Any party to an action under California Unfair Competition Law (UCL) or False Advertising Law (FAL) should beware of the California Supreme Court’s recent decision in Nationwide Biweekly Administration Inc. v. Superior Court of Alameda County (2020) 9 Cal.5th 279.
In Nationwide, the California Supreme Court determined that there is no right to a jury trial for these claims. Furthermore, any claims brought with a UCL or FAL claim risk being tried only after the trial court has decided the UCL or FAL claims in a bench trial. Determination of issues in the bench trial will be binding in a jury trial on the other non-equitable claims and could make such a trial unnecessary.
On the other hand, defendants facing these claims may be able to utilize this precedential decision to press for dismissal or settlement of UCL and FAL claims or use it to their procedural advantage. This decision also has implications for Proposition 65, California’s Consumers Legal Remedies Act (CLRA) and potentially all other statutory claims in California that authorize equitable relief. Any party with a current pending action involving such claims should consider this precedential decision in its litigation strategy moving forward.
In Nationwide, the California Supreme Court held that claims arising under the UCL or FAL “are equitable in nature and properly tried by a court rather than a jury,” even where the government seeks civil penalties in connection with its claims.
Chief Justice Tani Cantil-Sakauye, who authored the opinion, wrote, “Such causes of action are equitable either when brought by a private party seeking only an injunction, restitution, or other equitable relief or when brought by the Attorney General, a district attorney, or other governmental official seeking not only injunctive relief and restitution but also civil penalties. Accordingly, we conclude that there is no right to jury trial in such actions under the California Constitution.”
After analyzing the legislative history, the court concluded that “in enacting the UCL [the California legislature] intended to create an equitable, rather than a legal, cause of action.” And concluded likewise for the FAL.
Key Implications of the Nationwide Decision
(1) There Is No Right to a Jury Trial for UCL and FAL Claims.
The court clarified conflicting precedent in holding that UCL and FAL claims are equitable and there is no right to a jury trial for these claims under the California Constitution.
The court determined that the California State Legislature intended that UCL actions be tried by judges, rather than juries, for two primary reasons. First, the UCL originated as a statute solely to permit litigants to enjoin unfair and misleading business practices, and...
