Wednesday, February 2, 2005
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Proposition 64 Not Retroactive, Court of Appeal Rules
By KENNETH OFGANG, Staff Writer/Appellate Courts
Proposition 64’s limitations on private enforcement of unfair competition laws do not apply to lawsuits filed before its effective date of Nov. 3 of this year, the First District Court of Appeal ruled yesterday.
In a published opinion, Div. Four denied a motion by the owner of the Mervyn’s department store chain to dismiss an appeal from Alameda Superior Court Judge Henry Needham Jr.’s ruling in favor of the company.
Californians for Disability Rights sued Mervyn’s, LLC, alleging that the company—which operates 125 stores across California—discriminates against those with mobility disabilities by failing to provide adequate pathway space between merchandise displays. The complaint cited the Unruh Civil Rights Act and the Disabled Persons Act as authority.
Bench Trial
Needham held a bench trial in August 2003 and granted final judgment several months later. While the appeal was pending, voters approved Proposition 64, an initiative barring unfair competition actions by private persons unless the plaintiff has suffered economic injury and can qualify as a class representative.
Justice Patricia Sepulveda, writing for the Court of Appeal, said the presumption against retroactive application of new laws applies to Proposition 64.
The justice wrote:
“Proposition 64 contains no express declaration of retrospectivity, as Mervyn’s rightly concedes. Proposition 64 is wholly silent on the matter. The terms of the statutory amendments, the legislative analysis, and the ballot arguments make no mention as to whether Proposition 64 is meant to apply retroactively to preexisting lawsuits. The language used in the proposition and ballot materials also fails to provide any implicit indication that the electorate intended the law to be retroactive.”
Sepulveda cited Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, in which the court held that Proposition 51—the 1986 initiative that ended joint-and-several liability for non-economic damages—could not be applied to actions that accrued before the measure’s effective date.
The justice rejected Mervyn’s argument that retroactive application of Proposition 64 would further the measure’s goal of deterring abuse of the unfair competition laws. A similar argument was rejected in Evangelatos, the jurist noted, adding that if the measure’s sponsors wanted the measure to apply retroactively, they could have said so in the text.
Retroactivity Ruling
Sepulveda agreed that new legislation may usually be applied retroactively without violating the state Constitution. But this does not mean that intent to do so can be inferred in the absence of legislative language to the effect, the justice explained.
The jurist also rejected the argument that Proposition 64 was a change in procedural rules, so that a dismissal would be a prospective, not a retroactive, application. Sepulveda called the contention “ill suited to the situation presented here,” since Mervyn’s was seeking to apply Proposition 64 to deprive the plaintiff of substantive rights.
The justice went on to address the practical implications of retroactive application, including future litigation as to whether plaintiffs who did not plead actual injury or class action allegations could do so by amendment; and whether such amendments relate back to the filing of the complaint.
“Retroactive application of a statute often entails difficulties in enforcement and unanticipated consequences, and should not be embarked upon where, as here, there is no indication that retroactivity was ever considered or intended by the voters,” the jurist wrote.
Attorneys on appeal included Andrea G. Asaro of Rosen, Bien & Asaro and Sidney Wolinsky of Disability Rights Advocates for the plaintiff and David F. McDowell of Morrison & Foerster for Mervyn’s.
Sharon J. Arkin of Robinson, Calcagnie & Robinson authored an amicus brief for Consumer Attorneys of California in support of the plaintiff and Roy G. Weatherup and David N. Makous of Lewis Bribois Bisgaard & Smith filed an amicus brief for ReadyLink HealthCare, Inc. on behalf of Mervyn’s.
The case is Californians for Disability Rights v. Mervyn’s, LLC, A106199.
Copyright 2005, Metropolitan News Company