Abbott Labs. v. Superior Court of Orange Cnty.
Abbott Labs. v. Superior Court of Orange Cnty.
Opinion of the Court
*733*9The Orange County District Attorney (the District Attorney), representing "the People of the State of California," sued petitioners Abbott Laboratories, AbbVie Inc., Teva Pharmaceuticals USA, Inc., Barr Pharmaceuticals, Inc., Duramed Pharmaceuticals, Inc. and Duramed Pharmaceuticals Sales Corp., alleging generally that petitioners engaged in a scheme to keep generic versions of a prescription drug off the market in violation of California's Unfair Competition Law (UCL; Bus. & Prof. Code, 1 § 17200 et seq. ). The District Attorney sought an injunction as well as civil penalties and restitution. Petitioners unsuccessfully moved to strike portions of the operative complaint alleging "claims for restitution and civil penalties based on conduct outside the territorial jurisdiction of Orange County."
In this writ proceeding, petitioners ask us to resolve a single issue: whether section 17204 of the UCL "permit[s] a county district attorney to bring a claim that seeks relief for alleged injuries to residents of California counties whom he or she does not represent, based on conduct occurring outside the county he or she serves ...." Petitioners argue district attorneys have no authority to prosecute civil actions absent specific legislative authorization, and neither the Government Code, nor *10Business and Professions Code section 17204, authorize the district attorney of a single county to seek statewide penalties for alleged UCL violations. The California Attorney General has filed an amicus brief on the question, as have the California District Attorneys Association; the City Attorneys of Los Angeles, San Diego, San Francisco, and San Jose, Santa Clara County Counsel, and California State Association of Counties (collectively the city attorneys); the United States and California Chambers of Commerce (collectively Chambers of Commerce); and the Consumer Attorneys of California.
We grant the petition. The California Constitution designates the Attorney General the "chief law officer of the State" ( Cal. Const., art. V, § 13 ), and consistent with this constitutional provision, the Attorney General "has charge, as attorney, of all legal matters in which the State is interested" ( Gov. Code, § 12511 ) and also "shall ... prosecute or defend all causes to which the State ... is a party in his or her official capacity." ( Gov. Code, § 12512.) The District Attorney, on the other hand, is a county officer whose territorial jurisdiction and power is limited accordingly. Though section 17204 confers standing on *734district attorneys to sue in the name of the people of the State of California, it cannot constitutionally or reasonably be interpreted to grant the District Attorney power to seek and recover restitution and civil penalty relief for violations occurring outside the jurisdiction of the county in which he was elected. A contrary conclusion would permit the District Attorney to usurp the Attorney General's statewide authority and impermissibly bind his sister district attorneys, precluding them from pursuing their own relief. Thus, in the absence of written consent by the Attorney General and other county district attorneys, the District Attorney must confine such monetary recovery to violations occurring within the county he serves.
FACTUAL AND PROCEDURAL BACKGROUND
Petitioners are companies or wholly-owned subsidiaries involved in the manufacture, distribution or sale of pharmaceuticals or generic prescription drugs, including the prescription drug Niaspan. In October 2016, the Orange County District Attorney, representing "the People of the State of California" in association with private counsel, filed a complaint for violations of the UCL, alleging that petitioners either entered into agreements or otherwise engaged in conduct that prevented other generic manufacturers from launching their own Niaspan equivalent, causing purchasers and others in California to overpay for the drug. The District Attorney filed a first amended complaint, the operative pleading, in December 2016. In part, the operative complaint alleges that "[e]ach sale of Niaspan in violation of Section 17200 constitutes a separate violation," and purchasers in California sustained substantial losses in the form of overcharges on each sale based on the petitioners' unlawful and unfair business practices, which violated federal, state, and/or common *11laws, including federal and state antitrust laws. It alleges that "the violations of California law complained of herein resulted in damages to consumers of Niaspan in California, including in the County of Orange." In addition to an injunction, the complaint seeks an order that petitioners pay restitution of any money acquired through the unlawful and unfair business practices, and civil penalties of up to $2,500 for each violation under sections 17206 and 17206.1.
Petitioners thereafter moved to strike from the operative complaint "all claims for restitution and civil penalties based on conduct outside the territorial jurisdiction of Orange County."
In opposition, the District Attorney argued Hy-Lond was inapposite as it involved a settlement and stipulated injunction that purported to bind the real "client," which was the state Department of Health, and immunize the defendant as *735to future actions involving future violations of law. He argued that when statewide business practices are at issue, the California Constitution did not prevent the Legislature from giving district attorneys statewide enforcement authority and the ability to obtain statewide relief, which the UCL's plain language indicated the Legislature had done. The District Attorney argued the California Constitution did not restrict his duties and authority under the UCL to obtain statewide relief.
During arguments on the motion, the trial court stated its view that the appellate court in Hy-Lond did not address the Napa County district attorney's ability in that case to recover statewide civil penalties; in its opinion, Hy-Lond addressed only whether the district attorney could bind the Attorney General in a settlement relating to misconduct spanning more counties than just Napa County. The court explained that if a settlement occurred in the present case, the Attorney General would be permitted to appear and be heard. The court also questioned Hy-Lond 's reliance on Singh v. Superior Court (1919)
Petitioners sought writ relief by this petition. We issued an order to show cause and stayed further proceedings in the superior court pending further order.
DISCUSSION
I. District Attorney's Demurrer to Petition
Preliminarily, we address seriatim the District Attorney's arguments made in a general demurrer to the petition. ( Code Civ. Proc., § 1089 [when the court issues an alternative writ, "the party upon whom the writ ... has been served may make a return by demurrer, verified answer or both"]; see Cal. Rules of Court, rule 8.487(b)(1) ["If the court issues an alternative writ or order to show cause, the respondent or any real party in interest, separately or jointly, may serve and file a return by demurrer, verified answer, or both"]; Agricultural Labor Relations Board v. Superior Court (2016)
A. Service on Attorney General
The District Attorney first contends the petition is procedurally defective because petitioners did not provide a proof of service of a copy of the writ petition on the Attorney General as required by section 17209.
The District Attorney fails to point out that on September 11, 2017, before we issued the order to show cause in this matter, petitioners submitted their *13certificate of service on the Attorney General of their petition and letter brief in reply to the District Attorney's informal opposition. The Attorney General thereafter sought leave to file an amicus brief and has filed that brief. In view of these developments, we retain power and find good cause to sua sponte retroactively extend the time for providing the notice required under section 17209. (Accord, Black v. Financial Freedom Senior Funding Corp. (2001)
B. Advisory Opinion
The District Attorney next contends the petition seeks an improper advisory opinion on an abstract proposition of law, assertedly because the issue is "not tethered to the facts in this case" or to "any order that is now properly justiciable." The contention is not further explained, and we reject it. Petitioners challenge the trial court's ruling denying their motion to strike allegations seeking to recover restitution and civil penalties for each sale of Niaspan in the State of California, which rejected the argument that the District Attorney was geographically limited to the County of Orange in seeking such relief. The court's ruling presents a concrete legal dispute over the scope of recovery that a district attorney may seek under the UCL, which is properly the subject of a motion to strike. (Accord, Commodore Home Systems, Inc. v. Superior Court (1982)
C. Ripeness
Similarly, the District Attorney contends the petition must be dismissed *737because the trial court did not rule on the issue presented and thus no ruling is "ripe for appellate review." Specifically, the District Attorney argues the court "made no ruling with respect to what the permissible amount of penalties should be in this case." The District Attorney points to the court's remarks during oral argument on the petitioners' demurrer that concerns over damages "are a little premature" and during the motion to strike that there was no reason to reach "[w]hat kind of remedies plaintiff may be entitled to down the line ...."
" '[T]he ripeness doctrine is primarily bottomed on the recognition that judicial decisionmaking is best conducted in the context of an actual set of facts so that the issues will be framed with sufficient definiteness to enable the court to make a decree finally disposing of the controversy.' " ( Vandermost v. Bowen (2012)
*15D. Irreparable Harm for Purposes of Writ Relief
The District Attorney next contends petitioners have not established irreparable harm to support extraordinary writ review of the "amount of penalties to be awarded in this case." (Some capitalization omitted.) We reject the premise of this argument, namely that the petition at hand challenges merely the "amount" or sum of the award, as opposed to the District Attorney's power to collect penalties from sales or reimbursements occurring outside the limits of Orange County. We also reject the District Attorney's argument that because the pleading of civil penalties is legally authorized by the UCL, the remedies are not "irrelevant, false, or improper matter" subject to a motion to strike. The first amended complaint did not simply plead entitlement to civil penalties, a legally proper remedy in the abstract, but specifically sought such penalties for sales, purchases and reimbursements-alleged to constitute violations of "federal, state, statutory and/or common laws"-occurring throughout California. As stated, a motion to strike is proper where petitioners challenge *738the scope of UCL recovery sought by the District Attorney's pleading.
E. Important Question of Law
Finally, the District Attorney argues that this matter does not present, and petitioners have not identified, conflicting lower court decisions or an important issue of law that that should be settled by a ruling on their petition. The District Attorney argues that the proper remedy is "fact specific," and "[s]uch matters cannot be determined in one broad sweeping statement of the law ...."
The arguments are without merit. We have already determined by issuing an alternative writ that there is no adequate legal remedy in this case. (Accord, Smith v. Superior Court , supra , 10 Cal.App.4th at p. 1037,
II. The District Attorney's Authority to Recover Restitution and Civil Penalties Is Limited to Violations Occurring in the County in Which He Was Elected
A. Standard of Review
The issue presented by Petitioners' motion to strike-the scope of the District Attorney's authority to seek restitution and civil penalties under the UCL-is one of law that we review de novo. (Accord, Cal-Western Business Services, Inc. v. Corning Capital Group (2013)
*739Southern Cal. Underground Contractors, Inc. v. City of San Diego (2003)
In construing a statute or constitutional provision, we give the language used its ordinary meaning, and " '[i]f the language is clear and unambiguous there is no need for construction, nor is it necessary to resort to indicia of the intent of the Legislature ....' [Citation.] To that end, we generally must 'accord [ ] significance, if possible, to every word, phrase and sentence in pursuance of the legislative purpose,' and have warned that '[a] construction making some words surplusage is to be avoided.' [Citation.] [¶] But '[t]he words of the statute must be construed in context, keeping in mind the statutory purpose, and statutes or statutory sections relating to the same subject must be harmonized, both internally and with each other, to the extent *17possible.' [Citation.] 'Where uncertainty exists consideration should be given to the consequences that will flow from a particular interpretation.' " ( People v. Valencia (2017)
We also consider the doctrine of constitutional avoidance, under which "a statute should not be construed to violate the Constitution ' " 'if any other possible construction remains available.' " ' " ( People v. Garcia , supra , 2 Cal.5th at p. 804,
B. Powers of the Attorney General and District Attorneys
The California Constitution defines the powers and responsibilities of the executive branch and its principal officers, and appoints the Attorney General as "the chief law officer of the State ...." ( Cal. Const., art. V, § 13 ; see Steen v. Appellate Div., Superior Court (2014)
A district attorney, in turn, is a " 'public prosecutor, except as otherwise provided by law,' who ... 'within his or her discretion shall initiate and conduct on behalf of all people all prosecutions for public offenses' " in the name of the People of the State of California. ( Steen v. Appellate Div., Superior Court , supra , 59 Cal.4th at p. 1053,
A district attorney, however, is designated by both the Constitution ( Cal. Const., art. XI, § 1, subd. (b) ) and by statute ( Gov. Code, § 24000 ) as a county officer.
The duties of a district attorney can extend beyond those of a public prosecutor ( Gov. Code, § 26500 ) to the prosecution and defense of civil causes of action. ( County of Sutter v. Board of Administration (1989)
When specifying a county district attorney's duties with respect to civil matters, the Legislature recognizes the aforementioned jurisdictional limitations. In Government Code section 26507 (entitled "Joint prosecution in other jurisdictions"), the Legislature authorizes a county district attorney to enter into agreements to "act jointly" with other district attorneys "in prosecuting a civil cause of action of benefit to his own county in the court of another jurisdiction" as long as there is an agreement with the district attorney of the other county. ( Gov. Code, § 26507.) A district attorney of one county may provide legal or investigative services to a district attorney of another county "pertaining to the prosecution of a civil cause of action in the other county," but only "with the concurrence of the district attorney of [the other] county and the boards of supervisors of both affected counties ...." ( Gov. Code, § 26508.)
The foregoing constitutional and statutory provisions demonstrate that in civil matters, as in criminal matters, a district attorney lacks authority to function outside his or her county jurisdiction absent the consent of the district attorney of the other county. Even when a district attorney acts in a matter within the jurisdiction of the superior court, he or she is subject to oversight and direct supervision by the Attorney General, the state's chief law enforcement officer obligated to ensure the uniform and adequate enforcement of state law.
C. Relevant Provisions of the Unfair Competition Law
The UCL addresses unfair competition, and "proscrib[es] 'any unlawful' business act or practice ...." ( *21Zhang v. Superior Court (2013)
Section 17204 is the UCL's standing provision. ( Korea Supply , supra , 29 Cal.4th at p. 1143,
*743Feitelberg v. Credit Suisse First Boston, LLC (2005)
Section 17203, authorizing injunctive relief and orders of restitution, reads in part: "Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction. The court may make such orders or judgments, ... as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition." Restitution is made " ' "in order to deter future violations of the unfair trade *22practice statute and to foreclose retention by the violator of its ill-gotten gains." ' " ( People ex rel. Harris v. Aguayo (2017)
Section 17206 expressly confers authority on the Attorney General and district attorneys, as well as other local prosecutors under specified circumstances,
An action seeking injunctive relief and civil penalties filed by a public prosecutor on behalf of the People is not primarily concerned with restoring property or benefitting private parties; it is fundamentally a law enforcement action with a public, penal objective. ( State v. Altus Finance, S.A. , supra , 36 Cal.4th at p. 1308,
D. Analysis
Invoking the limitations on district attorneys' ability to bring civil actions as well as the territorial limits of their jurisdiction, petitioners argue absent a specific statutory grant of extraterritorial authority, a district attorney of a single county may not unilaterally seek civil relief under the UCL for conduct occurring outside his or her county. They point out that neither the Government Code nor section 17204 of the UCL authorizes recovery of statewide relief or civil penalties by a county district attorney. Petitioners, along with the Attorney General, the California District Attorneys Association, and the Chambers of Commerce as amici curiae, assert Hy-Lond , supra ,
*745In Hy-Lond , the Napa County District Attorney sued a nursing facility operator for an injunction, civil penalties, and other relief under the UCL and false advertising laws. ( Hy-Lond , supra , 93 Cal.App.3d at p. 739,
The Attorney General (on behalf of himself and other district attorneys in other counties where the defendant had facilities) and the California Department of Health (the department) intervened to set aside the judgment. (Hy-Lond , supra , 93 Cal.App.3d at pp. 739, 743,
The Hy-Lond court held it did not; the district attorney had no right "to surrender the powers of the Attorney General and his fellow district attorneys to commence, when appropriate, actions in other counties" under the UCL (the former provisions of 17200 to 17204, 17206, and 17207). ( Hy-Lond , supra , 93 Cal.App.3d at p. 753,
Hy-Lond explained that though "in conducting the prosecution of violations of state law on behalf of the people, the district *746attorney is acting as an agent of the state," it only acted as such an agent "within the territorial limits of the county for which he was elected." ( Hy-Lond , supra , 93 Cal.App.3d at p. 751,
We have no difficulty applying Hy-Lond 's principles to bar a district attorney's unilateral effort to seek restitution and civil penalties for UCL violations occurring outside his or her own county jurisdiction. To be sure, the UCL's scope is broad; it reaches any unlawful business act or practice committed in California. (See § 17200 ["As used in this chapter, unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice"]; People ex rel. Harris v. Pac Anchor Transp., Inc. (2014)
We therefore construe the authority conferred on the District Attorney by the UCL as subject to the constitutional and statutory jurisdictional limitations described above. (See, e.g., Steen v. Appellate Div., Superior Court , supra , 59 Cal.4th at pp. 1053-1054,
The District Attorney argues Hy-Lond is inapposite because it involves the enforceability of a settlement and judgment in which the defendant received immunity and restrictions were placed on the powers of the Department of Health relating to nursing homes; he maintains the decision is limited to its unusual facts and cannot impede the efforts of district attorneys in protecting California consumers.
Even absent Hy-Lond , a sound interpretation of the UCL defeats the District Attorney's arguments. Contrary to the assertions of the District Attorney and amici city attorneys, the text of the UCL provides no basis to conclude the Legislature intended to grant local prosecutors extraterritorial jurisdiction to recover statewide monetary relief. The District Attorney points to the UCL's silence on the issue; he asserts the UCL's text contains no geographical limitation on the remedies district attorneys may recover, nor *28is such a limitation expressed in its purpose or legislative history.
Additionally, the UCL's structure reflects the Legislature's understanding of public prosecutors' jurisdictional limitations as to monetary relief. As the Attorney General points out, section 17206, subdivision (c), which distributes penalties depending on which agency obtains them, requires the Attorney General's Office to deposit half of its collected civil penalties into the state's general fund, with the other half going to the county in which the judgment is entered, while district attorneys must deposit collected penalties only to the treasurer of their respective counties. According to the Attorney General, in drafting this provision, the Legislature contemplated that only the Attorney General may seek redress for statewide violations, and local prosecutors, absent a joint prosecution agreement, may address only misconduct occurring within their city or county. We agree that by structuring the statute so that penalties collected by a district attorney go only to the treasurer of the *29county in which the judgment was entered, the Legislature has manifested its understanding that a district attorney's redress is restricted to local violations, benefitting the electorate to which the district attorney is accountable. There is no indication the Legislature sought to write the UCL so broadly as to permit county district attorneys to collect penalties from violations occurring outside their county boundaries for their own county treasurers. To the contrary, it is reasonable to conclude the Legislature intended to prevent local prosecutors from "step[ping] outside [their] jurisdictional boundaries" ( State ex rel. Harris v. PricewaterhouseCoopers,LLP (2006)
We reject the District Attorney's assertion that he has a broad "legislative mandate" to seek restitution on behalf of individuals throughout the state. The District Attorney cites *750People ex rel. Bill Lockyer v. Fremont Life Ins. Co. (2002)
Nor can we draw a different conclusion, as the amici city attorneys would have us do, from the Legislature's use of limiting language in other statutes such as Code of Civil Procedure section 731 allowing a district attorney, county counsel or city attorney to abate nuisances "of any *30county in which the nuisance exists" and giving those officers a "concurrent right" to bring such an action. The constitutional limitations need not be explicitly set forth, as evidenced by Government Code section 26500, which authorizes a district attorney to "initiate and conduct on behalf of the people all prosecutions for public offenses" (italics added) but nevertheless does not permit a district attorney to prosecute crimes outside his or her county. (See People v. Eubanks , supra , 14 Cal.4th at p. 589,
We cannot agree with the District Attorney and other amici that the UCL's policy objectives counter the result we reach. The District Attorney argues that to prevent a district attorney from seeking statewide relief "would arbitrarily shield Defendants from liability for the full extent of their illegal misconduct and/or require district attorney suits in all California counties in order to secure any form of statewide relief ...." He asserts that private parties may secure statewide relief, and there is "no logical reason" why public prosecutors may not, since prosecutors do not stand in the victims' shoes and relief is awarded to consumers, not to the prosecutor. But a private plaintiff suing under the UCL is not entitled to seek civil penalties, and after Proposition 64, such a plaintiff must not only show he or she has " 'suffered injury in fact and has lost money or property *751as a result of' " the wrongful acts, but also meet class action requirements in order to bring a representative action. ( Arias v. Superior Court , supra , 46 Cal.4th at pp. 978, 980,
Finally, the construction urged by the District Attorney would incentivize public prosecutors, acting in their respective county's financial self-interest, to withhold pertinent information from their sister agencies as to the scope of violations, then "race[ ] [their colleagues] to the courthouse" ( State ex rel. Harris v. PricewaterhouseCoopers, LLP , supra , 39 Cal.4th at p. 1232,
Our foregoing conclusions are not broad policy pronouncements; we simply interpret the UCL in the light of constitutional and statutory jurisdictional limitations so as to avoid doubts concerning the UCL's validity.
DISPOSITION
Let a writ issue directing the respondent court to vacate its order denying the motion to strike of petitioners Abbott Laboratories, AbbVie Inc., Teva Pharmaceuticals USA, Inc., Barr Pharmaceuticals, Inc., Duramed Pharmaceuticals, Inc. and Duramed Pharmaceuticals Sales Corp., and to enter a new and different order striking the allegations by which the Orange County District Attorney seeks statewide monetary relief under the UCL. The stay issued will be vacated when the opinion is final as to this court.
I CONCUR:
HUFFMAN, Acting P.J.
Petitioners also filed a demurrer based on the statute of limitations. That demurrer and the trial court's ruling overruling it are not at issue in this proceeding.
Section 17209 provides in part: "If a violation of this chapter is alleged or the application or construction of this chapter is in issue in any proceeding in the Supreme Court of California, a state court of appeal, or the appellate division of a superior court, each person filing any brief or petition with the court in that proceeding shall serve, within three days of filing with the court, a copy of that brief or petition on the Attorney General .... No judgment or relief, temporary or permanent, shall be granted or opinion issued until proof of service of the brief or petition on the Attorney General and district attorney is filed with the court."
The record shows that when the court stated "we are not worried about damages in a demurrer, so I think your concerns are a little premature," and "[w]hat kind of remedies plaintiff may be entitled to down the line, there's no reason to reach that now," it was referring to petitioners' demurrer on statute of limitations grounds and their arguments as to the continuous accrual doctrine, under which a series of wrongs may be viewed as each triggering its own limitations period. (See Aryeh v. Canon Business Solutions, Inc. (2013)
That section of the Constitution also provides that the Attorney General "may require [the district attorney] to make reports concerning the investigation, detection, prosecution, and punishment of any crime in their respective jurisdictions as to the Attorney General may seem advisable." (Cal. Const., art. V, § 13.)
Article XI, section 1, subdivision (b) of the California Constitution provides: "The Legislature shall provide for county powers, an elected county sheriff, an elected district attorney, an elected assessor, and an elected governing body in each county." Government Code section 24000 states in part that "[t]he officers of a county are: [¶] (a) A district attorney." (See also Harvey v. County of Butte (1988)
Counties of course are "legal subdivisions of the state" (Cal. Const., art. XI, § 1 ) and their police powers may be enforced only within their territorial limits. (Cal. Const., art. XI, § 7 ; see Candid Enterprises, Inc. v. Grossmont Union High School Dist. (1985)
Section 17204 provides: "Actions for relief pursuant to this chapter shall be prosecuted exclusively in a court of competent jurisdiction by the Attorney General or a district attorney or by a county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, or by a city attorney of a city having a population in excess of 750,000, or by a city attorney in a city and county or, with the consent of the district attorney, by a city prosecutor in a 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 a board, officer, person, corporation, or association, or by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition."
These other local prosecutors are the same as specified in section 17204. (§ 17206, subd. (a) ; see footnote 8, ante .)
Petitioners also rely on the federal district court's decision in M & P Investments , supra ,
"Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them." (Mycogen Corp. v. Monsanto Co. (2002)
Amici city attorneys likewise argue that Hy-Lond is a narrow decision that does not bar a district attorney from seeking statewide remedies. They, and apparently our dissenting colleague, characterize its discussion of a district attorney's geographic limitations as dicta, and any extension to actions for monetary relief as a distortion of its ruling. We disagree for the reasons stated in this opinion.
Despite this argument, the District Attorney has neither summarized nor provided any legislative history on the issue. Nor have petitioners presented us with any legislative history materials.
Whether the UCL empowers a district attorney to obtain statewide injunctive relief was not a subject of petitioners' motion to strike below, and it is not before us. We do not address the issue of injunctive relief or the attendant civil penalties authorized in section 17207 for violations of UCL injunctions.
The District Attorney further points out that the UCL does not define a "violation" for purposes of assessing civil penalties, and it argues the question is not determined by a "strict 'geographic boundaries' test." It is established that the question of what constitutes a violation, as well as the amount of penalties, is left for the court to decide in its discretion on a case-by-case basis. (People ex rel. Kennedy v. Beaumont Investment, Ltd. (2003)
The California District Attorneys Association points out there are already protective mechanisms in place for statewide UCL enforcement, including multi-office joint investigations, and multi-agency prosecutions. Even if such matters were judicially noticeable, it does not ask this court to take judicial notice of any such agreements or their existence. Our dissenting colleague thus relies on matters outside the record to dispute the risk that the District Attorney's action could compromise other district attorneys or the Attorney General. (State Compensation Ins. Fund v. WallDesign, Inc. (2011)
Dissenting Opinion
As an intermediate appellate court, our primary role is to review *752final decisions of the superior court for prejudicial error. We generally avoid broad legal policy pronouncements, leaving that to the Supreme Court and the Legislature. Sometimes policy considerations can play an important part in our decisions, but even then we take pains to assure that the policy questions are squarely presented by the facts of the case and necessary to the decision we are required to render. *32I believe the majority's decision to entertain the writ petition in this case violates each of these salutary guidelines. The majority then compound this error by deciding the ill-framed legal issue in a manner that will materially impair the interests of California consumers by fundamentally altering the structure of consumer protection laws in this state. For these reasons, I respectfully dissent.
A
Let's start with what is really going on here. As is expressly authorized by statute ( Bus. & Prof. Code, § 17204
But there is an immediate problem with use of the motion-to-strike mechanism, for nowhere in the motion do defendants identify any language they seek to excise from the complaint that specifically seeks restitution or civil penalties for acts and practices that occurred entirely outside Orange County. Tellingly, the motion to strike nowhere references the complaint's prayer for relief, which simply requests "restitution of any money acquired by Defendants' unlawful and unfair business practices," as well as "civil penalties for each act of unfair and unlawful competition."
Nor did the thoughtful trial judge make any overly broad or unnecessary pronouncements that require correction. Contrary to the majority's assertion, she never specifically ruled that the District Attorney could recover restitution or civil penalties for acts that took place entirely outside Orange County. She simply denied the motion and ordered defendants to answer the complaint. Indeed, responding to defense counsel's comment during oral argument about the supposed importance of determining "what damages are at issue in the case", the judge characterized those concerns as "a little premature."
"Aways [sic ] down the road," if I may be so bold to suggest, would be the proper time to address the proper scope of monetary relief in this case. Specifically, if and when the trial court decides to award restitution to consumers outside of Orange County or civil penalties based entirely on acts occurring in other parts of the state, that will be the time when this issue is *34squarely presented. At the outset of the case-when the issue is not raised by the pleadings and was not decided by the trial court-is indisputably not the proper time.
B
It is well settled that an appellate court will review rulings on pleadings by writ only "rarely" ( Taylor v. Superior Court (1979)
The propriety of extraordinary writ review aside, the decision to prematurely intervene in this case has unnecessarily placed this court in the middle of a jurisdictional turf spat between public prosecutors. In doing so the majority attempt to construct a solution in search of a problem. The alleged "problem" here is an overzealous district attorney who seeks to recover (1) restitution on behalf of residents of other counties, and (2) civil penalties based on business practices that have no connection to the district attorney's local jurisdiction. Apparently, this bothers the Attorney General, who wishes to limit and control all litigation involving statewide unlawful business practices, and perhaps other district attorneys in other counties, who may view the actions of the Orange County District Attorney as "poaching" on their ability to recover civil penalties that would otherwise flow into their own county's treasury.
Business and Professions Code section 17204 broadly permits UCL enforcement actions to be "prosecuted ... by the Attorney General or a district attorney ...." Either way, the action is pursued "in the name of the people of the State of California," just as in criminal cases. ( § 17204.) Section 17203 permits the court, ancillary to its injunctive power, "to restore to any person in interest any money or property, real or personal, which may have been acquired by means of" the unlawful or unfair practice. ( § 17203, italics added.) Section 17206 similarly authorizes the court to award a civil penalty for each UCL violation, "recover[able] in a civil action brought ... by the Attorney General [or] by any district attorney ...." ( § 17206, subd. (a).) Nothing in any of these *35statutes limits a county district attorney to prosecuting UCL actions on behalf of citizens of in that particular county. Nor does anything in the UCL restrict a district attorney to recovering restitution on behalf of only county residents.
As justification for reaching out at the pleading stage to prematurely decide a major public policy issue not squarely presented or addressed by the trial court, the majority allude to vague notions of interference with the Attorney General's constitutional authority. They suggest that if a local district attorney can seek restitution on behalf of residents of other counties, or civil penalties attributable to violations in other counties, this would allow the district attorney "to impermissibly compromise and bind the Attorney General and the district attorneys of other counties," preventing them "from seeking further relief for violations occurring in their own communities." (Maj. opn., ante , at p. 747.) They then purport to interpret the relevant sections of the UCL to avoid a constitutional issue. (Maj. opn., ante , at p. 747-48.) Respectfully, the majority rely on a phantom constitutional concern to craft a cure that is worse than even the perceived disease.
The UCL is an exceedingly broad remedial statute designed to encourage multiple avenues of enforcement. (See Kasky v. Nike, Inc. (2002)
Moreover, the concern about a local district attorney binding other prosecutors to an improper or inadequate settlement is as fanciful as it is premature. Where, as here, a district attorney brings a UCL enforcement action alleging a statewide unlawful business practice, the Attorney General as the state's chief law enforcement officer always has the authority to intervene and take over the case. As a prominent treatise explains:
[T]he Attorney General and the 58 district attorney offices have entered into an arrangement to coordinate *36the filing of § 17200 actions. Every §§ 17200/17500 investigation must be logged onto the computer database under the name of the prospective defendant. That puts other DA offices and the AG on notice of the investigation, and gives the AG the opportunity to intervene, assume jurisdiction, and take control of the investigation and proceeding where the matter is deemed sufficiently important to warrant it, or where there appears to be a conflict among offices. (Stern, Cal. Practice Guide: Business & Professions Code Section 17200 Practice (The Rutter Group 2018) ¶ 9:6.)
Accordingly, there is no practical risk that a local district attorney will "compromise and bind" the Attorney General or district attorneys from other counties. Even if the Attorney General does not elect to formally intervene at the outset and take over a case, it can monitor and take appropriate action if and when the prosecuting district attorney proposes to settle.
The majority's heavy reliance on People v. Hy-Lond Enterprises, Inc. (1979)
The issue in the case involved the scope of a stipulated settlement between the District Attorney and the defendant. In exchange for general injunctive relief (i.e., comply with applicable laws in the future) and payment of civil penalties, the settlement made the Napa County District Attorney the "exclusive government agency" for enforcing the injunction. ( Hy-Lond, supra, 93 Cal.App.3d at p. 741, fn. 1,
C
The resounding theme so far is that we should not be deciding anything about a local district attorney's authority to request restitution and civil penalties attributable to victims and conduct outside the county. The issues the defendants seek to frame by means of their motion to strike are not squarely-or even unsquarely-presented. And certainly, there are no exceptional circumstances that warrant a departure from the general rule that we do not review undeveloped legal issues at the pleading stage of a lawsuit.
But even if the issues were properly presented in a procedural context that demanded their resolution, the majority opinion reaches the wrong result. If the Orange County District Attorney succeeds in proving his case, there is nothing inherently problematic about the court awarding restitution to statewide victims of defendants' unlawful business practice. As already noted, even absent a request by the District Attorney the court is empowered by section 17203 to award restitution to "to any person " adversely affected by the defendants' unlawful conduct. This includes, potentially, residents of counties other than Orange. And it is well established that the District Attorney's action will have no res judicata effect on a private party's restitution claim, except to the extent that the party signs a release. ( Payne v. National Collection Systems, Inc. (2001)
Nor should there be a problem with the court awarding civil penalties based on any statewide violations ultimately proven in this action. The penalties are the punishment imposed for each violation proved in a law enforcement action brought on behalf of the People of the State of California. If the violation is proved, the penalties are appropriately imposed. Assume a criminal defendant is charged with multiple offenses as part of a single crime spree that spanned several counties. Convicted of all offenses following a trial in one of the counties, surely the defendant would not be heard to argue that the district attorney could not request punishment and the court could not sentence him on any of the crimes he committed in a different county. (See, e.g., People v. Sering (1991)
The Attorney General is the "chief law enforcement officer of the State" with supervisory authority over district attorneys. ( Cal. Const. art. V, § 13.) District attorneys are county officers. ( Cal. Const. art. XI, § 1, subd. (b).) From these broad conceptual provisions the majority somehow infer a constitutional impediment to interpreting the UCL as allowing a district attorney to seek statewide monetary relief. (Maj. opn., ante , at p. 748.) But constitutional restrictions and limitations on the Legislature's power "are to be construed strictly, and are not to be extended to include matters not covered by the language used." ( Collins v. Riley (1944)
D
Well-tested principles underlie the traditional reticence of intermediate appellate courts to engage in interlocutory writ review of trial court procedural rulings such as the one at issue in this case. (See Omaha Indemnity Co. v. Superior Court (1989)
I would deny the petition.
Statutory references are to the Business and Professions Code unless otherwise specified.
Statutory references are to the Business and Professions Code unless otherwise specified.
The majority assert that the District Attorney's complaint "specifically sought [civil] penalties for sales occurring throughout California" (maj. opn., ante , at p. 737), but nowhere specify where in the complaint they find this "specific" request.
Significantly, although it takes no formal position on defendants' motion to strike, the Attorney General's amicus brief agrees that allegations in the complaint regarding defendants' statewide misconduct may be entirely proper.
The fact that this comment was made in the context of argument on the demurrer rather than the motion to strike (maj. opn., ante , at p. 737, fn. 4) hardly changes the substance of the statement. The court was clearly stating that questions regarding the scope of monetary relief would be addressed at a later date, not now.
The majority opinion inexplicably concludes that this statement "in no way suggest[s] the court declined to reach the issue presented by petitioners' motion to strike." (Maj. opn., ante , at p. 737, fn. 4.) I see no way to read the statement other than as indicating the court was not ruling on the proper scope of monetary relief. And even assuming the statement was in some way ambiguous, why would we reach out at the pleading stage to issue an extraordinary writ correcting an implication that might or might not have been intended by the trial judge?
The trial judge in this case was particularly sensitive to this issue. She told defense counsel, "If you reach a settlement with the District Attorney ... and if the [Attorney General] comes in and says I want to be heard about this, you bet I'm going to let them be heard on this. ..."
It makes no difference that the penalties are allocated by statute to the county treasurer when the enforcement action is prosecuted by the local district attorney. (§ 17206, subd. (c).) It is certainly reasonable for the Legislature to conclude that revenue from the penalties should benefit the county whose resources were used to prosecute the action and recover the penalties. This is particularly true where the statute specifies that the funds thus recovered are to be used exclusively for the enforcement of consumer protection laws. (Ibid. )
Reference
- Full Case Name
- ABBOTT LABORATORIES v. The SUPERIOR COURT of Orange County, Respondent The People ex rel. Tony Rackauckas, as District Attorney, etc., Real Party in Interest.
- Cited By
- 9 cases
- Status
- Published