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Motion to strike Prop 65 allegations and extraterritorial 1 Jeffrey B Margulies Bar

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Motion to strike Prop 65 allegations and extraterritorial 1 Jeffrey B Margulies Bar Powered By Docstoc
					                     1 Jeffrey B. Margulies (Bar No. 126002)
                       Rachel D. Stanger (Bar No. 200733)
                     2 PARKER, MILLIKEN, CLARK, O‟HARA &
                       SAMUELIAN
                     3 A Professional Corporation
                       333 South Hope Street, 27th Floor
                     4 Los Angeles, California 90071-1488
                       Telephone: (213) 683-6500
                     5 Facsimile: (213) 683-6669
                     6 Attorneys for Defendants
                       ACE HARDWARE CORPORATION; BARNETT,
                     7 INC.; BARNETT BRASS & COPPER, INC.; BIG
                       LOTS, INC.; COLEMAN CABLE, INC.; EAST
                     8 WEST DISTRIBUTING CO.; HOME DEPOT, INC.;
                       JO-ANN STORES, INC.; LINENS „N THINGS;
                     9 LONGS DRUG STORES CALIFORNIA, INC.;
                       ORCHARD SUPPLY HARDWARE
                    10 CORPORATION; RALEY‟S, INC.; SAFEWAY
                       INC.; SUPER STORES INDUSTRIES; TARGET
                    11 CORPORATION; WAL-MART STORES, INC.;
                       WALGREEN CO.
                    12
                       And Specially Appearing on Behalf of Defendants
                    13 ANGELO BROTHERS COMPANY, GENERAL
                       ELECTRIC COMPANY, IKEA NORTH AMERICA
                    14 SERVICES, LLC, MATSUSHITA ELECTRIC
                       CORPORATION OF AMERICA (SUED AS
                    15 PANASONIC), PHILIPS ELECTRONICS NORTH
                       AMERICA CORPORATION, AND PHILIPS
                    16 LIGHTING COMPANY
                    17                SUPERIOR COURT OF THE STATE OF CALIFORNIA
                    18                             COUNTY OF ALAMEDA
                    19 MICHAEL DIPIRRO,                           )   Case No. 02-046321 and
                                                                  )
                    20                        Plaintiff,          )   Related Case Nos. 01-027278, 01-032309,
                                vs.                               )   01-032518, 01-032050, and 01-035165
                    21                                            )
                       ACE HARDWARE CORPORATION, et               )   NOTICE OF MOTION AND MOTION
                    22 al.,                                       )   TO STRIKE PORTIONS OF
                                                                  )   PLAINTIFF‟S COMPLAINT;
                    23                   Defendants.              )   MEMORANDUM OF POINTS AND
                                                                  )   AUTHORITIES
                    24 AND RELATED ACTIONS                        )
                                                                  )
                    25                                            )   DATE: November 21, 2002
                                                                  )   TIME: 9:30 a.m.
                    26                                            )   DEPT: 22
                                                                  )   Hon. Ronald M. Sabraw
                    27                                            )
                    28

Parker, Milliken,
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                         129839v2                      MOTION TO STRIKE
                     1          TO ALL PARTIES AND TO THEIR ATTORNEYS OF RECORD HEREIN:
                     2          PLEASE TAKE NOTICE that on November 21, 2002, at 9:30 a.m., in Department
                     3 22 of the above-entitled court, defendants Ace Hardware Corporation, Barnett, Inc.,
                     4 Barnett Brass & Copper, Inc., Big Lots, Inc., Coleman Cable, Inc., East West Distributing
                     5 Co., Home Depot, Inc., Jo-Ann Stores, Inc., Linens ‟n‟ Things, Longs Drug Stores
                     6 California, Inc., Orchard Supply Hardware Corporation, Raley‟s, Inc., Safeway Inc., Super
                     7 Stores Industries, Target Corporation, Wal-Mart Stores, Inc., Walgreen Co., Angelo
                     8 Brothers Company, General Electric Company, IKEA North America Services, LLC,
                     9 Matsushita Electric Corporation Of America (sued as Panasonic), Philips Electronics
                    10 North America Corporation, and Philips Lighting Company, will and hereby do move for
                    11 an order striking portions of plaintiff‟s complaint. Defendants assert that the portions of
                    12 the complaint to be stricken fall into two distinct categories: A) portions of the complaint
                    13 relating to the Proposition 65 and unfair competition (“UCL”) causes of action and
                    14 theories of liability; and B) improper extraterritorial remedies. The portions of the
                    15 complaint to be stricken that fall into category A are identified in strikeout text on the
                    16 attached Exhibit A. The portions of the complaint to be stricken which fall into category B
                    17 are as follows:
                    18                33:4-9         preliminarily and permanently enjoin GROUP I
                    19          DEFENDANTS, GROUP III DEFENDANTS, MANUFACTURER
                    20          DEFENDANTS, DISTRIBUTOR DEFENDANTS and RETAIL DEFENDANTS
                    21          from offering the PRODUCTS for sale or use outside of the State of California,
                    22          without providing an identification of the LISTED CHEMICAL, as well as
                    23                33:24-34:2     That the Court grant appropriate restitution to individuals
                    24          outside the State of California for the PRODUCTS sold outside the State of
                    25          California for which the MARKETING SCHEME was made or disseminated or
                    26          caused to be made or disseminated from California in violation of Business &
                    27          Professions Code §17200 and § 17500;
                    28

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                         129839v2                          MOTION TO STRIKE
                     1                 34:3-17       That the Court grant an order requiring GROUP I
                     2          DEFENDANTS, GROUP III DEFENDANTS, MANUFACTURER
                     3          DEFENDANTS, DISTRIBUTOR DEFENDANTS and RETAIL DEFENDANTS
                     4          to send written communication to all customers on their electronic or other mailing
                     5          lists that advise each such customer that, since April 15, 1998, such defendant has
                     6          manufactured, distributed or sold PRODUCTS and that such PRODUCTS contain
                     7          the LISTED CHEMICAL. Such communication should then provide the
                     8          appropriate “clear and reasonable warning” for each such PRODUCTS, as defined
                     9          by 22 CCR § 12601. That the Court also grant an Order requiring defendant to
                    10          advise each customer of such defendant‟s willingness to refund any monies paid by
                    11          customer to such defendant should such PRODUCTS be returned to an authorized
                    12          representative of defendant;
                    13          This motion is brought pursuant to Code of Civil Procedure § 436, and is advanced
                    14 on the ground that the material designated in this notice is irrelevant and improper, and
                    15 must therefore be stricken from the complaint.
                    16          This motion will be, and hereby is, based upon this notice of motion and motion, the
                    17 accompanying memorandum of points and authorities, and such argument and other
                    18 matters as the court may consider at the hearing of this Motion.
                    19
                         Dated: March 9, 2010                         PARKER, MILLIKEN, CLARK, O‟HARA
                    20                                                  & SAMUELIAN
                    21
                    22                                                By:
                                                                            Jeffrey B. Margulies
                    23                                                      Rachel D. Stanger
                                                                            Attorneys for Defendants
                    24                                                      Ace Hardware Corporation, Barnett, Inc.,
                                                                            Barnett Brass & Copper, Inc., Big Lots,
                    25                                                      Inc., Coleman Cable, Inc., East West
                                                                            Distributing Co., Home Depot, Inc., Jo-
                    26                                                      Ann Stores, Inc., Linens „N Things,
                                                                            Longs Drug Stores California, Inc.,
                    27                                                      Orchard Supply Hardware Corporation,
                                                                            Raley‟s, Inc., Safeway Inc., Super Stores
                    28                                                      Industries, Target Corporation, Wal-Mart
                                                                            Stores, Inc., and Walgreen Co.
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                         129839v2                         MOTION TO STRIKE
                     1
                                                   And Specially Appearing for Defendants
                     2                             Angelo Brothers Company, General
                                                   Electric Company, IKEA North America
                     3                             Services, LLC, Matsushita Electric
                                                   Corporation Of America (sued as
                     4                             Panasonic), Philips Electronics North
                                                   America Corporation, and Philips
                     5                             Lighting Company
                     6
                     7
                     8
                     9
                    10
                    11
                    12
                    13
                    14
                    15
                    16
                    17
                    18
                    19
                    20
                    21
                    22
                    23
                    24
                    25
                    26
                    27
                    28

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                         129839v2   MOTION TO STRIKE
                     1                                               TABLE OF CONTENTS
                     2
                         I.     INTRODUCTION .................................................................................................... 1
                     3
                         II.    DEFENDANTS MAY PROPERLY MOVE THIS COURT TO
                     4          STRIKE A PORTION OF THE COMPLAINT ....................................................... 2
                     5 III.     PORTIONS OF THE COMPLAINT THAT REFERENCE
                                PROPOSITION 65 AND THE DERIVATIVE UCL CAUSE OF
                     6          ACTION MUST BE REMOVED ............................................................................ 3
                     7          A.       The Proposition 65 References are Improper and Must be
                                         Stricken. ......................................................................................................... 4
                     8
                                B.       Alternatively, Plaintiff Should Be Required to Amend the
                     9                   Complaint so That it Conforms to the Court‟s Orders
                                         Sustaining the Demurrers. ............................................................................. 4
                    10
                         IV.    THE EXTRATERRITORIAL REMEDIES SOUGHT BY
                    11          PLAINTIFF ARE IMPROPER, UNSUSTAINABLE AND MUST
                                BE STRICKEN FROM THE COMPLAINT ........................................................... 5
                    12
                                A.       The UCL Does Not Support the Extraterritorial Remedies
                    13                   Sought by Plaintiff. ........................................................................................ 5
                    14          B.       The Remedies Sought Violate the Due Process Clause. ............................... 8
                    15          C.       The Commerce Clause Properly Governs the Extraterritorial
                                         Relief Sought by Plaintiff. ........................................................................... 10
                    16
                         V.     CONCLUSION ...................................................................................................... 12
                    17
                    18
                    19
                    20
                    21
                    22
                    23
                    24
                    25
                    26
                    27
                    28

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                         129839v2                                      MOTION TO STRIKE
                     1                                             TABLE OF AUTHORITIES
                     2
                         Cases
                     3
                         Ankeny v. Lockheed Missiles & Space Co.
                     4         (1979) 88 Cal. App. 3d 531 ...................................................................................... 4
                     5 Bernhard v. Harrah’s Club,
                             16 Cal.3d 313 (1976) ................................................................................................ 6
                     6
                       Clothesrigger, Inc. v. GTE Corporation,
                     7       19 Cal.App.3d 605 (1987) ........................................................................................ 9
                     8 Consumer Protection Division v. Outdoor World,
                             91 Md.App. 275, 603 A.2d 1376 (1992) ............................................................ 7, 11
                     9
                       Crow v. Hildreth,
                    10       39 Cal. 618 (1870) .................................................................................................... 4
                    11 Diamond Multimedia Systems, Inc. v. Superior Court,
                             19 Cal.4th 1036 (1999) .......................................................................................... 6, 7
                    12
                       Ferguson v. Friendfinders, Inc.,
                    13       94 Cal.App.4th 1255 (2002) .................................................................................... 10
                    14 Healy v. The Beer Institute,
                             491 U.S. 324, 109 S.Ct. 2491, 95 L.Ed.2d 67 (1989) ............................................ 11
                    15
                       Norwest Mortgage, Inc. v. Superior Court,
                    16       72 Cal.App.4th 214 (1999) .................................................................................... 6, 9
                    17 Oppenheimer v. General Cable Corp.,
                             143 Cal.App.2d 293 (1956) ...................................................................................... 4
                    18
                       Payne v. National Collection Systems, Inc.,
                    19       91 Cal.App.4th 1037 (2001) ...................................................................................... 6
                    20 People v. Pacific Land Research Co.,
                              20 Cal.3d 10 (1977) .................................................................................................. 6
                    21
                       Phillips Petroleum Co. v. Schutts,
                    22        472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985) ...................................... 9, 10
                    23 Pike v. Bruce Church, Inc.,
                              397 U.S. 137, 90 S. Ct. 844; 25 L. Ed. 2d 174 (1970) ........................................... 11
                    24
                       Ricard v. Grobstein, Goldman, Stevenson, Siegel, LeVine & Mangel,
                    25        6 Cal.App.4th 157 (1992 ........................................................................................... 3
                    26 World-Wide Volkswagen Corporation v. Woodson,
                             444 U.S. 286, 100 S. Ct. 559; 62 L. Ed. 2d 490 (1980) ........................................... 9
                    27
                    28

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                         129839v2                                       MOTION TO STRIKE
                     1
                         Statutes
                     2
                         Business & Professions Code § 17200 ...................................................................... 1, 5, 12
                     3
                         Business & Professions Code § 17500 ....................................................................... passim
                     4
                         Code of Civil Procedure § 436 ............................................................................................ 2
                     5
                         Evidence Code § 452(c)....................................................................................................... 7
                     6
                         Health & Safety Code § 25249.6 ......................................................................................... 1
                     7
                         Other Authority
                     8
                         United States Constitution, 14th Amendment ................................................................ 9, 10
                     9
                         United States Constitution, Article 1, § 8 .................................................................... 10, 11
                    10
                         Miscellaneous
                    11
                         Fellmeth, R., “California‟s Unfair Competition Act: Conundrums and
                    12         Confusions,” 26 Cal. L. Revision Comm‟n. Reports 227 (1996) ........................ 7, 8
                    13
                    14
                    15
                    16
                    17
                    18
                    19
                    20
                    21
                    22
                    23
                    24
                    25
                    26
                    27
                    28

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                         129839v2                                       MOTION TO STRIKE
                     1                                                 I.
                     2                                       INTRODUCTION
                     3          Plaintiff‟s complaint originally contained three causes of action. The first cause of
                     4 action alleged that defendants violated Proposition 65 (Health & Safety Code § 25249.6),
                     5 by failing to warn of the alleged exposure to lead from light bulbs with one or more solder
                     6 points on the base. The second cause of action alleged that the failure to provide a
                     7 Proposition 65 warning was an “unlawful” act constituting unfair competition (Business &
                     8 Professions Code § 17200 [“UCL”]). The third cause of action alleged that the failure to
                     9 provide a Proposition 65 warning, and the failure to disclose the presence of lead in the
                    10 products, constitutes false advertising (Business & Professions Code § 17500).
                    11          This court sustained the defendants‟ demurrers to the first two causes of action
                    12 without leave to amend, because plaintiff failed to serve proper 60-day notices that
                    13 included certificates of merit, and thus lacked standing to enforce Proposition 65.
                    14 Plaintiff‟s complaint is therefore limited to his false advertising claim. Defendants have
                    15 filed a motion for judgment on the pleadings, asserting that plaintiff‟s false advertising
                    16 cause of action fails to state facts sufficient to constitute a cause of action. Should the
                    17 motion for judgment on the pleadings be granted without leave to amend, this motion to
                    18 strike will be moot. If, however, the court denies the motion for judgment on the
                    19 pleadings, or grants it with leave to amend, defendants respectfully submit that the court
                    20 should strike the allegations as requested in this motion, without leave to amend.
                    21          Given the state of the pleadings, a motion to strike is necessary. Although the
                    22 orders sustaining the demurrers limit the plaintiff‟s complaint to his third cause of action
                    23 for false advertising, the complaint still contains all of the allegations in both the
                    24 Proposition 65 and the UCL causes of action, as well as introductory allegations alleging
                    25 facts pertaining to the listing of lead and lead compounds under Proposition 65. These
                    26 allegations are incorporated in, and inextricably intertwined with, the third cause of action,
                    27 which was not the subject of the demurrers.
                    28

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                         129839v2                          MOTION TO STRIKE
                     1          Plaintiff‟s third cause of action claims the alleged failure to provide a Proposition
                     2 65 warning and alleged failure to disclose the presence of and/or exposure to lead in the
                     3 products, constitute “untrue or misleading” representations that are actionable under §
                     4 17500. As defendants point out in their motion for judgment on the pleadings, plaintiff
                     5 cannot premise his false advertising complaint on the alleged violation of Proposition 65.
                     6 For this reason, defendants move for an order that the offending passages of the complaint
                     7 identified in Exhibit A be stricken in their entirety. Alternatively, because the resulting
                     8 interlineated complaint will be an unwieldy document, defendants request that the court
                     9 order plaintiff to file an amended complaint that does not reference Proposition 65 or the
                    10 listing of lead and lead compounds under Proposition 65, as such references are irrelevant
                    11 to the false advertising claim.
                    12          In addition, even assuming that plaintiff has stated or can state a viable cause of
                    13 action for false advertising, defendants assert that some of the relief prayed for by the
                    14 plaintiff cannot be maintained. Specifically, plaintiff‟s request for remedies relating to the
                    15 sales of light bulbs in other states, or on behalf of persons outside the state of California
                    16 (“extraterritorial remedies”) are beyond the jurisdiction of this court. For that reason,
                    17 defendants respectfully move this court to order that these improper remedies be stricken
                    18 from the complaint, and not be included in any amended complaint.
                    19                                                   II.
                    20         DEFENDANTS MAY PROPERLY MOVE THIS COURT TO STRIKE A
                    21                                 PORTION OF THE COMPLAINT
                    22              This motion to strike is brought pursuant to Code of Civil Procedure § 436.
                    23 Section 436 provides that the court may:
                    24          “(a) Strike out any irrelevant, false, or improper matter inserted in any
                                pleading.
                    25
                                “(b) Strike out all or any part of any pleading not drawn or filed in
                    26
                                conformity with the laws of this state, a court rule, or an order of the court.”
                    27
                    28

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                         129839v2                            MOTION TO STRIKE
                     1          Because the court sustained the demurrers to the first and second causes of action to
                     2 the complaint without leave to amend, all references to Proposition 65 and the alleged
                     3 “unlawful” conduct of failing to provide a Proposition 65 warning must also be stricken
                     4 from the complaint, as they are now irrelevant and improper. Courts have the authority to
                     5 strike pleadings that are not in conformity with a prior ruling. Ricard v. Grobstein,
                     6 Goldman, Stevenson, Siegel, LeVine & Mangel, 6 Cal.App.4th 157 (1992).
                     7          Similarly, the extraterritorial relief sought by plaintiff exceeds this Court‟s authority
                     8 under both §17500 and the United States Constitution. A motion to strike is proper in an
                     9 instance where the remedies sought are not supported by the cause of action pleaded, as
                    10 they are by definition “not drawn or filed in conformity with the laws of this state.” As
                    11 such, these improper remedies must be stricken from the complaint, without leave to
                    12 amend.
                    13                                                 III.
                    14 PORTIONS OF THE COMPLAINT THAT REFERENCE PROPOSITION 65 AND
                    15              THE DERIVATIVE UCL CAUSE OF ACTION MUST BE REMOVED
                    16          From the outset, the gist of plaintiff‟s action was premised on the alleged violation
                    17 of Proposition 65. The complaint alleges the listing of lead as a carcinogen and
                    18 reproductive toxin under Proposition 65, makes numerous references to the “LISTED
                    19 CHEMICAL” and the alleged requirement to have “clear and reasonable warnings” for the
                    20 products, and alleges that the violation of the Proposition 65 warning duty constitutes false
                    21 advertising. The defendant‟s demurrers to the Proposition 65 and derivative UCL claims
                    22 have been sustained without leave to amend, because plaintiff‟s failure to serve adequate
                    23 60-day notices that included a certificate of merit precluded his standing under the terms of
                    24 Proposition 65‟s citizen enforcement provisions. What is left is a convoluted and
                    25 overreaching complaint that charges allegations inconsistent with the prior orders, and
                    26 seeks relief that cannot be provided.
                    27
                    28

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                         129839v2                           MOTION TO STRIKE
                     1          A. The Proposition 65 References are Improper and Must be Stricken.
                     2          As a result of the order sustaining the demurrers without leave to amend, the first
                     3 and second causes of action are deemed adjudicated (in law) and, for all intents and
                     4 purposes, dismissed. Unfortunately, references to Proposition 65 are not limited to the first
                     5 cause of action. The third cause of action for false advertising incorporates all of the
                     6 preceding allegations by reference, and affirmatively alleges that the defendants‟ failure to
                     7 include a “clear and reasonable warning” in violation of Proposition 65 constitutes a
                     8 violation of § 17500. It refers to the listing of lead under Proposition 65, and defines lead
                     9 as “the LISTED CHEMICAL.”
                    10          Since the court has ruled as a matter of law that plaintiff cannot enforce Proposition
                    11 65 directly, or indirectly, any references to Proposition 65, or the UCL claim based on
                    12 Proposition 65, and even the listing of lead and lead compounds under Proposition 65, are
                    13 “irrelevant” and “improper.” As defendants point out in their motion for judgment on the
                    14 pleadings, plaintiff may not base his false advertising claim on Proposition 65, not only
                    15 because of the court‟s rulings, but also because of the express terms of Proposition 65.
                    16 Those references must be removed from their complaint, in their entirety.
                    17          B. Alternatively, Plaintiff Should Be Required to Amend the Complaint so That it
                    18              Conforms to the Court’s Orders Sustaining the Demurrers.
                    19          Defendants are entitled to a clear and concise complaint. In pleading, the essential
                    20 facts on which a determination of the controversy depends should be stated with clearness
                    21 and precision so that nothing is left to surmise. See Ankeny v. Lockheed Missiles & Space
                    22 Co., 88 Cal.App.3d 531, 537 (1979) . A complaint is uncertain if, because of a lack of
                    23 clarity in pleading or inconsistency between allegations, its meaning is doubtful as to the
                    24 theory of liability or basis of recovery. Crow v. Hildreth, 39 Cal. 618, 620 (1870);
                    25 Oppenheimer v. General Cable Corp., 143 Cal.App.2d 293, 298 (1956).
                    26          Should the court grant this motion to strike, the pleading that will result from any
                    27 proposed interlineation will be an extremely confusing document, at best. (See Exhibit A,
                    28 in which the matters that defendants request be stricken are shown in strikeout text).

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                         129839v2                          MOTION TO STRIKE
                     1 Irrelevant and improper matters are so intertwined with the remaining cause of action in
                     2 the complaint, such that the only sensible remedy is to amend the complaint. For this
                     3 reason, as an alternative to the “striking” the portions of the complaint falling into category
                     4 A, defendants respectfully request this court to order plaintiff to file an amended
                     5 complaint, removing all of the Proposition 65 and § 17200 allegations and references.
                     6                                                 IV.
                     7        THE EXTRATERRITORIAL REMEDIES SOUGHT BY PLAINTIFF ARE
                     8        IMPROPER, UNSUSTAINABLE AND MUST BE STRICKEN FROM THE
                     9                                          COMPLAINT
                    10          The plaintiff has expressly sought remedies on behalf of consumers in other states.
                    11 He would require the placement of a Proposition 65 warning on products sold to
                    12 consumers outside of the state of California. He has sought to enjoin defendants‟
                    13 distribution and sales of light bulbs outside of the state of California without the disclosure
                    14 of the presence of lead that he claims is required under § 17500. Plaintiff has no standing,
                    15 and this court has no jurisdiction, to use California law as a vehicle to address sales of
                    16 products in other states, or to assert remedies on behalf of citizens of other states. There
                    17 can be no legitimate state interest in statements that are directed at consumers outside the
                    18 state about products that are sold outside the state, and imposing the laws of California on
                    19 citizens of other states would directly contravene those states‟ sovereignty. And, even if §
                    20 17500 may constitutionally reach statements, representations, or communications made
                    21 from California to persons outside the state, the Legislature of this state cannot grant a
                    22 private plaintiff authority to act as a “private attorney general” to seek relief on behalf of
                    23 citizens of another state.
                    24          A. The UCL Does Not Support the Extraterritorial Remedies Sought by Plaintiff.
                    25          Plaintiff sues in a representative capacity under the UCL, and claims to bring
                    26 members of the public of other states into the umbrella of the “public interest” that he
                    27 claims to represent. The UCL was not intended to, and constitutionally cannot apply to the
                    28 claims brought by a representative plaintiff on behalf of non-California residents. The

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                         129839v2                          MOTION TO STRIKE
                     1 presumption exists that the California Legislature did not intend for California statutes to
                     2 have force and effect beyond California. Norwest Mortgage, Inc. v. Superior Court, 72
                     3 Cal.App.4th 214 (1999). A statute should not be construed as regulating occurrences
                     4 outside the state unless a contrary intention is clearly expressed or can be reasonably
                     5 inferred from the language or purpose of the statute. Diamond Multimedia Systems, Inc. v.
                     6 Superior Court, 19 Cal.4th 1036, 1058-1059 (1999). The presumption against
                     7 extraterritoriality is based on the intent against applying the prohibition and remedies of a
                     8 California domestic statute to conduct occurring in a foreign jurisdiction. Diamond
                     9 Multimedia Systems, Inc. v. Superior Court, supra, 19 Cal.4th at 1059, fn. 20.
                    10          Although § 17500 makes it unlawful “to make or disseminate or cause to be made
                    11 or disseminated from this state before the public in any state” any false or misleading
                    12 statement, the false advertising law does not, itself, provide standing for plaintiff to
                    13 proceed in his representative capacity. He may gain standing to enforce the terms of §
                    14 17500, if at all, through the UCL. The UCL contains no express provision that it was
                    15 designed or intended to regulate claims of non-residents arising from conduct occurring
                    16 entirely outside California. Norwest Mortgage, Inc. v. Superior Court, 72 Cal.App.4th at
                    17 23 (1999).
                    18          A California criminal statute has no extraterritorial effect, and civil liability cannot
                    19 be based on a defendant‟s violation of a California criminal law that occurs outside the
                    20 state. Bernhard v. Harrah’s Club, 16 Cal.3d 313, 323-24 (1976). Section 17500 is a
                    21 criminal statute, and a UCL claim is “fundamentally a law enforcement action designed to
                    22 protect the public and not to benefit private parties.” People v. Pacific Land Research Co.,
                    23 20 Cal.3d 10, 17 (1977); see also Payne v. National Collection Systems, Inc., 91
                    24 Cal.App.4th 1037, 1045-46 (2001).
                    25          The Maryland Court of Special Appeals held that a state consumer protection
                    26 statute analogous to the UCL did not apply to claims arising solely from extraterritorial
                    27 conduct. Consumer Protection Division v. Outdoor World, 91 Md.App. 275, 603 A.2d
                    28 1376 (1992). In Consumer Protection Division, the court held that the state had

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                         129839v2                           MOTION TO STRIKE
                     1 jurisdiction over false and misleading statements made from outside Maryland, to
                     2 Maryland consumers, but had no jurisdiction over practices that occurred once the
                     3 Maryland residents left the state:
                     4          “The Division has no authority, directly, to preclude sales practices that
                                occur entirely within other States. If Pennsylvania and Virginia wish to
                     5          permit the kinds of high-pressure sales techniques demonstrated in this
                     6          record, that is their business. Once the consumer makes the decision to visit
                                the campground and travels to the out-of-State location, he or she must look
                     7          to the law there for protection. All that Maryland can do, in terms of future
                                activity, is to make sure that (1) communications do not violate the specific
                     8
                                prohibitions of the Consumer Protection Act and (2) its citizens are fairly
                     9          informed by OWC of what they are likely to receive and what will be
                                expected of them. To the extent that the order goes beyond that and purports
                    10          to exercise direct control over conduct occurring entirely outside the State, it
                    11          is invalid.” 603 A.2d at 1383.

                    12          Diamond Multimedia Systems affirms that California remedies may be available for
                    13 out-of state parties when they are harmed by wrongful conduct occurring in California.
                    14 However, such remedies are not available to non-California residents who are injured by
                    15 conduct occurring beyond California‟s borders, such as the sale of light bulbs outside of
                    16 California without disclosure of the alleged presence of lead, as plaintiff claims in his
                    17 complaint. Granting relief that would directly control conduct occurring entirely outside
                    18 the state would be both improper and invalid.
                    19          Similarly, the application of California law to regulate conduct in other states can
                    20 directly conflict with the laws of such other states. The UCL was discussed in detail in the
                    21 California Law Revision Commission report, Fellmeth, R., “California‟s Unfair
                    22 Competition Act: Conundrums and Confusions,” 26 Cal. L. Revision Comm‟n. Reports
                                  1
                    23 227 (1996). Fellmeth notes that the Unfair Competition statute was modeled after the
                    24 Federal Trade Commission Act, specifically section 5. Id. at 236. This “Little FTC Act”
                    25 is not the only comparable state enacted legislation designed to regulate anti-competitive
                    26
                    27
                                1
                                The Fellmeth report is attached to the appendix as Exhibit 12, and defendants
                    28 request that the court take judicial notice of it pursuant to Evidence Code § 452(c) as an
                       official government act.
Parker, Milliken,
Clark, O’Hara &
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                         129839v2                           MOTION TO STRIKE
                     1 conduct, as 16 other states have statutes that are roughly comparable to California‟s Unfair
                     2 Competition Act.2 Id. Each of these statutes differs from both the FTC Act and
                     3 California‟s UCL to varying degrees, ranging from limitations on plaintiffs‟ standing to
                     4 remedies provided for under the statutes. Id. at 239-48. However, California alone allows
                     5 for private attorney general status to be conferred upon any person to sue “in the public
                     6 interest” without qualification. Id. at 248. In other jurisdictions, persons must be injured
                     7 themselves in order to obtain redress and to be able to pursue a violation in a representative
                     8 capacity, and these plaintiffs must undertake a variety of different steps to assure adequacy
                     9 of representation and res judicata finality. Id. While the courts have affirmed the
                    10 Legislature‟s apparent intent to allow any person to sue “in the public interest” under the
                    11 UCL, the Legislature has no authority to enact—and the court no authority to enforce—
                    12 laws purporting to affect the interests of the public of another state, only 15 of which have
                    13 even authorized representative actions, although in a manner much more limited than the
                    14 UCL.3
                    15          Even if a conflict of laws analysis were to lead to the conclusion that statements
                    16 made in California to consumers in other states should be judged by California‟s false
                    17 advertising law, there is no legal basis for this plaintiff to bring an action seeking remedies
                    18 on behalf of consumers located in other states, and applying California‟s non-existent
                    19 standing requirement to allow for such enforcement would be offensive to the laws of each
                    20 of the 49 other states, which do not allow actions by unaggrieved persons such as plaintiff.
                    21          B. The Remedies Sought Violate the Due Process Clause.
                    22          Plaintiff seeks to have this court recognize him as the proper “representative” for
                    23 non-residents of California for the purpose of enjoining defendants‟ extraterritorial sales of
                    24
                    25
                                2
                               The states include: Alaska, Connecticut, Florida, Hawaii, Illinois, Louisiana,
                    26 Maine, Massachusetts, Montana, Nebraska, North Carolina, South Carolina, Utah,
                       Vermont, Washington and Wisconsin.
                    27
                             3
                               Indeed, one might consider such an attempt to run afoul of the guaranty clause of
                    28 the United States Constitution, which guarantees to each state the right to a republican
                       form of government.
Parker, Milliken,
Clark, O’Hara &
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                         129839v2                          MOTION TO STRIKE
                     1 light bulbs without disclosure of the presence of lead. Even if the court has the authority to
                     2 enjoin statements made in California, it cannot regulate defendants‟ sales of the products
                     3 elsewhere as requested by plaintiff in a manner consistent with the Due Process clause.
                     4          The Due Process Clause of the 14th Amendment allows a court to exercise personal
                     5 jurisdiction so long as the requisite “minimum contacts” over a nonresident exist. The
                     6 minimum contacts requirement functions to ensure that the states, through their courts, do
                     7 not reach out beyond the limits imposed on them by their status as coequal sovereigns in a
                     8 federal system. World-Wide Volkswagen Corporation v. Woodson, 444 U.S. 286, 291-292,
                     9 100 S. Ct. 559; 62 L. Ed. 2d 490 (1980). Plaintiff‟s status as an unaggrieved private
                    10 attorney general on behalf of citizens of other states violates the minimum contacts
                    11 analysis.
                    12          Both California and federal courts have applied this reverse due process analysis,
                    13 focusing on the non-resident plaintiffs‟ contacts with California, to determine whether
                    14 class action representative suits may be brought under California law on behalf of those
                    15 non-resident plaintiffs. These courts have recognized that, under the reasoning of Phillips
                    16 Petroleum Co. v. Schutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d 628 (1985), there are
                    17 constitutional limitations on the forum state‟s application of its law to the claims of non-
                    18 resident plaintiffs. See, e.g., Clothesrigger, Inc. v. GTE Corporation, 19 Cal.App.3d 605
                    19 (1987). The forum state must have significant contact to the claims asserted, thereby
                    20 creating a state interest, so that the choice of the forum law is not arbitrary or unfair.
                    21 Clothesrigger, 19 Cal.App.3d at 612-613. The mere fact that the forum state has personal
                    22 jurisdiction over the defendant is not sufficient, in and of itself, to permit the applicability
                    23 of the forum law to the claims of non-resident plaintiffs. Norwest Mortgage, Inc. v.
                    24 Superior Court, supra, 72 Cal.App.4th at 226.
                    25          In the instant action, plaintiff, as a representative of “the public interest,” is not (as
                    26 he would be if this were a class action) required to demonstrate that he is an “adequate”
                    27 representative, that his claims are typical of the claims or defenses of the represented
                    28 parties, and that questions of law or fact common to the class are substantially similar and

Parker, Milliken,
Clark, O’Hara &
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                         129839v2                           MOTION TO STRIKE
                     1 predominate over the questions affecting the individual members. If plaintiff could meet
                     2 those class representative requirements, he still could not demonstrate the requisite
                     3 contacts between the non-resident plaintiffs and the state of California to justify applying §
                     4 17500 to sales of the products in other states. The looser standing provisions of the UCL
                     5 should not reduce the scrutiny applied by the court under the Due Process Clause. To
                     6 allow plaintiff to sue on behalf of non-resident consumers under California law to activity
                     7 occurring outside the state would be arbitrary, unfair, and transgress due process
                     8 limitations. Phillips Petroleum Co. v. Schutts, 472 U.S. 797, 105 S.Ct. 2965, 86 L.Ed.2d
                     9 628(1985).
                    10          C. The Commerce Clause Properly Governs the Extraterritorial Relief Sought by
                    11              Plaintiff.
                    12          The Commerce Clause of the United States Constitution is codified in Article 1, § 8,
                    13 which states that, “[t]he Congress shall have the power to … regulate commerce with
                    14 foreign nations, and among the several states….” The affirmative grant of authority to
                    15 Congress under the Commerce Clause to regulate commerce among the several states also
                    16 encompasses an implicit or dormant limitation on the authority of states to enact legislation
                    17 affecting interstate commerce. Basically, the dormant commerce clause precludes state
                    18 regulation in certain areas even absent congressional action. Ferguson v. Friendfinders,
                    19 Inc., 94 Cal.App.4th 1255 (2002).
                    20          The criteria for determining the validity of state statutes affecting interstate
                    21 commerce follow three general rules. First, a state statute may not directly regulate
                    22 commerce occurring wholly outside the boundaries of the state consistent with the
                    23 Commerce Clause. Second, a state statute may not directly control commerce occurring
                    24 wholly outside the boundaries of the state consistent with the Commerce Clause. Third, in
                    25 determining whether an otherwise valid statute impermissibly controls commerce out side
                    26 the state, courts must consider the practical effect of the statute by evaluating the
                    27 consequences of the statute and how that statute might interact with the legitimate
                    28 regulatory regimes of other states. Ferguson v. Friendfinders, Inc., supra, 115 Cal.Rptr.2d

Parker, Milliken,
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                         129839v2                           MOTION TO STRIKE
                     1 at 264, citing Healy v. The Beer Institute, 491 U.S. 324, 336, 109 S.Ct. 2491, 95 L.Ed.2d
                     2 67 (1989); see also Pike v. Bruce Church, Inc., 397 U.S. 137, 142, 90 S. Ct. 844; 25 L. Ed.
                     3 2d 174 (1970) (where a statute regulates even-handedly to effectuate a legitimate local
                     4 public interest, and its effects on interstate commerce are only incidental, it will be upheld
                     5 unless the burden imposed on such commerce is clearly excessive in relation to the
                     6 putative local benefits).
                     7          Plaintiff‟s proposed remedies would directly regulate commerce occurring wholly
                     8 outside the borders of the state, and thus are in conflict with the dormant commerce clause.
                     9 This conclusion is easily derived from the facts of Healy. In that case, the Supreme Court
                    10 reviewed a Connecticut statute that required out-of-state shippers of beer to affirm that
                    11 their posted prices for products sold to Connecticut wholesalers were no higher than the
                    12 prices at which those products were sold in States bordering Connecticut. The court held
                    13 that the statute violated the dormant Commerce Clause, because it directly controlled
                    14 commerce occurring wholly outside the State, having the practical effect of controlling
                    15 beer prices in other states. 491 U.S. at 338-340. Here, plaintiff would impermissibly have
                    16 the court control advertising and sale of light bulbs in other states, through the remedy of
                    17 enjoining sales without the disclosure that he claims is required under § 17500.
                    18          Even under the more lenient standard of Pike v. Bruce Church, which applies to
                    19 “even-handed” regulation that incidentally burdens interstate commerce, California‟s
                    20 interest in preventing the dissemination from California of false or misleading information
                    21 in advertising to other states is tenuous, at best, and cannot constitutionally support or
                    22 justify plaintiff‟s attempt to restrict defendants‟ sale and distribution of its products outside
                    23 the state of California. See Consumer Protection Division, 603 A.2d at 1383. Certainly,
                    24 California‟s minimal interest is substantially outweighed by the clear impact on interstate
                    25 commerce that plaintiff‟s proposed remedies would have.
                    26          To use § 17500 as a basis to enjoin all of defendants‟ sales of light bulbs throughout
                    27 the country unless plaintiff‟s conditions regarding lead disclosure are met would violate
                    28 the dormant Commerce Clause, because it would have the direct effect of regulating the

Parker, Milliken,
Clark, O’Hara &
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                         129839v2                          MOTION TO STRIKE
                     1 sales of light bulbs in other states. Accordingly, plaintiff‟s extraterritorial remedies are
                     2 barred by the Commerce Clause.
                     3                                              V.
                     4                                         CONCLUSION
                     5          For all of the foregoing reasons, defendants‟ respectfully request that the motion to
                     6 strike should be granted with respect to the extraterritorial remedies sought by plaintiff.
                     7 Similarly, defendants respectfully request that this court grant their motion to strike the
                     8 allegations and references related to the Proposition 65 and § 17200 causes of action from
                     9 the complaint, or in the alternative, plaintiff should be ordered to amend his complaint in
                    10 conformity with the court‟s orders and the relief sought in this motion and the motion for
                    11 judgment on the pleadings.
                    12
                    13
                         Dated: March 9, 2010                            PARKER, MILLIKEN, CLARK, O‟HARA
                    14                                                     & SAMUELIAN
                    15
                    16                                                   By:
                                                                               Jeffrey B. Margulies
                    17                                                         Rachel D. Stanger
                                                                               Attorneys for Defendants
                    18                                                         Ace Hardware Corporation, Barnett, Inc.,
                                                                               Barnett Brass & Copper, Inc., Big Lots,
                    19                                                         Inc., Coleman Cable, Inc., East West
                                                                               Distributing Co., Home Depot, Inc., Jo-
                    20                                                         Ann Stores, Inc., Linens „N Things,
                                                                               Longs Drug Stores California, Inc.,
                    21                                                         Orchard Supply Hardware Corporation,
                                                                               Raley‟s, Inc., Safeway Inc., Super Stores
                    22                                                         Industries, Target Corporation, Wal-Mart
                                                                               Stores, Inc., and Walgreen Co.
                    23
                                                                               And Specially Appearing for Defendants
                    24                                                         Angelo Brothers Company, General
                                                                               Electric Company, IKEA North America
                    25                                                         Services, LLC, Matsushita Electric
                                                                               Corporation Of America (sued as
                    26                                                         Panasonic), Philips Electronics North
                                                                               America Corporation, and Philips
                    27                                                         Lighting Company
                    28

Parker, Milliken,
Clark, O’Hara &
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                         129839v2                          MOTION TO STRIKE
                     1                                         PROOF OF SERVICE
                     2
                                          I am employed in the County of San Francisco, State of California. I am
                     3
                         over the age of 18 and not a party to the within action. My business address is 333 Bush
                     4
                         Street, Suite 1700, San Francisco, California 94104.
                     5
                                          On October 2, 2002, I served a true copy(ies) of the foregoing document
                     6
                         described as:
                     7
                                NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF
                     8
                                PLAINTIFF‟S COMPLAINT; MEMORANDUM OF POINTS AND
                     9
                                AUTHORITIES
                    10
                    11 _X__ (BY EMAIL) By emailing a true copy addressed as follows: SEE ATTACHED
                    12
                                    SERVICE LIST. The envelope(s) were then sealed and deposited for collection
                    13
                                    and mailing in accordance with my employer‟s normal procedures. I am readily
                    14
                    15              familiar with the firm‟s practice for collection and processing correspondence for

                    16              mailing. Under that practice it would be deposited with the U.S. Postal Service,
                    17
                                    with all postage prepaid, at Los Angeles, California, on the same day in the
                    18
                                    ordinary course of business.
                    19
                    20 _XX_ (STATE) I declare under penalty of perjury under the laws of the State of
                    21              California that the above is true and correct.
                    22
                                Executed on July 12, 2002, at Los Angeles, California.
                    23
                    24
                    25                                                        _______________________________
                                                                              Judy Hidde
                    26
                    27
                    28

Parker, Milliken,
Clark, O’Hara &
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                         129839v2                              MOTION TO STRIKE
                     1                                               SERVICE LIST

                     2
                         NAME                                   PHONE NUMBERS                REPRESENTATION
                     3
                         Gregory M. Sheffer                     Phone: (510) 577-0747        Plaintiff
                     4   Clifford A. Chanler                    Fax: (510) 577-0787
                         Sheffer & Chanler
                         4400 Keller Avenue, Ste 200            sheffesq@aol.com
                     5
                         Oakland, CA 94605                      cchanler@aol.com
                     6   72 Huckleberry Hill Road               Phone: (203) 966-9911
                         New Canaan, CT 06840-3801              Fax: (203) 801-5222
                     7
                         Patrick J. Cafferty, Jr., Esq.         Phone: (415) 512-4000        Angelo Brothers Company;
                     8   Munger, Tolles & Olson, LLP            Fax: (415) 512-4077          Westinghouse Electric
                         33 New Montgomery Street, 19th Floor   Direct: (415) 512-4012       Corporation
                     9   San Francisco, CA 94105-9781           caffertypj@mto.com

                    10   William Noel Edlin, Esq.               Phone: (415) 781-7072        Feit Electric Company
                         Walsworth, Franklin, Bevins & McCall   Fax: (415) 391-6258
                    11   550 Montgomery Street, 8th Floor       noel@wfbm.com
                         San Francisco, CA 94111                attachment@wfbm.com
                    12
                         Sandra A. Kearney, Esq.                Phone: (415) 954-4400        General Electric Company
                    13   Farella, Braun & Martel LLP            Fax: (415) 954-4480
                         235 Montgomery Street, 30th Floor      Direct: (415) 954-4428
                    14   San Francisco, CA 94104                skearney@fbm.com

                    15   Ann C. Grimaldi, Esq.                  Phone: (415) 267-4000        Matsushita Electric
                         Eric S. C. Lindstrom, Esq.             Fax: (415) 267-4198          Industrial Co., Ltd.
                    16   McKenna & Cuneo, LLP                   agrimaldi@mcKennalong.com    (Sued as Panasonic Company)
                         One Market Plaza, Steuart Tower        elindstrom@mckennalong.com
                    17   San Francisco, CA 94105

                    18   Clem L. Glynn, Esq.                    Phone: (925) 210-2800        Osram Sylvania Inc.
                         Glynn & Finley                         Fax: (925) 945-1975
                    19   100 Pringle Avenue                     Clem.Glynn@usa.dupont.com
                         One Walnut Creek Center, Suite 500
                    20   Walnut Creek, CA 94596-3582

                    21   Roseann C. Stevenson, Esq.             Phone: (949) 651-9387        Philips Electronics
                         Law Offices of Roseann C. Stevenson    Fax: (949) 651-9388          North America Corporation;
                    22   20 Hollinwood, Suite 225               rcs@rcsesq.com               Philips Lighting Company
                         Irvine, CA 92618
                    23
                         Robert P. Lynn, Esq.                   rplynn@optonline.net         Satco Products, Inc.
                         Law Offices of Robert P. Lynn, Jr.
                    24   330 Old Country Road, Suite 103
                         Mineola, NY 11501
                    25                                          Trenton H. Norris, Esq.
                         Trenton H. Norris, Esq.                Phone: (415) 393-2000
                    26   Bingham McCutchen                      Fax: (415) 393-2286
                         3 Embarcadero Center, 18th Floor,      Direct (415) 393-2062
                    27   San Francisco, CA 94111-4067           trenton.norris@bingham.com

                    28

Parker, Milliken,
Clark, O’Hara &
                                                                       14
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                         129839v2                               MOTION TO STRIKE
                     1
                     2   Robin Stafford, Esq.                     Phone: (415) 268-7000            Sunbeam Products, Inc.
                         Morrison & Foerster, LLP                 Fax: (415) 268-7522
                     3   425 Market Street                        Direct: (415) 268-6674
                         San Francisco, CA 94105-2482             rstafford@mofo.com
                     4
                         James Meeder, Esq.                       Phone: (415) 837-1515            Ikea
                         Allen, Matkins, Leck, Gamble &           Fax: (415) 837-1516
                     5
                         Mallory, LLP                             Direct (415) 837-1575
                         333 Bush Street, Suite 1700              jmeeder@allenmatkins.com
                     6   San Francisco, CA 94104-2806
                     7   Michael L. Wachtell, Esq.                Main Tel: (213) 891-0700         Bulbrite
                         Buchalter, Nemer, Fields Younger, P.C.   Dir. Tel: (213) 891-5460
                     8   601 South Figueroa Street, Ste 2200      Dir. Fax: (213) 630-5760
                         Los Angeles, CA 90017                    Pager: (888) 860-7963
                     9                                            Mobile: (818) 679-0860
                                                                  mwachtell@buchalter.com
                    10
                         Rodney L. Eshelman, Esq.                 Phone: (415) 989-5900            Adams Apple Distributing, L.P.,
                    11   Elizabeth L. Musser, Esq.                Fax: (415) 989-0932              Urban Outfitters
                         Carroll, Burdick & McDonough, LLP        reshelman@cbmlaw.com
                    12   44 Montgomery Street, Suite 400          emusser@cbmlaw.com
                         San Francisco, CA 94104
                    13
                         Renee Devon Wasserman, Esq.              Phone: (415) 956-2828            East West Distributing Co.;
                    14   Robert Maxwell, Esq.                     Fax: (415) 956-6457              Wal-Green Co.
                         Rogers, Joseph, O‟Donnell & Phillips     rwasserman@rjop.com
                    15   311 California Street, 10th Floor        jmaxwell@rjop.com
                         San Francisco, CA 94104
                    16
                         Michael Delehunt, Esq.                   Phone:(415) 434-4484             Big Lots, Inc.
                    17   Foley & Lardner                          Fax: (415) 434-4507
                         One Maritime Plaza, Sixth Floor          (415) 438-6431 Direct
                    18   San Francisco, CA 94111-3409             mdelehunt@foleylaw.com
                                                                  Phone: (415) 434-1600
                    19   Richard C. Jacobs, Esq.                  Fax: (415) 217-5910              Longs Drug Stores Corporation
                         Howard, Rice, Nermerovski, Canady,       rjacobs@hrice.com
                    20   Folk, & Rabkin
                         3 Embarcadero Center, 7th Floor
                    21   San Francisco, CA 94111-4065

                    22   Charles D. May, Esq.                     Phone: (818) 205-9955 Ext. 284   Lowe‟s HIW, Inc.
                         Gene Sharaga, Esq.                       Fax: (818) 205-9944
                         Tharpe & Howell                          gsharaga@tharpe-howell.com
                    23   15250 Ventura Blvd. 9th Floor            cmay@tharpe-howell.com
                         Sherman Oaks, CA 91403-3221
                    24
                         Brenda Radmacher, Esq.                   Phone: (213) 622-9300            Orchard Supply Hardware
                    25   Wood, Smith, Henning & Berman LLP        Fax: (213) 622-9394              Corporation; Sears, Roebuck &
                         801 South Figueroa Street, 9th Floor     bkr@wshblaw.com                  Company
                    26   Los Angeles, CA 90017-2573

                    27
                    28

Parker, Milliken,
Clark, O’Hara &
                                                                           15
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                         129839v2                                 MOTION TO STRIKE
                     1
                     2   Michael A. Futterman, Esq.       Phone: (415) 399-3840   Super Store Industries
                         Dodd, Futterman & Dupree LLP     Fax: (415) 399-3838
                     3   160 Sansome Street, 17th Floor   mfutterman@dfdlaw.com
                         San Francisco, CA 94104
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Parker, Milliken,
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                         129839v2                         MOTION TO STRIKE

				
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