Thursday, September 27, 2018
Court of Appeal:
State Can’t Enforce Unfair Competition Law Against Indian Tribes
By a MetNews Staff Writer
The First District Court of Appeal has held that an action against an Indian businesswoman for violation of California’s Unfair Competition Law exceeds the scope of the state’s authority to regulate the activities of Indian tribe-members under federal law.
The opinion, filed Tuesday, was penned by Acting Presiding Justice Jon B. Streeter of Div. Four. It reverses the injunction against defendant Ardith Huber, a member of the Wiyot Band of Indians who lives and does business on Table Bluff Rancheria, the band’s land in Humboldt County.
Huber sells tobacco products grown and produced by other Indian tribes, both at wholesale to other Indian retailers and at retail to Indian and non-Indian customers. The Attorney General’s Office was granted its motion for summary judgment against Huber for violating the Unfair Competition Law (“UCL”), as well as tobacco-related requirements of the Fire Safety Act and the Directory Act.
The injunction applied only to sales by Huber to persons who are not part of the Wiyot Band, and allows her to continue business “so long as she complies with the Directory Act, the Fire Safety Act, and the Tax Stamp Act.”
Streeter’s opinion holds that summary judgment was appropriate as to the latter two acts and affirms the injunction insofar as it was based on those laws.
Central to Streeter’s analysis is Public Law 280, a federal law which grants six states—including California—jurisdiction over criminal matters involving Indian defendants or victims which occur on Indian lands.
Public Law 280 also confers limited civil jurisdiction to adjudicate civil disputes arising on Indian lands to which an Indian is a party, but subsequent cases interpreted this jurisdiction as being limited to matters which are “private in substance.”
Streeter quoted the U.S. Supreme Court’s opinion in California v. Cabazon Band of Mission Indians (1987), which states:
“[I]f the intent of a state law is generally to prohibit certain conduct, it falls within Pub.L. 280’s grant of criminal jurisdiction, but if the state law generally permits the conduct at issue, subject to regulation, it must be classified as civil/regulatory and Pub.L. 280 does not authorize its enforcement on an Indian reservation. The shorthand test is whether the conduct at issue violates the state’s public policy.”
The jurist wrote:
“Unlike the Directory Act and the Fire Safety Act, we view the third cause of action for violation of the UCL as a claim founded on a civil/regulatory law and thus outside Public Law 280’s grant of criminal jurisdiction. The UCL is a trade regulation statute. California permits open business competition—indeed promotes it—and the UCL regulates competition by making illegal only a subset of business practices that are ‘unlawful, unfair or fraudulent,’ as well as advertising that is ‘unfair, deceptive, untrue or misleading.’ ”
The government argued that the underlying unlawful practices—Huber’s violation of the Directory Act and Fire Safety Act—were “criminal/prohibitory” in nature, with which Streeter agreed. He continued:
“But it is the intent of the UCL that counts. To the extent the UCL is being used here as an enforcement tool targeting unlawful acts under more specific statutes, that simply illustrates the dividing line we draw: The UCL applies to business competition generally, which is not only permitted but promoted in California, and outlaws only specific practices comprising a subset of competition.”
The case is People ex rel. Becerra v. Huber, 2018 S.O.S. 4703.
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