BILL NUMBER: SB 122 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY JULY 16, 2003
AMENDED IN ASSEMBLY JULY 1, 2003
AMENDED IN SENATE MAY 15, 2003
AMENDED IN SENATE MAY 12, 2003
AMENDED IN SENATE MAY 6, 2003
INTRODUCED BY Senator Escutia
FEBRUARY 4, 2003
An act to add Sections 17204.6, 17204.7, 17204.8, and 17204.9 to
the Business and Professions Code, relating to unfair competition.
LEGISLATIVE COUNSEL'S DIGEST
SB 122, as amended, Escutia. Private enforcement actions.
Existing law provides remedies for unfair competition that may be
enforced by a governmental agency, including the district attorney,
or by a private party acting for the interests of itself, its
members, or the general public.
This bill would require, subject to specified exceptions, the
court to review and approve attorney's fees in an unfair competition
action brought or proposed to be brought by a private party on behalf
of the general public. The bill would also require that the
plaintiff in those actions submit a copy of the complaint to the
Judicial Council State Bar of
California. The bill would specify certain equitable remedies
applicable to all unfair competition actions and would set forth
principles for joining these actions. The bill would make its
provisions contingent upon AB 95 being enacted and becoming effective
on or before January 1, 2004.
Vote: majority. Appropriation: no. Fiscal committee: no.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 17204.6 is added to the Business and
Professions Code, to read:
17204.6. (a) (1) A court shall review and approve any
attorney's fees proposed to be paid in connection with a private
action or a private cause of action brought, or proposed to be
brought, under this chapter on behalf of the general public. The
request to review and approve the fees shall be made upon noticed
motion. The court shall approve an award of attorney's fees for a
plaintiff who prevails in the action against one or more defendants
if an award of attorney's fees is authorized by a statute or if the
award satisfies the requirements of Section 1021.5 of the Code of
Civil Procedure.
(2) (A) When any attorney's fees are proposed to be paid in
compromise or settlement of a private action or a private cause of
action proposed to be brought under this chapter on behalf of the
general public that has not been filed with the court, the potential
plaintiff shall file and serve on all parties the following:
(i) A complaint titled "Complaint re: Settlement of an Action
under Section 17200 of the Business and Professions Code" describing
the cause of action proposed to be brought under this chapter.
(ii) A special motion for review and approval of the proposed
fees.
(B) A potential defendant who is a party to the compromise or
settlement is not required to file an answer to the complaint but may
file a response to the special motion upon payment of a motion
filing fee pursuant to subdivision (a) of Section
26830 of the Government Code.
(C) Upon hearing the motion, the court shall approve an award of
attorney's fees to the potential plaintiff against one or more of the
potential defendants if an award of attorney's fees is authorized by
a statute or if the award satisfies the requirements of Section
1021.5 of the Code of Civil Procedure.
(3) No attorney's fees may be paid by a defendant or a potential
defendant in compromise or settlement of an action or proposed action
brought on behalf of the public under this chapter unless the fees
have been reviewed and approved pursuant to a motion under paragraph
(1) or (2). If not approved by the court, an agreement to pay any
attorney's fees is void and unenforceable.
(4) The plaintiff or the potential plaintiff is not required to
submit
(4) The court shall review in camera any information
submitted by the plaintiff or the potential plaintiff to
support the award of attorney's fees pursuant to this section if the
information is protected by the attorney-client or attorney work
product privilege.
(5) An attorney who receives attorney's fees in an action or
proposed action under this chapter without submitting the proposed
attorney's fees for review and approval by the court pursuant to
paragraph (1) or (2) is subject to disciplinary action by the State
Bar of California.
(b) At the time of filing a private cause of action under this
chapter on behalf of the general public, the plaintiff shall notify
and submit a copy of the complaint to the Judicial Council
State Bar of California. Any attorney who
fails to comply with this subdivision is subject to disciplinary
action by the State Bar of California.
(c) Subdivision (a) shall not require a court to review and
approve an award of attorney's fees if
when the fees are agreed upon by the parties as part of the
compromise or settlement of an action or proposed action brought by a
labor organization or by a representative of a labor organization or
by a joint labor management committee established pursuant to the
federal Labor Management Corporation Act of 1978 (29 U.S.C. Sec.
175a) or by an established employment or civil rights organization on
behalf of employees or the general public. For purposes of this
section, an employment or civil rights organization shall be in
existence for a minimum of five years in order to qualify for an
exemption and have as one of its purposes the vindication of labor,
civil, constitutional or human rights.
SEC. 2. Section 17204.7 is added to the Business and Professions
Code, to read:
17204.7. (a) In addition to the relief authorized by Section
17203, if the court finds that a defendant has engaged in an
unlawful, unfair, or fraudulent business act or practice in violation
of this chapter and that the defendant has derived profits or ill
gotten gains from that act or practice, the court may order any
appropriate equitable relief to remedy the act or practice. A court
shall assure that any monetary relief in excess of the restitution
paid by a defendant shall be distributed as a fluid recovery or cy
pres award pursuant to this section.
(b) Prior to the entry of any judgment or order for relief
pursuant to this section, the court shall determine the total amount
of monetary relief payable as the result of the defendant's unlawful,
unfair, or fraudulent business act or practice. The court shall set
a date when the parties shall report to the court the total amount
actually paid in restitution to members of the public. After the
report is received, the court shall amend the judgment to direct the
defendant to pay the sum of the unpaid residue to nonprofit
organizations or foundations to support projects consistent with the
objectives and purposes of the underlying action or to promote
justice for all. The court shall ensure that this distribution
provide provides substantial benefit to
California consumers.
SEC. 3. Section 17204.8 is added to the Business and Professions
Code, to read:
17204.8. (a) All persons may be joined in one action as
defendants if there is asserted against them:
(1) Any right to relief jointly, severally, or in the alternative,
in respect of or arising out of the same transaction, occurrence, or
series of transactions or occurrences and if any question of law or
fact common to all these persons will arise in the action; or
(2) A claim, right, or interest adverse to them in the property or
controversy which is the subject of the action.
(b) It is not necessary that each defendant be interested as to
every cause of action or as to all relief prayed for. Judgment may
be given against one or more defendants according to their respective
liabilities.
(c) Where the plaintiff is in doubt as to the person from whom he
or she is entitled to redress, he or she may join two or more
defendants, with the intent that the question as to which, if any, of
the defendants is liable, and to what extent, may be determined
between the parties.
(d) The fact that individual defendants who are not associates or
affiliates of each other are engaged in the same or similar types of
businesses and are alleged to have violated the same or similar laws
or regulations shall not, in itself, constitute a basis for joinder
under this chapter.
SEC. 4. Section 17204.9 is added to the Business and Professions
Code, to read:
17204.9. A court in reviewing an action brought pursuant to this
chapter may, in the interests of justice, order consolidation or
coordination of actions.
SEC. 5. The provisions of subdivision (d) of Section 17204.8 of
the Business and Professions Code added by this act do not constitute
a change in, but are declaratory of, existing law.
SEC. 6. This act shall become operative only if Assembly Bill 95
of the 2003-04 Regular Session is enacted and becomes effective on or
before January 1, 2004.