What’s New In 17-Two
Does Section 17200 require proof of reliance? It depends who you ask.
In Anunziato v. eMachines, Inc., 402 F. Supp. 2d 1133, 1138 (C.D. Cal. 2005), a district court in Los Angeles held that Proposition 64, which amended California’s
Business & Professions Code section 17200, did not impart a "reliance" element. That was a putative class action alleging that a brand of defendant’s laptop computers contained a defect causing some of
them to overheat. Defendant argued that the "as a result of" language of Proposition 64 added a reliance element, and that because plaintiff
did not allege that he even saw, let alone relied upon, any of the alleged misstatements by eMachines, his UCL claim must
fail. But two weeks later, another California district court reached the opposite conclusion: "[A]fter Proposition 64, a person seeking to represent claims on behalf of others must show that (1) she has suffered actual
injury in fact, and (2) such injury occurred as a result of the defendant’s alleged unfair competition." (Laster v. T-Mobile USA, Inc., ___ F. Supp. 2d ___, No. 05 CV 1167 DMS(AJB), 2005 WL 3610616, at*12 (S.D. Cal. Nov. 30, 2005).)
For more information, please contact Will Stern at wstern@mofo.com.
SB-1 and Privacy
The Ninth Circuit may decide the fate of California’s privacy statute sooner than we thought. As reported last time, the district court on October 4, 2005, held that the affiliate-sharing provisions of SB-1 were preempted in their entirety. (American Bankers Ass’nv.Lockyer, No. Civ. S04-0778MCE KJM, 2005 WL 2452798 (E.D. Cal. Oct. 5, 2005).) Now, under an expedited schedule, briefing will close March 27, and the case will
be scheduled for oral argument or disposition without argument "as soon as possible."
California Junk Fax Bill Enjoined
On February 27, 2006, a federal court in Sacramento found SB 833 unconstitutional. This is California’s "junk fax" bill that regulates unsolicited faxes. (We reported on this
in our last issue.) It differs from federal law in that there is no exception for fax senders who have an "established business
relationship" with the recipient. SB 833 would have had implications nationwide, because California’s fax law would have
applied interstate faxes as well as intrastate faxes. Judge England said no: "The Court finds that a judgment in favor of
Plaintiffs will serve a useful purpose in clarifying and settling the constitutional issues raised by SB 833 and will terminate
and afford relief from the uncertainty, insecurity, and controversy giving rise to this action. The Court concludes that SB
833 is unconstitutional to the extent it attempts to govern interstate transmission of unsolicited facsimile advertisements." (Chamber of Commerce of the United States of Americav.Lockyer, CV-02257-MCE(E.D. Cal. Feb. 27 2006).
For more information, please contact Will Stern at wstern@mofo.com.
Liquidated Damages Provisions O.K.
On January 20, 2006, the California Court of Appeals held in Utility Consumer Action Network v. AT&T Broadband of Southern Cal., Inc., 135 Cal.App.4th 1023 (2006) that a liquidated damages provision in a consumer contract used in California is not unconscionable just because the business
didn’t sit down and individually negotiate the amount with each and every consumer.
For more information, please contact Will Stern at wstern@mofo.com.
Anti-Predatory Lending
California’s anti-predatory lending law was amended as of January 1, 2006. Now, a covered loan includes those loans where the original principal balance does not exceed the most current
conforming loan limit for a single-family first mortgage loan used by the Federal National Mortgage Association (Fannie Mae).
Recently, the Office of Federal Housing Enterprise Oversight raised the amount to $417,000.
