Class Actions

Today the California Supreme Court made it easier to certify class actions in unfair business practices cases. In the so-called Tobacco II cases (S147345), the Court reversed a lower court order de-certifying a class action in the wake of Proposition 64, the law that modified California’s unfair business practices statute (Business & Professions Code Section 17200 et seq.) to require that the persons bringing such claims have actually been injured themselves by the alleged unfair practices. The main issue before the Supreme Court was whether all class members must comply with Proposition 64’s standing requirements, or only the class representatives. Specifically, the question was whether each smoker who is eligible to remain as a member of the class must demonstrate reliance on the tobacco companies’ alleged unfair practices.

The case relied on interpretation of Proposition 64 itself, holding that the initiative was only intended to limit the persons who can bring an unfair business practices claim, not to change the nature or type of relief available. Therefore, the Court held the amended statute does not preclude a class action on behalf of other persons who might not themselves be able to demonstrate compliance with the new standing requirements. So if the class of smokers who had been exposed to defendants’ advertising and marketing practices was validly certified in the first place, that certification did not become invalid merely by virtue of the passage of Proposition 64.

How this decision affects the definition and certifiability of class actions in other contexts, and even in other unfair business practices cases, will probably remain a subject of continued debate. The extent to which the members of a putative class must have similar interests to one another and to the interests of the class representatives, and the extent to which a class action is a manageable way of dealing with all of the different interests of class members, must still be addressed on a case-by-case basis.

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