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Class actions are not incompatible with the state’s Unfair Competition Law, the First District Court of Appeal ruled Tuesday on an issue that has divided trial judges around the state. A 2-1 majority led by Justice James Lambden held that Supreme Court precedent, legislative history and public policy compelled the conclusion that a “liquid recovery” is appropriate for UCL cases. “Refusing to ever permit a liquid recovery in a UCL claim would thwart the purpose of the UCL because it would permit defendants to keep a portion of their illicit profits,” Lambden wrote. Lambden was joined by Justice J. Anthony Kline in Corbett v. Superior Court( Bank of America), A097495. Justice Paul Haerle dissented on both substantive and procedural grounds. Thomas Corbett had sued Hayward Dodge Inc. and Bank of America for allegedly misleading car buyers into entering into financial arrangements with an “approved” annual percentage rate, while actually increasing the APR to include a dealer participation fee that the bank and Hayward Dodge later split. Corbett filed a class action on behalf of himself and other allegedly deceived car buyers, but did so through state Business & Professions Code �17200, also known as the Unfair Competition Law. Consumers contend that class actions under the UCL are the only way to ensure that companies don’t make windfalls off unfair practices, while businesses say the law is meant to provide injunctive relief and disgorgement of profits, not to compensate a class of private individuals. Read the full text of Corbett v. Superior Court( Bank of America), A097495.

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