Procedural Posture

[Saim Khan]

Plaintiff consumers sought review of a decision from the Court of Appeal, Fourth Appellate District, Division One (California), which affirmed the trial court's order decertifying a class of consumers in an action under California's unfair competition law (UCL), Bus. & Prof. Code, § 17200 et seq., against defendant tobacco companies.

Overview: government code 12926

The complaint alleged that the tobacco companies had violated the UCL by conducting a long campaign of deceptive advertising and misleading statements about the addictive nature of nicotine and the relationship between tobacco use and disease. Prior to the passage of Proposition 64 (approved November 2, 2004), the trial court had certified the case as a class action. After Proposition 64 was approved, the trial court ruled that each class member was required to show an injury in fact. The California Supreme Court concluded that in a UCL class action brought in accordance with Bus. & Prof. Code, § 17203, and Code Civ. Proc., § 382, the standing requirements of Bus. & Prof. Code, § 17204, were applicable only to the class representatives and not to all absent class members. Further, a claim of misrepresentation required a showing of actual reliance on the allegedly deceptive or misleading statements for purposes of establishing standing under the "as a result of" language in § 17204. Class representatives were not required, however, to plead or prove individual reliance on particular advertisements or statements when the unfair practice was a fraudulent advertising campaign.

Outcome

The court reversed the decertification order and remanded for further proceedings to determine whether the named representatives could establish standing in light of the court's decision and, if not, whether amendment should be permitted.