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Fulwider Patton LLP Scores Victory In Prop 64 Case

Judge Dismisses Class Action Complaint Against Scat Enterprises, World’s Largest Maker of Racing Crankshafts, Ruling That Plaintiff Suffered No Injury

LOS ANGELES -- In a ruling that could have far reaching implications for California companies targeted by costly class action suits for unfair business practices, the Hon. Victoria Chaney, Judge of the Los Angeles Superior Court, granted Fulwider Patton LLP's Motion for Judgment on the Pleadings, dismissing an Arizona resident's Complaint for false advertising and unfair business practices under California's Unfair Competition Law, Business and Professions Code section 17200 et seq. (“UCL") against Fulwider’s client SCAT Enterprises of Redondo Beach, California.

On November 2, 2004, California voters overwhelmingly passed Proposition 64, which sets a higher standard for plaintiffs filing claims under California's UCL. The new standard requires that a plaintiff "has suffered an injury in fact and has lost money or property as a result of [the defendant's alleged] unfair competition." In a matter of first impression, the Court ruled that the meaning of this language, in the context of false advertising claims, requires that a plaintiff actually relied on the allegedly deceptive advertising and suffered injury in fact and lost money or property because of that reliance. Judge Chaney also ruled that Proposition 64 applies to cases such as this, which were filed before the passage of the Proposition.

Finding that the plaintiff failed to allege the elements required under the UCL as amended by Proposition 64, Judge Chaney dismissed the plaintiff's complaint.