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Kwikset Corp. v. Superior Court

Supreme Court of California

January 27, 2011, Filed

S171845

Case Summary

Procedural Posture

Real party in interest plaintiffs brought suit against petitioner defendant corporation under the Unfair Competition Law (UCL) and the False Advertising Law (FAL). Respondent trial court overruled defendant's demurrer. The California Court of Appeal, Fourth Appellate District, Division Three, issued a writ of mandate directing the trial court to sustain defendant's demurrer and enter a judgment dismissing the action. Review was granted.

Overview

Defendant manufactured locksets it labeled as "Made in U.S.A." Plaintiffs' suit challenged the label's veracity. The court granted review to address the standing requirements of the UCL and FAL in the wake of Proposition 64. The court held that Proposition 64 should be read in light of its apparent purposes, i.e., to eliminate standing for those who have not engaged in any business dealings with would-be defendants and thereby strip such unaffected parties of the ability to file shakedown lawsuits, while preserving for actual victims of deception and other acts of unfair competition the ability to sue and enjoin such practices. Accordingly, plaintiffs who can truthfully allege they were deceived by a product's label into spending money to purchase the product, and would not have purchased it otherwise, have lost money or property within the meaning of Proposition 64 and have standing to sue. Under the allegations of their complaint, plaintiffs did not receive the benefit of the bargain and satisfied the narrower standing requirements imposed by Proposition 64. Plaintiffs bargained for locksets that were made in the United States; they got ones that were not.

Outcome

The appellate court's judgment was reversed, and the case was remanded for further proceedings.

LexisNexis® Headnotes

 

 

Torts > Business Torts > Unfair Business Practices > Elements

Antitrust & Trade Law > Consumer Protection > Deceptive & Unfair Trade Practices > State Regulation

Civil Procedure > ... > Justiciability > Standing > Injury in Fact

HN1  Elements

Proposition 64 should be read in light of its apparent purposes, i.e., to eliminate standing for those who have not engaged in any business dealings with would-be defendants and thereby strip such unaffected parties of the ability to file shakedown lawsuits, while preserving for actual victims of deception and other acts of unfair competition the ability to sue and enjoin such practices. Accordingly, plaintiffs who can truthfully allege they were deceived by a product's label into spending money to purchase the product, and would not have purchased it otherwise, have lost money or property within the meaning of Proposition 64 and have standing to sue.

 

Antitrust & Trade Law > Consumer Protection > False Advertising > State Regulation

Antitrust & Trade Law > Consumer Protection > Deceptive Labeling & Packaging > State Regulation

HN2  State Regulation

See Bus. & Prof. Code, § 17533.7.

 

Antitrust & Trade Law > Consumer Protection > Deceptive Labeling & Packaging > State Regulation

HN3  State Regulation

Civ. Code, § 1770, subd. (a)(4), prohibits using deceptive representations or designations of geographic origin in connection with the sale or lease of goods or services.

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51 Cal. 4th 310 ; 246 P.3d 877 ; 120 Cal. Rptr. 3d 741 ; 2011 Cal. LEXIS 532 

KWIKSET CORPORATION et al., Petitioners, v. THE SUPERIOR COURT OF ORANGE COUNTY, Respondent; JAMES BENSON et al., Real Parties in Interest.

Subsequent History: Reported at Kwikset Corporation v. S.C. (Benson), 2011 Cal. LEXIS 993 (Cal., Jan. 27, 2011)

Prior History:  [1] Superior Court of Orange County, No. 00CC01275, David C. Velasquez, Judge. Court of Appeal, Fourth Appellate District, Division Three, No. G040675.

Kwikset Corp. v. Superior Court, 171 Cal. App. 4th 645, 90 Cal. Rptr.3d 123, 2009 Cal. App. LEXIS 213 (Cal. App. 4th Dist., 2009)