California Court of Appeal, The People v. Johnson & Johnson, Docket No. D077945

Antitrust

 

Trade Regulation

 

Unfair Competition

 

Misleading Statements

 

False Advertising

 

Design Defect and Failure-to-Warn Theories of Liability

 

The FDA Did Not Create a Safe Harbor

 

Statute of Limitations

 

Tolling Agreement

 

Consumer Law

 

Drugs & Biotech

 

Health Law

 

California Law

 

 

 

Johnson & Johnson, Ethicon, Inc., and Ethicon US, LLC (collectively, Ethicon) appeal an adverse judgment following a bench trial. The trial court levied nearly $344 million in civil penalties against Ethicon for willfully circulating misleading medical device instructions and marketing communications that misstated, minimized, and/or omitted the health risks of Ethicon’s surgically-implantable transvaginal pelvic mesh products. The court found Ethicon committed 153,351 violations of the Unfair Competition Law (UCL) (Bus. & Prof. Code, § 17200 et seq.) and 121,844 violations of the False Advertising Law (FAL) (§ 17500 et seq.), and it imposed a $1,250 civil penalty for each violation.

(Further undesignated statutory references are to the Business and Professions Code.)

 

(…) In 2008, the U.S. Food and Drug Administration (FDA) issued a public health notification alerting health care providers about complications from pelvic mesh implants used to treat SUI and POP.

 

(…) In 2012, the FDA ordered Ethicon to conduct post-market surveillance studies for one of its SUI devices (TVT-Secur) and three of its POP devices (Prolift, Prolift-M, and Prosima). Instead of conducting these post-market surveillance studies, Ethicon stopped selling the products commercially. Ethicon also changed the indication for its fourth POP device (Gynemesh PS) from a transvaginal indication to an abdominal-only indication. Ethicon continued selling its other SUI devices (TVT, TVT-Obturator, TVT-Abbrevo, and TVT-Exact) up to and throughout the present lawsuit.

 

Ethicon’s competitors continued to sell pelvic mesh products for transvaginal repair of POP, even after Ethicon stopped selling most of its POP devices. However, in April 2019, the FDA concluded there was not a reasonable assurance of safety and effectiveness for any commercially- available pelvic mesh products intended for transvaginal repair of POP. Therefore, the FDA ordered all remaining manufacturers of surgical mesh intended for transvaginal repair of POP to stop selling and distributing such products.

 

Ethicon’s Communications About Its Pelvic Mesh Products 

During the relevant timeframe, Ethicon disseminated three categories of communications giving rise to the violations at issue here: (1) Instructions for Use (IFUs); (2) marketing communications directed to California doctors; and (3) marketing communications directed to California patients.

 

(…) In 2016, the Attorney General filed an enforcement action against Ethicon on behalf of the People of the State of California. The operative complaint alleged Ethicon violated the UCL and FAL by disseminating deceptive advertisements relating to its pelvic mesh products.

 

(…) The UCL has a four-year statute of limitations (§ 17208) and the FAL has a three-year statute of limitations (Code Civ. Proc., § 338, subd. (h)). However, the parties executed a tolling agreement, effective October 17, 2012. Thus, the earliest date Ethicon could be held liable for UCL violations was October 17, 2008, and the earliest date it could be held liable for FAL violations was October 17, 2009. 

 

Governing Laws

 

 

Unfair Competition Law

 

The Unfair Competition Law, or UCL, forbids unfair competition, which is defined as “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by” the False Advertising Law.  (§ 17200.)  The UCL’s “ ‘purpose is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.’ ”  (Abbott Laboratories v. Superior Court (2020) 9 Cal.5th 642, 651 (Abbott Labs).)“ ‘In service of that purpose, the Legislature framed the UCL’s substantive provisions in “ ‘broad, sweeping language’ ” ’ [citation] to reach ‘anything that can properly be called a business practice and that at the same time is forbidden by law’ [citation].  ‘By proscribing “any unlawful” business practice, “section 17200 ‘borrows’ violations of other laws and treats them as unlawful practices” that the unfair competition law makes independently actionable.’ ”  (Abbott Labs, supra, 9 Cal.5th at pp. 651–652.)  “However, the law does more than just borrow.  The statutory language referring to ‘any unlawful, unfair or fraudulent’ practice makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law.  ‘Because ... section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent.’ ”  (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (Cel-Tech).)

 

 

False Advertising Law

 

The False Advertising Law, or FAL, “broadly prohibits false or misleading advertising, declaring that it is unlawful for any person or business to make or distribute any statement to induce the public to enter into a transaction ‘which is untrue or misleading, and which is known, or which by the exercise of reasonable care should be known, to be untrue or misleading.’ ”  (Nationwide Biweekly Administration, Inc. v. Superior Court (2020) 9 Cal.5th 279, 306 (Nationwide), quoting § 17500.)  The FAL is “‘designed to protect consumers from false or deceptive advertising.’”  (Id. at p. 305; see Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 331 [“The UCL and false advertising law are both intended to preserve fair competition and protect consumers from market distortions.”].)  “Like the choice of the term ‘unfair’ in the UCL, the governing substantive standard of the FAL—prohibiting advertising that is ‘untrue or misleading’ [citation]—is set forth in broad and open-ended language that is intended to permit a court of equity to reach any novel or creative scheme of false or misleading advertising that a deceptive business may devise.”  (Nationwide, supra, 9 Cal.5th at p. 308.)  “The FAL prohibits ‘“not only advertising which is false, but also advertising which, although true, is either actually misleading or which has a capacity, likelihood or tendency to deceive or confuse the public.”  [Citation.]  Thus, to state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, “it is necessary only to show that ‘members of the public are likely to be deceived.’”’ ”  (Ibid.)

 

 

(…) The remedies and penalties provided for in the UCL and FAL generally are cumulative to each other and to remedies and penalties available under other laws.  (§§ 17205, 17534.5.)  Thus, conduct that violates both the UCL and FAL can result in separate penalties of up to $2,500 for each UCL violation and for each FAL violation.  (See People v. Toomey (1984) 157 Cal.App.3d 1, 22 [the UCL and FAL “allow for cumulative remedies, indicating a legislative intent to allow ... double fines”]. (p. 21).

 

 

1

 

Target Audience Standard

i

 

“To prevail on a claim under the fraudulent prong of the Unfair Competition Law ‘based on false advertising or promotional practices,’ the plaintiff must ‘ “show that ‘members of the public are likely to be deceived.’ ” ’  [Citations.]  An advertisement or promotional practice is likely to deceive if it includes assertions that are (1) untrue, or (2) ‘ “true [, but are] either actually misleading or which [have the] capacity, likelihood or tendency to deceive or confuse the public.” ’ ”  (Shaeffer v. Califia Farms, LLC (2020) 44 Cal.App.5th 1125, 1135 (Shaeffer).)  The FAL “substantively overlaps” with the fraudulent prong of the UCL and the “burden under these provisions is the same:  To prevail on a claim under the false advertising law, the plaintiff must show that ‘ “ ‘members of the public are likely to be deceived ....’ ” ’ ”  (Id. at p. 1136; see also Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 226 [for claims under “ ‘the UCL or the false advertising law, based on false advertising or promotional practices, “it is necessary only to show that ‘members of the public are likely to be deceived’ ” ’ ”] (Chapman).

 

 

In assessing the likelihood of deception, the challenged advertisement or practice is typically viewed “through the eyes of the ‘reasonable consumer’—that is, the ‘ordinary consumer acting reasonably under the circumstances....’ ”  (Shaeffer, supra,44 Cal.App.5th at p. 1135.)

 

 

However, “ ‘where the advertising or practice is targeted to a particular group or type of consumers, either more sophisticated or less sophisticated than the ordinary consumer, the question whether it is misleading to the public will be viewed from the vantage point of members of the targeted group, not others to whom it is not primarily directed.’ ”  (In re Vioxx Class Cases (2009) 180 Cal.App.4th 116, 130 (Vioxx), quoting Lavie v. Procter & Gamble Co. (2003) 105 Cal.App.4th 496, 509–510 (Lavie).)

 

 

A fraudulent or deceptive omission is actionable if it is “contrary to a representation actually made by the defendant, or an omission of a fact the defendant was obliged to disclose.”  (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 835; see Collins v. eMachines, Inc. (2011) 202 Cal.App.4th 249, 255 (Collins) [“fraud or deceit encompasses the suppression of a fact by one who is bound to disclose it, or the suppression of a fact that is contrary to a representation that was made”].)  In other words, omissions-based claims can be pure-omissions claims or partial-misrepresentation claims.

 

 

In assessing whether an omission is fraudulent or deceptive, courts typically consider whether the omission satisfies one or more of the four factors set forth in LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.  As this court explained in LiMandri:  “There are ‘four circumstances in which nondisclosure or concealment may constitute actionable fraud:  (1) when the defendant is in a fiduciary relationship with the plaintiff; (2) when the defendant had exclusive knowledge of material facts not known to the plaintiff; (3) when the defendant actively conceals a material fact from the plaintiff; and (4) when the defendant makes partial representations but also suppresses some material facts.’ ” (LiMandri, at p. 336; see Collins, supra, 202 Cal.App.4th at p. 255 [applying the LiMandri factors to determine whether a failure to disclose constituted actionable fraud or deceit].

As previously noted, the governing standard in a false advertising case is whether “ ‘ “ ‘members of the public are likely to be deceived.’ ” ’ ”  (Nationwide, supra, 9 Cal.5th at p. 308.)  If the challenged advertisement is likely to deceive, it is actionable “without individualized proof of deception, reliance and injury.”  (Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1288; see Prata v. Superior Court (2001) 91 Cal.App.4th 1128, 1137 [“The Legislature considered [the UCL’s] purpose so important that it authorized courts to order restitution without individualized proof of deception, reliance and injury if necessary to prevent the use or employment of an unfair practice.”], italics omitted.)

 

 

(…) Similarly, in Hrymoc v. Ethicon, Inc. (N.J. Super. Ct. App. Div. 2021) 467 N.J. Super. 42 (Hrymoc), certification granted October 19, 2021, 085547, a patient suffered severe medical complications after receiving a Prolift implant.  She sued Ethicon under New Jersey’s products liability law and a jury returned a verdict in her favor on design defect and failure-to-warn theories of liability.  (Id. at pp. 199–200.)

 

 

(…) The Kaiser, Hrymoc, Hammons, and Carlino decisions arose in other jurisdictions and the plaintiffs’ claims in those cases were predicated on legal theories and trial records different than those presented here.  However, each decision reveals a similar narrative:  Ethicon disseminated IFUs that were likely to deceive doctors because the IFUs falsified or omitted the full range, severity, duration, and cause of complications associated with Ethicon’s pelvic mesh products, as well as the potential irreversibility and catastrophic consequences of those complications.  The statement of decision and the appellate record in the present case tell precisely the same story.  Viewing the evidence in the light most favorable to the People, as the prevailing party, we conclude there was substantial evidence to support the trial court’s factual finding that Ethicon’s IFUs were likely to deceive doctors.

 

 

Substantial Evidence Supported the Findings Regarding Ethicon’s Written Marketing Communications, But Not its Oral Marketing Communications

 

However, unlike the trial court, we conclude the uniform nature of Ethicon’s sales representatives training does not, standing alone, give rise to a reasonable inference that every single one of Ethicon’s thousands of oral communications with doctors included false or misleading statements.  The mere fact a sales representative may have been trained in a particular way—even in a manner that promoted the disclosure of misleading information—reveals little, if anything, about the content of any particular conversation that may have occurred many months or years later.  Further, there is no evidence—at least none of which we are aware of—suggesting Ethicon’s sales representatives read or recited a uniform script, Ethicon’s IFUs, or Ethicon’s printed marketing materials during their oral communications with doctors.

 

 

We hasten to add that there is nothing inherently less problematic about a false or deceptive statement that is spoken aloud, as opposed to one that has been memorialized in writing.  In an appropriate case, where the content and deceptive nature of the oral statement is established, the speaker may be held liable for violating the UCL or FAL.  (See People v. Dollar Rent-A-Car Systems, Inc. (1989) 211 Cal.App.3d 119, 128–129 [the FAL’s prohibition against false or misleading advertising “extends to the use of false or misleading oral statements”].)  We merely conclude there was insufficient evidence in this case regarding the substance of Ethicon’s oral marketing communications; thus, there was insufficient evidence that these communications were likely to deceive their target audiences.

 

 

Substantial Evidence Supported the Finding that Ethicon’s Marketing Was Likely to Deceive Patients.

 

 

Overview of the Safe Harbor Defense  

 

Under the safe harbor defense, “specific legislation may limit the judiciary’s power to declare conduct unfair under the UCL.  If the Legislature has permitted certain conduct or considered a situation and concluded no action should lie, courts may not override that determination. When specific legislation provides a ‘safe harbor,’ plaintiffs may not use the general unfair competition law to assault that harbor.”  (Cel-Tech, supra, 20 Cal.4th at p. 182.)  Stated another way, the Attorney General or another UCL plaintiff may “not ‘plead around’ an ‘absolute bar to relief’ simply ‘by recasting the cause of action as one for unfair competition.’ ”  (Ibid.)

 

 

The FDA Did Not Create a Safe Harbor for Communications Related to the POP Products

 

The FDA’s limited review of the draft Prolift and Prolift+M IFUs—a review undertaken as part of the section 510(k) clearance process—did not create a safe harbor.  “To forestall an action under the unfair competition law, another provision or executive action, per our stated assumptions must actually ‘bar’  the action or clearly permit the conduct.”  (Cel-Tech, supra, 20 Cal.4th at p. 183; Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1379 [“to qualify for the ‘safe harbor’ rule, the defendant must show that a statute ‘explicitly prohibits liability for the defendant’s acts or omissions’ [citation] or ‘expressly precludes an action based on the conduct’ ”].)The FDA’s conduct during the clearance process did not clearly sanction or approve the final IFUs for non-510(k) purposes.  “ ‘The 510(k) process is focused on equivalence, not safety.’  ...  These determinations simply compare a post–1976 device to a pre–1976 device to ascertain whether the later device is no more dangerous and no less effective than the earlier device.’ ”  (Medtronic, Inc. v. Lohr (1996) 518 U.S. 470, 493; accord Kaiser, supra, 947 F.3d at p. 1018 [in products liability case, trial court properly excluded evidence that FDA cleared Prolift because the section 510(k) clearance process and FDA safety review serve different purposes].)

 

 

(…) The court found its calculation was likely an undercount because, for certain gaps of time, Ethicon did not have internal company data necessary for the Attorney General’s forensic accountant to calculate the number of deceptive IFUs and marketing communications that Ethicon disseminated.  These gaps of time were omitted from the violations count (fn. 16).

 

 

 

 

(California Court of Appeal, April 11, 2022, The People v. Johnson & Johnson, Docket No. D077945, Certified for Publication)

U.S. Court of Appeals for the Federal Circuit, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526

Trademark

Cancellation of Trademark Registrations

15 U.S.C. § 1064

Lexmark Analytical Framework

 

False Advertising Provided in 15 U.S.C. § 1125(a)

 

Standing v. Statutory Cause of Action

 

 

Appeal from the United States Patent and Trademark Office, Trademark Trial and Appeal Board in No. 92060308.

 

(…) We conclude that appellee SFM was entitled to bring and maintain a petition under 15 U.S.C. § 1064, the statutory cause of action for cancellation of trademark registrations, and that the Board did not otherwise abuse its discretion in imposing default judgment as a sanction. We affirm.

 

SFM filed a petition with the United States Patent and Trademark Office’s Trademark Trial and Appeal Board (“TTAB” or “Board”) to cancel Corcamore’s registration for SPROUT. J.A. 98–104.

 

(…) Corcamore moved to dismiss SFM’s petition for lack of standing under Rule 12(b)(6) of the Federal Rules of Civil Procedure. See J.A. 136–40. Corcamore argued that SFM lacked standing to bring a petition for cancellation of a registered trademark, citing the analytical framework established by the Supreme Court in Lexmark International, Inc. v. Static Control Components, Inc., 572 U.S. 118 (2014), for determining whether the requirements for maintaining a statutory cause of action have been satisfied.

 

(…) We first address the standing issue.

 

In this appeal, we review de novo whether SFM pleaded sufficient facts to establish entitlement to challenge Corcamore’s registered trademark under § 1064.

 

We first observe that there exists confusion in the law stirred by the inconsistent use of the term “standing.” As Justice Scalia observed, certain issues often discussed in terms of “standing” are more appropriately viewed as requirements for establishing a statutory cause of action. Lexmark, 572 U.S. at 128 n.4. That is the case here. To be clear, this appeal does not involve the traditional legal notions of Article III standing. This appeal focuses instead on the requirements that a party must satisfy to bring or maintain a statutory cause of action, such as a petition to cancel a registered trademark under 15 U.S.C. § 1064.

 

We hold that the Lexmark analytical framework is the applicable standard for determining whether a person is eligible under § 1064 to bring a petition for the cancellation of a trademark registration. However, because we discern no meaningful, substantive difference between the analytical frameworks expressed in Lexmark and Empresa Cubana, we do not agree that the Board reached the wrong result in this case.

 

In Lexmark, the Supreme Court established two requirements for determining whether a party is entitled to bring or maintain a statutory cause of action: a party must demonstrate (i) an interest falling within the zone of interests protected by the statute and (ii) proximate causation. 572 U.S. at 129–34. The Court explained that those two requirements “supply the relevant limits on who may sue” under a statutory cause of action. Id. at 134. The Court made clear that the zone-of-interests requirement applies to all statutory causes of action, and that proximate causation generally applies to all statutory causes of action. Id. at 129, 133.

 

In Lexmark, the Court addressed the cause of action for false advertising provided in 15 U.S.C. § 1125(a). Id. at 129–37. The Court held that in order for a person to “come within a zone of interests in a suit for false advertising under § 1125(a), a plaintiff must allege an injury to a commercial interest in reputation or sales.” Id. at 131–32. The Court explained that the zone-of-interests test is “not especially demanding,” and that “the benefit of any doubt goes to the plaintiff.” Id. at 130.

 

(…) While our precedent does not describe the causation requirement as one of “proximate causation,” it nonetheless requires petitioner’s belief of damage to have “a sufficiently close connection,” Lexmark, 572 U.S. at 133, to the registered trademark at issue.

 

 

(U.S. Court of Appeals for the Federal Circuit, October 27, 2020, Corcamore, LLC v. SFM LLC, Docket No. 2019-1526)

McGill v. Citibank, S224086

Unfair competition: False advertising: Injunction:

The UCL addresses “unfair competition,” which “means and includes any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by the false advertising law.”  (Bus. & Prof. Code, § 17200.)  Its purpose “is to protect both consumers and competitors by promoting fair competition in commercial markets for goods and services.”  (Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 949.)  “Actions for relief” under the UCL may be brought by various government officials and “by a person who has suffered injury in fact and has lost money or property as a result of the unfair competition.”  (Bus. & Prof. Code, § 17204.)  “The primary form of relief available under the UCL to protect consumers from unfair business practices is an injunction.”  (In re Tobacco II Cases (2009) 46 Cal.4th 298, 319.)  In this regard, the UCL provides:  “Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction.  The court may make such orders or judgments . . . as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.”  (Bus. & Prof. Code, § 17203.)

The false advertising law makes unlawful “untrue or misleading” statements designed to “induce the public to enter into any obligation” to purchase various goods and services.  (Bus. & Prof. Code, § 17500.)  Like the UCL, the false advertising law allows an action for relief to be brought by specified government officials and “by any person who has suffered injury in fact and has lost money or property as a result of a violation.”  (Bus. & Prof. Code, § 17535.)  It also authorizes injunctive relief, stating:  “Any person, corporation, firm, partnership, joint stock company, or any other association or organization which violates or proposes to violate this chapter may be enjoined by any court of competent jurisdiction.  The court may make such orders or judgments . . . as may be necessary to prevent the use or employment by any person, corporation, firm, partnership, joint stock company, or any other association or organization of any practices which violate this chapter, or which may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of any practice in this chapter declared to be unlawful.”  (Ibid.)

(…) Do not preclude a private individual who has “suffered injury in fact and has lost money or property as a result of” a violation of the UCL or the false advertising law (Bus. & Prof. Code, §§ 17204, 17535) — and who therefore has standing to file a private action — from requesting public injunctive relief in connection with that action.  A person who meets these requirements is “filing” the “lawsuit” or “action” on his or her own behalf, not “on behalf of the general public.”  (Prop. 64, § 1, subds. (b)(4), (f))  This remains true even if the person seeks, as one of the requested remedies, injunctive relief “the primary purpose and effect of” which is “to prohibit and enjoin conduct that is injurious to the general public.”  (Broughton, 21 Cal.4th at p. 1077.)  We find nothing in the ballot materials for Proposition 64 suggesting that voters, in stating their intent “that only the California Attorney General and local public officials be authorized to file and prosecute actions on behalf of the general public” (Prop. 64, § 1, subd. (f)), meant to preclude individuals who meet the standing requirements for bringing a private action from requesting such relief.

(Cal. S.C., April 6, 2017, McGill v. Citibank, S224086).

Concurrence déloyale :

La législation californienne contre la concurrence déloyale prévoit l'injonction comme moyen de choix pour mettre fin à un acte de concurrence déloyale ou de publicité mensongère. Les moyens prévus par dite législation sont à disposition de l'autorité et des particuliers lésés.

9th Court of Appeals, Multi Time Machine v. Amazon.com, Opinion by Judge Silverman, Dissent by Judge Bea, No. 13-55575

Advertisement: Consumer deception: Summary judgment:

(…) In the similar context of evaluating claims of consumer deception when

dealing with false advertising claims, we have at least twice concluded – after a review of the label or advertisement at issue – that there was no likelihood of consumer deception as a matter of law because no reasonable consumer could have been deceived by the label/advertisement at issue in the manner alleged by the plaintiff. See, e.g., Davis v. HSBC Bank, 691 F.3d 1152, 1162 (9th Cir. 2012); Freeman v. Time, Inc., 68 F.3d 285, 289–90 (9th Cir. 1995).

(9th Court of Appeals, October 21, 2015, Multi Time Machine v. Amazon.com, Opinion by Judge Silverman, Dissent by Judge Bea, No. 13-55575).

Un Tribunal détermine que la publicité litigieuse ne saurait tromper un consommateur raisonnable de la manière décrite par le demandeur. De la sorte, la vraisemblance d'une tromperie du consommateur doit être niée, ce qui peut permettre au Tribunal de rendre un Jugement sommaire.

Zhang v. Super. Ct., S178542

Insurance law: the question is whether insurance practices that violate the UIPA can support a UCL action? This case arises at the intersection of the Unfair Competition Law (UCL; Bus. & Prof. Code, § 17200 et seq.) and the Unfair Insurance Practices Act (UIPA; Ins. Code, § 790 et seq.).  The question is whether insurance practices that violate the UIPA can support a UCL action.  In Moradi-Shalal v. Fireman’s Fund Ins. Companies (1988) 46 Cal.3d 287, 304 (Moradi-Shalal) we held that when the Legislature enacted the UIPA, it did not intend to create a private cause of action for commission of the various unfair practices listed in Insurance Code section 790.03, subdivision (h).  In the wake of Moradi-Shalal, a split has developed in the Courts of Appeal regarding the viability of UCL claims based on insurer conduct covered by section 790.03.

We hold that Moradi-Shalal does not preclude first party UCL actions based on grounds independent from section 790.03, even when the insurer’s conduct also violates section 790.03.  We have made it clear that while a plaintiff may not use the UCL to “plead around” an absolute bar to relief, the UIPA does not immunize insurers from UCL liability for conduct that violates other laws in addition to the UIPA.  (Manufacturers Life Ins. Co. v. Superior Court (1995) 10 Cal.4th 257, 283-284 (Manufacturers Life); see also Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 182-183 (Cel-Tech); Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43 (Quelimane); Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 Cal.4th 553, 565 (Stop Youth Addiction).)

Here, plaintiff alleges causes of action for false advertising and insurance bad faith, both of which provide grounds for a UCL claim independent from the UIPA.  Allowing her also to sue under the UCL does no harm to the rule established in Moradi-Shalal.  The Moradi-Shalal court made it plain that while violations of section 790.03(h) are themselves not actionable, insureds retain other causes of action against insurers, including common law bad faith claims.  Furthermore, UCL actions by private parties are equitable proceedings, with limited remedies.  They are thus quite distinct from the claims for damages with which Moradi-Shalal was concerned. (A first party claim is one brought by the insured against the insurer.  Claims by injured parties against a liable party’s insurer are third party claims.  (See Zephyr Park v. Superior Court (1989) 213 Cal.App.3d 833, 835, fn. 2.)  Our holding here is confined to the first party context.  Third party claims raise distinct analytical and policy issues, which are not involved in this case.  (See Moradi-Shalal, supra, 46 Cal.3d at pp. 301-304.)) (Cal. S.Ct., 01.08.2013, Zhang v. Super. Ct., S178542).

Droit des assurances (application du droit californien) : ce cas concerne la possibilité pour une partie qui s’estime lésée par les pratiques (déloyales) d’une compagnie d’assurance de l’actionner sur la base de la loi relative à la concurrence déloyale, considérant que les pratiques illicites commises par une compagnie d’assurance sont avant tout régies par la loi sur les pratiques d’assurance déloyales, dite loi ne prévoyant pas de droit d’action par un particulier contre les compagnies d’assurance. La réponse est qu’il est possible pour un particulier d’agir contre une compagnie d’assurance sur la base d’autres dispositions légales que la loi sur les pratiques d’assurance ou sur la base de principes découlant de la common law. Cela même si les comportements prohibés par ces autres bases légales sont également prohibés par la loi sur les pratiques d’assurance déloyales. Dans la présente espèce, le demandeur fonde ses prétentions sur des allégations de publicité mensongère et de mauvaise foi. Son droit d’action direct est préservé : ces deux moyens sont prévus par la loi sur la concurrence déloyale indépendamment de la loi sur les pratiques d’assurance. L’action basée sur la mauvaise foi découle en outre de la common law.