Fourth District Court of Appeal Confirms that the No "Pick Off" Rule Applies to a Potential UCL Class Action

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In Wallace v. GEICO General Insurance Company (April 19, 2010) __ Cal.App.4th __, the Fourth District Court of Appeal confirmed that a defendant cannot "pick off" a potential class representative by tendering payment of their claim in a class action alleging violations of California's Unfair Competition Law, Business and Professions Code section 17200 et seq. ("UCL"). The no "pick off" rule stems from the California Supreme Court's holding in La Sala v. American Savings & Loan Ass'n, 5 Cal.3d 864 (1971), that an involuntary settlement of the named plaintiff's claim does not necessarily divest him or her of standing to continue the action on behalf of the class. Under Wallace, as long as the class representative "suffered injury in fact" and "lost money or property" as of the filing of the lawsuit, he or she may still serve as the representative plaintiff in a UCL class action.

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