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 ----------------------------------------------------------------- |Ayes:|Jones, Evans, Berg, | | | | |Krekorian, Laird, Levine, | | | | |Lieber | | | | | | | | |-----+--------------------------+-----+--------------------------| |Nays:|Berryhill, Duvall, Keene | | | | | | | | ----------------------------------------------------------------- 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UCL action until such time as its population reaches SB 376 Page 2 750,000, at which this special authorization will be repealed as no longer necessary. 4)Permits private parties to bring claims against unfair competition only if the complaining party has suffered injury in fact and has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 SB 376 Page 3 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