Client Alert

Ahead of the Summons

9/12/2005

CaliforniaExpands Nationwide

It must be depressing being a legislator in the other 49 states. Why bother passing laws when California has more than it needs and is willing to apply them nationwide? 

In June, the California Supreme Court held that a California resident could sue in California several Nevada casinos and hotels for including a so-called "energy surcharge" in their rates. The Supreme Court held that California had jurisdiction over the Nevada hotels and that California’s Section 17200 could apply to those claims. (Snowneyv.Harrah’s Entertainment, Inc., 35 Cal.4th 1054 (2005).)

Illinois doesn’t feel the same way. That state’s Supreme Court just declined to extend the reach of Illinois’ UDAP statute to residents of other states. (Averyv.State Farm Mutual Automobile Insurance Co., No. 91494, 2005 WL 1981444 (Ill. Aug. 18, 2005).)  Avery is also welcome news for any company unlucky enough to get sued in a class action in Madison County, as Avery reversed a $1 billion judgment in a nationwide class action.

For more information, see our Legal Update ("$1Billion Reversal Likely to Curtail Some Class Action Abuses") on our website at http://www.mofo.com/news/updates/files/update02059.html or contact Michael Agoglia (magoglia@mofo.com).

No Duty to Disclose Wholesale Cost

A California appellate court held that a business that fails to disclose its profit, mark-up, or wholesale cost does not violate California’s unfair competition law, Bus. & Prof. Code §17200. (McCannv.Lucky Money, Inc., 129 Cal.App.4th 1382 (2005).)

Bank Termination Fee Is OK

A bank’s $150 fee charged upon termination of a credit card merchant agreement is neither unconscionable nor a violation of the UCL. (See Morrisv.Redwood Empire Bank, 128 Cal.App.4th 1305 (2005).

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