New CA Unfair Competition And Class Certification Decisions

The California Supreme Court decided two cases yesterday in which my firm submitted amicus briefs consistent with the Court's conclusions.

Korea Supply Co. v. Lockheed Martin Corporation (PDF) concerned California's unfair competition law (Business & Professions Code §17200). Defendant Lockheed was accused of using unfair business practices to beat out competitor Korea Supply for a contract to provide the Republic of Korea with a radar system. Korea Supply sued under California's unfair competition law, and sought as a remedy the disgorgement of profits Lockheed had obtained from the contract. In its decision yesterday, the California Supreme Court confirmed that nonrestitutionary disgorgement of profits is not available in an individual action brought under §17200. Remedies in such cases are limited instead to injunctive relief and restitution, and restitution only involves the return of something unlawfully taken from the plaintiff (i.e., not profits). The court looked to the plain language of the statute in reaching this result, declining to interpret "restitution" to include disgorgement. It also found that §17200 was not meant to be an "all-purpose substitute for a tort or contract action." My colleagues Jim Martin and Mike Brown briefed these issues on behalf of amici Washington Legal Foundation and National Association of Independent Insurers, arguing the position that was adopted by the Court.

Lockheed Martin Corporation v. Superior Court (PDF; yes, two Lockheed cases on the same day), involved the question of whether a class consisting of 50,000 - 100,000 plaintiffs could be certified for medical monitoring purposes in a case where Lockheed was alleged to have contaminated the drinking water in the city of Redlands, CA. While certification of a medical monitoring class can be proper in appropriate cases, the Court concluded this was not such a case because the differences in each class member's particular circumstances defeated any efficiencies attainable through a class action. Jim Martin and Mike Brown briefed these issues on behalf of Washington Legal Foundation, and again the position they urged was that adopted by the Court.