1 JEFFREY B. MARGULIES (BAR NO. 126002)
RACHEL D. STANGER (BAR NO. 200733)
2 PARKER, MILLIKEN, CLARK, O‟HARA &
SAMUELIAN
3 A Professional Corporation
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333 South Hope Street, 27 Floor
4 Los Angeles, California 90071-1488
Telephone: (213) 683-6500
5 Facsimile: (213) 683-6669
6 Attorneys for Defendants
ACE HARDWARE CORPORATION; BARNETT, INC.;
7 BARNETT BRASS & COPPER, INC.; BIG LOTS, INC.;
EAST WEST DISTRIBUTING CO.; HOME DEPOT,
8 INC.; JO-ANN STORES, INC.; LINENS „N THINGS;
LONGS DRUG STORES CALIFORNIA, INC.;
9 ORCHARD SUPPLY HARDWARE CORPORATION;
RALEY‟S, INC.; SAFEWAY INC.; SUPER STORES
10 INDUSTRIES; TARGET CORPORATION; WAL-MART
STORES, INC.; WALGREEN CO.
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Additional Counsel Listed on Next Page
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SUPERIOR COURT OF THE STATE OF CALIFORNIA
13
COUNTY OF ALAMEDA
14
MICHAEL DIPIRRO, ) Case No. 02-046321
15 )
Plaintiff, ) DEFENDANTS’ CONSOLIDATED
16 vs. ) SUPPLEMENTAL BRIEF IN SUPPORT
) OF DEMURRERS TO SECOND CAUSE
17 ACE HARDWARE CORPORATION, et al., ) OF ACTION FOR UNFAIR
) COMPETITION
18 Defendants. )
) DATE: August 30, 2002
19 TIME: 9:00 p.m.
DEPT: 22
20
Hon. Ronald M. Sabraw
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22 Defendants Ace Hardware Corporation, Barnett, Inc., Barnett Brass & Copper, Inc., Big
23 Lots, Inc., East West Distributing Co., Home Depot, Inc., Jo-Ann Stores, Inc., Linens „N Things,
24 Longs Drug Stores California, Inc., Orchard Supply Hardware Corporation, Raley‟s, Inc., Safeway
25 Inc., Super Stores Industries, Target Corporation, Wal-Mart Stores, Inc., and Walgreen Co.
26 (“Retailer Defendants”), Philips Electronics North America Corporation and Philips Lighting
27 Company (collectively “Philips”), IKEA North America Services , LLC, Coleman Cable, Inc.,
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1 General Electric Company, and Angelo Brothers Company (collectively “Demurring
2 Defendants”), submit the following supplemental brief in support of defendants‟ demurrers to the
3 second cause of action for unfair competition in plaintiff‟s complaint.
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Additional Counsel for Demurring Defendants
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6 James L. Meeder (Bar No. 62114)
Alexander G. Crockett (Bar No. 193910)
7 ALLEN MATKINS LECK GAMBLE & MALLORY LLP
333 Bush Street, Seventeenth Floor
8 San Francisco, California 94104-2806
Phone: (415) 837-1515
9 Fax: (415) 837-1516
10 Attorneys for Defendant
IKEA North America Services, LLC
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Roseann C. Stevenson (Bar No. 89337)
12 Attorney At Law
20 Hollinwood, Suite 225
13 Irvine, California 92618
Telephone: (949) 651-9387
14 Facsimile: (949) 651-9388
15 Attorney for Defendants Philips Lighting
Company, a Division of Philips
16 Electronics North America Corp., and Philips
Electronics North America Corp.
17
Michael J. Steel (Bar No. 107492)
18 Rachael E. Salcido (Bar No. 203415)
PILLSBURY WINTHROP, LLP
19 50 Fremont Street
Post Office Box 7880
20 San Francisco, CA 94120-7880
Telephone: (415) 983-1000
21 Facsimile: (415) 983-1200
22 Attorneys for Defendant
Coleman Cable, Inc.
23
James A. Bruen (State Bar No. 43880)
24 Sandra A. Kearney (State Bar No. 154578)
FARELLA BRAUN & MARTEL LLP
25 Russ Building, 30th Floor
235 Montgomery Street
26 San Francisco, CA 94104
Telephone: (415) 954-4400
27 Facsimile: (415) 954-4480
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1 Attorneys for Defendant
General Electric Company
2
3 Patrick J. Cafferty, Jr. (State Bar No. 103417)
MUNGER, TOLLES & OLSON LLP
4 33 New Montgomery Street, Suite 1900
San Francisco, CA 94105
5 Telephone: (415) 512-4000
Facsimile: (415) 512-4077
6
Attorneys for Defendant
7 Angelo Brothers Company
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1 TABLE OF CONTENTS
2 Page
3
I. INTRODUCTION AND SUMMARY OF ARGUMENT. ...................................... 1
4
II. THE NATURE OF PLAINTIFF‟S UNFAIR COMPETITION
5 CAUSE OF ACTION. .............................................................................................. 2
6 A. The Scope of the Unfair Competition Law ................................................... 3
7 B. Private Party Standing Under the UCL ......................................................... 4
8 III. PRIVATE ENFORCEMENT OF PROPOSITION 65 REQUIRES
COMPLIANCE WITH THE NOTICE PROVISIONS OF THE ACT. ................... 6
9
A. Proposition 65‟s Notice Requirement ........................................................... 6
10
B. Proposition 65‟s Notice Requirement Must Be Harmonized
11 with the Standing Accorded to Private Individuals Under the
UCL. .............................................................................................................. 8
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IV. CONCLUSION. ..................................................................................................... 11
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1 TABLE OF AUTHORITIES
2 Page(s)
3
Cases
4
Bank of the West v. Superior Court,
5 2 Cal.4th 1254 (1992).......................................................................................................... 3
6 Chern v. Bank of America,
15 Cal.3d 866 (1976) ........................................................................................................... 3
7
Day v. AT&T Corp.,
8 63 Cal.App.4th 325 (1998) .................................................................................................. 3
9 Desert Healthcare District v. PacifiCare, FHP, Inc.,
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94 Cal.App.4 781 (2001) ................................................................................................... 3
10
Farmers Insurance Exchange v. Superior Court,
11 2 Cal.4th 377 (1992)............................................................................................................ 3
Management Services, Inc.,
12 Kraus v. Trinityth
23 Cal.4 116 (2000)........................................................................................................... 4
13
Payne v. National Collection Systems, Inc.,
14 91 Cal.App.4th 1037 (2001) ................................................................................................. 3
15 People v. Pacific Land Research Co.,
20 Cal.3d 10, 17 (1977) ....................................................................................................... 3
16
Samura v. Kaiser Foundation Health Plan,
17 17 Cal.App.4th 1284 (1993) ................................................................................................ 3
18 State Farm Fire & Casualty Co. v. Superior Court,
45 Cal.App.4th 1093 (1996) ................................................................................................ 3
19
Stop Youth Addiction, Inc. v. Lucky Stores, Inc.,
20 17 Cal.4th 553 (1998)............................................................................................. 2,4,5,9,10
21 Tippett v. Terich,
37 Cal.App.4th 1517 (1995) ........................................................................................... 3,10
22
Yeroushalmi v. Sheraton Miramar,
23 88 Cal.App.4th 738 (2001)….. ................................................................................... 6, 7, 10
24 Statutes
25 Business & Professions Code § 17200 ......................................................................... 2, 3,4,5,9, 11
26 Business & Professions Code § 17203 ......................................................................................... 3,5
27 Business & Professions Code § 17204 ............................................................................................ 3
28 Business & Professions Code § 17205 ......................................................................................... 5,8
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1 Code of Civil Procedure Section 128.5 ........................................................................................... 8
2 Health & Safety Code § 25249.6 ................................................................................................ 1, 9
3 Health & Safety Code § 25249.7(a). ............................................................................................... 8
4 Health & Safety Code § 25249.7(b) ................................................................................................ 8
5 Health & Safety Code § 25249.7(d) .................................................................................. 2, 6, 8, 10
6 Health & Safety Code § 25249.13 .................................................................................................. 8
7 Penal Code § 308.......................................................................................................................... 4,5
8 Regulations
9 22 Cal. Code Regs. § 12903(a) ....................................................................................................... 6
22 Cal. Code Regs. § 12903(b)(2)…………………………………………………………………7
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1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I.
3 INTRODUCTION AND SUMMARY OF ARGUMENT.
4 Plaintiff alleges that the defendants have exposed individuals to lead or lead compounds
5 from “light bulbs with one or more solder points on the base” without first giving “clear and
6 reasonable warning.” Plaintiff‟s first cause of action claims that this alleged conduct violated
7 Proposition 65 (Health & Safety Code § 25249.6). Plaintiff‟s second cause of action claims that
8 this alleged violation of Proposition 65 also constitutes an unlawful business activity in violation
9 of the Unfair Competition Law (“UCL”).
10 The court sustained the defendants‟ demurrers to plaintiff‟s first cause of action -- a direct
11 Proposition 65 claim -- without leave to amend, holding that plaintiff has no standing to sue
12 because he failed to serve Defendants with valid 60-Day Notices that included certificates of merit
13 as required by Proposition 65 and its implementing regulations. The court also tentatively ruled
14 that it would dismiss plaintiff‟s derivative UCL claims, but on plaintiff‟s request allowed the
15 parties to provide supplemental briefs addressing the question of whether plaintiff can maintain an
16 indirect UCL claim where the court has already dismissed the underlying direct Proposition 65
17 claim based on the exact same alleged conduct.
18 Plaintiff cannot maintain a derivative UCL cause of action to enforce Proposition 65 under
19 such circumstances for the simple reason that the voters and the Legislature have set forth specific
20 requirements that determine when private plaintiffs can challenge activity that allegedly violated
21 Proposition 65, and when such private actions are prohibited, and did not intend that plaintiffs
22 could circumvent those requirements by citing the UCL‟s general private party standing
23 provisions. Proposition 65 and the UCL allow citizen participation in enforcing compliance with
24 the law. The Proposition 65 notice requirements, however, also serve the important policy of
25 limiting frivolous lawsuits by restricting private enforcement of claims that Proposition 65 has
26 been violated. To allow private plaintiffs to maintain claims for alleged Proposition 65 violations
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1 under the guise of the UCL where they are unsupported by valid 60-day notices would gut the
2 express restrictions on such claims contrary to the intent of the voters and the Legislature.
3 Moreover, Stop Youth Addiction, Inc. v. Lucky Stores, Inc., 17 Cal.4th 553 (1998), upon
4 which plaintiff chiefly relies, does not hold to the contrary, as it did not involve such a well-
5 developed private enforcement scheme as exists under Proposition 65. Unlike other statutes that
6 either do not address, or allow for, direct private enforcement, Proposition 65‟s private
7 enforcement mechanism strikes a careful balance between abusive and appropriate private
8 enforcement of Proposition 65, by providing limited but important procedural safeguards in the
9 form of the 60-day notice requirement, including the certificate of merit. The only way to
10 preserve that balance is to hold that the more general standing provisions in the UCL, which apply
11 when the Legislature has not adopted specific procedural requirements for challenging such
12 conduct, must be harmonized with Proposition 65‟s carefully considered scheme, setting forth
13 when a private plaintiff can challenge conduct he claims violates Proposition 65, and when he
14 cannot. “The courts are bound, if possible, to maintain the integrity of both statutes if the two may
15 stand together.” Id at 569 (internal quotation marks omitted). The only way to “maintain the
16 integrity of both statutes” is to require private plaintiffs to comply with the notice requirements of
17 Health & Safety Code § 25249.7(d) if they intend to allege that defendants have violated
18 Proposition 65, whether directly under the Health & Safety Code or indirectly through the UCL.
19 Any other holding would render the important procedural requirements for private enforcement of
20 Proposition 65 a nullity, the exact opposite of maintaining the integrity of those requirements. For
21 that reason, the demurrers to the second cause of action should be sustained, without leave to
22 amend.
23 II.
24 THE NATURE OF PLAINTIFF’S UNFAIR COMPETITION CAUSE OF ACTION.
25 Business & Professions Code § 17200 allows a lawsuit by any private person “in the public
26 interest” to obtain injunctive relief and/or restitution against unfair, unlawful, or deceptive
27 business practices. Plaintiff‟s second cause of action alleges that the violations of Proposition 65
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1 set forth in the first cause of action are “unlawful” acts that constitute “unfair competition”
2 actionable under Business & Professions Code § 17200.
3 A. The Scope of the Unfair Competition Law
4 A private UCL action “ „ “borrows” violations‟ ” of other statutes to establish predicate
5 “unlawful” business activity. Farmers Insurance Exchange v. Superior Court, 2 Cal.4th 377, 383
6 (1992). The UCL authorizes the court to “make such orders or judgments as may be necessary to
7 prevent the use or employment” of the proscribed conduct. Business & Professions Code § 17203.
8 The courts have held that the Legislature authorized virtually unlimited standing and coverage
9 because the UCL is curative rather than compensatory. The general rule is that private party
10 plaintiffs can receive only injunctive or other equitable relief (Samura v. Kaiser Foundation
11 Health Plan, 17 Cal.App.4th 1284 (1993)), because an injunction is the “primary remedy”
12 provided by the UCL. Tippett v. Terich, 37 Cal.App.4th 1517, 1537 (1995). Similarly, restitution
13 is “not the primary object of the suit,” but “only ancillary to the primary remedies sought for the
14 benefit of the public.” People v. Pacific Land Research Co., 20 Cal.3d 10 (1977). Private
15 plaintiffs are not entitled under the UCL to an award of compensatory damages (Chern v. Bank of
16 America, 15 Cal.3d 866 (1976); Bank of the West v. Superior Court, 2 Cal.4th 1254, 1266, 1272-
17 1273 (1992); Tippett v. Terich, 37 Cal.App.4th at 1537), punitive damages (State Farm Fire &
18 Casualty Co. v. Superior Court, 45 Cal.App.4th 1093, 1100 (1996)), or civil penalties. Day v.
19 AT&T Corp., 63 Cal.App.4th 325, 338 (1998). A UCL claim is “fundamentally a law enforcement
20 action designed to protect the public and not to benefit private parties.” People v. Pacific Land
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21 Research Co., 20 Cal.3d at 17; see also Payne v. National Collection Systems, Inc., 91 Cal.App.4
22 1037, 1045-46 (2001).
23 Under § 17204, an action under the UCL may be brought “by any person acting for the
24 interests of itself . . . or the general public.” However, the right to bring such claims is not without
25 any limitation. “[B]ecause the remedies available under the UCL, namely injunctions and
26 restitution, are equitable in nature, courts have the discretion to abstain from employing them.”
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27 Desert Healthcare District v. PacifiCare, FHP, Inc., 94 Cal.App.4 781, 795 (2001). The nature
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1 of the equitable remedies available under the UCL allows a “court to decline to entertain the action
2 as a representative suit” when the action presents a “potential for harm,” or “is not one brought by
3 a competent plaintiff for the benefit of injured parties.” Kraus v. Trinity Management Services,
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4 Inc., 23 Cal.4 116, 138 (2000).
5 B. Private Party Standing Under the UCL
6 Plaintiff‟s supplemental memorandum relies almost exclusively on the Supreme Court‟s
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7 decision in Stop Youth Addiction, 17 Cal.4 553, as support for the proposition that he is entitled
8 to pursue alleged violations of Proposition 65 as “unfair competition” under the UCL,
9 notwithstanding his admitted noncompliance with the procedural certificate of merit requirements.
10 Stop Youth Addiction is the most recent and exhaustive analysis by the Supreme Court of the issue
11 of private party standing.
12 In Stop Youth Addiction, the plaintiff sought to enforce the unfair competition law against a
13 grocery store, which it alleged had violated Penal Code § 308 by unlawfully selling cigarettes to
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14 minors. 17 Cal.4 at 558. The defendant argued that plaintiff‟s suit was barred by the UCL for
15 two reasons: (1) plaintiff lacked standing to bring a UCL action predicated on violation of a statute
16 for which there is no private right of action, and (2) Penal Code § 308 and another enforcement act
17 pertaining to underage smoking (the “STAKE” Act), set forth the Legislature's intent to create a
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18 comprehensive, exclusive scheme for combating the sale of tobacco to minors. 17 Cal. 4 at 560.
19 As the court explained, the analysis differed for each of these theories. As to the first, “whether
20 the UCL requires that the underlying statute have a direct right of action turns primarily on the
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21 Legislature‟s intent in enacting and amending the UCL.” 17 Cal.4 at 562, fn. 5. As to the
22 second, “whether the Legislature intended that [Penal Code] section 308 not serve as the basis for
23 a UCL action turns primarily on the Legislature‟s intent in enacting section 308 and (according to
24 Lucky) the STAKE Act.” Id.
25 The court disposed of defendant‟s first argument by noting that, “pursuant to section 17200
26 as construed by this court and the Courts of Appeal, „a private plaintiff who has himself suffered
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27 no injury at all may sue to obtain relief for others.‟ ” 17 Cal.4 at 561. “ „[W]hether a private
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1 right of action should be implied under [the predicate] statute ... is immaterial since any unlawful
2 business practice ... may be redressed by a private action charging unfair competition in violation
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3 of Business and Professions Code sections 17200 and 17203.‟ ” 17 Cal.4 at 562 (citation
4 omitted). Although Penal Code § 308 only allowed for enforcement by prosecutors, the lack of
5 private enforcement in that “borrowed” statute did not bar the use of the statute “to establish
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6 predicate „unlawful‟ (§ 17200) business activity.” 17 Cal.4 at 566.
7 The court found the answer to the second argument in the principles of implied repeal “of
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8 the UCL‟s broad express standing provision.” 17 Cal.4 at 569.
9 “The governing principles in determining whether a statute repeals another by
10 implication are well established. [Citation.] The law shuns repeals by implication.
11 [Citation.] In fact, „ “ [t]he presumption against implied repeal is so strong that,
12 „To overcome the presumption the two acts must be irreconcilable, clearly
13 repugnant, and so inconsistent that the two cannot have concurrent operation. The
14 courts are bound, if possible, to maintain the integrity of both statutes if the two
15 may stand together.‟ ” ‟ [Citation.]” Id.
16 The court held that “the mere fact the Legislature has enacted penal laws concerning
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17 minors and tobacco does not impliedly repeal any UCL remedy.” 17 Cal.4 at 572. The court
18 also relied upon the UCL‟s provision that “ „[u]nless otherwise expressly provided‟ ” its remedies
19 are “ „cumulative to each other and to the remedies or penalties available under all other laws of
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20 this state.‟ ” 17 Cal.4 at 573 (emphasis in original). “As neither Penal Code section 308 nor the
21 STAKE Act expressly provides otherwise, we conclude the remedies or penalties provided by the
22 UCL are cumulative to the remedies or penalties available under those statutes.” Id. “We need
23 not decide in this case whether section 17205‟s statement that UCL remedies are cumulative to
24 others „unless expressly otherwise provided‟ necessarily precludes the Legislature from ever
25 impliedly repealing any aspect of UCL standing. For present purposes, we merely conclude
26 Lucky has not overcome, in this case, the strong presumption against implied repeal [citations] of
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27 the UCL.” 17 Cal.4 at 574.
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1 III.
2 PRIVATE ENFORCEMENT OF PROPOSITION 65 REQUIRES COMPLIANCE
3 WITH THE NOTICE PROVISIONS OF THE ACT.
4 A. Proposition 65’s Notice Requirement
5 A private party may file an action seeking to enforce Proposition 65 if the private party
6 has given “notice” of the alleged violation to various public prosecutors and the defendant at least
7 60 days earlier, and no public prosecutor has commenced and is diligently prosecuting the alleged
8 violation. Health & Safety Code § 25249.7(d). In order to maintain an action under Proposition
9 65, the private party must comply with both the statutory and regulatory requirements for 60-day
10 notices. Health & Safety Code § 25249.7(d); 22 Cal. Code Regs. § 12903(a) (“No person shall
11 commence an action to enforce the provisions of the Act „in the public interest‟ pursuant to Health
12 and Safety Code section 25249.7(d) except in compliance with all requirements of this section.”).
13 The reasons for the notice requirement were discussed in the recent decision of
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14 Yeroushalmi v. Sheraton Miramar, 88 Cal.App.4 738 (2001). The court found that the “nearly
15 identical” citizen enforcement provisions of the federal Clean Water Act and Clean Air Act were
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16 appropriate “indicator[s] of the intent of the framers of Proposition 65.” 88 Cal.App.4 at 749.
17 Based on the CWA and CAA decisions, the court stated:
18 “ „ “The required notice was intended to trigger agency enforcement, and to afford
19 the [agency], state, and violator sixty days to resolve the problem without being
20 harassed by a lawsuit. By guaranteeing time for cooperation and agency
21 enforcement, notice also ensured that some citizen suits could be avoided, thereby
22 lessening the burden of citizen suits shouldered by the courts. . . .” ‟ Thus, the
23 purpose of the notice provision is to encourage public enforcement, thereby
24 avoiding the need for a private lawsuit altogether, and to encourage resolution of
25 disputes outside the courts.
26 “It is likely that the framers of Proposition 65 were aware of the analogous
27 federal authorities, and intended the same construction to placed upon the
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1 provisions similar to those found in the federal Clean Air Act and Clean Water Act.
2 We thus conclude that the framers of the initiative intended that the notice contain
3 sufficient facts to facilitate and encourage the alleged polluter to comply with the
4 law, and to encourage the public attorney charged with enforcement to undertake
5 its duty.” 88 Cal.App.4th at 750.
6 As the court explained:
7 “California regulations reflect the same intent to further settlement and
8 public enforcement by requiring „adequate information from which to allow the
9 recipient to assess the nature of the alleged violation.‟ (Cal. Code Regs., tit. 22, §
10 12903(b)(2).) Neither settlement nor an official investigation is likely to result
11 from a pro forma notice that the citizen intends to sue in 60 days for any violation
12 relating to tobacco smoke or cigars which discovery might turn up.” 88
13 Cal.App.4th at 750.
14 The SB 471 amendments were intended to provide an additional hurdle for putative private
15 enforcers, due to the Legislature‟s perception that inappropriate enforcement actions were being
16 brought. As was stated in the September 13, 2001 Senate Floor Analysis for SB 471:
17 “The basic intent of the bill makes changes to the enforcement of
18 Proposition 65 and addresses abusive actions brought by private persons containing
19 little or no supporting evidence by barring such actions from proceeding, or shifting
20 the burden of proof provided by the statute.
21 “The bill requires the notice in warning cases to include a certificate of
22 merit, which would certify that the attorney or party believes there is good cause
23 for the notice, based on consultation with an appropriate expert who has reviewed
24 appropriate information. The AG could demand production of the certificate and
25 all supporting materials at any time. The certificate would not be discoverable, but
26 if the action proceeds and it is found that there is no provable exposure to a listed
27 chemical, the certificate could be reviewed by the court. If the court found that
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1 there was no credible factual basis for the certificate, the action would be deemed
2 frivolous under the Code of Civil Procedure (CCP), Section 128.5, and subject to
3 sanctions.
4 “The „certificate of merit‟ provision is based on the current provision for
5 malpractice suits against architects and engineers, and the former (now sunsetted)
6 provision concerning suits against physicians. The provision will require private
7 plaintiffs to consult with a person of appropriate knowledge and expertise to
8 establish an exposure to a listed chemical. In order to evaluate these claims before
9 litigation starts, the AG will have authority to require production of the information
10 supporting the certificate of merit. If the action proceeds to judgment, the court
11 may review the certification, and if it had no credible basis in fact, find the action
12 frivolous under CCP Section 128.5. This certificate of merit provision is stronger
13 than similar provisions in other laws, because it allows the court to review the
14 underlying basis of the certificate (not just whether the certificate was obtained),
15 and allows the AG to review the materials before litigation. Because the problem
16 of suits with no factual basis has been greater in warning cases, the provision is
17 limited to cases alleging violations of the warning provision of the statute.” Id. at
18 2-3 (emphasis added).1
19 B. Proposition 65’s Notice Requirement Must Be Harmonized with the Standing
20 Accorded to Private Individuals Under the UCL.
21 Proposition 65 states that “Any person violating or threatening to violate [the Act] may be
22 enjoined in any court of competent jurisdiction.” Health & Safety Code § 25249.7(a). Section
23 25249.7(b) allows for imposition of civil penalties for violations of the Act. Importantly,
24 subdivision (d) provides that private parties may bring “Actions pursuant to this section” only in
25 accordance with the 60-day notice requirement. Moreover, § 25249.13 explicitly states that
26
27
1
28 This Analysis was previously filed with the court as Exhibit M to the Retailer
Defendants‟ Request for Judicial Notice.
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1 “Nothing in this chapter shall alter or diminish any legal obligation otherwise required in common
2 law or by statute or regulation . . . .” Even assuming that a UCL claim could be brought for
3 alleged violations of Proposition 65 when those allegations are supported by a proper 60-day
4 notice, the Act is explicit that it cannot be “enforced,” and violations cannot be “enjoined,” unless
5 there is compliance with the 60-day notice requirement.
6 Following Stop Youth Addiction, the plaintiff attempts to frame the question in his
7 supplemental brief as whether the 60-day notice requirement for private enforcement of
8 Proposition 65, either in the original initiative statute, or as modified by the SB 471 amendments,
9 constitutes an “implied repeal” of the UCL‟s universal standing provision. But in fact the issue
10 raised by the defendants‟ demurrers is not whether a private individual has standing to enforce
11 Proposition 65, but whether there are any conditions that must be met in order to do so.
12 Stop Youth Addiction, its forebears, and its progeny, all deal with the limited questions of
13 whether the UCL may be used by a person who is either (a) unaggrieved by the defendant‟s
14 alleged conduct, or (b) not allowed standing directly to enforce the underlying law, to enjoin that
15 conduct as “unfair competition” under the UCL. For example, the argument that Lucky Stores
16 advanced was that the UCL could not accord standing to an individual to enforce the Penal Code,
17 the enforcement of which was expressly accorded to public prosecutors. Proposition 65, on the
18 other hand, does expressly allow for private enforcement.
19 Defendants do not argue that the plaintiff may not use the UCL because he has no standing
20 to enforce Proposition 65 in the general sense that this question has been previously considered by
21 cases such as Stop Youth Addiction. Defendants also do not assert that Proposition 65 repealed the
22 UCL with regard to whether violation of Health & Safety Code § 25249.6 is a predicate
23 “unlawful” act that may be redressed by § 17200. Nor do they contend that the UCL cannot
24 provide “cumulative” remedies to those provided by Proposition 65. Rather, the question posed
25 by the demurrers is whether the careful balance of the competing interests of private and public
26 enforcement embodied in Proposition 65‟s notice requirement should be disregarded when
27 determining the reach of the UCL. The answer to the question is that the express limitation on the
28
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1 standing of individuals contained in the original Proposition 65 initiative and in SB 471 overrides
2 the more general standing accorded under the UCL. By contrast, under plaintiff‟s view, a plaintiff
3 who has failed to give proper notice under Proposition 65 could nevertheless assert violation of
4 Proposition 65 as a predicate for liability under the UCL.
5 Allowing a plaintiff to file a UCL claim seeking to enforce Proposition 65 when he has not
6 complied with the standing requirements of § 25249.7(d) would gut those provisions and the clear
7 statement by the electorate and Legislature that those requirements be satisfied before challenging
8 conduct alleged to be in violation of Proposition 65. Allowing such a case to proceed is
9 antithetical to “the purpose of the notice provision,” which “is to encourage public enforcement,
10 thereby avoiding the need for a private lawsuit altogether, and to encourage resolution of disputes
th
11 outside the courts” (Yeroushalmi, 88 Cal.App.4 at 750), because it would only encourage the
12 filing of more litigation. As the Bill Analysis for SB 471 points out, the intent of the certificate of
13 merit amendment was to “bar” enforcement actions in which a certificate was not filed “from
14 proceeding, or shifting the burden of proof provided by the statute.” Allowing a Proposition 65
15 enforcement action to proceed in the sheep‟s clothing of an “unfair competition” action would in
16 fact be “irreconcilable” with the SB 471 amendments.
17 “The courts are bound, if possible, to maintain the integrity of both statutes if the two may
th
18 stand together.” Stop Youth Addiction, 17 Cal.4 at 569 (internal quotation marks omitted).
19 Defendants respectfully submit that the only way to “maintain the integrity of both statutes” is to
20 require private plaintiffs to comply with the notice requirements of Health & Safety Code §
21 25249.7(d) if they intend to allege that defendants have violated Proposition 65, whether directly
22 under the Health & Safety Code or indirectly through the UCL.
23 Finally, we note that sustaining the demurrers does not interfere with plaintiff‟s
24 prosecution of his claims. As noted in our oppositions to plaintiff‟s motions requesting the court
25 to reconsider and vacate the order sustaining defendants‟ demurrers, if plaintiff wishes to pursue
26 his Proposition 65 claims, he will be required to file a new complaint after the expiration of the
27 60-day notice period for the new notices (assuming no public enforcer assumes jurisdiction over
28
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1 the claims). Hence, the defect in the UCL Section 17200 claim can be cured by plaintiff in the
2 same new complaint. In this fashion, the public interest in both the proper enforcement of
3 Proposition 65 and in ensuring that parties to litigation proceed in accordance with governing law
4 are served by sustaining the demurrers.
5 IV.
6 CONCLUSION.
7 For all the foregoing reasons, Demurring Defendants respectfully submit that the court
8 must sustain their demurrers to the second cause of action for unfair competition without leave to
9 amend.
10
Dated: August 23, 2002 PARKER, MILLIKEN, CLARK, O‟HARA
11 & SAMUELIAN
12
13 By:
Rachel D. Stanger
14 Attorneys for Defendants Ace Hardware
Corporation, Barnett, Inc., Barnett Brass &
15 Copper, Inc., Big Lots, Inc., Coleman Cable,
Inc., East West Distributing Co., Home
16 Depot, Inc., Jo-Ann Stores, Inc., Linens „N
Things, Longs Drug Stores California, Inc.,
17 Orchard Supply Hardware Corporation,
Raley‟s, Inc., Safeway Inc., Super Stores
18 Industries, Target Corporation, Wal-Mart
Stores, Inc., and Walgreen Co.
19
20 Dated: August 23, 2002 ALLEN MATKINS LECK GAMBLE &
MALLORY LLP
21
22
By:
23 James L. Meeder
Alexander G. Crockett
24 Attorneys for Defendant IKEA North
America Services, LLC
25
26
27
28
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1 Dated: August 23, 2002 ROSEANN C. STEVENSON
2
3 By:
Roseann C. Stevenson
4 Attorney for Defendants Philips Lighting
Company, a Division of Philips
5 Electronics North America Corp., and
Philips Electronics North America Corp.
6
7 Dated: August 23, 2002 PILLSBURY WINTHROP, LLP
8
9 By:
10 Michael J. Steel
Rachael E. Salcido
11 Attorneys for Defendant Coleman Cable,
Inc.
12
13 Dated: August 23, 2002 FARELLA BRAUN & MARTEL LLP
14
By:
15
James A. Bruen
16 Sandra A. Kearney
Attorneys for Defendant
17 General Electric Company
18
Dated: August 23, 2002 MUNGER, TOLLES & OLSON LLP
19
20 By:
21 Patrick J. Cafferty, Jr.
Attorneys for Defendant
22 Angelo Brothers Company
23
24
25
26
27
28
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1 PROOF OF SERVICE
2 I am employed in the County of Los Angeles, State of California. I am over the age of 18 and not a party to
the within action. My business address is 333 South Hope Street, 27 th Floor, Los Angeles, California 90071.
3
On October 20, 2011, I served the foregoing document(s) described as
4
DEFENDANTS’ CONSOLIDATED SUPPLEMENTAL BRIEF IN SUPPORT OF DEMURRERS TO
5 SECOND CAUSE OF ACTION FOR UNFAIR COMPETITION
6 on all interested parties:
7 ___ (BY HAND): By hand-delivering a true copy(ies) thereof in sealed envelope(s) to the offices of the party(ies)
listed below:
8
_XX_ (BY MAIL) By placing a true copy in envelope(s) addressed as follows: SEE ATTACHED SERVICE LIST.
9 The envelope(s) were then sealed and deposited for collection and mailing in accordance with my
employer‟s normal procedures. I am readily familiar with the firm‟s practice for collection and
10 processing correspondence for mailing. Under that practice it would be deposited with the U.S.
Postal Service, with all postage prepaid, at Los Angeles, California, on the same day in the ordinary
11 course of business.
12 ____ (BY OVERNIGHT DELIVERY) By placing a true copy in envelope(s) addressed as follows: SEE
ATTACHED SERVICE LIST. The envelopes were then sealed and deposited for collection and
13 delivery in accordance with my employer‟s normal procedures. I am readily familiar with the firm‟s
practice for collection and processing correspondence for overnight delivery. Under that practice it
14 would be picked up by either an Overnite Express Parcel Service employee OR an Airborne
Express employee (depending on the location of each addressee), at Los Angeles, California, on the
15 same day in the ordinary course of business. Some overnight delivery packages are deposited in a
Federal Express envelope and taken to the nearest Federal Express office at Los Angeles,
16 California, on the same day in the ordinary course of business.
17 Gregory M. Sheffer Gregory M. Sheffer Plaintiffs
Clifford A. Chanler Clifford A. Chanler
18 Sheffer & Chanler Sheffer & Chanler
4400 Keller Avenue, Ste 200 72 Huckleberry Hill Road
19 Oakland, CA 94605 New Canaan, CT 06840-3801
20 ____ (BY FACSIMILE) Pursuant to agreement of the parties in compliance with California Rules of Court, Rule
2008, by use of facsimile machine telephone number (213) 683-6669, I served a true and correct
21 copy of the above-referenced document on all interested parties in this action by facsimile
transmission to the following:
22
NAME FAX NO. TIME
23
The transmission was reported as complete and without error on a printed report issued by said
24 facsimile machine upon completion of the transmission, and a copy of same is attached hereto.
25 _XX_ (STATE) I declare under penalty of perjury under the laws of the State of California that the above is true
and correct.
26
Executed on October 20, 2011, at Los Angeles, California.
27
_________________________
28 Cheryl Smith
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