Metropolitan News-Enterprise


Friday, June 1, 2018


Page 3


District Attorney May Not Bring Statewide UCL Action—C.A.


By a MetNews Staff Writer


A district attorney, in maintaining an action under the Unfair Competition Law, may not seek relief based on conduct in other counties, the Fourth District Court of Appeal held yesterday.

Justice Terry B. O’Rourke of Div. One wrote the majority opinion, in which Acting Presiding Justice Richard D. Huffman joined. Justice William Dato dissented.

Orange County District Attorney Tony Rackauckas brought an action under Business and Professions Code §17200 et seq. against major drug companies alleging that they are engaged, on a statewide basis, in the unfair business practice of keeping generic versions of Niaspan—a cholesterol medicine—off the market, meaning higher prices for consumers. The action seeks restitution of moneys acquired through wrongful practices and civil penalties of up to $2,500 for each violation, defined by the complaint as each sale made as the result of the allegedly unlawful scheme.

The defendants moved for an order striking “all claims for restitution and civil penalties based on conduct outside the territorial jurisdiction of Orange County,” which Orange Superior Court Judge Kim G. Dunning denied. Yesterday’s opinion orders that the claims be limited to the county.

Sec. 17204

At issue was the breadth of authority conferred under district attorneys by §17204, which provides:

“Actions for any relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or any district attorney….”

O’Rourke pointed out that the state Constitution designates the attorney general the “chief law officer of the State,” and by statute, the holder of that office “has charge, as attorney, of all legal matters in which the State is interested” and “shall...prosecute or defend all causes to which the a party in his or her official capacity.” A district attorney, “on the other hand, is a county officer whose territorial jurisdiction and power is limited accordingly,” he wrote.

The jurist continued:

“Though section 17204 confers standing on district attorneys to sue in the name of the people of the State of California, it cannot constitutionally or reasonably be interpreted to grant the District Attorney power to seek and recover restitution and civil penalty relief for violations occurring outside the jurisdiction of the county in which he was elected. A contrary conclusion would permit the District Attorney to usurp the Attorney General’s statewide authority and impermissibly bind his sister district attorneys, precluding them from pursuing their own relief. Thus, in the absence of written consent by the Attorney General and other county district attorneys, the District Attorney must confine such monetary recovery to violations occurring within the county he serves.”

1979 Decision

The Office of Attorney General, the California District Attorneys Association, and the Chambers of Commerce were amici curiae, arguing for the granting of a writ. They pointed to the Court of Appeal’s 1979 decision in People v. Hy-Lond Enterprises, Inc.

In that case, the district attorney of Napa County brought an action under the Unfair Competition Law (“UCL”) against the operator of a convalescent hospital within the county; a stipulated judgment covered 18 facilities located in 12 counties, including Napa; then-Attorney General Evelle J. Younger moved to set aside the judgment; the trial court denied the motion; the First District Court of Appeal reversed.

Justice Richard M. Sims Jr., since deceased, found that the district attorney exceeded his bounds by bringing about a statewide resolution of the controversy. He said, by way of analogy:

“No one could reasonably contend that in return for a plea of guilty to an offense committed in one county, the district attorney of that county could give an accused immunity from prosecution for a series of similar offenses committed in other counties.”

The district attorney lacked the power, Sims wrote, to “surrender the powers of the Attorney General and his fellow district attorneys to commence, when appropriate, actions in other counties” under the UCL.

Principles Applied

O’Rourke said in yesterday’s opinion:

“by the recognition of a possible conflict of interest.” (Id. at pp. 753-754.)

“We have no difficulty applying Hy-Lond’s principles to bar a district attorney’s unilateral effort to seek restitution and civil penalties for UCL violations occurring outside his or her own county jurisdiction. To be sure, the UCL’s scope is broad; it reaches any unlawful business act or practice committed in California….And the law…expressly confers standing on district attorneys to bring civil law enforcement actions in the People’s name when prosecuting UCL violations. But that grant of standing, as in criminal actions, cannot reasonably or constitutionally be interpreted as conferring statewide authority or jurisdiction to recover such monetary remedies beyond the county the district attorney serves, or restricting the Attorney General’s constitutional power to obtain relief on behalf of the entire state.

He continued:

“Thus, the law does not grant the District Attorney in this case authority to unilaterally pursue statewide monetary relief in the name of the state, as such a grant would permit the Legislature to usurp the Attorney General’s constitutional authority as the state’s chief law officer, and allow the district attorney of one county to impermissibly compromise and bind the Attorney General and the district attorneys of other counties. Under a contrary interpretation, a judgment in this case would bind the state under principles of res judicata and collateral estoppel, and prevent the Attorney General and other district attorneys from seeking further relief for violations occurring in their own communities. Both the constitution and Hy-Lond countenance this result.”

Dato’s Dissent

Dato protested in his dissent:

“One needn’t have been a justice of the Court of Appeal for long—and I have not—to appreciate the prudential institutional limitations on an intermediate appellate court. Our primary role is to review final decisions of the superior court for prejudicial error. We generally avoid broad legal policy pronouncements, leaving that to the Supreme Court and the Legislature. Sometimes policy considerations can play an important part in our decisions, but even then we take pains to assure that the policy questions are squarely presented by the facts of the case and are necessary to the decision we are required to render.

“I believe the majority’s decision to issue writ relief in this case violates each of these salutary guidelines. The majority then compound these judgmental errors by deciding the ill-considered legal issue incorrectly in a manner that will materially impair the interests of California consumers by fundamentally altering the structure of consumer protection laws in this state. For these reasons, I respectfully dissent.”

He went on to observe:

“[T]he concern about a local district attorney binding other prosecutors to an improper or inadequate settlement is as fanciful as it is premature. Where, as here, a district attorney brings a UCL enforcement action alleging a statewide unlawful business practice, the Attorney General as the state’s chief law enforcement officer always has the authority to intervene and take over the case.”

The case is Abbott Laboratories v. Superior Court, D072577.


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