California Supreme Court Hears Arguments Regarding Standing for UCL Class Actions
Recently, the California Supreme Court ruled that lawsuits under the Consumer Legal Remedies Act can only be filed by individuals who suffer real damage from unlawful business practices. According to Mike McKee’s article in the Recorder, the Court heard oral arguments on March 3 and it was not clear where the court stood on applying that same rule to every participant of class actions filed under the California's Unfair Competition Law (“UCL”).
The underlying suit, filed 12 years ago, accused Philip Morris USA, Inc. and five other tobacco manufacturers of violating the UCL by allegedly denying links between smoking and serious illnesses. The trial court granted class certification in 2001, allowing smokers who lived in California between June 10, 1993 and April 23, 2001, to pursue claims under the UCL. But after voters passed Proposition 64 in 2004, the court decertified the class, ruling that under the ballot measure's terms, individual plaintiffs and class members did not have standing to sue unless they actually suffered harm by loss of money or property. The Fourth District Court of Appeal affirmed in 2006.
Because this decision will impact insurance industry class actions, we will follow it. A ruling is due within 90 days.
