BILL ANALYSIS
SB 376
Page 1
SENATE THIRD READING
SB 376 (Migden)
As Amended April 24, 2007
Majority vote
SENATE VOTE :22-15
JUDICIARY 7-3
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|Ayes:|Jones, Evans, Berg, | | |
| |Krekorian, Laird, Levine, | | |
| |Lieber | | |
| | | | |
|-----+--------------------------+-----+--------------------------|
|Nays:|Berryhill, Duvall, Keene | | |
| | | | |
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SUMMARY : Seeks to ensure that the City and County of San
Francisco will maintain its standing to bring actions under
California's Unfair Competition Law (UCL). Eliminates the
population requirement for a consolidated city and county,
seeking to ensure that the City and County of San Francisco can
bring an action under the UCL.
EXISTING LAW :
1)Defines "unfair competition" as: a) any unlawful, unfair, or
fraudulent business practice; b) any unfair, deceptive,
untrue, or misleading advertising; or, c) any act prohibited
by the state's false advertising statutes.
2)Provides that any actions, including injunctions, brought
under the UCL 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
with the district attorney in actions involving violation of a
county ordinance, or by any city attorney having a population
in excess of 750,000 persons. Allows city attorneys from
smaller cities to bring actions with the consent of the
district attorney.
3)Authorizes the City Attorney of the City of San Jose to bring
a UCL action until such time as its population reaches
SB 376
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750,000, at which this special authorization will be repealed
as no longer necessary.
4)Permits private parties to bring claims against unfair
competition only if the complaining party has suffered injury
in fact and has lost money or property as a result of such
unfair competition. However, private individuals cannot seek
money damages under the UCL. Private plaintiff remedies are
limited to equitable relief; civil penalties are only
recoverable in actions brought by the specified public
attorneys. (Business and Professions Code Section 17204. See
also Kasky v Nike, Inc. (2002) 27 Cal. 4th 939; Brown v.
Allstate Insurance Co. (SD Cal 1998) 17 F. Supp. 2d 1134.)
FISCAL EFFECT : None
COMMENTS : According to the author, the consolidated City and
County of San Francisco has a population that hovers around
750,000. As a result, it continually has to prove standing
whenever it seeks to bring an unfair competition action. This
bill would appear to avoid this potential confusion by
reconfirming standing to the City and County of San Francisco
regardless of minor fluctuations in its population.
It should be noted that there is already a precedent for such
exceptions. In 1988, the Legislature authorized the City
Attorney of the City of San Jose to prosecute UCL actions even
though the San Jose's population was close to, but still below,
750,000. The authorization was set to expire when San Jose's
population exceeded 750,000, at which time San Jose's standing
would be based on the population provisions of Business and
Professions Code Section 17204.5. The Legislature found that
because the city's population was close to 750,000, and the City
Attorney's Office of San Jose had already "demonstrated it
competence, the enforcement of the laws relation to unfair
competition would be enhanced by this act." The Assembly
Judiciary Committee believes that the same logic can and should
be applied to the City and County of San Francisco.
In opposition, the California Chamber of Commerce states:
We do not support removal of any defense to unfair
competition actions currently available under the
unfair competition law, as such actions have been an
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area ripe for abuse and used to harass businesses. In
particular, the City and County of San Francisco
already possesses a history of establishing ordinances
and policies that are particularly burdensome to
businesses within its jurisdiction.
While we are aware that the Legislature has made one
such exception in the past, the 1980's, for the City
of San Jose, we are opposed to the state's
establishing a trend of carving out exceptions to
existing business defenses under the unfair
competition law.
As previously stated, San Francisco has consistently proven
standing in UCL cases, therefore, the arguments of the
opposition seem unfounded. Further, any fears that the
floodgates would open seem unfounded considering that San
Francisco is the only consolidated city and county remaining in
California.
Analysis Prepared by : Manuel Valencia / JUD. / (916) 319-2334
FN: 0001554