Thursday, July 2, 2020

SFALP Students Help Secure Major Victory for California Consumers

Last week, a unanimous decision by the California Supreme Court affirmed the powers of local public law offices to protect consumers statewide under California’s unfair business competition law. Students in the San Francisco Affirmative Litigation Project (SFALP) know this law well: For over a decade, they have helped the San Francisco City Attorney’s Office use it to bring cases against businesses flouting the law and cheating consumers, such as predatory immigration consultants and payday lenders, and companies charging hidden fees. They also played a key role in defending the right of local prosecutors like the City Attorney’s Office to enforce the Unfair Competition Law statewide.

“Yale Law students have long played an important role in helping us pursue consumer protection cases,” said deputy city attorney Owen Clements, who supervised students’ work in Abbott Laboratories et al. v. Superior Court. “Last week’s decision is a crucial victory for consumers throughout California, and will allow for continued effective local enforcement of this crucial consumer protection law.”

While San Francisco was not a party to Abbott Laboratories, the case decided last week, it had a tremendous stake in the outcome. The case arose when the Orange County District Attorney’s Office filed an Unfair Competition Law complaint against Abbott Labs for illegally suppressing competition in the market for generic drugs. The complaint alleged uniform statewide misconduct by Abbott Labs and sought uniform statewide relief for California consumers. Abbott Labs moved to strike the request for statewide remedies, seeking to limit relief only to the residents of Orange County. The Superior Court denied that motion, but the Fourth District Court of Appeal reversed and granted the motion—a ruling that would severely limit the scope of San Francisco’s and other cities’ consumer protection work.

“As it’s become increasingly difficult for private consumers to challenge unlawful and predatory business practices, it’s all the more important that public prosecutors like San Francisco can act to protect consumers statewide,” said Christine Kwon ’17, the 2017–2018 SFALP fellow. “Abbott Labs struck at the core of SFALP’s work to help vindicate the rights of California’s most vulnerable. I am proud of our students’ research and advocacy efforts and grateful for the opportunity to support the talented deputy city attorneys on this case.”

With students’ help, the San Francisco City Attorney’s Office filed amicus briefs in Abbott Labs, as did the City Attorneys of Los Angeles, Oakland, San Diego, and San Jose, the Santa Clara County Counsel, the League of California Cities, and the California State Association of Counties. The briefs argued that the Unfair Competition Law gives designated city attorneys, district attorneys, and the attorney general overlapping authority to enforce cases under the Unfair Competition Law and obtain statewide remedies. San Francisco’s brief in particular disputed Abbott Laboratories’ misapplication of public nuisance case law. The filing points to clear language in the law granting district attorneys, city attorneys, and the attorney general authority to prosecute past violations of the law and pursue statewide remedies on behalf of the People of the State of California.

In addition to working on San Francisco’s amicus briefs, SFALP students also used legal scholarship to deepen the conversation about the role of local prosecutors in enforcing consumer protection law. Kwon and James Horner ’19 coauthored a forum piece for the Yale Law Journal setting forth some of the strongest practical arguments against limiting the scope of the unfair competition law. They argued that “to undercut local prosecutors’ power in this way, and thereby necessitate multiple prosecutions of the same consumer harms, would be both wasteful and dangerous — it would protect companies guilty of wrongdoing, not consumers.” 

The California Supreme Court heard argument in Abbott Labs on April 7, 2020. Yvonne Meré, Chief of Complex and Affirmative Litigation at the San Francisco City Attorney’s Office and a longtime SFALP supervisor, argued on behalf of San Francisco and local amici co-counsel.

In a unanimous decision, the Court concluded that local prosecutors are not bound by geographic limits in pursuing civil penalties and restitution on behalf of consumers under the Unfair Competition Law and that the law does not require local prosecutors to obtain the Attorney General’s consent, written or otherwise, before pursuing an enforcement action under the statute. The Court also emphasized the central role that the Legislature and voters play in determining who may enforce the Unfair Competition Law and the breadth and scope of that enforcement.

“Our team has worked closely with Yale Law students from the start of this case,” Meré said. “It’s been great to work with students on these issues, and we look forward to continuing to team up to enforce consumer protection laws.”