Recently in Unfair Competition Law Category

The federal Ninth Circuit Court of Appeals has unplugged a speculative class action filed against Apple by lawyers claiming iPod music players are defective by posing an unreasonable risk of hearing loss to its users.

The court ruled that the plaintiffs -- a California man and a Louisiana man -- lacked standing to assert a claim under California's Unfair Competition Law (UCL) because they "do not claim that they suffered or imminently would suffer hearing loss from use of their iPods."

"To have standing under California's UCL, as amended by California's Proposition 64, plaintiffs must establish that they (1) suffered an injury in fact and (2) lost money or property as a result of the unfair competition," states the opinion, written by Judge David R. Thompson.

"Although the plaintiffs allege that Apple has sold more than 100 million iPods, they do not claim that they, or anyone else, have suffered or are substantially certain to suffer hearing loss from using an iPod. As discussed above, as a result of this omission, the plaintiffs fail to state an implied warranty claim, and they have no standing to assert a UCL claim," he wrote. "The plaintiffs' alleged injury in fact is premised on the loss of a 'safety' benefit that was not part of the bargain to begin with."

Read the opinion here: Birdsong v. Apple Inc.pdf

"California state courts are reluctant to apply their Unfair Competition Law to a nationwide class. Perhaps it's because they recognize that theirs is one of the most liberal (and standardless) consumer fraud statutes in the nation. Whatever the cause, this reluctance made it all the more notable when Judge Christina A. Snyder held -- with little conflicts-of-law analysis whatsoever -- that the UCL could be applied to a nationwide class of advertisers suing Citysearch."

So writes J. Russell Jackson on his Consumer Class Actions & Mass Torts blog about a case, Menagerie Productions v. Citysearch, in which the plaintiffs claimed that CitySearch failed to identify fraudulent clicks on their online advertisements. The plaintiffs sought to represent a nationwide class of advertisers.

Jackson wrote that the court's entire analysis of whether the UCL can be applied to the nationwide class based on the California residence of defendant CitySearch is contained in one sentence:

"Furthermore, the Court agrees that California's UCL can be applied to the nationwide class, as CitySearch has not shown that any 'differences between California law and the law of other jurisdictions are material,' nor that 'other states have an interest in applying their laws to this case.' "

Jackson continued: "... there is no evidence of the differences between the California UCL and other states' UCLs being material? Really?!! How about the fact that every other state requires some sort of proof of actual deception that causes injury -- for each class member? Or the fact that some states, like South Carolina, do not even allow class actions under their consumer fraud statutes?"

As Jackson wrote, this case is rife for an appeal to the Ninth Circuit.

With California courts facing closure one day a month to save money, and the state's budget deficit estimated at $24 billion, one court in California was forced to use its resources on a lawsuit by a plaintiff who alleged she was misled by a cereal box.

A U.S. District Court judge in California has tossed a lawsuit filed by a woman who said she had purchased "Cap'n Crunch with Crunchberries" cereal because she believed the crunchberries contained real fruit. The plaintiff brought her claims under California's Unfair Competition Law and Consumer Legal Remedies Act.

As the Lowering the Bar blog so aptly described the case:

"The plaintiff, Janine Sugawara, alleged that she had only recently learned to her dismay that said 'berries' were in fact simply brightly-colored cereal balls, and that although the product did contain some strawberry fruit concentrate, it was not otherwise redeemed by fruit. She sued, on behalf of herself and all similarly situated consumers who also apparently believed that there are fields somewhere in our land thronged by crunchberry bushes.
Plaintiff did not explain why she could not reasonably have figured this out at any point during the four years she alleged she bought Cap'n Crunch with Crunchberries in reliance on defendant's fraud."

Judge Morrison C. England, Jr., in dismissing the case, wrote: "In this case, however, it is simply impossible for Plaintiff to file an amended complaint stating a claim based upon these facts. The survival of the instant claim would require this Court to ignore all concepts of personal responsibility and common sense."

The judge noted that the same plaintiffs firm, Hewell Law Firm in San Diego, had filed a similar claim against the packaging of Froot Loops cereal, which was rejected by another California district court. The Hewell Law Firm is headed by Harold Hewell, identified by the State Bar web site as a graduate of the California Western School of Law in San Diego and admitted to the bar in California in 1994.

Meanwhile, California's judicial branch is facing a $495 million shortfall for fiscal year 2009-10, according to the Daily Journal legal newspaper. On top of that, Gov. Arnold Schwarzenegger announced last week additional budget cuts of more than $150 million for the courts.

The Civil Justice Association of California suggests the Legislature enact the following to help state courts deal with budget cuts and matters like the Crunchberry case: Give every judge in the state the option to calendar one case each month for hearing on a set day each month. If the case is not heard on that day, it is dismissed. That set day, explained CJAC President John H. Sullivan, would be the same day as the designated one day-a-month courtroom closures resulting from the budget crisis.

Brea lawyer Harpreet S. Brar, who first made headlines by filing shakedown lawsuits against more than 400 nail salon owners in southern California in 2003, may be disbarred following a recommendation by a State Bar Court judge.

Brar was later jailed for contempt of court for persisting in other harassing legal tactics and then convicted of federal tax evasion. He has a collection of State Bar suspensions and probations over the past two years, but it has taken until February 1, 2008 to reach the disbarment recommendation stage.

The final decision rests with the California Supreme Court, which will take up Judge Richard Honn's recommendation that Brar be disbarred for actions that amount to "serious breaches" of an attorney's fundamental ethical mores, the California Bar Journal reported this month.

Brar "has engaged in a nearly continuous course of serious misconduct" since his admission to the bar in 2000, Honn said. The attorney refused to let Proposition 64 stop him from filing shakedown lawsuits -- even though an Orange County judge called him "basically an extortionist," ordered him to pay $1.8 million in civil penalties, and enjoined him from filing any more cases under the California unfair competition law.

After the CJAC-sponsored Proposition 64 closed the door on unfair competition law shakedowns in 2004, Brar filed used his wife as a plaintiff and filed three new lawsuits within nine months accusing liquor stores of not posting notices of 50-cent debit-card fees charged at ATM machines in their stores and claiming her debit-card fees as a loss of money and property. He also sent the defendants a threatening letter in which he offered to settle the matter for about $750 and encouraged a quick settlement to avoid additional fees and costs.

Orange County Superior Court Judge Peter Polos held Brar in contempt and sentenced him to 15 days in jail.

Brar, 36, was convicted of five felony counts of tax evasion last July and is currently serving one year in county jail. He failed to file 1999 personal income tax and corporate income tax returns, as well as his 2002 personal income tax returns.