Supreme Court of California Justia
Citation 46 Cal. 4th 298, 207 P.3d 20, 93 Cal. Rptr. 3d 559

In re Tobacco II Cases

Filed 5/18/09



IN THE SUPREME COURT OF CALIFORNIA



IN RE TOBACCO II CASES.

S147345

Ct.App. 4/1 D046435

San Diego County

Super. Ct. No. 711400;



JCCP No. 4042

Prior to the 2004 amendment of the unfair competition law (UCL) (Bus. &

Prof. Code, § 17200 et seq.), by Proposition 64, “[a]ctions for relief [under the

UCL could be] prosecuted . . . by the Attorney General or any district attorney or

by any county counsel . . . [or] by a city prosecutor . . . [or] by a city attorney . . .

or upon the complaint of any board, officer, person, corporation or association or

by any person acting for the interests of itself, its members or the general public.”

(Bus. & Prof. Code, former § 17204, as amended by Stats. 1993, ch. 926, § 2, p.

5198; see also Californians for Disability Rights v. Mervyn’s, LLC (2006) 39

Cal.4th 223, 227 (Mervyn’s).) 1 Post Proposition 64, the section provides, “[a]ny

person may pursue representative claims or relief on behalf of others only if the

claimant meets the standing requirements of Section 17204 and complies with

section 382 of the Code of Civil Procedure” (§ 17203, as amended by Prop. 64,

§ 2), that is, a “person who has suffered injury in fact and has lost money or


1

All further statutory references are to this code unless otherwise specified.

1


property as a result of [such] unfair competition.” (§ 17204, as amended by Prop.

64, § 3.)

The complaint before us alleges that the tobacco industry defendants violated

the UCL by conducting a decades-long campaign of deceptive advertising and

misleading statements about the addictive nature of nicotine and the relationship

between tobacco use and disease. Prior to passage of Proposition 64, the trial

court had certified the case as a class action. The class was defined as “All people

who at the time they were residents of California, smoked in California one or

more cigarettes between June 10, 1993 to April 23, 2001, and who were exposed

to Defendants’ marketing and advertising activities in California.” After

Proposition 64 was approved, the trial court granted defendants’ motion to

decertify the class on the grounds that each class member was now required to

show an injury in fact, consisting of lost money or property, as a result of the

alleged unfair competition. The Court of Appeal affirmed.

On review, we address two questions: First, who in a UCL class action must

comply with Proposition 64’s standing requirements, the class representatives or

all unnamed class members, in order for the class action to proceed? We conclude

that standing requirements are applicable only to the class representatives, and not

all absent class members. Second, what is the causation requirement for purposes

of establishing standing under the UCL, and in particular what is the meaning of

the phrase “as a result of” in section 17204? We conclude that a class

representative proceeding on a claim of misrepresentation as the basis of his or her

UCL action must demonstrate actual reliance on the allegedly deceptive or

misleading statements, in accordance with well-settled principles regarding the

element of reliance in ordinary fraud actions. Those same principles, however, do

not require the class representative to plead or prove an unrealistic degree of

specificity that the plaintiff relied on particular advertisements or statements when

2

the unfair practice is a fraudulent advertising campaign. Accordingly, we reverse

the order of decertification to the extent it was based upon the conclusion that all

class members were required to demonstrate Proposition 64 standing, and remand

for further proceedings regarding whether the class representatives in this case

have, or can demonstrate, standing.

I. STATEMENT OF THE CASE

A. Introduction

The original complaint in this action was filed on June 10, 1997, and was

thereafter amended numerous times, ultimately resulting in the current, ninth

amended complaint. The UCL cause of action was added in the sixth amended

complaint. Class certification of the UCL cause of action was granted in

connection with the seventh amended complaint. The relevant allegations of the

seventh and the ninth amended complaints are substantially the same. Therefore,

we examine the seventh amended complaint as background for our discussion of

the class certification issues.

B. The Seventh Amended Complaint

The seventh amended complaint was filed in January 2001. In it, plaintiff

Willard Brown, acting “individually, on behalf of the General Public of the State

of California, as well as on Behalf of All Others Similarly Situated,” sued the

American Tobacco Company, Philip Morris USA Inc., R.J. Reynolds Tobacco

Company, Brown & Williamson Tobacco Corporation, British American Tobacco

Co., Ltd., Liggett & Myers, Inc., Hill and Knowlton, Inc., the Council for Tobacco

Research-U.S.A., Inc., the Tobacco Institute, Inc., United States Tobacco

Company, and Lorillard Tobacco Company, alleging causes of action for unfair

competition under the UCL; false and misleading advertisement under the false

advertising law (§ 17500 et seq.); violation of the Consumers Legal Remedies Act

3

(Civ. Code, § 1750 et seq.) (CLRA); breach of express warranty; fraud and

intentional misrepresentation; breach of undertaking of special duty; negligence;

and breach of implied warranty of merchantability.

The prefatory allegations stated: “Through a fraudulent course of conduct

that has spanned decades, Defendants have manufactured, promoted, distributed or

sold tobacco products to Plaintiff and thousands of California citizens and

residents, knowing, but denying and concealing that Defendants’ tobacco products

contain a highly addictive drug known as nicotine. Unbeknownst to the public,

Defendants have intentionally controlled and manipulated the amount and bio-

availability of nicotine in their tobacco products to create and sustain addiction to

their products.”2

Class action allegations were stated with respect to the causes of action

under the UCL, false advertising law and CLRA, pursuant to Code of Civil

Procedure section 382. The complaint alleged that the predominance of common

questions supported class action certification. “These common legal and factual

questions arise from two central issues, which do not vary among Class Members:


2

Plaintiffs initially posited two distinct theories of violation of the UCL:

first, that defendants engaged in unlawful business practices because the
manipulation of nicotine levels in their products, and the sale and distribution of
such products, violated the CLRA; and second, defendants engaged in unfair and
fraudulent business practices because of their misrepresentations regarding the
dangerousness of their products. In September 2002, however, defendants and
plaintiffs entered into a stipulation in which plaintiffs abandoned any claim that
the manipulation of the chemical content of cigarettes to enhance addiction was an
unfair business practice and elected instead to “present this issue solely in the
context that Defendants made false and misleading statements to the public about
Defendants’ efforts to manipulate cigarettes to enhance addiction and that such
false and/or misleading statements constitute a fraudulent and/or unfair business
act or practice.” Thus, plaintiffs have elected to proceed solely under their second
theory, the UCL’s fraud prong.

4

(1) Defendants’ common course of conduct in manufacturing, promoting,

distributing and selling cigarettes; and (2) the biochemical and psychoactive

properties of nicotine.” Included among the specific allegations of commonality

was “Whether Defendants conspired to misrepresent, have repeatedly

misrepresented, and continue to misrepresent to Plaintiffs and Class Members that

smoking does not cause diseases, including, but not limited to, lung disease, heart

disease, various cancers and other diseases.”

Following the class action allegations was a lengthy section captioned

“FACTUAL ALLEGATIONS COMMON TO ALL COUNTS,” which set forth in

specific detail the alleged concealment by the tobacco industry of the relationship

between its product and various diseases. Pertinently, the complaint alleged that

defendants had engaged in a “public disinformation strategy . . . concerning the

health effects of cigarette smoking,” beginning in the 1960’s with magazine

articles that questioned the link between cigarette smoking and lung cancer. It was

further alleged that “[o]ther public statements by the Defendants over the years

have repeated the misrepresentations that Defendants were dedicated to the pursuit

and dissemination of the scientific truth regarding smoking and health.”

The UCL claim was alleged as the first cause of action: “The acts

complained of in each of the preceding paragraphs of this complaint, and each of

them, constitute unfair and/or unlawful acts in competition in violation of Section

17200 of the California Business and Professions Code. Such acts and violations

have not abated and will continue to occur unless enjoined.”3


3

The second cause of action alleged violation of the false advertising law.

5

C. The Motion for Class Certification

Plaintiff Brown moved for class certification of the UCL and false

advertising causes of action in his seventh amended complaint. He sought to

certify as a class “those people who are residents of California and who, while

residents of California, smoked one or more cigarettes during the applicable class

period.”4 Defendants opposed certification on the grounds that plaintiff had failed

to establish that common questions of law or fact predominated over issues

requiring plaintiff-specific proof. As to plaintiff’s UCL claim, defendants argued

that each plaintiff would have to demonstrate that “(a) he read or heard a

misrepresentation made by defendants, and (b) that he was in some way misled or

deceived about the health risks of smoking. It is undeniable that proof of these

issues cannot be made on a class-wide basis.”

Defendants also maintained that issues of causation and injury would

require individual proof as to each class member to justify the remedy of

restitution under the UCL. Defendants argued: “Given the multitude of different

alleged unfair and deceptive practices which plaintiff says were committed over a

forty year plus history by eleven different defendants, it is beyond reasonable

dispute that proof of causation cannot be made on a class-wide basis.”

In granting the motion, the trial court stated: “While the court agrees with

Defendants that a myriad of distinct issues exist as to each class member’s

exposure to the alleged deceptive marketing, reliance thereon, whether same was a

causal factor of the person’s smoking and whether each class member sustained


4

Plaintiff Brown had previously sought to certify a class based on a cause of

action under the CLRA (Civ. Code, § 1750 et seq.) in his sixth amended
complaint. That motion had been denied. He renewed the motion in connection
with his seventh amended complaint. That motion was also denied.

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injury, such does not defeat the otherwise finding [sic] of substantial commonality

as such issues are wholly outside the purview of B & P Code §§ 17200 et seq. and

17500 et seq.” The court explained: “All class claims are brought under B & P

§§ 17200 et seq. and 17500, et seq. and assert identically that Defendants, by way

of concealment and affirmative misrepresentation, manipulated the chemical

constituent content of tobacco products and by way of deceptive advertising and

marketing acts, misled the smoking public of the health risks and addictive nature

of smoking and targeted the putative class uniformly in an alleged class-wide

effort to seduce and induce people to smoke.” The court concluded: “As the class

is defined as including those people that smoked in California one or more

cigarettes during the applicable class period and were exposed to Defendants’

marketing and advertising activities in California, it must be said the class is

readily ascertainable.” The trial court’s order granting the certification motion

specified that the “class period for said class is June 10, 1993 to April 23, 2001.”

D. The Class Decertification Motion

Following class certification, plaintiff filed an eighth and then a ninth

amended complaint. The ninth amended complaint, the operative pleading here,

alleged only two causes of action, for violation of the UCL and for false

advertising.5 The factual allegations in support of these claims were essentially

unchanged from those alleged in the seventh amended complaint. The ninth


5

The ninth amended complaint was subject to a series of summary judgment

motions that were granted in part and denied in part. One result of the motions
was that allegations within the UCL cause of action that pertained to defendants’
targeting of minors in advertising were struck as preempted by federal law. (See
In re Tobacco II (2007) 41 Cal.4th 1257, 1262 [UCL claim against tobacco
industry based on advertising targeting minors preempted by the Federal Cigarette
Labeling and Advertising Act (FCLAA) (15 U.S.C. § 1331 et seq.)].)

7

amended complaint added three new plaintiffs, Damien Bierly, Michelle Denise

Buller-Seymore, and Daniel Kagei.

Following the passage of Proposition 64 in November 2004, defendants

moved for class decertification. Defendants argued that the new standing

requirement imposed on plaintiffs bringing a UCL action by Proposition 64 — that

such persons must have suffered injury in fact and lost money or property as a

result of the alleged UCL violation — applied to every class member. Therefore

“numerous individualized issues now predominate, including: (1) whether each

class member was actually exposed to the allegedly false and misleading

statements on which Plaintiffs’ remaining UCL and [false advertising] claims are

based; (2) whether, assuming such exposure, each class member was actually

affected in some manner by the statement (e.g., did they believe some or all of the

statement[s] to be true); and (3) whether each class member actually spent money

to purchase cigarettes manufactured by any of the Defendants in this case as a

result of his or her exposure to, and belief in the veracity of, the allegedly false and

misleading statement, which the class member would not have spent in the

absence of such alleged statement.”6

Plaintiffs responded that Proposition 64’s class action compliance

requirement “adds nothing to the substantive analysis of whether this action has

been properly certified. Neither before nor after Prop. 64 does the class action

procedure impose different substantive elements on the prosecution of a claim.

There is no evidence supporting defendants’ argument that the voters intended to


6

The bulk of the decertification motion addressed the issue of whether

Proposition 64 applied to cases pending at the time of its enactment, which was
then an unsettled question, but which we have now answered in the affirmative.
(Mervyn’s, supra, 39 Cal.4th at p. 227.)

8

or did add additional substantive elements to the definition of what constitutes

unlawful, unfair or fraudulent business practices.”

The trial court granted defendants’ motion. Most of its ruling addressed the

question whether Proposition 64 applied to pending cases and its discussion of

Proposition 64’s standing requirement was brief. The trial court found that the

“simple language” of Proposition 64 required that “for standing purposes, a

showing of causation is required as to each class member’s injury in fact . . . .

[T]he injury in fact that each class member must show for standing purposes in

this case would presumably consist of the cost of their cigarette purchases. But

significant questions then arise undermining the purported commonality among

the class members, such as whether each class member was exposed to

Defendants’ alleged false statements and whether each member purchased

cigarettes ‘as a result’ of the false statements. Clearly . . . individual issues

predominate, making class treatment unmanageable and inefficient.”

Plaintiffs appealed. The Court of Appeal affirmed, agreeing with the trial

court that, post Proposition 64, individual issues of exposure to the allegedly

deceptive statements and reliance upon them, predominated over class issues. We

granted plaintiffs’ petition for review.

II. DISCUSSION

A. Standard of Review

“Because trial courts are ideally situated to evaluate the efficiencies and

practicalities of permitting group action, they are afforded great discretion in

granting or denying certification. . . . [I]n the absence of other error, a trial court

ruling supported by substantial evidence generally will not be disturbed ‘unless (1)

improper criteria were used [citation]; or (2) erroneous legal assumptions were

made [citation].’ ” (Linder v. Thrifty Oil Co. (2000) 23 Cal.4th 429, 435-436; see

People v. Superior Court (Humberto S.) (2008) 43 Cal.4th 737, 746 [“When a trial

9

court’s decision rests on an error of law, that decision is an abuse of discretion”].)

Additionally, the issues before us involve the meaning of certain language in the

UCL as amended by Proposition 64 and, as such, present questions of law that we

review de novo. (Jones v. Pierce (1988) 199 Cal.App.3d 736, 741 [“Questions of

statutory interpretation are, of course, pure matters of law upon which we may

exercise our independent judgment”].)

B. Purpose and Scope of the Fraud Prong of the UCL

The UCL defines unfair competition as “any unlawful, unfair or fraudulent

business act or practice . . . .” (§ 17200.) Therefore, under the statute “there are

three varieties of unfair competition: practices which are unlawful, unfair or

fraudulent.” (Daugherty v. American Honda Motor Co., Inc. (2006) 144

Cal.App.4th 824, 837.) We are here concerned with the third prong of the statute

— an allegation of a fraudulent business act or practice, specifically claims of

deceptive advertisements and misrepresentations by the tobacco industry about its

products.7

“[T]o state a claim under either the UCL or the false advertising law, based

on false advertising or promotional practices, ‘it is necessary only to show that

“members of the public are likely to be deceived.’ ” ’ ” (Kasky v. Nike, Inc.

(2002) 27 Cal.4th 939, 951.)8 To achieve its goal of deterring unfair business


7

As previously noted, plaintiffs abandoned the only other unfair or unlawful

business practice claim they made — regarding the alleged manipulation of the
chemical constituents of cigarettes to enhance their addictiveness — except to the
extent that defendants made false or misleading statements on this subject. (See
fn. 2, ante, at p. 4.)

8

A violation of the UCL’s fraud prong is also a violation of the false

advertising law (§ 17500 et seq.). (Committee on Children’s Television v. General
Foods Corp.
(1983) 35 Cal.3d 197, 210; Brockey v. Moore (2003) 107
Cal.App.4th 86, 98.)

10

practices in an expeditious manner, the Legislature limited the scope of the

remedies available under the UCL. “A UCL action is equitable in nature; damages

cannot be recovered. [Citation.] . . . We have stated under the UCL, ‘[p]revailing

plaintiffs are generally limited to injunctive relief and restitution.’ [Citation.]”

(Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144.)

The fraudulent business practice prong of the UCL has been understood to

be distinct from common law fraud. “A [common law] fraudulent deception must

be actually false, known to be false by the perpetrator and reasonably relied upon

by a victim who incurs damages. None of these elements are required to state a

claim for injunctive relief” under the UCL. (Day v. AT&T Corp. (1998) 63

Cal.App.4th 325, 332; see State Farm Fire & Casualty Co. v. Superior Court

(1996) 45 Cal.App.4th 1093, 1105.) This distinction reflects the UCL’s focus on

the defendant’s conduct, rather than the plaintiff’s damages, in service of the

statute’s larger purpose of protecting the general public against unscrupulous

business practices. (Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d

442, 453.)

C. Class Actions and the UCL; Impact of Proposition 64

Class actions have often been the vehicle through which UCL actions have

been brought. Code of Civil Procedure section 382 has been judicially construed

as the authorizing statute for class suits in California. (Washington Mutual Bank

v. Superior Court (2001) 24 Cal.4th 906, 913.)9 It provides, in pertinent part, that

“when the question is one of a common or general interest, of many persons, or


9

“Section 382 has also been interpreted as permitting associations to sue on

behalf of their members.” (Mervyn’s, supra, 39 Cal.4th at p. 232, fn. 4; see
Raven’s Cove Townhomes, Inc. v. Knuppe Development Co. (1981) 114
Cal.App.3d 783, 793.)

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when the parties are numerous, and it is impracticable to bring them all before the

court, one or more may sue or defend for the benefit of all.” “Class certification

requires proof (1) of a sufficiently numerous, ascertainable class, (2) of a well-

defined community of interest, and (3) that certification will provide substantial

benefits to litigants and the courts, i.e., that proceeding as a class is superior to

other methods. [Citations.] In turn, the ‘community of interest requirement

embodies three factors: (1) predominant common questions of law or fact; (2)

class representatives with claims or defenses typical of the class; and (3) class

representatives who can adequately represent the class.’ ” (Fireside Bank v.

Superior Court (2007) 40 Cal.4th 1069, 1089.)

“ ‘[A] trial court may certify a UCL claim as a class action when the

statutory requirements of section 382 of the Code of Civil Procedure are met.’ ”

(Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1015.)

As we commented in Kraus v. Trinity Management Services, Inc. (2000) 23

Cal.4th 116, “consumer class actions and representative UCL actions serve

important roles in the enforcement of consumers’ rights. [They] make it

economically feasible to sue when individual claims are too small to justify the

expense of litigation, and thereby encourage attorneys to undertake private

enforcement actions. Through the UCL a plaintiff may obtain restitution and/or

injunctive relief against unfair or unlawful practices in order to protect the public

and restore to the parties in interest money or property taken by means of unfair

competition. These actions supplement the efforts of law enforcement and

regulatory agencies. This court has repeatedly recognized the importance of these

private enforcement efforts.” (Id. at p. 126, fn. omitted.)

Thus, the UCL class action is a procedural device that enforces substantive

law by aggregating many individual claims into a single claim, in compliance with

Code of Civil Procedure section 382, to achieve the remedial goals outlined above.

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It does not change that substantive law, however. (City of San Jose v. Superior

Court (1974) 12 Cal.3d 447, 462 [“Class actions are provided only as a means to

enforce substantive law”].)

This remains true even after passage of Proposition 64. Proposition 64

wrought certain procedural changes with respect to standing to bring a UCL

action, and it now also explicitly mandates that a representative UCL action

comply with Code of Civil Procedure section 382. These procedural

modifications to the statute, however, “left entirely unchanged the substantive

rules governing business and competitive conduct. Nothing a business might

lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden

is now permitted.” (Mervyn’s, supra, 39 Cal.4th at p. 232.)

As we explained in Mervyn’s, prior to passage of Proposition 64 the UCL

“authorized any person acting for the general public to sue for relief from unfair

competition.” (Mervyn’s, supra, 39 Cal.4th at p. 227.) “Standing to bring such an

action did not depend on a showing of injury or damage.” (Id. at p. 228.) “After

Proposition 64, which the voters approved at the November 2, 2004, General

Election, a private person has standing to sue only if he or she ‘has suffered injury

in fact and has lost money or property as a result of such unfair competition.’

(§ 17204, as amended by Prop. 64, § 3; see also § 17203, as amended by Prop. 64,

§ 2.)” (Mervyn’s, supra, 39 Cal.4th at p. 227.)

“Proposition 64 accomplishes its goals in relatively few words. The

measure amends section 17204, which prescribes who may sue to enforce the

UCL, by deleting the language that had formerly authorized suits by any person

‘acting for the interests of itself, its members or the general public,’ and by

replacing it with the phrase, ‘who has suffered injury in fact and has lost money or

property as a result of such unfair competition.’ The measure also amends section

17203, which authorizes courts to enjoin unfair competition, by adding the

13

following words: ‘Any person may pursue representative claims or relief on

behalf of others only if the claimant meets the standing requirements of Section

17204 and complies with Section 382 of the Code of Civil Procedure, but these

limitations do not apply to claims brought under this chapter by the Attorney

General, or any district attorney, county counsel, city attorney, or city prosecutor

in this state.’ (§ 17203.)” (Mervyn’s, supra, 39 Cal.4th at pp. 228-229.) Thus, the

effect of Proposition 64 is to “prevent uninjured private persons from suing for

restitution on behalf of others.” (Id. at p. 232, italics omitted.)

With this background in mind, we turn to the questions before us.

D. Analysis

1. Who Must Meet the Standing Requirement in a UCL Class Action, the

Representative Plaintiff or All Class Members?

As noted, in granting defendants’ motion for decertification, the trial court

concluded that “the simple language of Prop[osition] 64” required each class

member to show injury in fact and causation. Thus, the trial court construed the

text of Proposition 64 as requiring absent members to affirmatively demonstrate

that they met Proposition 64’s standing requirements — injury in fact and the loss

of money or property as a result of the unfair practice. We conclude that the trial

court’s construction of Proposition 64 was erroneous.

The trial court did not identify the “simple language” in Proposition 64

upon which it based its conclusion. In fact, as we demonstrate, no such language

appears — a point that even defendants’ counsel conceded at argument — nor is

such a construction necessary to address the very specific abuse of the prior UCL

standing provision at which Proposition 64 was directed.

The first principle of statutory construction requires us to interpret the

words of the statute themselves, giving them their ordinary meaning, and reading

them in context of the statute (or, here, the initiative) as a whole. If the language

14

is unambiguous, there is no need for further construction. If, however, the

language is susceptible of more than one reasonable meaning, we may consider

the ballot summaries and arguments to determine how the voters understood the

ballot measure and what they intended in enacting it. (Professional Engineers in

California Government v. Kempton (2007) 40 Cal.4th 1016, 1037.) Applying the

first principle of construction to the initiative, it is obvious that nothing in its plain

language supports the trial court’s construction of it as imposing the standing

requirement on absent class members.

Section 17204 now provides in pertinent part: “Actions for relief pursuant

to this chapter shall be prosecuted exclusively in a court of competent jurisdiction

by the Attorney General or a district attorney or by a county counsel . . . [or] city

attorney . . . [or] city prosecutor . . . or upon the complaint of a board, officer,

person, corporation, or association, or by a person who has suffered injury in fact

and has lost money or property as a result of the unfair competition.” Section

17203 — the statute authorizing representative actions — states in part: “Any

person may pursue representative claims or relief on behalf of others only if the

claimant meets the standing requirements of Section 17204 and complies with

Section 382 of the Code of Civil Procedure, but these limitations do not apply to

claims brought under this chapter by the Attorney General, or any district attorney,

county counsel, city attorney, or city prosecutor in this state.”

Notably, the references in section 17203 to one who wishes to pursue UCL

claims on behalf of others are in the singular; that is, the “person” and the

“claimant” who pursues such claims must meet the standing requirements of

section 17204 and comply with Code of Civil Procedure section 382. The

conclusion that must be drawn from these words is that only this individual — the

representative plaintiff — is required to meet the standing requirements. Thus, the

plain language of the statute lends no support to the trial court’s conclusion that all

15

unnamed class members in a UCL class action must demonstrate section 17204

standing. “ ‘If there is no ambiguity in the language of the statute, “then the

Legislature [or electorate] is presumed to have meant what it said, and the plain

meaning of the language governs.” ’ ” (People v. Tindall (2000) 24 Cal.4th 767,

772.)

Just as nothing in the initiative’s language supports the trial court’s

conclusion, neither does that conclusion find any support in Proposition 64’s ballot

materials. (See Soukup v. Law Offices of Herbert Hafif (2006) 39 Cal.4th 260, 279

[even though recourse to extrinsic material is unnecessary given plain language of

statute, we may consult it for material that buttresses our construction of the

statutory language].)

The specific abuse of the UCL at which Proposition 64 was directed was its

use by unscrupulous lawyers who exploited the generous standing requirement of

the UCL to file “shakedown” suits to extort money from small businesses.

“Attorneys form[ed] a front ‘watchdog’ or ‘consumer’ organization. They

scour[ed] public records on the Internet for what [were] often ridiculously minor

violations of some regulation or law by a small business, and sue[d] that business

in the name of the front organization. Since even frivolous lawsuits can have

economic nuisance value, the attorneys then contact[ed] the business (often owned

by immigrants for whom English is a second language), and point[ed] out that a

quick settlement (usually around a few thousand dollars) would be in the

business’s long-term interest.” (People ex rel. Lockyer v. Brar (2002) 115

Cal.App.4th 1315, 1317.)

“In Proposition 64, as stated in the measure’s preamble, the voters found

and declared that the UCL’s broad grant of standing had encouraged ‘[f]rivolous

unfair competition lawsuits [that] clog our courts[,] cost taxpayers’ and ‘threaten[ ]

the survival of small businesses . . . .’ (Prop. 64, § 1, subd. (c) [‘Findings and

16

Declarations of Purpose’].) The former law, the voters determined, had been

‘misused by some private attorneys who’ ‘[f]ile frivolous lawsuits as a means of

generating attorney’s fees without creating a corresponding public benefit,’ ‘[f]ile

lawsuits where no client has been injured in fact,’ ‘[f]ile lawsuits for clients who

have not used the defendant’s product or service, viewed the defendant’s

advertising, or had any other business dealing with the defendant,’ and ‘[f]ile

lawsuits on behalf of the general public without any accountability to the public

and without adequate court supervision.’ (Prop. 64, § 1, subd. (b)(1)-(4).) ‘[T]he

intent of California voters in enacting’ Proposition 64 was to limit such abuses by

prohibiting private attorneys from filing lawsuits for unfair competition where

they have no client who has been injured in fact’ (id., § 1, subd. (e)) and by

providing ‘that only the California Attorney General and local public officials be

authorized to file and prosecute actions on behalf of the general public’ (id., § 1,

subd. (f)).” (Mervyn’s, supra, 39 Cal.4th at p. 228, italics added.)

On the other hand, the ballot materials also support the conclusion that

Proposition 64 did not propose to curb the broad remedial purpose of the UCL or

the use of class actions to effect that purpose, but targeted only the specific abuse

described above. The proponents’ statement in the voter information guide for

Proposition 64 described the purpose of the initiative as “prot[ecting] small

business from frivolous lawsuits” generated by “[s]hakedown lawyers [who]

‘appoint’ themselves to act like the Attorney General and file lawsuits on behalf of

the people of the State of California, demanding thousands of dollars from small

business that can’t afford to fight in court.” (Voter Information Guide, Gen. Elec.

(Nov. 2004) argument in favor of Prop. 64, p. 40.)

17

At the same time, the proponents proclaimed that Proposition 64 “[p]rotects

your right to file a lawsuit if you’ve been damaged.” (Ibid.)10

Opponents of Proposition 64 argued that the initiative would adversely

impact the ability of private groups to enforce consumer protection statutes,

including “enforcing the laws against selling tobacco to children.” In response,

the proponents emphasized: “Proposition 64 doesn’t change any of these laws,

and “Proposition 64 would permit ALL the suits cited by its opponents.” (Voter

Information Guide, Gen. Elec. (Nov. 2004) rebuttal to argument against Prop. 64

at p. 41.) Indeed, the findings and declarations of the purpose of Proposition 64

state quite plainly: “It is the intent of California voters in enacting this act to

eliminate frivolous unfair competition lawsuits while protecting the right of

individuals to retain an attorney and file an action for relief pursuant to this

chapter.” (Prop. 64, § 1, subd. (d), as reprinted in 4D West’s Ann. Bus. & Prof.

Code (2008 ed.) foll. § 17203, p. 409.)11

Notably absent from the ballot materials is any indication that the purpose

of the initiative was to alter the way in which class actions operate in the context

of the UCL. Indeed, other than the requirement that the representative plaintiff


10

We grant the request for judicial notice by amicus curiae the Foundation for

Taxpayer and Consumer Rights to judicially notice the text of Proposition 64, the
ballot pamphlet argument for and against the proposition, and the analysis of the
initiative by the Legislative Analyst.

11

At several points, the dissent conveys the distinct impression that

Proposition 64 reserved to public officials alone the right to bring broad-based
actions to enforce the provisions of the UCL. As the language quoted above
illustrates, however, it is clear that the proponents did not intend to eliminate
private representative actions to protect Californians from unfair business
practices. In the post-Proposition 64 era, as before, such actions continue to
“supplement the efforts of law enforcement and regulatory agencies.” (Kraus v.
Trinity Management Services, Inc., supra,
23 Cal.4th at p. 126.)

18

comply with Code of Civil Procedure section 382, the ballot materials contain no

reference whatsoever to class actions nor is there any indication that Proposition

64 was intended in any way to alter the rules surrounding class action certification.

Those rules do not require that unnamed class members establish standing but,

insofar as standing is concerned, focus on the class representative. This is

demonstrated by federal law, to which we look when seeking guidance on issues

of class action procedure. (Caro v. Proctor & Gamble Co. (1993) 18 Cal.App.4th

644, 656, fn. 7.)

Under rule 23(a) of the Federal Rules of Civil Procedure (28 U.S.C.), a

class action is authorized “only if [¶] (1) the class is so numerous that joinder of

all members is impracticable, [¶] (2) there are questions of law or fact common to

the class, [¶] (3) the claims or defenses of the representative parties are typical of

the claims or defenses of the class, and [¶] (4) the representative parties will

fairly and adequately protect the interests of the class.” These requirements are

analogous to the requirements for class certification under Code of Civil

Procedure section 382. (Fireside Bank v. Superior Court, supra, 40 Cal.4th at p.

1089.) Under both federal and state procedure, a prerequisite to class certification

is the existence of an ascertainable class. (McElhaney v. Eli Lilly & Co. (D.S.D.

1982) 93 F.R.D. 875, 877 [“Prior to a consideration of the criteria established by

Rule 23, the Court must determine whether a class exists, and is capable of legal

definition”]; American Suzuki Motor Corp. v. Superior Court (1995) 37

Cal.App.4th 1291, 1294 [“A prerequisite to the maintenance of a class action is the

existence of an ascertainable class”].)

Although, with respect to whether such a class exists, it has been said that

“[t]he definition of a class should not be so broad as to include individuals who are

without standing to maintain the action on their own behalf” (Clay v. American

Tobacco Company (S.D.Ill. 1999) 188 F.R.D. 483, 490), such references do not

19

support the proposition that all class members must individually show they have

the same standing as the class representative in order to be part of the class. 12

Rather, federal case law is clear that the question of standing in class actions

involves the standing of the class representative and not the class members.

“Generally standing in a class action is assessed solely with respect to class

representatives, not unnamed members of the class.” (In re General Motors

Corporation Dex-Cool Products Liability Litigation (S.D.Ill. (2007) 241 F.R.D.

305, 310; see 1 Newberg & Conte, Newberg on Class Actions (3d ed. 1992)

§ 2.07, p. 2-41 [“the standing issue focuses on whether the plaintiff is properly

before the court, not whether . . . absent class members are properly before the

court”].) “Representative parties who have a direct and substantial interest have

standing; the question whether they may be allowed to present claims on behalf of

others who have similar, but not identical, interests depends not on standing, but

on an assessment of typicality and adequacy of representation.” (7AA Wright et

al., Federal Practice and Procedure (3d ed. 2005) § 1785.1, pp. 388-389.) “In a

class action, then, the trial court initially must address whether the named

plaintiffs have standing under Article III to assert their individual claims. If that

initial test is met, the court must then scrutinize the putative class and its

representatives to determine whether the relationship between them is such that


12

Our reading of the trial court’s order — that a “showing of causation is

required as to each class members’ injury in fact (specifically the phrase ‘as a
result of’ the UCL violation)” — is that the court meant that the absent class
members in this action must individually establish standing. Defendants
apparently would not go so far. They suggest only that standing must be part of
the calculus the court employs when it rules on a certification motion under the
UCL. This is a distinction without a difference because ultimately both the trial
court and defendants proceed from the same erroneous premise that the standing
requirements of Proposition 64 apply to absent class members.

20

under the requirements of Rule 23 the named plaintiffs may represent the class.

The trial court generally need not address the final question of whether the class

itself, after certification, has standing. If that court, guided by the nature and

purpose of the substantive law on which the plaintiffs base their claims, properly

applies Rule 23, then the certified class must necessarily have standing as an

entity.” (Vuyanich v. Republic National Bank of Dallas (N.D.Tex. 1979) 82

F.R.D. 420, 428.)

As noted, nothing in the text of Proposition 64, nor in the accompanying

ballot materials, makes any reference to altering class action procedures to impose

upon all absent class members the standing requirement imposed upon the class

representative. Moreover, Proposition 64 left intact provisions of the UCL that

support the conclusion that the initiative was not intended to have any effect on

absent class members. Specifically, Proposition 64 did not amend the remedies

provision of section 17203. This is significant because under section 17203, the

primary form of relief available under the UCL to protect consumers from unfair

business practices is an injunction, along with ancillary relief in the form of such

restitution “as may be necessary to restore to any person in interest any money or

property, real or personal, which may have been acquired by means of such unfair

competition.” (§ 17203.)

Neither form of relief requires that the absent class members, on whose

behalf such relief is sought, meet the same standing requirements as are imposed

upon the class representative. Injunctive relief operates “ ‘ “in futuro.” ’ ”

(Koebke v. Bernardo Heights Country Club (2005) 36 Cal.4th 824, 837.) The

purpose of such relief, in the context of a UCL action, is to protect California’s

consumers against unfair business practices by stopping such practices in their

tracks. An injunction would not serve the purpose of prevention of future harm if

only those who had already been injured by the practice were entitled to that relief.

21

Indeed, “[a]n injunction should not be granted as punishment for past acts where it

is unlikely that they will recur.” (Choice-in-Education League v. Los Angeles

Unified School Dist. (1993) 17 Cal.App.4th 415, 422.)13

Similarly, the language of section 17203 with respect to those entitled to

restitution — “to restore to any person in interest any money or property, real or

personal, which may have been acquired” (italics added) by means of the unfair

practice — is patently less stringent than the standing requirement for the class

representative — “any person who has suffered injury in fact and has lost money

or property as a result of the unfair competition.” (§ 17204, italics added.) This

language, construed in light of the “concern that wrongdoers not retain the benefits

of their misconduct” (Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d

442, 452) has led courts repeatedly and consistently to hold that relief under the

UCL is available without individualized proof of deception, reliance and injury.

(E.g., Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1267; Committee

on Children’s Television, Inc. v. General Foods Corp., supra, 35 Cal.3d at p. 211.)

Accordingly, to hold that the absent class members on whose behalf a private UCL

action is prosecuted must show on an individualized basis that they have “lost

money or property as a result of the unfair competition” (§ 17204) would conflict

with the language in section 17203 authorizing broader relief — the “may have

been acquired” language — and implicitly overrule a fundamental holding in our

previous decisions, including Fletcher, Bank of the West and Committee on

Children’s Television. Had this been the intention of the drafters of Proposition 64


13

It is conceivable that a named class representative who met the standing

requirements under Proposition 64 could pursue a broad-based UCL class action
in which only injunctive relief was sought on behalf of a class that was likely to,
but had not yet, suffered injury arising from the unfair business practice. We need
not decide here whether such an action would be proper.

22

— to limit the availability of class actions under the UCL only to those absent

class members who met Proposition 64’s standing requirements — presumably

they would have amended section 17203 to reflect this intention. Plainly, they did

not.14

To conclude: (1) there is nothing in the express language of Proposition 64

that purports to alter accepted principles of class action procedure that treat the

issue of standing as referring only to the class representative and not the absent

class members; (2) nor is there any indication in the ballot pamphlet materials that

would have alerted the voters that such alteration in class action procedure was an

intended result of passage of the initiative; (3) imposing such a novel requirement

is not necessary to remedy the specific abuse of the UCL at which Proposition 64

was directed; (4) but, on the other hand, imposing this unprecedented requirement

would undermine the guarantee made by Proposition 64’s proponents that the


14

Our conclusion with respect to the remedies set forth in section 17203 has

nothing to do with the nonrestitutionary disgorgement disallowed in Kraus v.
Trinity Management Services, Inc., supra
, 23 Cal.4th 116. In Kraus, we
concluded that section 17203 does not allow a court to order disgorgement into a
fluid recovery fund, e.g., to “compel a defendant to surrender all money obtained
through an unfair practice even though not all is to be restored to the persons from
whom it was obtained or those claiming under those persons.” (Id. at p. 127.)
This prohibition against nonrestitutionary disgorgement did not overrule any part
of Fletcher v. Security Pacific National Bank, supra, 23 Cal.3d 442, under which
restitution may be ordered “without individualized proof of deception, reliance,
and injury if necessary to prevent the use or employment of an unfair practice.”
(Bank of the West, supra, 2 Cal.4th at p. 1267.)

Nothing in Proposition 64 explicitly extends the standing requirement of

the representative plaintiff to the unnamed class members; the fact that the “may
have been acquired” language in section 17203 was unchanged by the initiative
undermines the dissent’s conclusion that it was the intention of the electorate to do
so. We must take the initiative as it is, neither reading into it language that is not
in it, nor reading out of it language that is to support some presumed intention of
the electorate.

23

initiative would not undermine the efficacy of the UCL as a means of protecting

consumer rights, because requiring all unnamed members of a class action to

individually establish standing would effectively eliminate the class action lawsuit

as a vehicle for the vindication of such rights; and (5) the remedies provision of

UCL, left unchanged by Proposition 64, offers additional support for the

conclusion that the initiative was not intended to have any effect at all on unnamed

members of UCL class actions.

At argument, defendants acknowledged that the text of Proposition 64 does

not apply the standing requirements to unnamed class members. Defendants

maintained, rather, that application of these requirements to absent class members

is mandated by class action principles, specifically, that a class member must have

standing to bring the action individually and that the aggregation of individual

claims into a class action cannot be used to transform the underlying claim. We

reject these arguments.

In concluding that Proposition 64 required absent class members to

demonstrate standing, the lower courts and defendants here uncritically cited a

single sentence in Collins v. Safeway Stores, Inc. (1986) 187 Cal.App.3d 62

stating that “ ‘[e]ach class member must have standing to bring the suit in his own

right.’ ” (Id. at p. 73, quoting McElhaney v. Eli Lilly & Co., supra, 93 F.R.D. at

p. 878.) A closer reading of Collins reveals that it is inapposite; the question in

Collins was whether a class existed at all and not whether unnamed members of a

certified class must demonstrate standing.

In Collins, the putative class representatives bought eggs produced by

defendant egg producer and sold by defendant supermarket chain; some of the

eggs had been contaminated by a pesticide. The contaminated eggs were mixed in

with uncontaminated eggs and once the contamination was known, all cartons

from the producer were pulled from the supermarket chains’ shelves and

24

destroyed. The proposed class was divided into two subclasses: (1) all California

consumers who had purchased eggs from Safeway within a five-month period (the

economic class), and (2) all persons who had ingested the eggs and sustained

damage. The trial court declined to certify the first class on the grounds that the

proposed “class was not ascertainable as an economic class that had suffered an

economic loss.” (Collins v. Safeway Stores, Inc., supra, 187 Cal.App.3d at p. 67.)

The Court of Appeal affirmed. As the court observed, under the particular

facts of the case before it, “no individual member of the defined economic class

will ever be able to come forward and prove that their purchased eggs were

contaminated in whole or in part. Due to the commingling of 20 percent

contaminated eggs with 80 percent noncontaminated eggs, each carton may have

contained one or more contaminated eggs, or none at all.” (Collins v. Safeway

Stores, Inc., supra, 187 Cal.App.3d at p. 69.) Thus, the court declined “to certify

an economic class where not all products sold to the class were defective and

where the class members themselves do not know, and will never know, whether

they purchased a defective product.” (Id. at p. 70.) It was therefore in this context

— in which it could not be established that any member of the alleged class had

suffered any injury caused by the defendants’ conduct — that the court quoted the

McElhaney court’s observation that each class member must have standing to

bring the action on his or her own behalf. (Id. at p. 73.)

Importantly, the class certification discussion in Collins was not framed in

the context of the UCL. Indeed, the only hint that the UCL was involved in

Collins is a brief reference in a footnote that, among the plaintiffs’ “theories of

recovery” were “violations of sections of the . . . Business and Professions Code.”

(Collins v. Safeway Stores, Inc., supra, 187 Cal.App.3d at p. 66, fn. 2.)

Moreover, to the extent that the UCL was involved, the Court of Appeal’s

conclusion that the plaintiffs had failed to describe a certifiable class is

25

questionable. It is clear in Collins that some of the purchasers in question may

have purchased contaminated eggs — therefore, the “money or property” of the

entire class of purchasers “may have acquired by means” of an unfair practice

(§ 17203), thus entitling them to restitution for their loss. 15

Collins does not address the question before us of whether absent class

members in a UCL action are required to establish standing, and is therefore

inapposite. (Ginns v. Savage (1964) 61 Cal.2d 520, 524, fn. 2 [“an opinion is not


15

Collins quoted McElhaney v. Eli Lilly & Co., supra, 93 F.R.D. 877, but

McElhaney is no more apposite than Collins because it, too, dealt with the denial
of a class certification motion based on putative class representatives’ inability to
describe a cognizable class of individuals who had suffered injury caused by the
defendant’s conduct, allegedly the exposure of fetuses to the drug
diethylstilbestrol (DES). (McElhaney v. Eli Lilly & Co. supra, 93 F.R.D. at p. 877
[“Although plaintiff alleges that she is suffering from DES-related injuries, there
appears to be no requirement that any class member has sustained any injury or
damage”].) The cases cited by McElhaney also involve the failure of the putative
class representative to have identified an ascertainable class. (Kister v. Ohio
Board of Regents
(S.D. Ohio 1973) 365 F.Supp. 27 [purported class challenging
statute governing suspension and dismissal of students and employees of Ohio’s
university and college system, who had been arrested and convicted of certain
criminal statutes, which included all students, faculty and staff members, was too
broad]; Lamb v. Hamblin (D.Minn. 1972) 57 F.R.D. 58 [class action brought by
users of municipal water service challenging termination of service procedure
must be limited to those under present threat of termination or whose service had
been terminated, not all users of service]; Thomas v. Clarke (D.Minn. 1971) 54
F.R.D. 245 [class action challenging constitutionality of claim and delivery statute
that defined class as all persons potentially subject to the statute was too broad;
limited to those whose property had been seized or was under threat of seizure
under the statute].) Moreover, the genesis of the Collins quotation is a decision,
cited by Thomas, involving a radically different context than the dicta for which it
has been subsequently cited. (Pacific Inter-Club Yacht Association v. Morris
(N.D.Cal. 1960) 197 F.Supp. 218, 222-223 [where court lacks jurisdiction over
plaintiff’s action to prevent the building of a bridge over a navigable waterway,
bringing the action as a class action does not confer jurisdiction; “[b]anding
together a group of individuals who could not invoke the jurisdiction of this Court
does not cloak the group with rights not granted to the several individuals”].)

26

authority for a proposition not therein considered”].) Rather, Collins involved the

preliminary step of identifying the existence of an ascertainable class. The

reference to standing must be understood in this context — that is, as part of the

requirement that a class “ ‘be sufficiently definite so that it is administratively

feasible for the Court to determine whether a particular individual is a member of

the proposed class.’ ” (Miller v. Janssen Pharmaceutica Products, L.P. (S.D.Ill.

2007) 2007 WL 1295824, p. *5.)

Here, the trial court certified a class. Its subsequent decertification was not

based on any deficiency by the plaintiffs in having described the class in the first

place, but on the trial court’s erroneous view that changes in the UCL’s standing

requirement were now applicable to all class members. In other words, the trial

court did not conclude that the class was no longer ascertainable, but that the

absent class members were now required in a UCL action to individually

demonstrate standing in order to remain in the class. As we have demonstrated,

the trial court’s conclusion is not supported either by principles of class action

procedure or by the language of Proposition 64 itself.

Defendants also argue that Proposition 64’s standing requirement must be

applied to all class members because otherwise the class representative would be

permitted “to assert ‘claims’ that the absent class members do not have.”

According to defendants this would violate the principle that the aggregation of

individual claims into a class action “does not serve to enlarge substantive rights

or remedies.” (Feitelberg v. Credit Suisse First Boston, LLC., supra, 134

Cal.App.4th at p. 1014.) We disagree.

The substantive right extended to the public by the UCL is the “ ‘ “right to

protection from fraud, deceit and unlawful conduct” ’ ” (Prata v. Superior Court

(2001) 91 Cal.App.4th 1128, 1137), and the focus of the statute is on the

defendant’s conduct. As we have already observed, the proponents of Proposition

27

64 told the electorate that the initiative would not alter the statute’s fundamental

purpose of protecting consumers from unfair businesses practices. Rather, the

purpose of the initiative was to address a specific abuse of the UCL’s generous

standing provision by eliminating that provision in favor of a more stringent

standing requirement. That change, as we observed in Mervyn’s, did not change

the substantive law. (Mervyn’s, supra, 39 Cal.4th at p. 232.)

The underlying claim in the instant case is that defendants have engaged in

a long-term campaign of deceptive advertising and misrepresentations to the

consumers of its products regarding the health risks of those products. The class,

as certified, consists of members of the public who were exposed to defendants’

allegedly deceptive advertisements and misrepresentations and who were also

consumers of defendants’ products during a specific period of time. The nature of

the claim is the same — the right to be protected against defendants’ alleged deceit

— and the remedies remain the same — injunctive relief and restitution. Applying

Proposition 64’s standing requirements to the class representative but not the

absent class members enlarges neither the substantive rights nor the remedies of

the class.

We therefore conclude that Proposition 64 was not intended to, and does

not, impose section 17204’s standing requirements on absent class members in a

UCL class action where class requirements have otherwise been found to exist.

2. What Is Required to Establish Standing Under the UCL as Amended by



Proposition 64?

The second question before us is the meaning of the phrase “as a result of”

in section 17204’s requirement that a private enforcement action under the UCL

can only be brought by “a person who has suffered injury in fact and has lost

money or property as a result of the unfair competition.” (§ 17204.) While it is

clear that the phrase indicates there must be some connection between the injury

28

and the defendant’s conduct, the parties disagree about the type of causation the

plaintiff must demonstrate.

Defendants claim that the phrase “as a result of” introduced a tort causation

element into UCL actions. In the context of this case, this would appear to require

a showing of actual reliance on the deceptive advertising and misrepresentations

as a result of which the loss of money or property was sustained. Plaintiffs, on the

other hand, maintain that the new standing requirement did not impose any type of

tort causation requirement. Plaintiffs argue that the phrase merely requires “a

factual nexus” between a defendant’s conduct and a plaintiff’s injury: “the

representative plaintiff need only be one of the people from whom the defendant

obtained money or property while engaging in its unfair business practice.”16

The phrase is not defined by other provisions of the statute. Moreover,

examination of the ballot materials does not shed any light on whether it was the

intent of the electorate in enacting Proposition 64 to impose actual reliance where

16

Plaintiffs also maintain that Proposition 64 was intended to do no more than

require federal article III standing and that, for purposes of such standing, a
plaintiff need only show that his or her injury is fairly traceable to the defendant’s
conduct. They base their argument on the following statement: “It is the intent of
the California voters in enacting this act 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.” (Prop. 64,
§ 1, subd. (e), as reprinted in 4D West’s Ann. Bux. & Prof. Code, supra, foll.
§ 17203, p. 409.) The purpose of article III standing is to ensure that “federal
courts reserve their judicial power for ‘ “concrete legal issues, presented in actual
cases, not abstractions.” ’ ” (Associated Contractors of California v. Coalition for
Economic Equity
(9th Cir. 1991) 950 F.2d 1401, 1406.) It may have been that the
reference to article III standing was intended simply to emphasize Proposition 64’s
requirement that only those plaintiffs who have suffered actual injury be permitted
to prosecute private enforcement actions under the UCL. In any event, we are
certain that if the proponents of the initiative had intended some other standard of
causation to apply, they would have said so directly instead of using an elliptical
reference to federal standing.

29

a UCL claim is based on fraud.17 Causation merits only a passing mention in the

Attorney General’s summary. The summary describes the purpose of the initiative

as limiting the right of an individual to sue by allowing private enforcement of the

UCL only by a person who “was actually injured by, and suffered

financial/property loss because of, an unfair business practice.” (Voter

Information Guide, Gen. Elec. (Nov. 2004) official title and summary, p. 38,

italics added.) In describing the changes to the UCL that would result from the

initiative, the analysis by the Legislative Analyst does not refer to causation at all:

“This measure prohibits any person, other than the Attorney General and local

public prosecutors, from bringing a lawsuit for unfair competition unless the

person has suffered injury and lost money or property.” (Voter Information

Guide, Gen. Elec. (Nov. 2004), analysis of Legislative Analyst, p. 38.)

Moreover, as noted, before Proposition 64, “California courts have

repeatedly held that relief under the UCL is available without individualized proof

of deception, reliance and injury.” (Massachusetts Mutual Life Ins. Co. v.

Superior Court (2002) 97 Cal.App.4th 1282, 1288.)

On the other hand, there is no doubt that reliance is the causal mechanism

of fraud. (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1108.) Additionally,

because it is clear that the overriding purpose of Proposition 64 was to impose

limits on private enforcement actions under the UCL, we must construe the phrase

“as a result of” in light of this intention to limit such actions. (People v. Cooper


17

We emphasize that our discussion of causation in this case is limited to

such cases where, as here, a UCL action is based on a fraud theory involving false
advertising and misrepresentations to consumers. The UCL defines “unfair
competition” as “includ[ing] any unlawful, unfair or fraudulent business act or
practice . . . .” (§ 17200.) There are doubtless many types of unfair business
practices in which the concept of reliance, as discussed here, has no application.

30

(2002) 27 Cal.4th 38, 45 [“To determine the meaning of a statute, we seek to

discern the sense of its language, in full context, in light of its purpose”].)

Therefore, we conclude that this language imposes an actual reliance requirement

on plaintiffs prosecuting a private enforcement action under the UCL’s fraud

prong.

This conclusion, however, is the beginning, not the end, of the analysis of

what a plaintiff must plead and prove under the fraud prong of the UCL. Reliance

is “an essential element of . . . fraud . . . . [¶] [R]eliance is proved by showing that

the defendant’s misrepresentation or nondisclosure was ‘an immediate cause’ of

the plaintiff’s injury-producing conduct. [Citation.] A plaintiff may establish that

the defendant’s misrepresentation is an ‘immediate cause’ of the plaintiff’s

conduct by showing that in its absence the plaintiff ‘in all reasonable probability’

would not have engaged in the injury-producing conduct.” (Mirkin v. Wasserman

(1993) 5 Cal.4th 1082, 1110-1111 (conc. & dis. opn. of Kennard, J.).)

While a plaintiff must show that the misrepresentation was an immediate

cause of the injury-producing conduct, the plaintiff need not demonstrate it was

the only cause. “ ‘It is not . . . necessary that [the plaintiff’s] reliance upon the

truth of the fraudulent misrepresentation be the sole or even the predominant or

decisive factor influencing his conduct. . . . It is enough that the representation has

played a substantial part, and so had been a substantial factor, in influencing his

decision.’ [Citation.] [¶] Moreover, a presumption, or at least an inference, of

reliance arises wherever there is a showing that a misrepresentation was material.

[Citations.] A misrepresentation is judged to be ‘material’ if ‘a reasonable man

would attach importance to its existence or nonexistence in determining his choice

of action in the transaction in question’ [citations], and as such materiality is

generally a question of fact unless the ‘fact misrepresented is so obviously

unimportant that the jury could not reasonably find that a reasonable man would

31

have been influenced by it.’ [Citation.]” (Engalla v. Permanente Medical Group,

Inc. (1997) 15 Cal.4th 951, 976-977.)

Nor does a plaintiff need to demonstrate individualized reliance on specific

misrepresentations to satisfy the reliance requirement. This principle is illustrated

in a pair of tobacco case decisions that upheld verdicts for plaintiffs against

substantial-evidence challenges, specifically focusing on the sufficiency of the

evidence supporting reliance. (Boeken v. Philip Morris, Inc. (2005) 127

Cal.App.4th 1640 (Boeken); Whiteley v. Philip Morris, Inc. (2004) 117

Cal.App.4th 635 (Whiteley).) In each case, the defendants argued that the

evidence was insufficient to support the judgments because the plaintiffs had

failed to prove they heard and had relied on specific misrepresentations about the

health hazards of cigarette smoking. (Boeken, supra, 127 Cal.App.4th at p. 1657;

Whiteley, supra, 117 Cal.App.4th at pp. 667-678.) In both Boeken and Whiteley,

evidence was admitted to prove the decades-long campaign of the tobacco

industry to conceal the health risks of its product while minimizing the growing

consensus regarding the link between cigarette smoking and lung cancer and,

simultaneously, engaging in “saturation advertising targeting adolescents, the age

group from which new smokers must come.” (Whiteley, supra, 117 Cal.App.4th

at p. 647; Boeken, supra, 127 Cal.App.4th at p. 1660 [“Even before Boeken

became a target member of the group of addicted smokers, Philip Morris targeted

Boeken as a member of another group — adolescent boys”].)

In each case, the plaintiffs testified that their decision to begin smoking was

influenced and reinforced by cigarette advertising, though neither could point to

specific advertisements. (Boeken, supra, 127 Cal.App.4th 1662-1663; Whiteley,

supra, 117 Cal.App.4th at p. 679.) Each plaintiff also testified that, despite

awareness of the controversy surrounding smoking, he or she believed the tobacco

industry’s assurances that there was no definitive connection between cigarette

32

smoking and various diseases. (Boeken, supra, 127 Cal.App.4th at pp. 1664-1665;

Whiteley, supra, 117 Cal.App.4th at p. 679.) Based on this record, the Boeken

court concluded that there was substantial evidence that Boeken began to smoke

“for reasons that track Philip Morris’s advertising of the time” (Boeken, at

p. 1663), notwithstanding his inability to recall specific advertisements, that he

relied on the defendant’s false statements regarding the health risks of cigarette

smoking notwithstanding his awareness of contrary statements, and that his

reliance was justified. (Boeken at pp. 1664-1667.) Similarly, in Whiteley, the

court concluded that substantial evidence supported the conclusion that Whiteley’s

justifiably relied on the defendant’s “false assurances and denials” regarding the

hazard of smoking. (Whiteley, supra, 117 Cal.App.4th at p. 679.)

These decisions provide a framework for what plaintiffs must plead and

prove in UCL fraud actions in terms of reliance. These cases teach that, while a

plaintiff must allege that the defendant’s misrepresentations were an immediate

cause of the injury-causing conduct, the plaintiff is not required to allege that those

misrepresentations were the sole or even the decisive cause of the injury-

producing conduct. Furthermore, where, as here, a plaintiff alleges exposure to a

long-term advertising campaign, the plaintiff is not required to plead with an

unrealistic degree of specificity that the plaintiff relied on particular

advertisements or statements. Finally, an allegation of reliance is not defeated

merely because there was alternative information available to the consumer-

plaintiff, even regarding an issue as prominent as whether cigarette smoking

causes cancer. (See Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623,

638 [there is no “special presumption under California law based on common

knowledge that a plaintiff is aware that smoking is addictive or harmful”].)

Accordingly, we conclude that a plaintiff must plead and prove actual reliance to

satisfy the standing requirement of section 17204 but, consistent with the

33

principles set forth above, is not required to necessarily plead and prove

individualized reliance on specific misrepresentations or false statements where, as

here, those misrepresentations and false statements were part of an extensive and

long-term advertising campaign.

In granting the motion to decertify the class, and in concluding that the

entire class was required to demonstrate standing, the trial court’s order also

stated, “Further, it appears from the record that not even Plaintiffs’ named

representatives satisfy Prop[osition] 64’s standing requirement.” The trial court

did not elaborate on the basis for its conclusion and we cannot be certain what it

meant. Moreover, even assuming that, in light of Proposition 64, the named

representatives are no longer adequate representatives of the class because they

lack standing, the proper procedure would not be to decertify the class but grant

leave to amend to redefine the class or add a new class representative. “This rule

is usually applied in situations where the class representative originally had

standing, but has since lost it by intervening law or facts.” (First American Title

Ins. Co. v. Superior Court (2007) 146 Cal.App.4th 1564, 1574.) We ourselves

sanctioned this procedure in a post-Proposition 64 case. (Branick v. Downey

Savings & Loan Assn. (2006) 39 Cal.4th 235, 243 [“courts have permitted

plaintiffs who have been determined to lack standing, or who have lost standing

after the complaint was filed, to substitute as plaintiffs the true parties in

interest”].) Accordingly, we reverse the order granting the decertification motion

and remand the case for further proceedings to determine whether these plaintiffs

can establish standing as we have now defined it and, if not, whether amendment

should be permitted.

34

DISPOSITION

The order granting defendants’ decertification motion is reversed and the

matter is remanded for further proceedings consistent with this opinion.



MORENO, J.

WE CONCUR: KENNARD, ACTING C. J.


WERDEGAR, J.

MOORE, J.*

























_________________

*

Associate Justice, Court of Appeal, Fourth Appellate District, Division 3,

assigned by the Acting Chief Justice pursuant to article VI, section 6 of the
California Constitution.

35










CONCURRING AND DISSENTING OPINION BY BAXTER, J.




Proposition 64, an initiative measure adopted by the voters at the November

2004 election, worked a sea change in litigation to enforce the unfair competition

law (UCL; Bus. & Prof. Code, § 17200 et seq.).1 Previously, a UCL action

against one alleged to have committed an illegal, unfair, or deceptive business

practice could be maintained by any one of several specified public officials, or by

“any person acting for the interests of itself, its members or the general public.”

(Former § 17204.) In a suit by either a public or private plaintiff, the court could

order injunctive relief as well as the restoration “to any person in interest [of] any

money or property, real or personal, which [might] have been acquired by means

of such unfair competition.” (Former § 17203.) As a result, a private individual

or entity with no relationship to the alleged wrongful practice could use the statute

to force a business to repay substantial sums arguably acquired through a UCL

violation.

Advised that the broad power accorded to “private attorneys general” under

the UCL had led to abusive “shakedown” suits, the voters, through Proposition 64,

adopted crucial reforms. Proposition 64 left intact the authority of the enumerated

public officials to maintain UCL actions on the public’s behalf, and therein to


1

All unlabeled statutory references are to the Business and Professions

Code.

1

obtain injunctive relief and restitution of profits generally associated with the

alleged unfair practice. However, the measure severely restricted the UCL

enforcement powers of private persons in two ways.

First, it provided that any private person bringing an UCL suit must have

suffered “injury in fact and . . . lost money or property as a result of the unfair

competition.” (§ 17204, italics added.) Second, it specified that a private person

may pursue representative claims on behalf of others only if he or she

(1) personally has suffered actual injury and loss caused by the unfair practice and

(2) “complies with [s]ection 382 of the Code of Civil Procedure.” (§ 17203.)

Code of Civil Procedure section 382 is the statute that authorizes class

actions, and the ballot pamphlet materials for Proposition 64 leave no doubt the

voters understood the reference to this statute as requiring all representative UCL

suits by private persons to proceed under the rules and principles governing class

actions.2 As I will discuss, those rules and principles prominently require that the

representative, or named, plaintiff have a claim typical of the class, and that each

class member be someone who could bring suit on his or her own behalf.

Applying these principles to the issues before us, I concur in the majority’s

conclusion that, under Proposition 64’s injury-in-fact and causation requirements,

the named plaintiffs in a UCL action alleging deceptive or fraudulent advertising

of an injurious product must plead and prove they purchased the product in actual


2

(See Voter Information Guide, Gen. Elec. (Nov. 2, 2004) (Voter

Information Guide), official title and summary of Prop. 64 by Atty. Gen., p. 38
[measure “[r]equires private representative claims [under unfair competition
statutes] to comply with procedural requirements applicable to class action
lawsuits”]; id., analysis of Prop. 64 by Legis. Analyst, p. 39 [“measure requires
that unfair competition lawsuits initiated by any [private] person . . . on behalf of
others, meet the additional requirements of class action lawsuits”].)

2

reliance on the false advertising. I also agree the named plaintiffs need not allege

or establish that the asserted false advertising was the sole cause of the purchases.

Nor, where the defendant has engaged in a pervasive campaign of false claims

over a long period of time, need the named plaintiffs cite a specific advertisement

or advertisements that influenced their purchases.

However, I respectfully disagree with the majority insofar as it concludes

that unnamed class members in a private UCL class action need not meet the

injury-in-fact and causation requirements of Proposition 64. In this UCL suit

alleging that tobacco companies engaged in false advertising about the health risks

of their products, the majority applies its mistaken holding to conclude, in effect,

that so long as the named plaintiffs actually relied on the allegedly deceptive

advertising claims when buying and smoking cigarettes, they may seek injunctive

and restitutionary relief on behalf of all California smokers who simply saw or

heard such ads during the period at issue, regardless of whether false claims

contained in those ads had anything to do with any class member’s decision to buy

and smoke cigarettes.

Even if the majority’s holding has some sympathetic appeal on the

particular facts alleged here, the rule the majority announces will apply equally to

less egregious cases, where it invites the very kinds of mischief Proposition 64

was intended to curtail. Accordingly, I cannot join the majority’s erroneous

determination, which turns class action law upside down and contravenes the

initiative measure’s plain intent.

As indicated above, Proposition 64 requires all UCL suits brought by

private persons on behalf of others to comply with Code of Civil Procedure

section 382 by proceeding as class actions. It is well settled that maintenance of a

class suit requires proof, among other things, of a sufficiently numerous,

ascertainable class with a well-defined community of interest. The “community of

3

interest” requirement has three aspects: (1) predominant common questions of

law and fact, (2) class representatives with claims or defenses typical of the class,

and (3) class representatives who can adequately represent the class. (E.g.,

Fireside Bank v. Superior Court (2007) 40 Cal.4th 1069, 1089; Sav-On Drug

Stores, Inc. v. Superior Court (2004) 34 Cal.4th 319, 326; Linder v. Thrifty Oil Co.

(2000) 23 Cal.4th 429, 435; Richmond v. Dart Industries, Inc. (1981) 29 Cal.3d

462, 470.) As the majority notes, these criteria are analogous to those set forth in

Federal Rules of Civil Procedure rule 23(a) (28 U.S.C.), and we look to federal

decisions under that rule for guidance in matters of class action procedure.

Ascertainability and typicality both require that members of a certified class

themselves have causes of action against the defendant. Courts, state and federal,

repeatedly have stressed that the definition of a class cannot be so broad as to

include persons who would lack standing to bring suit in their own names. (E.g.,

American Suzuki Motor Corp. v. Superior Court (1995) 37 Cal.App.4th 1291,

1294-1295 [class action for breach of warranty based on motorcycle design defect

could not be maintained on behalf of purchasers who suffered no injury or

property damage from alleged defect]; Collins v. Safeway Stores, Inc. (1986)

187 Cal.App.3d 62, 69, 72-73 (Collins) [in action alleging defendant’s distribution

of 20 percent contaminated and 80 percent uncontaminated eggs, randomly

commingled, no class could be ascertained because it was impossible to tell

whether any particular putative class member bought contaminated eggs];

Oshana v. Coca-Cola Co. (7th Cir. 2006) 472 F.3d 506, 514-515 [in statutory

consumer-fraud action claiming defendant misrepresented ingredients in its

fountain diet soda, requirements of ascertainability and typicality were not met

where proposed class included persons who did not rely on misrepresentations

when buying defendant’s fountain soda]; Denney v. Deutsche Bank AG (2d Cir.

2006) 443 F.3d 253, 264 [stating that, while class members need not make

4

individual showings of standing at the certification stage, “no class may be

certified that contains members lacking . . . standing [under U.S. Const., art. III]”];

Adashunas v. Negley (7th Cir. 1980) 626 F.2d 600, 604 [stating, in action on

behalf of all learning-disabled Indiana public school students who allegedly had

not been identified and thus were not receiving their special-education entitlement,

that under art. III’s “case or controversy” requirement, it must “be reasonably clear

that the proposed class members have all suffered a constitutional or statutory

violation warranting some relief”; denial of class certification affirmed]; In re

Copper Antitrust Litigation (W.D.Wis. 2000) 196 F.R.D. 348, 353 [stating that

“[i]mplicit in Rule 23 is the requirement that the plaintiffs and the class they seek

to represent have standing”]; Clay v. American Tobacco Co. (S.D.Ill. 1999)

188 F.R.D. 483, 490 [stating, in suit against tobacco companies for wrongful

youth-oriented marketing, seeking disgorgement of all profits from cigarette sales

to minors, and proposing class of all U.S. persons who, as children, bought and

smoked defendants’ cigarettes, that “[t]he definition of a class should not be so

broad . . . as to include individuals who are without standing to maintain the action

on their own behalf”; class certification denied]; McElhaney v. Eli Lilly & Co.

(D.S.D. 1982) 93 F.R.D. 875, 878 (McElhaney) [in suit claiming precancerous

condition caused by in utero exposure to diethylstilbestrol (DES), proposed class

could not include persons who lacked standing to sue in their own right because

they were not exposed to DES and sustained no injury in fact]; see 7AA Wright et

al., Federal Practice and Procedure (3d ed. 2005) § 1785.1, p. 388, fn. 10.)3


3

For purposes of California law, Collins expressly states that “ ‘[t]he

definition of a class cannot be so broad as to include individuals who are without
standing to maintain the action on their own behalf. Each class member must have
standing to bring the suit in his own right.’ ” (Collins, supra, 187 Cal.App.3d 62,
73, quoting McElhaney, supra, 93 F.R.D. 875, 878.) The majority attempts to

(fn. continued to next page)

5

In this private UCL action alleging fraudulent advertising by tobacco

companies, the majority agrees the named plaintiffs could not sue without meeting

Proposition 64’s standing requirement of personal loss stemming from their actual

reliance on the deceptive ads. Under well-established class action rules, the

putative class the named plaintiffs seek to represent may include only persons who

could themselves bring similar UCL claims in their own behalves. They could do

so only if they themselves met Proposition 64’s standing requirement. It follows

inexorably that any UCL class certified in this action must be limited to those

individuals who also actually relied on defendants’ alleged deceptive advertising

campaign when purchasing and smoking cigarettes, and thereby suffered loss.

In holding otherwise, the majority thus determines, contrary to the

electorate’s clear directive, that normal class action rules do not apply to UCL

private representative actions governed by Proposition 64. The majority says that

under Proposition 64, as long as the named plaintiffs in a UCL action have

suffered “injury in fact and loss of money or property” caused by the unfair

practice alleged, they can file a representative UCL action, and even seek UCL

restitutionary relief, on behalf of members of the public to whom the unfair

(fn. continued from previous page)

distinguish both Collins and McElhaney on grounds those cases simply present
problems in certifying a class when the circumstances make it impossible, in the
first instance, to ascertain if anyone was injured, and if so, who. But the purported
distinction is unpersuasive. The premise upon which the “ascertainability”
conclusions in Collins and McElhaney proceed is that the class may include only
those persons who have suffered injury and could thus bring suit in their own
behalves. This is equally true of the cases cited by McElhaney and discussed by
the majority in footnote 15 of its opinion. (Maj. opn., ante, at p. 26.)

6

practice caused no actual harm or loss. None of the majority’s reasons for

interpreting Proposition 64 in this way is persuasive.4

The majority notes that the words of Proposition 64 say only that the

“claimant” — the named plaintiff in a private representative UCL action — must

“meet the standing requirements of [s]ection 17204” (§ 17203), that is, must have

suffered “injury in fact and [loss of] money or property” as a result of the unfair

practice. (§ 17204.) The initiative’s language, the majority stresses, does not

impose similar express limitations on the persons to be represented. However,

those limitations are incorporated into the UCL by Proposition 64’s additional

specification that, to maintain a representative action, a private person must

“compl[y] with [s]ection 382 of the Code of Civil Procedure” (§ 17203) — i.e.,


4

The majority’s error may stem, in part, from the fact that it largely

misframes the issue. The majority repeatedly implies the question is whether each
unnamed class member must “affirmatively demonstrate” (maj. opn., ante, at
p. 14) or “individually show” (id., at p. 20) he or she has the same “standing” as
the named plaintiff or plaintiffs before a class can be certified. The majority
suggests this is “[o]ur reading” of the trial court’s decertification order. (Id.,
fn. 12.) However, as the majority briefly acknowledges (ibid.), defendants make
no such argument. Indeed, class action principles include no such requirement;
the identification of individual class members and their entitlement to personal
recovery is determined only after a class has been certified and issues common to
the class have been litigated.


As defendants contend, and as a fair reading of the trial court’s order

indicates it understood, the true “class standing” issue at the certification stage is
simply one of class definition. As applied under Proposition 64, this means only
that any class to be certified in a private UCL action must be defined or described
to include only those (as yet unidentified) persons who, like the named plaintiffs,
have suffered actual injury and loss of money or property as a result of the alleged
unfair business practice. That limitation may lead, in turn, as it did here, to a
determination that individual issues of proof ultimately would predominate over
common ones, thus negating the benefits of a class proceeding.

7

must satisfy the procedural rules governing class actions. As we have seen, those

rules provide that the putative class cannot include persons to whom an alleged

unfair practice caused no actual injury or loss, and who thus could not bring suit in

their own names.

The majority insists Proposition 64 sought only to end a single, narrow

form of abuse — “shakedown” suits by uninjured named plaintiffs — and did not

otherwise restrict the role of private representative actions in enforcing the UCL’s

prohibition of unfair business practices. However, the ballot materials for the

initiative measure indicate otherwise.

Both the neutral descriptions of the measure and the proponents’ arguments

emphasized that under Proposition 64, the government officials enumerated in the

UCL would retain the right to maintain representative enforcement actions on

behalf of the public generally, but private persons would not. (Voter Information

Guide, supra, official title and summary of Prop. 64 by Atty. Gen., p. 38 [Prop. 64

“[a]uthorizes only the California Attorney General or local government

prosecutors to sue on behalf of general public to enforce unfair business

competition laws” (italics added)]; id., analysis of Prop. 64 by Legis. Analyst,

p. 39 [Prop. 64 “requires that unfair competition lawsuits initiated by any person,

other than the Attorney General and local public prosecutors, on behalf of others,

meet the additional requirements of class action lawsuits” (italics added)]; id.,

argument in favor of Prop. 64, p. 40 [Prop. 64 “[a]llows only the Attorney

General, district attorneys, and other public officials to file lawsuits on behalf of

the People of the State of California to enforce California’s unfair competition

law” (original italics)]; id., rebuttal to argument against Prop. 64, p. 41 [Prop. 64

“[p]ermits only real public officials like the Attorney General or District Attorneys

to file lawsuits on behalf of the People of the State of California” (original

italics)].) The proponents urged that passage of the measure would “[stop] fee-

8

seeking trial lawyers from exploiting a loophole in California law—

A LOOPHOLE NO OTHER STATE HAS—that lets them ‘appoint’ themselves

Attorney General and file lawsuits on behalf of the People of the State of

California.” (Id., rebuttal to argument against Prop. 64, p. 41.)

Nothing in these statements and arguments suggested a private lawyer

could sue on behalf of the public so long as he or she had a single client to whom

the unfair practice had caused actual injury and loss, and who could thus serve as a

named plaintiff. On the contrary, Proposition 64 clearly sought to eliminate the

UCL’s former “private attorney general” enforcement feature by precluding

individuals, even if themselves injured, from suing on behalf of others except

under the rules normally attendant on class actions. Thus, just as Proposition 64

eliminated the right of uninjured private persons to represent those who have been

injured (Californians for Disability Rights v. Mervyn’s, LLC (2006) 39 Cal.4th

223, 232 (Mervyn’s)), it also eliminated any private right, even of injured persons,

to represent those who have not been injured.

Indeed, the majority’s holding encourages the very sort of abusive

shakedown suits that Proposition 64 was designed to curb. That holding can be

applied not only to the unsympathetic facts alleged in this case — i.e., that large

tobacco companies lured consumers into nicotine addiction by falsely claiming,

over many years, that cigarettes were safe — but also to a myriad of situations in

which the anticonsumer implications are far less dire.

Consider the following scenario: A local chain of family-owned

supermarkets receives a large shipment of ground beef and puts it out for sale.

The stores’ meat departments label and display the meat as “ground round,” the

leanest grade. The stores’ regular price for ground round is $5.99 per pound, but

the display labels offer the meat from this shipment at a “reduced price” of $4.99

per pound. The company has not intentionally misrepresented the product.

9

However, in the exercise of due care, it should have known the meat is ground

sirloin, a wholesome but slightly fattier grade. The chain is actually selling other

quantities of ground sirloin, correctly labeled, at its regular $4.99 per pound price.

Customer A visits one of the stores, seeking to buy ground beef.

Concerned about his fat intake, he does not intend to purchase any grade other

than ground round and would not knowingly do so. Relying upon the incorrect

“ground round” label, he buys a pound of the meat, so labeled, at the $4.99 price,

and consumes it. A substantial number of other customers also see the incorrect

“ground round” labels. However, many do not care about the grade of ground

beef they eat, do not realize the significance of the label, and are not influenced by

it. Nonetheless, they also buy substantial quantities of the mislabeled meat and

happily consume it.

Customer A later discovers the labeling mistake. He obtains counsel and

brings a UCL action alleging false advertising that caused him actual injury or loss

in the amount of $4.99. He claims restitution to himself in that amount. In the

suit, he further seeks to certify a class of all other customers who saw the incorrect

labels and purchased the mistakenly mislabeled meat. Regardless of whether these

persons relied on the incorrect description when purchasing the mislabeled

product, he prays for restitution, on their behalf, of all profits the stores received

from such purchases.

Under the majority’s concept of no-injury class actions, the plaintiff,

Customer A, may well succeed in this endeavor if the case proceeds in court.

Realizing this, the company quickly settles. That cannot be what the voters

intended when they adopted the substantial reforms set forth in Proposition 64.

The majority’s reasoning contains an even more fundamental flaw. As

explained above, under the majority’s construction of Proposition 64, a person

may be a party to a UCL private representative action as a class member even

10

though he or she could not sue in his or her own name. Thus, an individual whose

personal effort to bring a UCL action failed because he or she could not

demonstrate any personal injury or loss caused by the unfair practice may simply

join, as an uninjured class member, in an identical class action brought by another

named plaintiff who does meet the minimal injury-in-fact and causation

requirements. Again, this cannot be what the electorate intended to achieve by

enacting Proposition 64.

The majority insists Proposition 64 did not alter the remedies the court may

order in a private representative UCL action, including injunctive relief and, of

particular note, the “restor[ation] to any party in interest [of] any money or

property, real or personal, which may have been acquired by means of [the

alleged] unfair competition.” (§ 17203, italics added.) In pre-Proposition 64

cases, the majority points out, we held that this “may have” language promotes the

UCL’s purpose of ensuring that wrongdoers do not profit by their misconduct, and

allows the court to order restitutionary relief under the UCL without

individualized proof of deception, reliance, and injury. (E.g., Bank of the West v.

Superior Court (1992) 2 Cal.4th 1254, 1267; Committee on Children’s Television,

Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211; Fletcher v. Security

Pacific National Bank (1979) 23 Cal.3d 442, 449-454 (Fletcher).) Hence, the

majority reasons, even after Proposition 64, an individual who was actually

injured and suffered the loss of money or property as a result of a defendant’s

unfair practice must still be able to sue on behalf of other persons from whom the

defendant merely “may” have obtained money or property by wrongful means.5

5

Fletcher, the pre-Proposition 64 case most on point, did hold, in a UCL

action for restitution of illegal bank overcharges on short-term commercial loans,
that an overcharged plaintiff who alleged he was unaware of the illegal practice
could maintain a class action on behalf of some 50,000 other overcharged

(fn. continued to next page)

11

Again, the majority’s analysis is not convincing. As the ballot materials for

Proposition 64 made clear, the public officials enumerated in the UCL still may

bring broad-based injunctive and restitutionary actions on behalf of the public to

redress and prevent unfair or deceptive business practices. Public enforcement

(fn. continued from previous page)

customers without any need for individualized proof that each class member was
aware of the overcharge. Of course, the gravamen of that action was the illegality
of the overcharge itself
, regardless of any associated deception. Thus, all
overcharged customers had suffered loss as a result of the unfair practice, the
representative plaintiff did have a typical claim, and unnamed class members
could have sued in their own names. Moreover, to the extent Fletcher and its
progeny broadly suggested, under the UCL’s “may have acquired” language, that
a private UCL action, individual or representative, could force disgorgement of
unfair profits without strict regard to the persons from whom those profits actually
were wrongfully obtained, we had, even before Proposition 64, rejected any such
notion. (See Kraus v. Trinity Management Services, Inc. (2000) 23 Cal.4th 116,
126-137 [UCL authorizes not general “disgorgement,” but only restitution to
specific persons from whom money was obtained by means of unfair practice;
hence, in representative UCL action, statute does not authorize defendant’s
payment of profits into fluid recovery fund]; Korea Supply Co. v. Lockheed Martin
Corp.
(2003) 29 Cal.4th 1134, 1143-1152 [in individual UCL action, plaintiff who
alleges injury or loss from unfair business practice is entitled only to restitution,
not “disgorgement,” and thus may not recover money not taken directly from him
or her as a result of the unfair practice]; but see Massachusetts Mutual Life Ins.
Co. v. Superior Court
(2002) 97 Cal.App.4th 1282, 1288-1292.)

Proposition 64 confirmed these principles. It expressly requires both

(1) that a private person may sue under the UCL only if money or property was
taken from him or her by means of an unfair business practice and (2) that he or
she may represent others only under the rules generally pertaining to class actions.
The measure thus made clear that all UCL class members must have suffered
actual loss of money or property caused by the unfair practice. Where, as here, the
gravamen of the complaint is fraudulent inducement, all class members in a
private UCL suit must therefore meet the standard of actual reliance upon which
such a claim depends. In such an action, a smoker who may have been “exposed”
to, but was not deceived by, the alleged false advertising claims is not entitled to
restitution of the money he or she paid for cigarettes.

12

suits are not constrained by Proposition 64’s class action restrictions, and in such

actions, the court may order the full range of remedies specified in the statute. But

by specially providing that private UCL suitors may represent others only under

the rules governing class actions, Proposition 64 withdrew from these plaintiffs

any authority simply to force repayment of alleged wrongful profits on behalf of

persons not truly and similarly affected by the alleged unfair practice. This change

in the law was impelled by a belief that certain private litigants and their counsel

had abused their authority as “private attorneys general” to “shake down”

undeserving businesses. Accordingly, under Proposition 64’s class action

provisions, private UCL plaintiffs may represent only those other persons with

similar UCL claims that could be brought individually.6

In my view, therefore, the Court of Appeal properly upheld the trial court’s

order granting defendants’ motion to decertify the UCL class approved prior to the

adoption of Proposition 64. That class had been defined to include all persons

who, as residents of California, “smoked one or more cigarettes between June 10,


6

Contrary to plaintiffs’ and the majority’s suggestion, a conclusion that both

the named, or representative, plaintiff and the UCL class he or she seeks to
represent must include only persons who satisfy Proposition 64’s injury-in-fact
and causation requirements does not contravene our determination in Mervyn’s
that the initiative measure made no change in “the substantive rules governing
business and competitive conduct.” (Mervyn’s, supra, 39 Cal.4th 223, 232.) As
Mervyn’s explained, “[n]othing a business might lawfully do before Proposition
64 is unlawful now, and nothing earlier forbidden is now permitted.” (Ibid.)
Now, as before, damages are unavailable, and “a private person may recover
restitution only of those profits that the defendant has unfairly obtained from such
person . . . .” (Ibid.) Now, as before, enumerated public officials may enforce the
UCL by means of litigation seeking broad forms of injunctive and restitutionary
relief. The only changes wrought by Proposition 64 are that uninjured private
persons
cannot seek restitution on behalf of others (Mervyn’s, supra, at p. 232),
and that private persons, even if themselves injured, may not represent a class of
persons who suffered no injury and loss caused by the alleged unfair practice.

13

1993 [and] April 23, 2001, and who were exposed to [d]efendants’ marketing and

advertising activities in California.” (Italics added.)

However, as the trial court and the Court of Appeal correctly concluded,

Proposition 64, as applicable to this pending action, requires that class members in

a UCL action, like the named plaintiffs, must have suffered actual injury and loss

of money or property caused by the defendants’ alleged deceptive advertising and

marketing campaign. In turn, both courts concluded, because the necessary

element of causation created so many potential issues of individual proof, there

was no predominant commonality in the proposed class. Finding this reasoning

entirely sound, I would affirm the judgment of the Court of Appeal.7

BAXTER, J.

WE CONCUR:

CHIN, J.
CORRIGAN, J.


7

Plaintiffs argue that even if UCL class members must, like the named

plaintiffs themselves, be persons who actually relied on defendants’ alleged
disinformation campaign when deciding to buy and smoke cigarettes, the
previously certified class of “exposed” smokers met this standard, without creating
undue problems of individual proof, under the doctrine of presumed reliance.
(See, e.g., Vasquez v. Superior Court (1971) 4 Cal.3d 814, 815.) The Court of
Appeal correctly rejected this contention. The duration and diversity of the
alleged campaign of deception, the myriad of different statements to which various
members of the putative class were exposed over time, the prominent, long-
standing private and governmental counter-campaign to alert the public to the
dangers of smoking, and the many cultural and psychological factors that
influence individual decisions to smoke all militate against a presumption that
every smoker who merely saw or heard deceptive cigarette advertising and
marketing statements believed and relied on those statements in deciding to
consume tobacco products.

14

See last page for addresses and telephone numbers for counsel who argued in Supreme Court.

Name of Opinion In re Tobacco II Cases
__________________________________________________________________________________

Unpublished Opinion

Original Appeal
Original Proceeding
Review Granted
XXX 142 Cal.App.4th 891
Rehearing Granted
__________________________________________________________________________________

Opinion No.
S147345
Date Filed: May 18, 2009
__________________________________________________________________________________

Court:
Superior
County: San Diego
Judge: Ronald S. Prager
__________________________________________________________________________________

Attorneys for Appellant:

Dougherty & Hildre, Donald F. Hildre, William O. Dougherty, Frederick M. Dudek, Thomas D. Haklar;
Robinson, Calcagnie & Robinson, Mark P. Robinson, Sharon J. Arkin and Karen Karavatos for Plaintiffs
and Appellants.

Harvey Rosenfield, Pamela M. Pressley, Todd M. Foreman; Gianelli & Morris, Timothy J. Morris and Jully
C. Pae for The Foundation for Taxpayer and Consumer Rights as Amicus Curiae on behalf of Defendants
and Appellants.

Law Offices of Mark Peacock and Mark J. Peacock for Consumer Attorneys of California as Amicus
Curiae on behalf of Defendants and Appellants.

Mark Savage for Consumers Union of United States, Inc., as Amicus Curiae on behalf of Defendants and
Appellants.

Jackson, DeMarco Tidus & Peckenpaugh, William M. Hensley and Robert J. Stein III for Curtis
Schlessinger, Peter LoRe and California Law Institute as Amici Curiae on behalf of Defendants and
Appellants.

Fazio Micheletti, Jeffrey L. Fazio and Dina E. Micheletti for Public Citizen, Inc., and The Center for Auto
Safety as Amici Curiae on behalf of Defendants and Appellants.

Levy, Ram & Olson, Arthur D. Levy; The Sturdevant Law Firm, James C. Sturdevant and Monique Olivier
for The National Consumer Law Center and National Association of Consumer Advocates as Amici Curiae
on behalf of Defendants and Appellants.
__________________________________________________________________________________

Attorneys for Respondent:

Munger, Tolles & Olson, Gregory P. Stone, Daniel P. Collins, Fred A. Rowley, Jr., Steven B. Weisburd,
Joseph S. Klapach, Daniel B. Levin; Seltzer Caplan McMahon Vitek, Gerald L. McMahon and Daniel E.
Eaton for Defendant and Respondent Philip Morris USA Inc.






Page 2 – S147345 – counsel continued

Attorneys for Respondent:

Dechert, H. Joseph Escher III; Wright & L’Estrange, Robert C. Wright; Jones Day and William T. Plesec
for Defendants and Respondents R.J. Reynold Tobacco Company and Brown & Williamson Holdings, Inc.,
formerly known as Brown & Williamson Tobacco Corporation.

Loeb & Loeb and Sharon S. Mequet for Defendant and Respondent The Council for Tobacco Research-
U.S.A., Inc.

DLA Piper Rudnick Gray Cary US, DLA Piper US, William S. Boggs and Brian A. Foster for Defendant
and Respondent Lorillard Tobacco Company.

Reed Smith and Mary C. Oppedahl for Defendant and Respondent The Tobacco Institute.

Lendrum Law Firm and Jeffrey P. Lendrum for Defendants and Respondents Liggett Group Inc., and
Liggett & Myers, Inc.

Deborah J. La Fetra for Pacific Legal Foundation as Amicus Curiae on behalf of Defendants and
Respondents.

Fred J. Hiestand; Morrison & Foerster and William L. Stern for The Civil Justice Association of California,
California Chamber of Commerce, California Manufacturers and Technology Association and California
Bankers Association as Amici Curiae on behalf of Defendants and Respondents.

Shook, Hardy & Bacon and Kevin Underhill for Product Liability Advisory Council, Inc., as Amicus
Curiae on behalf of Defendants and Respondents.

Kaye Scholer and Jeffrey S. Gordon for Pfizer Inc., as Amicus Curiae on behalf of Defendants and
Respondents.

Gibson, Dunn & Crutcher, G. Charles Nierlich, Rebecca Justice Lazarus, Gail E. Lees and Christopher
Chorba for Farmers Insurance Exchange and Granite State Insurance Company as Amici Curiae on behalf
of Defendants and Respondents.

Horvtiz & Levy, Lisa Perrochet and John A. Taylor, Jr., for Verisign, Inc., and AT&T Mobility LLC as
Amici Curiae on behalf of Defendants and Respondents.








Counsel who argued in Supreme Court (not intended for publication with opinion):

Mark P. Robinson
Robinson, Calcagnie & Robinson
620 Newport Center Drive, #700
Newport Beach, CA 92660
(949) 720-1288

Daniel P. Collins
Munger, Tolles & Olson
355 Grand Avenue, 35th Floor
Los Angeles, CA 90071-1560
(213) 683-9100


Petition for review after the Court of Appeal affirmed orders decertifying a class in a civil action. This case includes the following issues: (1) In order to bring a class action under Unfair Competition Law (Bus. & Prof. Code, section 17200 et seq.), as amended by Proposition 64 (Gen. Elec. (Nov. 2, 2004)), must every member of the proposed class have suffered "injury in fact," or is it sufficient that the class representative comply with that requirement? (2) In a class action based on a manufacturer's alleged misrepresentation of a product, must every member of the class have actually relied on the manufacturer's representations?

Opinion Information
Date:Citation:Docket Number:Category:Status:Cross Referenced Cases:
Mon, 05/18/200946 Cal. 4th 298, 207 P.3d 20, 93 Cal. Rptr. 3d 559S147345Review - Civil Appealclosed; remittitur issued

PFIZER, INC. v. S.C. (GALFANO) (S145775)
McADAMS v. MONIER (S154088)
OBRIEN v. CAMISASCA AUTOMOTIVE MANUFACTURING (S163207)


Parties
1Tobacco II Cases (Overview party)
2Brown, Williard R. (Plaintiff and Appellant)
Represented by Thomas David Haklar
Dougherty Hildre & Haklar
2550 Fifth Avenue, Suite 617
San Diego, CA

3Brown, Williard R. (Plaintiff and Appellant)
Represented by Mark P. Robinson
Robinson Calcagnie & Robinson
620 Newport Center Drive, Suite 700
Newport Beach, CA

4Smith, Willetta (Plaintiff and Appellant)
Represented by Mark P. Robinson
Robinson Calcagnie et al.
620 Newport Center Drive, Suite 700
Newport Beach, CA

5Smith, Willetta (Plaintiff and Appellant)
Represented by Thomas David Haklar
Dougherty Hildre & Haklar
2550 Fifth Avenue, Suite 617
San Diego, CA

6Kosar, Marilyn (Plaintiff and Appellant)
Represented by Mark P. Robinson
Robinson Calcagnie et al.
620 Newport Center Drive, Suite 700
Newport Beach, CA

7Kosar, Marilyn (Plaintiff and Appellant)
Represented by Thomas David Haklar
Dougherty Hildre & Haklar
2550 Fifth Avenue, Suite 617
San Diego, CA

8Phillip Morris Usa, Inc. (Defendant and Respondent)
Represented by Fred Anthony Rowley
Munger Tolles & Olson LLP
355 S Grand Ave
Los Angeles, CA

9Phillip Morris Usa, Inc. (Defendant and Respondent)
Represented by Gregory P. Stone
Munger, Tolles & Olson, LLP
355 S. Grand Avenue, 35th Floor
Los Angeles, CA

10Phillip Morris Usa, Inc. (Defendant and Respondent)
Represented by Daniel P. Collins
Munger, Tolles & Olson, LLP
355 S. Grand Avenue, 35th Floor
Los Angeles, CA

11Phillip Morris Usa, Inc. (Defendant and Respondent)
Represented by Martin Douglas Bern
Munger, Tolles & Olson, LLP
560 Mission Street, 27th Floor
San Francisco, CA

12Phillip Morris Usa, Inc. (Defendant and Respondent)
Represented by Gerald L. Mcmahon
Seltzer Caplan et al.
750 "B" Street Suite 2100
San Diego, CA

13R.J. Reynolds Tobacco Company (Defendant and Respondent)
Represented by Robert C. Wright
Wright & L'Estrange
401 West "A" Street, Suite 2250
San Diego, CA

14R.J. Reynolds Tobacco Company (Defendant and Respondent)
Represented by Henry Joseph Escher
Dechert, LLP
1 Maritime Plaza, Suite 2300
San Francisco, CA

15Lorillard Tobacco Company (Defendant and Respondent)
Represented by William Stuart Boggs
DLA Piper U.S., LLP
401 "B" Street, Suite 1700
San Diego, CA

16Brown & Williamson Holdings, Inc. (Defendant and Respondent)
Represented by Henry Joseph Escher
Dechert, LLP
1 Maritime Plaza, Suite 2300
San Francisco, CA

17Liggett Group, Inc. (Defendant and Respondent)
Represented by Jeffrey Patrick Lendrum
Lendrum Law Firm
600 W. Broadway, Suite 1100
San Diego, CA

18Liggett & Meyers, Inc. (Defendant and Respondent)
Represented by Jeffrey Patrick Lendrum
Lendrum Law Firm
600 W. Broadway, Suite 1100
San Diego, CA

19Council For Tobacco Research Usa, Inc. (Defendant and Respondent)
Represented by Sharon Sogomian Mequet
Loeb & Loeb, LLP
10100 Santa Monica Boulevard, Suite 2200
Los Angeles, CA

20Council For Tobacco Research Usa, Inc. (Defendant and Respondent)
Represented by Mary C. Oppedahl
Reed, Smith, LLP
1999 Harrison Street, Suite 2400
Oakland, CA

21Tobacco Institute, Inc. (Defendant and Respondent)
Represented by Mary C. Oppedahl
Reed, Smith, LLP
1999 Harrison Street, Suite 2400
Oakland, CA

22Verisign, Inc. (Amicus curiae)
Represented by Lisa Perrochet
Horvitz & Levy, LLP
15760 Ventura Boulevard, Suite 1800
Encino, CA

23Consumers Union Of The United States, Inc. (Amicus curiae)
Represented by Mark Savage
Consumers Union of the United States, Inc.
1535 Mission Street
San Francisco, CA

24Brown, Edumund G. (Amicus curiae)
Represented by Kathrin Sears
Office of the Attorney General
455 Golden Gate Ave. Suite 11000
San Francisco, CA

25Farmers Insurance Exchange (Amicus curiae)
Represented by George Charles Nierlich
Gibson Dunn & Crutcher, LLP
One Montgomery Street, Suite 3100
San Francisco, CA

26Public Citizen, Inc. (Amicus curiae)
Represented by Jeffrey L. Fazio
Fazio Micheletti LLP
2410 Camino Ramon, Suite 315
San Ramon, CA

27Center For Auto Safety (Amicus curiae)
Represented by Jeffrey L. Fazio
Fazio Micheletti LLP
2410 Camino Ramon, Suite 315
San Ramon, CA

28American Association Of Retired Persons (Amicus curiae)
Represented by Arthur D. Levy
Levy Ram & Olson, LLP
639 Front Street, 4th Floor
San Francisco, CA

29National Consumer Law Center (Amicus curiae)
Represented by James C. Sturdevant
The Sturdevant Law Firm
354 Pine Street, Fourth Floor
San Francisco, CA

30National Association Of Consumer Advocates (Amicus curiae)
Represented by Arthur D. Levy
Levy Ram & Olson, LLP
639 Front Street, 4th Floor
San Francisco, CA

31Consumer Attorneys Of California (Amicus curiae)
Represented by Mark Jeremiah Peacock
Attorney at Law
5160 Campus Drive
Newport Beach, CA

32Pacific Legal Foundation (Amicus curiae)
Represented by Deborah Joyce Lafetra
Pacific Legal Foundation
3900 Lennane Drive, Suite 200
Sacramento, CA

33Product Liability Advisory Council (Amicus curiae)
Represented by Michael Kevin Underhill
Shook Hardy & Bacon, LLP
333 Bush Street, Suite 600
San Francisco, CA

34Foundation For Taxpayer And Consumer Rights (Amicus curiae)
Represented by Jully Chang Pae
Attorney at Law
626 Wilshire Boulevard, Suite 800
Los Angeles, CA

35Foundation For Taxpayer And Consumer Rights (Amicus curiae)
Represented by Todd Michael Foreman
Foundation for Taxpayer & Consumer Rights
1750 Ocean Park Boulevard, Suite 200
Santa Monica, CA

36Pfizer, Inc. (Amicus curiae)
Represented by Jeffrey Sheppard Gordon
Attorney at Law
1999 Avenue of the Stars, 16h Floor
Los Angeles, CA

37Civil Justice Association Of California (Amicus curiae)
Represented by Fred James Hiestand
Attorney at Law
1121 "L" Street, Suite 404
Sacramento, CA

38Civil Justice Association Of California (Amicus curiae)
Represented by William L. Stern
Morrison & Foerster, LLP
425 Market Street
San Francisco, CA

39California Chamber Of Commerce (Amicus curiae)
Represented by Fred James Hiestand
Attorney at Law
1121 "L" Street, Suite 404
Sacramento, CA

40California Manufacturers & Technology Association (Amicus curiae)
Represented by Fred James Hiestand
Attorney at Law
1121 "L" Street, Suite 404
Sacramento, CA

41California Bankers Association (Amicus curiae)
Represented by Fred James Hiestand
Attorney at Law
1121 "L" Street, Suite 404
Sacramento, CA

42Granite State Insurance Co. (Amicus curiae)
Represented by Christopher Chorba
Gibson Dunn & Crutcher, LLP
333 S. Grand Avenue
Los Angeles, CA

43At&T Mobility, Llc (Amicus curiae)
Represented by Lisa Perrochet
Horvitz & Levy, LLP
15760 Ventura Boulevard, Suite 1800
Encino, CA

44Schlessinger, Curtis (Amicus curiae)
Represented by William M. Hensley
Jackson DeMarco et al.
P.O. Box 19704
2030 Main Street, Suite 1200
Irvine, CA

45Lore, Peter (Amicus curiae)
Represented by William M. Hensley
Jackson DeMarco et al.
P.O. Box 19704
2030 Main Street, Suite 1200
Irvine, CA

46California Law Institute (Amicus curiae)
Represented by William M. Hensley
Jackson DeMarco et al.
P.O. Box 19704
2030 Main Street, Suite 1200
Irvine, CA


Opinion Authors
OpinionJustice Carlos R. Moreno
ConcurJustice Marvin R. Baxter

Disposition
May 18 2009Opinion: Reversed

Dockets
Oct 13 2006Petition for review filed
Appellants Willard Brown, Willetta Smith & Marilyn Kosar Attorneys Thomas D. Haklar and Mark P. Robinson, Jr.
Oct 17 2006Record requested
Oct 25 2006Request for extension of time filed
for defendants and respondents to file the answer to the petition for review, to November 9.
Oct 25 20062nd record request
(overnite)
Oct 26 2006Extension of time denied
The request for an extension of time to file the answer to the petition for review, filed on October 25, 2006, is hereby denied. Because the Court is considering the possibility of acting upon the petition for review on an expedited basis, any answer to the petition for review must be filed in the San Francisco office of the Supreme Court by 12:00 p.m. on Monday, October 30, 2006. Filing may be effected by transmitting a copy of the answer by facsimile to the Clerk's Office in the Court's San Francisco office.
Oct 27 2006Received Court of Appeal record
one doghouse
Oct 27 2006Record requested
remainder of record (overnite)
Oct 30 2006Answer to petition for review filed
Philip Morris USA, et al, defendants and respondents Daniel Collins, Sharon Mequet, Mary Oppedahl, William Boggs, H. Joseph Escher III, Jeffrey Lendrum, counsel
Oct 31 2006Received Court of Appeal record
6 full boxes
Nov 1 2006Petition for review granted (civil case)
George, CJ., was recused and did not participate. Werdegar, ACJ., Kennard, Baxter, Chin, Moreno and Corrigan, JJ.
Nov 15 2006Certification of interested entities or persons filed
Brown, et al., plaintiffs and appellants Thomas Haklar, counsel
Nov 16 2006Certification of interested entities or persons filed
Philip Morris, Altria Group, defendant and respondent Daniel Collins, counsel
Nov 21 2006Certification of interested entities or persons filed
Liggett Group, defendand and respondent Jeffrey Lendrum, counsel
Nov 21 2006Certification of interested entities or persons filed
Counsel for Tobacco Research, defendant and respondent Sharon Sogomian Mequet, counsel
Nov 21 2006Request for extension of time filed
Joint application of appellants and respondents. Appellants' opening brief on the merits:12-15-06, respondents' answer briefs: 1-29-07. (No date specified for reply brief)
Nov 29 2006Extension of time granted
On joint application of parties and good cause appearing, it is ordered that the time to serve and file Appellants' opening brief on the merits is extended to and including December 15, 2006 and the time to serve and file Respondents' answer brief(s) on the merits is extended to and including January 29, 2006.
Nov 29 2006Certification of interested entities or persons filed
R. J. Reynolds Tobacco Company, Respondent by H. Joseph Escher III, counsel
Nov 29 2006Certification of interested entities or persons filed
Brown and Williamson Tobacco Corporation, Respondent by H. Joseph Escher III, counsel
Dec 5 2006Certification of interested entities or persons filed
Tobacco Institute, Respondent by Mary C. Oppedahl, counsel.
Dec 15 2006Opening brief on the merits filed
Willard Brown, et al, plaintiffs and appellants Thomas Haklar, Mark Robinson, Jr., counsel
Jan 30 2007Answer brief on the merits filed
Philip Morris USA, et al defendants and respondents Gregory Stone, et al, counsel (timely-CRC 8.25)
Feb 20 2007Received:
Late Certification of Interested Entities or Persons from counsel for respondent Lorillard Tobacco Company.
Feb 22 2007Reply brief filed (case fully briefed)
Appellants, Willard Brown, et al. by counsel, Thomas Haklar.
Mar 5 2007Request for extension of time filed
Amicus Curiae VeriSign to file their brief to April 23, 2007. by counsel, Lisa Perrochet.
Mar 6 2007Received:
Amended proof of service to Application for Extension of Time to file AC brief by VERISIGN, INC.
Mar 8 2007Extension of time granted
On application of Verisign and good cause appearing, it is ordered that the time to serve and file the amicus curiae brief is extended to and including April 23, 2007.
Mar 15 2007Request for extension of time filed
to submit an amicus curiae application and brief Consumers Union of U.S. (in support of appellants) extension requested to April 12.
Mar 19 2007Request for extension of time filed
By AARP, The National Consumer Law Center, and National Association of Consumer Advocates requesting until April 23, 2007 to file the application and AC brief in support of appellants.
Mar 20 2007Request for extension of time filed
Attorney General to file an amicus curiae brief to April 23, 2007.
Mar 22 2007Request for extension of time filed
for A/C applicant Public Citizen, Inc. and Center for Auto Safety to file an amicus curiae brief in support of appellant Brown. Extension requested to 4/23.
Mar 22 2007Extension of time granted
On application of Attorney General and good cause appearing, it is ordered that the time to serve and file the amicus curiae biref is extended to and including April 23, 2007.
Mar 22 2007Request for extension of time filed
Farmers Insurance Exchange to file their amicus curiae brief to April 23, 2007.
Mar 23 2007Extension of time granted
On application of amicus curiae Consumers Union of United States, Inc. and good cause appearing, it is ordered that the time to serve and file its application and amicus curiae brief in support of app appellants herein is extended to and including April 13, 2007.
Mar 23 2007Received application to file Amicus Curiae Brief
Pacific Legal Foundation Deborah LaFetra, counsel Application & brief submitted (in support of respondents)
Mar 26 2007Received application to file Amicus Curiae Brief
The Foundation For Taxpayer & Consumer Rights, supporting appellants Timonthy J. Morris & Jully C. Pae....Harvey Rosenfield, Pamela M. Pressley & Todd M. Foreman, counsel Request for Judicial Notice received form The Foundation For Taxpayer & Consumer Rights.
Mar 26 2007Received application to file Amicus Curiae Brief
amici Pfizer Inc., [application and brief under same covers] in support of respondents
Mar 26 2007Extension of time granted
On application of amicus curiae AARP, The National Consumer Law Center and National Association of Consumer Advocates and good cause appearing, it is ordered that the time to serve and file its application and amicus curiae brief in support of appellants is hereby extended to and including April 23, 2007.
Mar 26 2007Received application to file Amicus Curiae Brief
Consumer Attorneys of California in support of Appellants. by counsel, Mark Peacock.
Mar 27 2007Received application to file Amicus Curiae Brief
Product Liability Advisory Council, Inc., in support of respondents Kevin Underhill, counsel Application/brief one day late.
Mar 27 2007Received application to file Amicus Curiae Brief
Civil Justice Association, in support of respondents Fred Hiestand, William Stern, counsel brief & separate application (timely-CRC 8.25)
Mar 27 2007Extension of time granted
On application of amici curiae Public Citizen, Inc. and the Center for Auto Safety and good cause appearing, it is ordered that the time to serve and file the application and amicus curiae brief in support of appellant Brown is extended to and including April 23, 2007.
Mar 27 2007Extension of time granted
On application of amicus curiae Farmers Insurance Exchange and good cause appearing, it is ordered that the time to serve and file its application and amicus curiae brief is extended to and including April 23, 2007.
Apr 4 2007Permission to file amicus curiae brief granted
The application of Pacific Legal Foundation for permission to file an amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Apr 4 2007Amicus curiae brief filed
Pacific Legal Foundation, in support of respondents.
Apr 9 2007Permission to file amicus curiae brief granted
The application of Pfizer, Inc. for permission to file an amicus curiae brief in suppor tof respondents is hereby granted. An answer therto may be served and filed by any party within twenty days of the filing of the brief.
Apr 9 2007Amicus curiae brief filed
Pfizer, Inc. in support of respondents by Jeffery S. Gordon, Counsel
Apr 9 2007Permission to file amicus curiae brief granted
The application of the Foundation for Taxpayer ans Consumer Rights for permission to file an amicas curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of filing of the brief.
Apr 9 2007Amicus curiae brief filed
The Foundation for Taxpayer & Consumer Rights in support of appellants, by Jully C. Pae, Counsel
Apr 9 2007Permission to file amicus curiae brief granted
The application of the Civil Justice Association, et al. for permission to file an amicus brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Apr 9 2007Amicus curiae brief filed
Civil Justice Association, in support of defendants and respondents by Fred J. Hiestand, Counsel
Apr 9 2007Request for extension of time filed
Respondents, Philip Morris USA, Inc. , et al., to file one consolidated answer to amicus curiae briefs. and to file oppositions to any requests for judicial notice filed in connection with amicus curiae briefs. Asking to June 4, 2007
Apr 9 2007Permission to file amicus curiae brief granted
The application of Product Liability Advisory Council, Inc. for permission to file an amicus brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Apr 9 2007Amicus curiae brief filed
Product Liability Advisory Council, Inc. in support of respondents, by Kevin Underhill, counsel
Apr 9 2007Permission to file amicus curiae brief granted
The application of Consumer Attorneys of California for permission to file an amicus brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of filing of the brief.
Apr 9 2007Amicus curiae brief filed
Consumer Attorneys of California in support of Plaintiff and appellants, by Mark J. Peacock, counsel
Apr 9 2007Request for judicial notice filed (granted case)
The Foundation for Taxpayers & Consumer Rights, by Jully C. Pae, Counsel
Apr 10 2007Change of contact information filed for:
H. Joseph Escher III of Dechert LLP as counsel for Respondents R. J. Reynolds Tobacco Company and Brown & Williamson Holdings, Inc. (formerly known as Brown & Williamson Tobacco Corp.)
Apr 11 2007Request for extension of time filed
to file consolidated responses to any amicus briefs and oppositions to any requests for judicial notice, extension requested to 6-4-04 Brown, et al., appellants
Apr 13 2007Received application to file Amicus Curiae Brief
Consumers Union of U.S. in support of appellants Mark Savage, counsel (they were previously granted an extension of time to 4/13)
Apr 16 2007Extension of time granted
On application of respondents and good cause appearing, it is ordered that the time to serve and file one consolidated answer to amicus curiae briefs and oppositions to any request for judicial notice filed in connection with amicus curiae briefs is extended to and including June 4, 2007.
Apr 19 2007Extension of time granted
On application of appellants and good cause appearing, it is ordered that the time to serve and file consolidated responses to any amicus curiae briefs and oppositions to any requests for judicial notice filed in conjunction with amicus curiae briefs is extended to and including June 4, 2007.
Apr 19 2007Permission to file amicus curiae brief granted
The application of Consumers Union of United States, Inc. for permission to file an amicus curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
Apr 19 2007Amicus curiae brief filed
by Consumers Union of United States, Inc. in support of appellants.
Apr 23 2007Received application to file Amicus Curiae Brief
National Consumer Law Center and National Assn. of Consumer Advocates Arthur Levy, James Sturdevant, counsel (app & sep brief)
Apr 23 2007Received application to file Amicus Curiae Brief
Farmers Insurance Exchange and Granite State Insurance Co. G. Charles Nierlich, Christopher Chorba, counsel (appln & separate brief)
Apr 23 2007Received application to file Amicus Curiae Brief
of Curt Schlessinger, Peter Lore, and California Law Institute for permission to file amici curiae brief in support of Appellants Willard Brown.
Apr 24 2007Received application to file Amicus Curiae Brief
Verisign Inc and AT&T Mobility LLC Lisa Perrochet, counsel timely per CRC 8.25 (appln & brief under same cover)
Apr 24 2007Received application to file Amicus Curiae Brief
Public Citizen Inc, and the Center for Auto Safety Jeffrey Fazio, counsel timely per CRC 8.25 (appln & brief under same cover)
May 4 2007Permission to file amicus curiae brief granted
The application of Curtis Schlessinger, Peter LoRe and California Law Institute for permission to file an amicus curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
May 4 2007Amicus curiae brief filed
by Schlessinger, LoRe and Calif. Law Institute in support of appellants William Hensley, counsel
May 4 2007Permission to file amicus curiae brief granted
The application of The National Consumer Law Center and National Association of Consumer Advocates for permission to file an amicus curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
May 4 2007Amicus curiae brief filed
by The National Consumer Law Center and National Association of Consumer Advocates in support of appellants Arthur Levy, James Sturdevant, counsel
May 4 2007Permission to file amicus curiae brief granted
The application of Verisign, Inc. and AT&T Mobility LLC for permission to file an amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
May 4 2007Amicus curiae brief filed
by Verisign, Inc. and AT&T Mobility LLC in support of respondents. Lisa Perrochet, counsel
May 4 2007Permission to file amicus curiae brief granted
The application of Public Citizen, Inc. and The Center for Auto Safety for permission to file an amicus curiae brief in support of appellants is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
May 4 2007Amicus curiae brief filed
by Public Citizen, Inc. and The Center for Auto Safety in support of appellants. Jeffrey Fazio, counsel
May 4 2007Permission to file amicus curiae brief granted
The application of Farmers Insurance Exchange and Granite State Insurance Company for permission to file an amicus curiae brief in support of respondents is hereby granted. An answer thereto may be served and filed by any party within twenty days of the filing of the brief.
May 4 2007Amicus curiae brief filed
by Farmers Insurance Exchange and Granite State Insurance Company in support of respondents. G. Charles Nierlich, Christopher Chorba, counsel
May 8 2007Request for extension of time filed
to file responses to the amicus curiae briefs, to 6/29/07 Philip Morris, et al respondents
May 10 2007Extension of time granted
On application of respondents and good cause appearing, it is ordered that the time for appellants and respondents to serve and file the responses to the amicus curiae briefs is extended to and including June 29, 2007.
Jun 29 2007Response to amicus curiae brief filed
Willard Brown, et al., plaintiffs and appellants Thomas Haklar, Mark Robinson, Jr., counsel
Jul 2 2007Response to amicus curiae brief filed
Respondents' Consolidated Response (timely per CRC 8.25)
Jul 2 2007Opposition filed
to request for judicial notice filed by A/C Foundation for Taxpayer Relief & Consumer Rights. Consolidated opposition by respondents (timely-CRC 8.25)
Oct 10 2007Supplemental briefing ordered
George, C.J., was recused and did not participate. The court requests that the parties file supplemental letter briefs addressing the impact of this court's recent opinion in In re Tobacco II (2007) 41 Cal.4th 1257 on the issues presented in this case, and particularly our conclusion that certain claims advanced under Unfair Competition Law regarding advertising by tobacco companies to minors are preempted by federal law. Supplemental briefing is to proceed as follows: The parties may file simultaneous letter briefs on or before November 16, 2007, 2007. Each party may then file an additional letter brief in response on or before November 29, 2007. No further extensions of time for the filing of these briefs are contemplated by the Court. George, C.J., was recused and did not participate.
Oct 30 2007Request for extension of time filed
by appellants for filing of the letter briefs and responses. One week extension requested.
Oct 31 2007Extension of time granted
On application of appellants and good cause appearing, it is ordered that the time for the parties to serve and file the simultaneous letter briefs is extended to and including November 26, 2007. Each party may then file an additional letter brief in response on or before December 10, 2007.
Nov 26 2007Supplemental brief filed
Letter brief of defendants and respondents
Nov 26 2007Supplemental brief filed
Letter brief of appellants
Dec 10 2007Letter brief filed
Appellants' Response to Respondent's Letter Brief, Williared R. Brown, et al, by Thomas D. Haklar, Counsel
Dec 10 2007Supplemental brief filed
Letter brief of Respondent - Phillip Morris USA, Inc. by Daniel P. Collins, counsel
Aug 21 2008Justice pro tempore assigned
Feb 3 2009Case ordered on calendar
to be argued on Tuesday, March 3, 2009, at 9:00 a.m., in San Francisco
Feb 10 2009Note: Mail returned and re-sent
copy of calendar for James Sturdevant. New address noted from returned envelope
Feb 18 2009Received:
Appellants' additional authority for oral argument
Feb 20 2009Received:
Respondents' additional authorities for oral argument.
Feb 23 2009Request for Extended Media coverage Filed
The California Channel by James Gualtieri
Feb 24 2009Request for Extended Media coverage Granted
The request for extended media coverage, filed by The California Channel on February 23, 2009, is granted, subject to the conditions set forth in rule 1.150, California Rules of Court.
Feb 26 2009Received:
letter from Appellants' counsel, dated 2-25-08
Mar 3 2009Cause argued and submitted
May 15 2009Notice of forthcoming opinion posted
May 18 2009Opinion filed: Judgment reversed
The order granting defendants' decertification motion is reversed and the matter is remanded for further proceedings consistent with this opinion. Opinion by: Moreno, J. - joined by Kennard, Acting C.J., Werdegar, and Moore, J.* Concurring and Dissenting Opinion by Baxter, J. - joined by Chin and Corrigan, JJ.
Jun 1 2009Notice of substitution of counsel
(filed) re respondent Council for Tobacco Research
Jun 2 2009Rehearing petition filed
Jun 10 2009Time extended to consider modification or rehearing
The time for granting or denying rehearing in the above-entitled case is hereby extended to and including August 14, 2009, or the date upon which rehearing is either granted or denied, whichever occurs first.
Jun 10 2009Answer to rehearing petition filed
Willard Brown, et al., Appellants by Thomas D. Haklar and Mark P; Robinson, counsel
Aug 12 2009Rehearing denied
The petition for rehearing is denied. George, C.J., was recused and did not participate. Baxter, Chin and Corrigan, JJ., are of the opinion the petition should be granted. Eileen C. Moore, Associate Justice, Court of Appeal, Fourth Appellate District, Division Three, was assigned by the Acting Chief Justice pursuant to article VI, section 6 of the California Constitution.
Aug 12 2009Remittitur issued

Briefs
Dec 15 2006Opening brief on the merits filed
Willard Brown, et al, plaintiffs and appellants Thomas Haklar, Mark Robinson, Jr., counsel
Jan 30 2007Answer brief on the merits filed
Philip Morris USA, et al defendants and respondents Gregory Stone, et al, counsel (timely-CRC 8.25)
Feb 22 2007Reply brief filed (case fully briefed)
Appellants, Willard Brown, et al.
Apr 4 2007Amicus curiae brief filed
Pacific Legal Foundation, in support of respondents.
Apr 9 2007Amicus curiae brief filed
Pfizer, Inc. in support of respondents by Jeffery S. Gordon, Counsel
Apr 9 2007Amicus curiae brief filed
The Foundation for Taxpayer & Consumer Rights in support of appellants, by Jully C. Pae, Counsel
Apr 9 2007Amicus curiae brief filed
Civil Justice Association, in support of defendants and respondents by Fred J. Hiestand, Counsel
Apr 9 2007Amicus curiae brief filed
Product Liability Advisory Council, Inc. in support of respondents, by Kevin Underhill, counsel
Apr 9 2007Amicus curiae brief filed
Consumer Attorneys of California in support of Plaintiff and appellants, by Mark J. Peacock, counsel
Apr 19 2007Amicus curiae brief filed
by Consumers Union of United States, Inc. in support of appellants.
May 4 2007Amicus curiae brief filed
by Schlessinger, LoRe and Calif. Law Institute in support of appellants William Hensley, counsel
May 4 2007Amicus curiae brief filed
by The National Consumer Law Center and National Association of Consumer Advocates in support of appellants Arthur Levy, James Sturdevant, counsel
May 4 2007Amicus curiae brief filed
by Verisign, Inc. and AT&T Mobility LLC in support of respondents. Lisa Perrochet, counsel
May 4 2007Amicus curiae brief filed
by Public Citizen, Inc. and The Center for Auto Safety in support of appellants. Jeffrey Fazio, counsel
May 4 2007Amicus curiae brief filed
by Farmers Insurance Exchange and Granite State Insurance Company in support of respondents. G. Charles Nierlich, Christopher Chorba, counsel
Jun 29 2007Response to amicus curiae brief filed
Willard Brown, et al., plaintiffs and appellants Thomas Haklar, Mark Robinson, Jr., counsel
Jul 2 2007Response to amicus curiae brief filed
Respondents' Consolidated Response (timely per CRC 8.25)
If you'd like to submit a brief document to be included for this opinion, please submit an e-mail to the SCOCAL website
Nov 11, 2009
Annotated by Sean Franzblau

Held: (1) In a class action suit, Proposition 64's "injury in fact" standing requirement is applicable only to the class representatives, and not all absent class members. Nothing in Proposition 64's plain language makes any reference to altering class action procedures. Furthermore, ballot materials demonstrate Proposition 64 was directed at preventing claims by "unscrupulous lawyers" seeking to exploit the UCL's generous standing requirement, and not legitimate class action plaintiffs. (2) Class representatives claiming misrepresentation as basis of UCL action must demonstrate actual reliance on the allegedly deceptive or misleading statements, in accordance with well-settled principles regarding the element of reliance in common law fraud actions. These reliance principles do not require the class representative to plead or prove an "unrealistic degree of specificity" that a plaintiff relied on a particular advertisement or statement when the alleged unfair practice is a fraudulent advertising campaign.