Kwikset: California Supreme Court Expands Plaintiffs' Standing To Sue Under The Unfair Competition Law

In Kwikset v. Superior Court (Jan. 27, 2011) __ Cal.4th __, the California Supreme Court greatly expanded the standard for determining whether a plaintiff has standing to sue under the Unfair Competition Law (“UCL”), Business and Professions Code section 17200. In doing so, the Supreme Court disapproved several prior court of appeal decisions that had narrowed standing to only those plaintiffs who were entitled to restitution. (Silvaco Data Systems v. Intel Corp. (2010) 184 Cal.App.4th 210, 245; Citizens of Humanity, LLC v. Costco Wholesale Corp. (2009) 171 Cal.App.4th 1, 22; and Buckland v. Threshold Enterprises, Ltd., (2007) 155 Cal.App.4th 798, 817.) The Supreme Court’s opinion means that more lawsuits alleging UCL violations are likely to be filed and such lawsuits will be harder to dismiss at the pleading stage. In Kwikset, the plaintiff accused Kwikset of improperly advertising locksets as “Made in USA” when, in fact, some parts were manufactured abroad. The plaintiff sued for violation of the UCL and False Advertising. At trial, the court concluded that the plaintiff was correct and issued an injunction ordering Kwikset to cease labeling its products as “Made in the USA” and to notify its retailers and distributors of the falsely labeled products so they could return them for a refund. However, the court concluded that the plaintiff was not entitled to restitution for equitable reasons. Only injunctive relief and restitution are available under the UCL. The parties appealed.

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Published In: Civil Procedure Updates, Civil Remedies Updates, General Business Updates, Communications & Media Updates, Constitutional Law Updates

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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