Example of Unfair Competition Lawsuit in California
In Branick v. Downey Savings & Loan Assn. (2006) 39 Cal.4th 235, the plaintiffs sued the defendant on behalf of the public for unfair competition, claiming it had overcharged customers for bank fees.
But the plaintiffs did not allege they had done business with the defendant or suffered any damage in fact.
During the pendency of the action, Proposition 64 was enacted.
The Supreme Court held the plaintiffs had the right to seek leave to amend the complaint to substitute new plaintiffs who would have standing under the amended provisions of the unfair competition law. (39 Cal.4th at pp. 242-243.)
It noted that "courts have permitted plaintiffs who have been determined to lack standing, or who have lost standing after the complaint was filed, to substitute as plaintiffs the true real parties in interest. " (Id. at p. 243.)
The court declined to decide the merits of the motion to amend, however, because it had not yet been filed and the court had no information about "the identity of any person the plaintiffs might attempt to substitute and the nature of the claims any substituted plaintiff might assert." (Branick v. Downey Savings & Loan Assn., supra, 39 Cal.4th at p. 243.)
In remanding the case, Branick instructed the trial court to "decide the motion by applying the established rules governing leave to amend (Code Civ. Proc., 473) and the relation back of amended complaints ." (Id. at p. 239.)
In Branick v. Downey Savings and Loan Assn. (2006) 39 Cal.4th 235, the California Supreme Court concluded Proposition 64 did not forbid amendment of complaints, under the established rules governing leave to amend, to cure standing defects resulting from application of the proposition to pending complaints. (39 Cal.4th at pp. 239, 242.)
The court held plaintiffs should be permitted to substitute a new plaintiff who has standing under the amended UCL, subject to the important limitation that the proposed plaintiff "may not 'state facts which give rise to a wholly distinct and different legal obligation against the defendant.'" (Id. at p. 243.)
The court declined any attempt to decide "at this stage of the proceedings" whether the plaintiffs could amend their complaint. (Branick, supra, 39 Cal.App.4th at p. 244.)
Procedurally, in Branick the plaintiffs had never had an opportunity to file a motion in the trial court for leave to amend because judgment on the pleadings had been granted in the trial court on the basis of federal preemption, plaintiffs had appealed and while the case was pending on appeal Proposition 64 took effect. (Id. at pp. 240, 242.)
As a result, the Supreme Court stated it did not "know the facts that would necessarily inform the superior court's discretionary decision on a motion for leave to amend, such as the identity of any person plaintiffs might attempt to substitute and the nature of the claims any substituted plaintiff might assert." (Id. at pp. 242-243.) The matter belonged to the trial court in the first instance. (Id. at pp. 243-244.)
The Supreme Court rejected certain categorical arguments made by the defendants, which are not advanced by Young America here. (Ibid.)