Amended in Senate March 16, 2015

Senate BillNo. 202


Introduced by Senator Hernandez

February 10, 2015


An actbegin insert to amend Section 1770 of the Civil Code,end insert relating to controlled substances.

LEGISLATIVE COUNSEL’S DIGEST

SB 202, as amended, Hernandez. Controlledbegin delete substances.end deletebegin insert substances: unfair or deceptive practices.end insert

Existing law makes it a misdemeanor to sell, dispense, distribute, furnish, administer, or give, or offer to sell, dispense, distribute, furnish, administer, or give, or possess for sale, any synthetic stimulant compound or any specified synthetic stimulant derivative. Existing law also makes it a misdemeanor to sell, dispense, distribute, furnish, administer, or give, or offer to sell, dispense, distribute, furnish, administer, or give, or possess for sale, any synthetic cannabinoid compound or any synthetic cannabinoid derivative. Existing law, beginning January 1, 2016, makes it an infraction to use or possess those drugs.

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This bill would state the intent of the Legislature to enact legislation relating to the deceptive packaging and marketing of synthetic drugs.

end delete
begin insert

Existing law, the Consumers Legal Remedies Act, makes unlawful certain acts identified as unfair methods of competition and unfair or deceptive acts or practices undertaken by any person in a transaction intended to result or which results in the sale or lease of goods to any consumer. Existing law, among other remedies, authorizes consumer class action lawsuits and injunctive relief for alleged violations of the act and provides for senior citizens and disabled persons to receive an award of punitive damages and attorney’s fees, as specified, for successful actions brought under these provisions.

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begin insert

This bill would add to that list of unlawful acts the act of advertising or offering for sale products that contain synthetic cannabinoids or synthetic stimulants, as defined.

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Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.

The people of the State of California do enact as follows:

P2    1begin insert

begin insertSECTION 1.end insert  

end insert

begin insertSection 1770 of the end insertbegin insertCivil Codeend insertbegin insert is amended to
2read:end insert

3

1770.  

(a) The following unfair methods of competition and
4unfair or deceptive acts or practices undertaken by any person in
5a transaction intended to result or which results in the sale or lease
6of goods or services to any consumer are unlawful:

7(1) Passing off goods or services as those of another.

8(2) Misrepresenting the source, sponsorship, approval, or
9certification of goods or services.

10(3) Misrepresenting the affiliation, connection, or association
11with, or certification by, another.

12(4) Using deceptive representations or designations of
13geographic origin in connection with goods or services.

14(5) Representing that goods or services have sponsorship,
15approval, characteristics, ingredients, uses, benefits, or quantities
16which they do not have or that a person has a sponsorship,
17approval, status, affiliation, or connection which he or she does
18not have.

19(6) Representing that goods are original or new if they have
20deteriorated unreasonably or are altered, reconditioned, reclaimed,
21used, or secondhand.

22(7) Representing that goods or services are of a particular
23standard, quality, or grade, or that goods are of a particular style
24or model, if they are of another.

25(8) Disparaging the goods, services, or business of another by
26false or misleading representation of fact.

27(9) Advertising goods or services with intent not to sell them
28as advertised.

P3    1(10) Advertising goods or services with intent not to supply
2reasonably expectable demand, unless the advertisement discloses
3a limitation of quantity.

4(11) Advertising furniture without clearly indicating that it is
5unassembled if that is the case.

6(12) Advertising the price of unassembled furniture without
7clearly indicating the assembled price of that furniture if the same
8furniture is available assembled from the seller.

9(13) Making false or misleading statements of fact concerning
10reasons for, existence of, or amounts of price reductions.

11(14) Representing that a transaction confers or involves rights,
12remedies, or obligations which it does not have or involve, or
13which are prohibited by law.

14(15) Representing that a part, replacement, or repair service is
15needed when it is not.

16(16) Representing that the subject of a transaction has been
17supplied in accordance with a previous representation when it has
18not.

19(17) Representing that the consumer will receive a rebate,
20discount, or other economic benefit, if the earning of the benefit
21is contingent on an event to occur subsequent to the consummation
22of the transaction.

23(18) Misrepresenting the authority of a salesperson,
24representative, or agent to negotiate the final terms of a transaction
25with a consumer.

26(19) Inserting an unconscionable provision in the contract.

27(20) Advertising that a product is being offered at a specific
28price plus a specific percentage of that price unless (A) the total
29price is set forth in the advertisement, which may include, but is
30not limited to, shelf tags, displays, and media advertising, in a size
31larger than any other price in that advertisement, and (B) the
32specific price plus a specific percentage of that price represents a
33markup from the seller’s costs or from the wholesale price of the
34product. This subdivision shall not apply to in-store advertising
35by businesses which are open only to members or cooperative
36organizations organized pursuant to Division 3 (commencing with
37Section 12000) of Title 1 of the Corporations Code where more
38than 50 percent of purchases are made at the specific price set forth
39in the advertisement.

P4    1(21) Selling or leasing goods in violation of Chapter 4
2(commencing with Section 1797.8) of Title 1.7.

3(22) (A) Disseminating an unsolicited prerecorded message by
4telephone without an unrecorded, natural voice first informing the
5person answering the telephone of the name of the caller or the
6organization being represented, and either the address or the
7telephone number of the caller, and without obtaining the consent
8of that person to listen to the prerecorded message.

9(B) This subdivision does not apply to a message disseminated
10to a business associate, customer, or other person having an
11established relationship with the person or organization making
12the call, to a call for the purpose of collecting an existing
13obligation, or to any call generated at the request of the recipient.

14(23) The home solicitation, as defined in subdivision (h) of
15Section 1761, of a consumer who is a senior citizen where a loan
16is made encumbering the primary residence of that consumer for
17the purposes of paying for home improvements and where the
18transaction is part of a pattern or practice in violation of either
19subsection (h) or (i) of Section 1639 of Title 15 of the United States
20Code or paragraph (e) of Section 226.32 of Title 12 of the Code
21of Federal Regulations.

22A third party shall not be liable under this subdivision unless
23(A) there was an agency relationship between the party who
24engaged in home solicitation and the third party or (B) the third
25party had actual knowledge of, or participated in, the unfair or
26deceptive transaction. A third party who is a holder in due course
27under a home solicitation transaction shall not be liable under this
28subdivision.

29(24) (A) Charging or receiving an unreasonable fee to prepare,
30aid, or advise any prospective applicant, applicant, or recipient in
31the procurement, maintenance, or securing of public social services.

32(B) For purposes of this paragraph, the following definitions
33shall apply:

34(i) “Public social services” means those activities and functions
35of state and local government administered or supervised by the
36State Department of Health Care Services, the State Department
37of Public Health, or the State Department of Social Services, and
38involved in providing aid or services, or both, including health
39care services, and medical assistance, to those persons who,
P5    1because of their economic circumstances or social condition, are
2in need of that aid or those services and may benefit from them.

3(ii) “Public social services” also includes activities and functions
4administered or supervised by the United States Department of
5Veterans Affairs or the California Department of Veterans Affairs
6involved in providing aid or services, or both, to veterans, including
7pension benefits.

8(iii) “Unreasonable fee” means a fee that is exorbitant and
9disproportionate to the services performed. Factors to be
10considered, when appropriate, in determining the reasonableness
11of a fee, are based on the circumstances existing at the time of the
12service and shall include, but not be limited to, all of the following:

13(I) The time and effort required.

14(II) The novelty and difficulty of the services.

15(III) The skill required to perform the services.

16(IV) The nature and length of the professional relationship.

17(V) The experience, reputation, and ability of the person
18providing the services.

19(C) This paragraph shall not apply to attorneys licensed to
20practice law in California, who are subject to the California Rules
21of Professional Conduct and to the mandatory fee arbitration
22provisions of Article 13 (commencing with Section 6200) of
23Chapter 4 of Division 3 of the Business and Professions Code,
24when the fees charged or received are for providing representation
25in administrative agency appeal proceedings or court proceedings
26for purposes of procuring, maintaining, or securing public social
27services on behalf of a person or group of persons.

28(25) (A) Advertising or promoting any event, presentation,
29seminar, workshop, or other public gathering regarding veterans’
30benefits or entitlements that does not include the following
31statement in the same type size and font as the term “veteran” or
32any variation of that term:

33(i) “I am not authorized to file an initial application for Veterans’
34Aid and Attendance benefits on your behalf, or to represent you
35before the Board of Veterans’ Appeals within the United States
36Department of Veterans Affairs in any proceeding on any matter,
37including an application for such benefits. It would be illegal for
38me to accept a fee for preparing that application on your behalf.”
39The requirements of this clause do not apply to a person licensed
40to act as an agent or attorney in proceedings before the Agency of
P6    1Original Jurisdiction and the Board of Veterans’ Appeals within
2the United States Department of Veterans Affairs when that person
3is offering those services at the advertised event.

4(ii) The statement in clause (i) shall also be disseminated, both
5orally and in writing, at the beginning of any event, presentation,
6seminar, workshop, or public gathering regarding veterans’ benefits
7or entitlements.

8(B) Advertising or promoting any event, presentation, seminar,
9workshop, or other public gathering regarding veterans’ benefits
10or entitlements which is not sponsored by, or affiliated with, the
11United States Department of Veterans Affairs, the California
12Department of Veterans Affairs, or any other congressionally
13chartered or recognized organization of honorably discharged
14members of the Armed Forces of the United States, or any of their
15auxiliaries that does not include the following statement, in the
16same type size and font as the term “veteran” or the variation of
17that term:


19“This event is not sponsored by, or affiliated with, the United
20States Department of Veterans Affairs, the California Department
21of Veterans Affairs, or any other congressionally chartered or
22recognized organization of honorably discharged members of the
23Armed Forces of the United States, or any of their auxiliaries.
24None of the insurance products promoted at this sales event are
25endorsed by those organizations, all of which offer free advice to
26veterans about how to qualify and apply for benefits.”


28(i) The statement in this subparagraph shall be disseminated,
29both orally and in writing, at the beginning of any event,
30presentation, seminar, workshop, or public gathering regarding
31veterans’ benefits or entitlements.

32(ii) The requirements of this subparagraph shall not apply in a
33case where the United States Department of Veterans Affairs, the
34California Department of Veterans Affairs, or other congressionally
35chartered or recognized organization of honorably discharged
36members of the Armed Forces of the United States, or any of their
37auxiliaries have granted written permission to the advertiser or
38promoter for the use of its name, symbol, or insignia to advertise
39or promote the event, presentation, seminar, workshop, or other
40public gathering.

P7    1(26) Representing that a product is made in California by using
2a Made in California label created pursuant to Section 12098.10
3of the Government Code, unless the product complies with Section
412098.10 of the Government Code.

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5(27) Advertising, distributing, or selling a product for use by a
6consumer that contains synthetic cannabinoids, as defined in
7Section 11357.5 of the Health and Safety Code, or synthetic
8stimulants, as defined in Section 11375.5 of the Health and Safety
9Code.

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10(b) (1) It is an unfair or deceptive act or practice for a mortgage
11broker or lender, directly or indirectly, to use a home improvement
12contractor to negotiate the terms of any loan that is secured,
13whether in whole or in part, by the residence of the borrower and
14which is used to finance a home improvement contract or any
15portion thereof. For purposes of this subdivision, “mortgage broker
16or lender” includes a finance lender licensed pursuant to the
17California Finance Lenders Law (Division 9 (commencing with
18Section 22000) of the Financial Code), a residential mortgage
19lender licensed pursuant to the California Residential Mortgage
20Lending Act (Division 20 (commencing with Section 50000) of
21the Financial Code), or a real estate broker licensed under the Real
22Estate Law (Division 4 (commencing with Section 10000) of the
23Business and Professions Code).

24(2) This section shall not be construed to either authorize or
25prohibit a home improvement contractor from referring a consumer
26to a mortgage broker or lender by this subdivision. However, a
27home improvement contractor may refer a consumer to a mortgage
28lender or broker if that referral does not violate Section 7157 of
29the Business and Professions Code or any other provision of law.
30A mortgage lender or broker may purchase an executed home
31improvement contract if that purchase does not violate Section
327157 of the Business and Professions Code or any other provision
33of law. Nothing in this paragraph shall have any effect on the
34application of Chapter 1 (commencing with Section 1801) of Title
352 to a home improvement transaction or the financing thereof.

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36

SECTION 1.  

It is the intent of the Legislature to enact
37legislation relating to the deceptive packaging and marketing of
38synthetic drugs.

end delete


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