Wednesday, May 16, 2012
C.A. Revives District Attorneys’ UCL Action Against Vendor
Panel Says Claims May Be Timely, Criticizes Trial Judge for Citing Uncitable Opinion
By KENNETH OFGANG, Staff Writer
A Los Angeles Superior Court judge erred when he sustained, on statute-of-limitations grounds and without leave to amend, a demurrer in an action by the district attorneys of three counties against a vendor accused of mislabeling goods, the Court of Appeal for this district has ruled.
Div. Seven Monday reversed Judge Rolf M. Treu’s ruling in favor of E*Poly Star, Ltd. and several of its officers and directors, and remanded the action by the district attorneys of Los Angeles, Marin, and Fresno counties for further proceedings.
The district attorneys filed suit in November 2010, alleging that the company sold polyethylene and paper products to state and local government entities and had, for a period of years and “continuing through the present,” misrepresented the length, width, thickness and count of its packaged products and commodities in violation of state law. The complaint sought injunctive relief and civil penalties under various statutes, including the Unfair Competition Law.
In demurring, the defendants argued that the suit was untimely because the Los Angeles County Department of Agricultural Commissioner had notified the company in August 2006 that it had short weighted products delivered to the Probation Department, Sheriff’s Department, Internal Services Department and Registrar-Recorder’s Office of the county during May and June of that year. Since those agencies were aware of potential claims more than four years before suit was filed, the defense argued, all of the claims were untimely.
Those four agencies were among 17 on whose behalf the district attorneys filed suit.
The district attorneys argued that their claims were timely because the violations had continued, and because they were only seeking penalties for violations that occurred during the applicable limitations period of four years preceding the filing of the complaint. They also contended that the suit was in any event timely as to claims of agencies not mentioned in the notice.
The defense responded that there is no continuing violations rule with respect to UCL violations. They urged the judge to consider Aryeh v. Canon Business Solutions, Inc. (2010) 185 Cal.App.4th 1159.
This district’s Div. Eight in that case threw out a West Los Angeles copy shop owner’s UCL action alleging Canon Business Services routinely overcharged copy machine renters for “test” copies made by Canon service personnel.
The court said the claim accrued when the plaintiff first learned of the alleged overcharges nearly six years before filing suit, and that the “continuing violations” doctrine did not extend four-year statute of limitations period.
The Supreme Court granted review of that ruling before the district attorneys’ suit was filed, but the defense urged Treu to consider it.
“While the case is not precedent, nor citable, its decision is instructive,” defense counsel said in their papers.
Treu agreed, writing:
“Even though Arye[h] is not citable, the Court has reviewed it for the purpose of considering its analysis. The Court agrees with Arye[h]’s analysis; there is no reason to apply the continuing violations doctrine to a cause of action for unfair competition.”
But Presiding Justice Dennis Perluss, writing for the Court of Appeal, criticized both the trial judge’s reasoning and his—and defense counsel’s—citation of the uncitable opinion.
The trial judge did not err in taking judicial notice of the letter sent to the defendant by the agricultural department in 2006, the jurist acknowledged. But even if that letter triggered the limitations period with respect to those agencies, Perluss said, that does not establish that the claims of the other agencies were untimely.
In addition, the presiding justice explained, since the prosecutors had offered to amend to specify when each discrete violation of the UCL had occurred, they should have been allowed to do so.
The defense attorneys, Perluss went on to say, had engaged in “something akin to the rhetorical device formally known as paraleipsis or apophasis—that is, mentioning something while disclaiming any intention of mentioning it.”
They did not, he said, note the opinion in passing, but had specifically explained the holding and urged the court to defer to it. “This use of an unpublished, noncitable opinion is a direct violation of rule 8.1115(a) and is wholly unacceptable,” he wrote.
If the trial judge was persuaded by Aryeh’s analysis, Perluss said, he should have repeated the analysis without citing the opinion.
Treu told the MetNews that he did not recall the case, had not read the opinion, and could not comment in any event. But he said that he never takes reversals personally. An attorney for E*Poly Star did not return a phone call.
The local agencies were represented by Deputy District Attorneys Stanley P. Williams, Leslie A. Hanke, and Thomas R. Wenke.
The case is People v. E*Poly Star, Inc., 12 S.O.S. 2271.
Copyright 2012, Metropolitan News Company