Standing Provisions of Proposition 64 Apply to Pending Actions

In Californians for Disability Rights v. Mervyn's, LLC (2006) 39 C.4th 223, 46 C.R.3d 57, 138 P.3d 707, plaintiff, a nonprofit corporation, sued defendant, a corporation that owns and operates department stores, for violating the Unfair Competition Law (B. & P.C. 17200 et seq.; see 13 Summary (10th), Equity, §105 et seq.) by allegedly failing to maintain pathways between fixtures and shelves in defendant’s stores sufficiently wide to permit access by persons using mobility aids such as wheelchairs and walkers. At the time the action was filed, plaintiff had standing under B. & P.C. 17204, which allowed "any person acting for the general public" to sue for relief from unfair competition. Trial resulted in judgment for defendant, and plaintiff appealed. While the appeal was pending, B. & P.C. 17204 was amended by Proposition 64, under which a private person has standing to sue only if he or she "has suffered injury in fact and has lost money or property as a result of such unfair competition," a condition not satisfied by plaintiff. Arguing that Proposition 64 eliminated plaintiff’s standing, defendant moved to dismiss the appeal, but the Court of Appeal denied the motion on the ground that the standing provisions did not apply to cases pending when the measure took effect. Held, reversed.

(a) Proposition 64 does not state whether its standing provisions apply to pending cases. Relying on the presumption that statutes apply prospectively in the absence of a clearly expressed contrary intent (see Evangelatos v. Superior Court (1988) 44 C.3d 1188, 246 C.R. 629, 753 P.2d 585, 7 Summary (10th), Constitutional Law, §634), plaintiff contends that applying the standing provisions of Proposition 64 to pending cases is impermissibly retroactive, while defendant responds that applying the standing provisions is prospective. Defendant is correct. (39 C.4th 229.)

(b) Whether the application of a law is prospective or retroactive is a matter of function, not form. Courts must inquire whether a law changes the legal consequences of past conduct by imposing new or different liabilities based on that conduct, or whether it substantially affects existing rights and obligations. If so, then application to a trial of preenactment conduct is forbidden, absent an express legislative intent to permit retroactive application. If not, then application to a trial of preenactment conduct is permitted, because the application is prospective. A statute that establishes rules for the conduct of pending litigation without changing the legal consequences of past conduct is not made retroactive merely because it draws upon facts existing prior to its enactment. Rather, the statute is prospective in nature, because it relates to the procedure to be followed in the future. (39 C.4th 230, 231.)

(c) Under these rules, the applications of new statutes to pending actions have been held to be retroactive when they: (1) expanded contractors' tort liability for past conduct by imposing broader duties than existed under the common law (see Elsner v. Uveges (2004) 34 C.4th 915, 22 C.R.3d 530, 102 P.3d 915); (2) subjected tobacco sellers to tort liability for acts performed at a time when they enjoyed the protection of an immunity statute (see Myers v. Philip Morris Cos. (2002) 28 C.4th 828, 123 C.R.2d 40, 50 P.3d 751, 6 Summary (10th), Torts, §1536); and (3) subjected persons to increased punishment for past criminal conduct, or to punishment for past conduct not formerly defined as criminal (see Tapia v. Superior Court (1991) 53 C.3d 282, 279 C.R. 592, 807 P.2d 434. 1 Cal. Crim. Law (3d), Introduction to Crimes, §110). In each of these cases, application of the new law to pending cases improperly changed the legal consequences of past conduct by imposing new or different liabilities based upon that conduct. (39 C.4th 231.)

(d) In contrast, courts have found to be prospective, and thus permissible, the application to pending cases of new statutes that: (1) required plaintiffs suing under an environmental law to provide a certificate of merit (see In re Vaccine Cases (2005) 134 C.A.4th 438, 36 C.R.3d 80); (2) eliminated the right under the anti-SLAPP law to dismiss certain public-interest lawsuits (see Brenton v. Metabolife Int. (2004) 116 C.A.4th 679, 10 C.R.3d 702, 5 Cal. Proc. (4th), Pleading, Supp., §962); and (3) eliminated the right to appeal from decisions upholding revocation of a physician's license (see Landau v. Superior Court (1998) 81 C.A.4th 191, 97 C.R.2d 657, 9 Cal. Proc. (4th), Appeal, Supp., §3). In each of these cases, application of the new law to pending actions properly governed the conduct of proceedings following the law's enactment without changing the legal consequences of past acts. (39 C.4th 231.)

(e) Applying the standing provisions of Proposition 64 to the present case is not to apply them retroactively. “The measure left entirely unchanged the substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted. Nor does the measure eliminate any right to recover.” Although Proposition 64 withdraws the standing of persons who have not been harmed to represent those who have, it need not for that reason be described as operating retroactively; for a lawsuit properly to be allowed to continue, standing must exist at all times until judgment is entered, and not just on the date that the complaint is filed. (39 C.4th 232.)

Witkin References

On retroactivity generally, see 7 Summary (10th), Constitutional Law, §623 et seq.

On Unfair Competition Law generally, see 13 Summary (10th), Equity, §105 et seq.

On parties having standing to sue for unfair competition, see 13 Summary (10th), Equity, §124.