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Thursday, August 12, 2010

Supreme Court Issues Decision on Interplay Between UCL and Senior Citizen Statute

This decision is a bit outside my wheelhouse, but it caught my eye. In Clark v. Superior Court (National Western Life Insurance Company) (August 9, 2010) --- Cal.4th ---, 2010 WL 3081288, the California Supreme Court considered whether the plaintiffs could recover treble damages under the Unfair Competition Law. The Court held:

Under California's unfair competition law (Bus. & Prof.Code, § 17200 et seq.), plaintiffs, who are senior citizens, sued an insurance company, alleging deceptive business practices relating to the purchase and sale of annuity contracts. Plaintiffs sought a monetary award, and they asserted that statutory law entitled them to a trebling of the award.

Plaintiffs rely on Civil Code section 3345, which provides that in an action brought by senior citizens to redress unfair competition, a trier of fact may award up to three times the amount imposed as “a fine, or a civil penalty or other penalty, or any other remedy the purpose or effect of which is to punish or deter.” (Id., § 3345, subd. (b).) At issue here is the applicability of that provision to the unfair competition law, which generally limits a private party's available remedies to injunctions and restitution. (Bus. & Prof.Code, § 17203.)

We conclude that because Civil Code section 3345 authorizes the trebling of a remedy only when it is in the nature of a penalty, and because restitution under the unfair competition law is not a penalty, an award of restitution under the unfair competition law-which plaintiffs seek here-is not subject to section 3345 's trebling provision.

Slip op. at 1. Query what role this holding will have on the Court's decision in Pineda v. Bank of America, which is on our watch list and which will consider, among other issues, among other things, whether Labor Code Section 203 "waiting time" penalties are available as restitution under the UCL. Our post on Pineda is here.

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