California's Unfair Competition Law, Cal. Bus. & Prof. Code section 17200 et seq. ('UCL'), already gives governmental officials great power to seek civil penalties from any business engaged in unlawful, deceptive or even 'unfair' activity. A recent California Court of Appeal ruling encourages entrepreneurial UCL penalty litigation by expressly permitting government officials to hire private contingent fee attorneys to pursue these claims. People ex rel. City of San Diego v. Experian Data Corp., No. G060360, 2022 WL 1222870 (Cal. Ct. App. 4th Dist., Div. 3, Apr. 26, 2022). And because the California Supreme Court's ruling in Abbott Laboratories v. Superior Court, 9 Cal. 5th 642 (2020), allows even small governmental bodies to seek relief based on statewide activity, there is a risk of increasing litigation from the most unexpected corners of the State.
Experian involved a claim by the San Diego City Attorney that the defendant, a credit bureau, allowed a hacker to gain access to data belonging to approximately 400,000 California residents. According to the government, Experian was liable under the UCL for penalties of up to $2,500 per resident (plus enhanced penalties for senior citizens and the disabled) for failing to provide adequate notice of the data breach to affected residents. To pursue the claim, the City Attorney hired a private class action firm that was simultaneously pursuing private claims against Experian in a class action case, and agreed to pay the private firm a percentage of the penalties actually recovered.
Experian filed a motion to disqualify the private lawyers on the grounds that the government lacked authority to hire private...
