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C.A. Bars Nonclass Actions by Associations Under UCL
By a MetNews Staff Writer
An association may not bring a nonclass lawsuit on behalf of its members under the Unfair Competition Law, Div. Eight of the Court of Appeal for this district has declared, affirming a summary judgment granted by a Los Angeles Superior Court judge in favor of Aetna Healthcare of California, Inc. in an action brought by the California Medical Association.
Acting Presiding Justice Elizabeth A. Grimes wrote the opinion, filed Wednesday. It agrees with Judge Elihu M. Berle’s ruling that the CMA’s action must be scuttled based on a proviso added to the UCL in 2004 by Proposition 64 denying standing unless the plaintiff has personally “suffered injury in fact and has lost money or property as a result of the unfair competition.”
Voters enacted the measure in light of actions being brought by the Trevor Law Group (since disbanded) which sued thousands of small businesses under Business & Professions Code §17200 et seq. over small matters to extort settlements.
Grimes said:
“This appeal presents two issues. First, we must decide if the body of law permitting an association to bring a nonclass representative action bestows standing upon CMA to seek an injunction against Aetna under the UCL, whether or not CMA individually suffered injury in fact and lost money or property. We find the answer to that question is ‘no.’ ”
She continued:
“Next, we must decide whether CMA’s evidence that it diverted substantial resources to assist its physician members who were injured by Aetna’s policy created a material disputed fact as to whether CMA itself suffered injury in fact and lost money or property. We find the answer to that question also is ‘no’ and affirm the trial court’s grant of summary judgment on that basis.”
CMA—which, unlike the State Bar, is a private asssociation with voluntary membership—sued to block Aetna from restricting or barring in-network physicians from referring patients insured by Aetna to out-of-network physicians.
In light of the requirement of personal injury, Grimes said, CMA must “produce evidence that CMA itself, and not just its members, lost money or property in order to have standing to sue under the UCL,” adding that “the cases recognizing an association may have standing to assert its members’ non-UCL claims do not apply here.”
It did not make such a showing, she said.
“[T]he evidence here was that CMA was founded to advocate on behalf of its physician members,” Grimes recited. The staff time spent here in response to Aetna’s termination and threats to terminate physicians was typical of the support CMA provides its members in furtherance of CMA’s mission.”
If standing were accorded in the dispute with Aetna, she reasoned, “then any organization acting consistently with its mission to help its members through legislative, legal and regulatory advocacy could claim standing based on its efforts to address its members’ injuries,” remarking:
“The 2004 amendments to the UCL eliminated such representational standing.”
The case is California Medical Association v. Aetna Healthcare of California, Inc., 2021 S.O.S. 1813
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