Californians for Disab. Rights v. Mervyn's

• Decision Date: 24 July 2006
• Docket Number: No. S131798.,S131798.
• Citation: 46 Cal.Rptr.3d 57,138 P.3d 207,39 Cal.4th 223
• Court: California Supreme Court
• Parties: CALIFORNIANS FOR DISABILITY RIGHTS, Plaintiff and Appellant, v. MERVYN'S, LLC, Defendant and Respondent.

46 Cal.Rptr.3d 57

39 Cal.4th 223

138 P.3d 207

CALIFORNIANS FOR DISABILITY RIGHTS, Plaintiff and Appellant, v. MERVYN'S, LLC, Defendant and Respondent.

No. S131798.

Supreme Court of California.

July 24, 2006.

Rosen, Bien & Asaro, Andrea G. Asaro, San Francisco, Holly M. Baldwin; Zelle, Hofmann, Voelbel, Mason & Gette, Daniel S. Mason, San Francisco; Disability Rights Advocates, Sidney Wolinsky, Monica Goracke, Laurence W. Paradis, Oakland; The Sturdevant Law Firm, James C. Sturdevant and Monique Olivier, San Francisco, for Plaintiff and Appellant.

Robinson, Calcagnie & Robinson, Sharon J. Arkin, Newport Beach; Arias, Ozzello & Gignac, Los Angeles, and H. Scott Leviant, Tarzana, for Consumer Attorneys of California, Janice Duran and Julia Ramos as Amici Curiae on behalf of Plaintiff and Appellant.

Lexington Law Group, Mark N. Todzo, Eric S. Somers and Lynne R. Saxton, for California League for Environmental Enforcement Now as Amicus Curiae on behalf of Plaintiff and Appellant.

Bramson, Plutzik, Mahler & Birkhaeuser, Robert M. Bramson, Walnut Creek; and Leslie A. Brueckner, for National Association of Consumer Advocates and Trial Lawyers for Public Justice as Amici Curiae on behalf of Plaintiff and Appellant.

Law Office of Richard R. Wiebe and Richard R. Wiebe, San Francisco, for Center for Biological Diversity, Inc., Environmental Protection Information Center and Electronic Frontier Foundation as Amici Curiae on behalf of Plaintiff and Appellant.

Thomas Osborne, Ventura, Michael Schuster and Barbara Jones, for AARP as Amicus Curiae on behalf of Plaintiff and Appellant.

Morrison & Foerster, David F. McDowell, John Sobieski, Los Angeles, Linda E. Shostak and Gloria Y. Lee, San Francisco, for Defendant and Respondent.

Lewis Brisbois Bisgaard & Smith, Roy G. Weatherup, David N. Makous, Eric J. Erickson and Leo Bautista, Los Angeles, for ReadyLink HealthCare, Inc., as Amicus Curiae on behalf of Defendant and Respondent.

Fred J. Hiestand, Sacramento, for The Civil Justice Association of California as Amicus Curiae on behalf of Defendant and Respondent.

Munger, Tolles & Olson, Ronald L. Olson, Steven B. Weisburd and Dean N. Kawamoto, Los Angeles, for the California Chamber of Commerce, the California Bankers Association, the California Financial Services Association, the California Manufacturers & Technology Association and the California Motor Car Dealers Association as Amici Curiae on behalf of Defendant and Respondent.

Sonnenschein Nath & Rosenthal, Paul E.B. Glad, Thomas E. McDonald, San Francisco, and Jennifer A. Bushoft, for Association of California Insurance Companies and American Insurance Association as Amici Curiae on behalf of Defendant and Respondent.

Paul J. Beard III, Sacramento, for Pacific Legal Foundation and Central California Citizens Against Lawsuit Abuse as Amici Curiae on behalf of Defendant and Respondent.

Heller Ehrman, Vanessa Wells, Warrington S. Parker III and Daniel K. Slaughter, San Francisco, for State Farm Mutual Automobile Insurance Company, The Hertz Corporation and Visa U.S.A. Inc., as Amici Curiae on behalf of Defendant and Respondent.

Gibson, Dunn & Crutcher, Gail E. Lees, Kirk A. Patrick, G. Charles Nierlich and Christopher Chorba, Los Angeles, for Express Scripts, Inc., National Prescription Administrators, Inc., Aetna Health of California Inc., and Aetna Life Insurance Company as Amici Curiae on behalf of Defendant and Respondent.

Law Offices of Neal T. Wiener and Neal T. Wiener, for Jarrow Formulas, Inc., as Amicus Curiae on behalf of Defendant and Respondent.

WERDEGAR, J.

California law previously authorized any person acting for the general public to sue for relief from unfair competition. (Bus. & Prof.Code,¹ former § 17204, as amended by Stats.1993, ch. 926, § 2, p. 5198 (former section 17204); see also Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 561, 71 Cal.Rptr.2d 731, 950 P.2d 1086; cf. Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 211, 197 Cal.Rptr. 783, 673 P.2d 660.) 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.) This case requires us to decide whether the amended standing provisions apply to cases already pending when Proposition 64 took effect. We hold the new provisions do apply to pending cases.

I. BACKGROUND

Plaintiff Californians for Disability Rights (CDR), a nonprofit corporation, sued defendant Mervyn's, LLC (Mervyn's), a corporation that owns and operates department stores, for alleged violations of the unfair competition law. (§ 17200 et seq.) CDR alleged that pathways between fixtures and shelves in Mervyn's stores were too close to permit access by persons who use mobility aids such as wheelchairs, scooters, crutches and walkers. CDR did not claim to have suffered any harm as a result of Mervyn's conduct. Instead, CDR purported to sue on behalf of the general public under former section 17204. As relief, CDR sought an order declaring Mervyn's practices to be unlawful, an injunction barring those practices and requiring remedial action, CDR's costs and expenses of suit, and attorneys' fees. Following a bench trial, the superior court entered judgment for Mervyn's. CDR appealed.

On November 3, 2004, while the appeal was pending, Proposition 64 took effect, having been approved by the voters the preceding day. (See Cal. Const., art. II, § 10, subd. (a).) Mervyn's moved to dismiss the appeal, arguing the measure eliminated CDR's standing to prosecute the action. The Court of Appeal denied the motion, holding that Proposition 64's standing provisions did not apply to cases pending when the measure took effect. We granted Mervyn's petition for review.

II. DISCUSSION

As mentioned, California's statutory unfair competition law (§ 17200 et seq.) (hereafter the UCL) previously authorized "any person acting for the interests of itself, its members or the general public" (former § 17204) to file a civil action for relief. Standing to bring such an action did not depend on a showing of injury or damage. (See Committee on Children's Television, Inc. v. General Foods Corp., supra, 35 Cal.3d 197, 211, 197 Cal.Rptr. 783, 673 P.2d 660; cf. Stop Youth Addiction, Inc. v. Lucky Stores, Inc., supra, 17 Cal.4th 553, 561, 71 Cal.Rptr.2d 731, 950 P.2d 1086.)

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 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 attorneys' 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 "prohibit[ing] 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)).

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 unfair competition." The measure also amends section 17203, which authorizes courts to enjoin unfair competition, by adding the 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.)²

Proposition 64 does not expressly declare whether the new standing provisions it adds to the UCL apply to pending cases. Mervyn's argument that the measure does so declare is unconvincing. According to Mervyn's, the electorate expressed its understanding that the new standing provisions apply to pending cases by stating in section 17204 that suits under the unfair competition laws "shall be prosecuted exclusively" (italics added) by the persons therein given standing. Mervyn's argues the word "prosecuted" is broad enough to describe the continued prosecution of actions filed before the measure took effect. (Cf. Melancon v. Superior Court (1954) 42 Cal.2d 698, 707-708, 268 P.2d 1050 [describing the term "prosecution" in a different context as "`sufficiently comprehensive to include every step in an action from its commencement to its final determination' "].) Mervyn's would find similar indications of the voters' intent in the measure's preamble, which declares that "the intent of California voters" was "to eliminate frivolous unfair...