Metropolitan News-Enterprise


Wednesday, July 15, 2020


Page 1


Court of Appeal:

No Seventh Amendment Right to Jury Exists In Action for Penalties Under UCL, FAL


By a MetNews Staff Writer


There is no Seventh Amendment right to have a jury determine civil penalties in an action under California’s consumer-protection statutes, Div. One of the First District Court of Appeal held yesterday.

The decision came in a case that has bounced between the state Supreme Court and the Court of Appeal.

Div. One on Feb. 1, 2017, denied a petition for a writ of mandate sought by Nationwide Biweekly Administration Inc. and its principal, Daniel S. Lipsky, in an action brought against them by the California Department of Business Oversight and the district attorney’s offices of Alameda, Kern, Marin, and Monterey counties.

The defendants—facing suit under the Unfair Competition Law (Business & Professions Code §17200 et seq.), the False Advertising Law (§17500 et seq. of that code), and, initially, a provision of the Financial Code—claimed entitlement to a jury trial under the state Constitution.

OSC Required

The California Supreme Court on March 24, 2017, granted review and transferred the case back to Div. One with directions “to issue an order to show cause why defendant does not have a right to a jury trial where the government seeks to enforce the civil penalties” under the statutes under which it was proceeding.

Div. One issued the order to show cause, the case was argued, and on June 13, 2018, the appeals court issued a peremptory writ of mandate ordering the Alameda Superior Court to afford a jury trial.

Last April 30, the California Supreme Court reversed, in an opinion by Chief Justice Tani Cantil-Sakauye, who said:

“[W]e conclude that the causes of action established by the UCL and FAL at issue here are equitable in nature and are properly tried by the court rather than a jury.”

Seventh Amendment Discussed

The chief justice briefly addressed the Seventh Amendment to the United States Constitution, which provides that “[i]n suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved….” Cantil-Sakauye observed:

“The federal civil jury trial provision of the Seventh Amendment applies only to civil trials in federal court; federal decisions explicitly hold that the civil jury trial provision of the Seventh Amendment does not apply to state court proceedings.”

The opinion says that “the matter is remanded to the Court of Appeal for further proceedings consistent with this opinion.”

Chief Justice’s Footnote

In a footnote, Cantil-Sakauye said:

“In its answer brief filed in this court, Nationwide maintains that if this court rejects its state constitutional claim, we should address the question whether it has a right to a jury trial under the Sixth or Seventh Amendment to the United States Constitution and should hold, notwithstanding the absence of federal decisional support, that it has a right to jury trial in a state court action under those federal provisions. The Court of Appeal did not address these issues, neither the petition for review nor any answer to the petition raised these issues, and thus we decline to address those issues.”

  Based on that footnote, Justice Kathleen Banke inferred a directive to decide, on remand, whether there is a Seventh Amendment right to a jury trial where a governmental entity is seeking civil penalties under the UCL or the FAL. Agreeing with what Cantil-Sakauye said in her April opinion, Banke wrote, in yesterday’s unpublished opinion:

“There is an unbroken line of cases holding the Seventh Amendment does not apply to state court proceedings.”

She added:

“The United States Supreme Court’s pronouncements on the issue are dispositive.”

The case is Nationwide Biweekly Administration, Inc. v. Superior Court, A150264.


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