BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 376
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          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  








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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 


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