Procedural Posture

Petitioner filed a petition for peremptory writ of mandate from an order of respondent, the Alameda County Superior Court, California, which found as a matter of law that petitioner could not pursue a class action against the real parties in interest for violating California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code § 17200 et seq. The instant court issued an order to show cause.

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Overview

The superior court struck the portion of petitioner's pleading against the real parties in interest for disgorgement of unlawful profits into a fluid recovery fund. Petitioner challenged the superior court's conclusion, as a matter of law, that it could not certify a class to pursue a claim for violating the UCL. The real parties in interest maintained that the California Supreme Court in Kraus v. Trinity Management Services, Inc., settled the question as to whether class actions and UCL claims were fundamentally incompatible when it concluded that Cal. Bus. & Prof. Code § 17203 did not authorize orders for disgorgement into a fluid recovery fund. However, the instant court did not agree that Kraus held that class actions and UCL claims were mutually exclusive. The instant court held that UCL claims and class actions were not mutually exclusive as a matter of law. The superior court erred when it ruled that petitioner could not bring a class action for the UCL claim as a matter of law. Refusing to ever permit a liquid recovery in a UCL claim would thwart the purpose of the UCL because it would permit defendants to keep a portion of their illicit profits.

Outcome

A peremptory writ of mandate was issued directing the superior court to vacate its order refusing to consider a class action under the UCL, and to consider further disposition of this matter in accordance with the views expressed in the instant court's opinion. Costs were awarded to petitioner.

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