California Supreme Court Allows "Continuous Accrual" Doctrine to Avoid Statute of Limitations for "Unfair" UCL Claim


Seeking to clarify the extent to which the four-year statute of limitations applies to claims under the Unfair Competition Law, Business & Professions Code section 17200 et seq. (the “UCL”), a unanimous California Supreme Court today issued its decision in Aryeh v. Canon Business Solutions, Inc., allowing at least a portion of the plaintiff’s UCL claim to proceed beyond demurrer.

Relying on the continuous accrual doctrine, the Court explained that this equitable exception to the usual rules governing limitations periods would permit the plaintiff to pursue:

at least some [alleged unfair] acts within the four years preceding suit, [and thus] the suit is not entirely time-barred.”


The plaintiff ran a copying business and entered into two agreements with Canon (one in November 2001 and one in February 2002) to lease copiers. The agreements required the plaintiff to pay monthly rent for each copier, subject to a maximum copy allowance. If plaintiff exceeded the monthly allowance, he had to pay an additional per copy charge. The agreements also provided that Canon would service the copiers. 

Beginning in 2002, plaintiff noticed discrepancies between meter readings taken by Canon employees and the actual number of copies made on each copier, and he began compiling independent records. Plaintiff alleged that Canon employees had run thousands of test copies during 17 service visits between February 2002 and November 2004, which he claimed resulted in him exceeding his monthly allowances and having to pay excess copy charges and fees to Canon.

Plaintiff delayed until January 2008 before he filed a single-claim complaint for violation of the UCL. In that complaint, plaintiff alleged that Canon’s practice of charging for test copies implicated both the unfair and fraudulent prong of the UCL.

Canon demurred to the complaint, contending that plaintiff’s claim was barred by the four-year statute of limitations for UCL claims. After permitting plaintiff leave to amend the complaint two times, the trial court dismissed the action. The Court of Appeal, in a 2-1 decision, affirmed the dismissal and held that neither the “delayed discovery” rule nor the “continuing violation doctrine” applied to avoid the statute of limitations. The dissenting opinion would have allowed plaintiff to proceed with a portion of his claim under the “continuous accrual” theory for those parts of the claim that were not time-barred.

Supreme Court Decision

The Supreme Court essentially adopted the position of the dissent, in a decision that canvassed California law as to the “handful of equitable exceptions” that may “alter the rules governing either the initial accrual of a claim” or “the subsequent running of the limitations period, or both.” These doctrines include the discovery rule, equitable tolling, the doctrine of fraudulent concealment, the continuing violation doctrine, and the theory of continuous accrual.

Before turning to these doctrines, the Court analyzed the language and legislative history of the UCL and its four-year statute of limitations to conclude that:

the UCL is governed by common law accrual rules to the same extent as any other statute” and that “exceptions to that rule apply precisely to the extent the preconditions for their application are met, as would be true under any other statute” 

After confirming that the plaintiff’s claim accrued for statute of limitations purposes no later than February 2002, and in the absence of any exception, a lawsuit alleging a UCL claim filed after 2006 would be barred by the four-year statute, the Court considered only two of the above-referenced exceptions, the continuing violation doctrine and the theory of continuous accrual. (Presumably, the other doctrines had no applicability to the claim alleged.)

The continuing violation doctrine is an exception that

aggregates a series of wrongs or injuries . . . treating the limitations period as accruing for all of them upon commission or sufferance of the last of them.”

The Court found this exception did not apply to the plaintiff’s claim since it did not involve a “wrongful course of conduct” that only became apparent “through the accumulation of a series of harms,” and since plaintiff conceded that he was aware of Canon’s alleged conduct in 2002.

Turning to the theory of continuous accrual, which the Court defined as “a series of wrongs or injuries may be viewed as each triggering its own limitations period, such that a suit for relief may be partially time-barred as to older events but timely as to those within the applicable limitations period,” the Court found this exception did apply – at least based on the allegations in the operative complaint. 

Nevertheless, where the continuing violation doctrine would allow recovery for a defendant’s “entire course of conduct,” the continuous accrual theory only supports recovery “for damages arising from those breaches falling within the limitations period.” Thus, Canon’s recurring “duty not to impose unfair charges in monthly bills” was a continuously accruing claim and those breaches that occurred within four years of the filing of the lawsuit (i.e., from January 2004 forward) could be pursued. The charges prior to that time were barred.

Canon tried to avoid this determination by claiming that plaintiff’s UCL claim was “at heart” a single claim for fraud incepting in 2001 or 2002 and known shortly thereafter, and not any recurring wrongful act. The Court rejected this argument since the UCL claim raised both the fraud and unfair prongs of the UCL, which “at the demurrer stage,” meant that the “complaint is not barred in its entirety by the statute of limitations.” The Court did note that it was not suggesting “that, to the extent the operative complaint does allege a fraud claim, it is timely.”  

The bottom line is that the Court has now announced that the four-year statute that applies to UCL claims may be circumvented, at least at the pleading stage, by the various judicially developed exceptions that apply to any other statute. Whether the actual facts match up to the complaint’s allegations must be resolved on the merits.


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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