work alongside the Attorney General’s Office and local prosecutors to fight for consumers’ rights and a fair marketplace.”

Case Background

The Orange County District Attorney’s Office filed an Unfair Competition Law complaint against Abbott Labs for illegally suppressing competition in the market for generic drugs. That complaint alleged uniform statewide misconduct by Abbott Labs and sought uniform statewide relief for California consumers. Abbott Labs moved to strike the request for statewide remedies, seeking to limit relief only to the residents of Orange County. The Superior Court denied that motion, but the Fourth District Court of Appeal reversed. The California Supreme Court then decided to hear this important issue of state consumer protection law.

The San Francisco City Attorney’s Office, joined by the City Attorneys of Los Angeles, Oakland, San Diego, and San Jose, the Santa Clara County Counsel, the League of California Cities, and the California State Association of Counties, filed amicus briefs in support of maintaining local prosecutors’ ability to enforce California’s Unfair Competition Law in both the Court of Appeal and the California Supreme Court.

The amicus briefs in Abbott Laboratories et al. v. Superior Court argued that the Unfair Competition Law gives designated city attorneys, district attorneys and the attorney general overlapping authority to enforce cases under the Unfair Competition Law and obtain statewide remedies.

In the brief, Herrera disputed Abbott Laboratories’ misapplication of public nuisance case law and its distortion of the holding in People v. Hy-Lond Enterprises, Inc. that applies to prosecutors seeking future relief of Unfair Competition Law violations. The filing points to the clear language of the law that bestows district attorneys, city attorneys and the attorney general authority to prosecute past violations of the law and pursue statewide remedies on behalf of the People of the State of California.

The Supreme Court heard arguments in the case on April 7, 2020. Abbott Labs was the first case the California Supreme Court heard remotely due to Coronavirus distancing restrictions. Orange County Deputy District Attorney Kelly Ernby made the main argument for the People’s position. The Orange County District Attorney’s Office generously shared argument time with Yvonne Meré, Chief of Complex and Affirmative Litigation with the San Francisco City Attorney’s Office, to emphasize the importance of this issue to local prosecutors statewide.

The unanimous decision today reverses the previous ruling by the Fourth District Court of Appeals that ruled against local prosecutors’ abilities to obtain statewide relief under the Unfair Competition Law.

The Court’s Opinion recognizes the role of the Legislature and the voters to determine who may enforce the Unfair Competition Law and the breadth and scope of that enforcement.

“…it is undisputed that the Legislature has authorized local prosecutors to seek a statewide injunction under the UCL. And it is the Legislature, elected by voters across the state, that has decided to allow local prosecutors to seek civil penalties.”

The Court concluded that local prosecutors are not bound by geographic limits in pursuing civil penalties and restitution on behalf of consumers under the Unfair Competition Law.

“…the text of the UCL grants broad civil enforcement authority to district attorneys, and this broad grant of authority is consistent with the statute’s purpose and history. We see no indication that in an enforcement action brought by a district attorney, the Legislature intended to limit civil penalties or restitution to the geographic boundaries of the district attorney’s county.”

Herrera’s office has long defended consumers statewide through the Unfair Competition Law. The City Attorney’s Office has used the law to take on cases against businesses flouting the law and cheating consumers, including scofflaw landlordsgun suppliers and businesses charging hidden fees.

You can find a copy of the decision here.

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