BILL ANALYSIS
SENATE JUDICIARY COMMITTEE
Senator Ellen M. Corbett, Chair
2007-2008 Regular Session
SB 376 S
Senator Migden B
As Amended April 9, 2007
Hearing Date: April 17, 2007 3
Business & Professions Code 7
KB:rm 6
SUBJECT
Unfair Competition: actions by city attorneys
DESCRIPTION
This bill would revise the statute authorizing the city and
county of San Francisco to bring unfair competition
actions, and to allow recovery of a civil penalty
regardless of the size of its population.
(This analysis reflects author's amendments to be offered
in committee.)
BACKGROUND
Unfair business practices encompass fraud,
misrepresentation, and oppressive or unconscionable acts or
practices by businesses, often against consumers. In
California, specified governmental agencies are authorized
to bring an action for unfair competition and to recover a
civil penalty from the defendant in those actions.
Among the agencies authorized to bring such actions, is the
city attorney of a city and county with a population in
excess of 750,000. A consolidated city-county is a city
and county that have been merged into one jurisdiction. As
such, it is simultaneously a city, which is a municipal
corporation, and a county, which is an administrative
division of a state. Currently, the City and County of San
Francisco is the only consolidated city-county in
California, a status it has held since 1856. Thus, in
(more)
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practice, San Francisco is the only public entity that is
affected by the statutory provisions granting authority to
a city attorney of a city and county to bring unfair
competition actions.
A federal census has recently put San Francisco's
population at under 750,000. This has prompted defendants
in unfair competition actions to argue, albeit
unsuccessfully, that San Francisco no longer has standing
to bring these actions. The San Francisco City Attorney's
office is concerned that it will continuously need to
defend attacks on its standing, which will consume scare
public resources unless the issue is clarified in the
statute.
This bill would remove the population requirement
pertaining to a city and county, and instead authorize the
city attorney of any city and county to bring an action for
unfair competition and recover a civil penalty from the
defendant in those actions.
CHANGES TO EXISTING LAW
Existing law authorizes, among other specified governmental
agencies, the city attorney of a city and county having a
population in excess of 750,000 to bring an action for
unfair competition and to recover a civil penalty from the
defendant in those actions. [Business & Professions Code
17204 & 17206.]
This bill would authorize the city attorney of any city and
county, regardless of its population, to bring an action
for unfair competition and recover a civil penalty from the
defendant in those actions.
COMMENT
1. Stated need for the bill
According to the sponsor, the San Francisco City
Attorney's office has a long and distinguished history of
bringing actions under the unfair competion law.
However, a recent federal census estimates that San
Francisco's population has decreased to below 750,000.
This has prompted defendants in unfair compeition actions
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to argue that the San Francisco City Attorney no longer
has standing to bring these actions. While these
arguments have ultimately been unsuccessful, there is a
concern that defendants will continue to attack San
Francisco's standing to bring unfair competition actions
unless the issue is clarified by statute.
2.Author's amendments will clarify that this bill will not
affect the standing of other parties currently authorized
to bring unfair competition actions, or unnecessarily
broaden the statute
The California District Attorneys Association and the
League of Cities have expressed concern that the current
version of the bill is not narrowly drafted, and could be
interpreted as both removing the authority currently
granted to certain entities, and granting authority to
others who currently do not possess it. They are not
opposed to San Francisco retaining its standing, but wish
to avoid unnecessary and overbroad changes to the current
law. Because this is the primary tool utilized by
district and city attorneys in protecting consumers from
unfair business practices, public policy would be best
served by minimizing change to the current statutes so as
not to create additional disputes as to standing of
various entities to bring these actions.
To address these concerns, the author has offered
amendments, which would simply delete the population
requirement pertaining to a city and county, and leave
the remainder of the statutes intact. This would enable
San Francisco to maintain its authority to bring unfair
competition actions without affecting the standing of any
other entity. Thus, in practice, if this bill is
enacted, the agencies currently entitled to bring unfair
competitions would not change.
The amendments shall be as follows:
On page 2, strike lines 5-22, inclusive and insert,
"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 or by any county counsel authorized by agreement
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with the district attorney in actions involving violation
of a county ordinance, or any city attorney of a city
having a population in excess of 750,000, or by a city
attorney in any city and county and, with the consent of
the district attorney, by a city prosecutor in any city
having a full-time city prosecutor in the name of the
people of the State of California upon their own
complaint or upon the complaint of any board, officer,
person, corporation or association or by any person who
has suffered injury in fact and has lost money or
property as a result of such unfair competition."
On page 2, strike lines 26-32, inclusive and insert,
"(a) Any person who engages, has engaged, or proposes to
engage in
unfair competition shall be liable for a civil penalty
not to exceed two thousand five hundred dollars ($2,500)
for each violation, which shall be assessed and recovered
in a civil action brought in the name of the people of
the State of California by the Attorney General, by any
district attorney, by any county counsel authorized by
agreement with the district attorney in actions involving
violation of a county ordinance, by any city attorney of
a city having a population in excess of 750,000, by any
city attorney of any city and county, and, with the
consent of the district attorney, by a city prosecutor in
any city having a full-time city prosecutor, in any court
of competent jurisdiction."
These amendments would resolve the concerns expressed by
both the California District Attorneys Association and
the League of Cities.
Support: None Known
Opposition: None as Amended
HISTORY
Source: Office of San Francisco City Attorney Dennis
Herrera
Related Pending Legislation: None Known
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Prior Legislation: AB 759 (Leiber) would have deleted the
limitations on unfair competition actions
brought by a county counsel, allowing the
county counsel to proceed without an
agreement with the district attorney. This
bill was later amended to pertain to an
unrelated matter.
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