San Francisco Trial Court Rules Prop. 64 Is Not

							JANUARY 5, 2005



        San Francisco Trial Court Rules Prop. 64 Is Not Retroactive
        By Bruce E. Copeland and Stephen E. Paffrath

        In the latest of a series of trial court decisions regarding the retroactivity of California
        Proposition 64 (“Prop. 64”), which placed strict new limits of actions brought under
        California’s Unfair Competition Law, California Business and Professions Code section
        17200 (the “UCL”), a San Francisco trial court judge ruled in California Law Institute v. Visa
        USA, Superior Court of the State of California, City and County of San Francisco, Case No.
        421180, that Prop. 64 is not retroactive to “cases already on file as of the time of its
        enactment (November 3, 2004).” Prop. 64 requires a plaintiff to establish standing resulting
        from injury in fact as a result of unfair competition and, if suing in a representative capacity
        on behalf of others, to satisfy the procedural requirements for class action certification under
        California Code of Civil Procedure section 382. In addition, a private plaintiff can no longer
        sue under section 17200 “on behalf of the general public.” Pursuant to the judge’s decision
        in California Law Institute v. Visa USA, and pending any reversal by the Court of Appeal,
        Prop. 64’s newly enacted limits will not apply to the UCL claims at issue in that case, as such
        claims existed prior to November 3, 2004. In arriving at its decision, the trial court relied on
        a California Supreme Court case, Tapia v. Superior Court (1991) 53 Cal. 3d 282, for the
        proposition that “a new ballot proposition is presumed to operate prospectively in the
        absence of an express declaration of retroactivity or a clear indication that the electorate
        intended otherwise,” and then confirmed that presumption based on a finding that the
        changes mandated by Prop. 64 were neither “remedial” nor “procedural” for purposes of
        analyzing retroactivity. If the Court had determined that the changes required by Prop. 64
        were merely “remedial” or “procedural,” presumably it would have found that Prop. 64
        applied retroactively.

        Significantly, trial courts elsewhere in California have ruled that Prop. 64 is retroactive, while
        still others have ruled that it is not retroactive, setting up a potential showdown in the Court
        of Appeal. Coincidentally, the Court of Appeal for the Second District in Los Angeles will
        be hearing oral argument on January 5, 2005 regarding the retroactivity of Prop. 64 in a case
        entitled United Investors Life Insurance Company v. Waddell & Reed, et al., Division 5, case no.
        B176546. In that regard, until the retroactivity issue is resolved, parties defending against
        UCL claims should ensure that the potential retroactive impact of Prop. 64 is preserved as a
        defense.




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For more information on this issue or other class action related matters, please contact your
Nixon Peabody attorney, Bruce E. Copeland at 415-984-8253, Stephen E. Paffrath at 415-
984-8483, Paul J. Hall at 415-984-8266, Eric K. Larson at 415-984-8486, or any of the
following members of the Class Action Team:


Attorney                                     Email Name                       Phone
Andrew Burns (ROC)                           aburns@nixonpeabody.com          585-263-1091
Marcus Cohn (BOS)                            mcohn@nixonpeabody.com           617-345-1322
Roger Crane (NYC)                            rcrane@nixonpeabody.com          212-940-3190
Brian Dalrymple (SF)                         bdalrymple@nixonpeabody.com      415-984-8275
Dennis Duggan (BOS)                          dduggan@nixonpeabody.com         617-345-1340
Samuel Goldblatt (BUF)                       sgoldblatt@nixonpeabody.com      716-853-8121
Stephen Johnson (SF)                         scjohnson@nixonpeabody.com       415-984-8222
Fred Kelly (BOS)                             fkelly@nixonpeabody.com          617-345-1319
Hugh Koss (SF)                               hkoss@nixonpeabody.com           415-984-8414
Joseph Leghorn (BOS)                         jleghorn@nixonpeabody.com        617-345-1114
Christopher Mason (NYC)                      cmason@nixonpeabody.com          212-940-3017
Louise McCabe (SF)                           lmccabe@nixonpeabody.com         415-984-8258
Rick McGuirk (ROC)                           rmcguirk@nixonpeabody.com        585-263-1644
Carolyn Nussbaum (ROC)                       cnussbaum@nixonpeabody.com       585-263-1558
Scott O’Connell (BOS)                        soconnell@nixonpeabody.com       617-345-1150
Joseph Ortego (GC)                           jortego@nixonpeabody.com         516-832-7564
Frank Penski (NYC)                           fpenski@nixonpeabody.com         212-940-3124
Vivian Quinn (BUF)                           vquinn@nixonpeabody.com          716-853-8134
Steven Rider (BOS)                           srider@nixonpeabody.com          617-345-1333
George Skelly (BOS)                          gskelly@nixonpeabody.com         617-345-1220
John Stadler (BOS)                           jstadler@nixonpeabody.com        617-345-6098
Melissa Tearney (BOS)                        mtearney@nixonpeabody.com        617-345-1323
David Tennant (ROC)                          dtennant@nixonpeabody.com        585-263-1021
Deborah Thaxter (BOS)                        dthaxter@nixonpeabody.com        617-345-1326
James Weller (GC)                            jweller@nixonpeabody.com         516-832-7543




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