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Back in 1997, an article in The Recorder observed that “a backlash appears to be shaping up against the state’s liberal consumer protection laws.” Referring to Business & Professions Code �17200 et seq. (also known as the Unfair Competition Law or UCL), the article went on to say, “Sparked by an uptick in the number of [UCL] suits in recent years, lawmakers have introduced a slew of bills to curtail the law.” The article further noted that, as a result, some were predicting 1997 to be “a year of reckoning for California’s consumer protection laws.” The reckoning never happened. None of the reform bills passed and, by all accounts, the rate of UCL filings has continued to rise so dramatically that now even a few members of the plaintiffs bar have publicly admitted that something must be done. Business interests complain bitterly about the high price of defending against amorphous charges of “unfair” conduct, consumer interests are hurt by the passed-on litigation costs built into products and services, and litigants of all types suffer when scarce judicial resources are diverted to deal with insubstantial — some might say extortionist — UCL suits. Despite a few pending bills (AB 69, AB 95, AB 102 and SB 122) and recent hearings in Sacramento that indicate a renewed interest in evaluating the uses and abuses of the UCL, most attorneys experienced in UCL litigation probably aren’t holding their breath while waiting to see if some appreciable standards for UCL liability and remedies result this time around. What can those counsel do in the meantime? One option, particularly for defense counsel, is to urge trial judges to hark back to the historic and now all-but-forgotten distinction between law and equity and take their cue from the rules allowing trial courts to “do the right thing” in equitable actions. In modern times, trial judges are most accustomed to the constraints they face when presiding over legal actions in which they ascertain the elements of a cause of action, determine whether the plaintiff has pleaded facts to meet the elements and then turn the case over, with proper instructions on the law, to a jury that awards damages if the evidence supports the claim. Section 17200, however, authorizes no awards for damages per se. Instead, it allows only injunctive or restitutionary relief, both of which are purely equitable remedies. As a result, UCL claims are decided exclusively by the judge as the trier of fact, sitting in equity, who enjoys a great deal of power to grant or withhold relief — power that many judges may not fully realize is theirs. In a frequently quoted passage, the California Supreme Court declared in a 1972 decision that the UCL permits “tribunals to enjoin ongoing wrongful business conduct in whatever context such activity might occur” and “was intentionally framed in its broad, sweeping language, precisely to enable judicial tribunals to deal with the innumerable ‘new schemes which the fertility of man’s invention could contrive.’” ( Barquis v. Merchants Collection Assn. 7 Cal.3d 94, 111-112.) Less often quoted, however, is other language from the Supreme Court explaining that, unlike remedies at law, the equitable remedies available under the UCL are not automatic upon proof of a UCL violation. “Section 17203 does not mandate restitutionary or injunctive relief when an unfair business practice has been shown. . . . A court cannot properly exercise an equitable power without consideration of the equities on both sides.” ( Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 180-181.) “In deciding whether to grant the remedy or remedies sought by a UCL plaintiff, the court must permit the defendant to offer [equitable] considerations” as a defense. In a similar vein, the Supreme Court has said, “Because a UCL action is one in equity, in any case in which a defendant can demonstrate a potential for harm . . . the court may decline to entertain the action as a representative suit.” ( Kraus v. Trinity Management Services Inc. (2000) 23 Cal.4th 116, 138.) And, in another case, the court answered concerns about the almost unlimited scope of 17200 liability by noting that trial courts “are empowered to inquire into the bona fides of private lawsuits” to avoid their misuse. ( Stop Addiction Inc. v. Lucky Stores Inc. (1998) 17 Cal.4th 553, 575.) In shouldering the responsibility for weighing the equities before deciding a UCL case, the trial judge should remember — and should be reminded by counsel — that nothing in the UCL abrogates the traditional restrictions on granting equitable relief even in actions where some misconduct by the defendant is shown. Thus, for example, if an adequate remedy at law exists, such as through an administrative action or a suit for negligence or fraud, equitable relief should be denied. ( Prudential Home Mortgage Co. v. Superior Court (1998) 66 Cal.App.4th 1236, 1250 [prayer for injunctive relief under UCL stricken because legal remedy under specific statutory scheme governing conduct was sufficient to address the practice claimed to be "unfair"].) In other words, while the UCL remedies are cumulative of other remedies (Bus. & Prof. Code, �17205), they should be used only to supplement alternative but inadequate relief mechanisms and should not be employed if consumers can obtain appropriate relief through other means. Consequently, UCL remedies are often inappropriate where the alleged harm to consumers is of a type that would ordinarily provide an incentive for a traditional action at law by individual consumers such as investors bilked out of substantial funds, car purchasers induced to buy “lemons” or policyholders wrongfully denied insurance benefits owed to them. Another circumstance that justifies a trial judge’s rejection of a UCL claim occurs when the specific business practice that appears to violate the UCL is subject to comprehensive regulation or the active oversight of an administrative agency, and awarding equitable relief “would pull the court deep into the thicket” of a regulated arena “that courts are ill-equipped to meddle in.” ( Desert Healthcare Dist. v. Pacificare FHP Inc. (2001) 94 Cal.App.4th 781, 794-796.) Several courts have recognized that UCL relief should be denied when it would (1) embroil the courts in the ongoing supervision of business practices, (2) lead to a multiplicity of actions or (3) when the relief would render incapable meaningful enforcement. For example, in Diaz v. Kay-Dix Ranch (1970) 9 Cal.App.3d 588, the court affirmed dismissal of a UCL claim brought by migratory farm workers seeking an injunction prohibiting defendant ranch owners from knowingly employing illegal aliens. In concluding that injunctive relief should be denied, the court observed that such relief would lead to a multiplicity of enforcement actions and ongoing supervision of business practices. In turn, “[m]ultiple injunctions . . . would have the cumulative effect of a statutory regulation, administered by the superior courts through the medium of contempt hearings. The injunctive relief sought by plaintiffs would subject farm operators to burdensome, if bearable, regulation, and the courts to burdensome, if bearable, enforcement responsibilities.” The court in Diaz concluded that “equity withholds its aid” where it would be “more orderly, more effectual, less burdensome to the affected interests, that the national government [act on plaintiffs' complaints],” rather than the courts. The court’s conclusion is consistent with the subsequent ruling in Larez v. Oberti, 23 Cal.App.3d 217, a 1972 decision that involved a UCL claim by farm workers to enjoin the employment of illegal immigrant laborers. The court in Larez observed: “The impracticability of drafting, supervising and enforcing an injunctive order in this case and the plethora of cases it would undoubtedly spawn is a factor to consider in determining the appropriateness of injunctive relief. The courts are ill-equipped to deal with that task.” Judicial intervention in a regulated industry was also rejected in California Grocers Assn. v. Bank of America (1994) 22 Cal.App.4th 205. In that case, the court reversed a UCL injunction limiting a $3 bank fee charged by the defendant to $1.73. The court held that “[s]uch relief is an inappropriate exercise of judicial authority” and that granting such relief qualified as an abuse of discretion by the trial court. “Judicial review of one service fee charged by one bank is an entirely inappropriate method of overseeing bank service fees. . . .” the court ruled. “[T]he control of charges, if it be desirable, is better accomplished by statute . . . than by ad hoc decisions of the courts. Legislative committees and an administrative officer charged with regulating an industry have better sources of gathering information and assessing its value than do courts in isolated cases.” Most recently, in Gregory v. Albertson’s Inc., 02 C.D.O.S. 12287, (December 2002), the court of appeal affirmed an order sustaining a demurrer in a case where the plaintiff alleged that a Health & Safety Code violation was unfairly contributing to urban blight. Recognizing the public policy behind the statutory scheme invoked by the plaintiff, the court nonetheless held that allowing a private enforcement action would upset the Legislature’s effort at “harmonizing the policy condemning blight with distinct policies favoring the free use of property.” The court concluded that it would be inappropriate to step outside the statutory scheme by “fashioning a private remedy through the use of the unfair competition law to affect a single leasehold in a shopping center.” The court added that the plaintiff’s proposed remedy would force the court into a burdensome role of directing and supervising blight remediation efforts not contemplated under the statutes expressly aimed at such efforts. The court of appeal in Gregory approved dismissal of the UCL claim as an appropriate “conclusion of law.” But in doing so, it closely scrutinized the result under a strict standard of review applicable to ordinary legal actions, in which trial judges have little power to summarily dispose of cases. However, when a trial court sitting in equity summarily resolves a case through the exercise of broad equitable discretion rather than through “conclusions of law,” the ruling is subject to a more deferential standard of review. Thus, for example, on appeal from summary judgment of an equitable cause of action, the appellate court should affirm the trial court’s ruling as long as there is no abuse of discretion. ( Centennial Insurance Co. v. United States Fire Insurance Co. (2001) 88 Cal.App.4th 105, 110-111.) This rule has been applied — albeit infrequently — to UCL litigation. ( Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1136-1137.) If trial judges are made aware of the commonly overlooked abuse of discretion standard of review applicable to summary disposition of equitable claims, they might be emboldened to couch their decisions in terms of an exercise of their broad discretion rather than as a “matter of law.” As a result, they might more readily avoid the need for a full-blown trial exploring every disputed fact issue in certain cases. A judge may be able to ascertain from the pleadings that, whatever details might be revealed at trial, it is evident that some classes of consumers, such as those who may benefit from a challenged business practice, will not be sufficiently represented to warrant proceeding on a representative action purportedly brought on behalf of the general public. A judge may conclude that the equitable relief sought is simply not of a type that courts are equipped to administer fairly and efficiently. Or a judge might reject a UCL claim because the plaintiff’s real grievance is one that can and should be addressed in a traditional legal action. Most judges do not yet seem to have embraced the ability of trial courts to summarily dispose of UCL claims on discretionary grounds. But if momentum in that direction develops, it could go a long way toward ameliorating some of the problems that have plagued the courts, litigants and the general public as a result of burgeoning UCL litigation — problems that, so far, have eluded legislative redress.

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