Arbitration News

Our Supreme Court Has Left Unresolved The Question Whether A Plaintiff Seeking Restitution As A Private Attorney

Our Supreme Court has left unresolved the question whether a plaintiff seeking restitution as a private attorney general under the UCL can be compelled to arbitrate when the plaintiff is not a party to the arbitration agreement but is acting on behalf of
injured consumers who are parties to the arbitration agreement. (Cruz v. PacifiCare Health Systems, Inc., supra, 30 Cal.4th at p. 320, fn. 7.) We observe that the question has little practical significance, because the same factors that preclude a private attorney general from being compelled to arbitrate also serve to limit the plaintiff’s relief in court.While civil penalties may be assessed when the action is initiated by a governmental prosecutor (Bus. & Prof. Code, § 17206), monetary damages are not recoverable under the UCL. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266.) A private
plaintiff is limited to injunctive relief or restitution, i.e., the return of money obtained through an unfair business practice (Bus. & Prof. Code, § 17203). And restitution requires an ownership or vested interest in the money; nonrestitutionary disgorgement of profits is not available to an individual acting as a private attorney general under the UCL. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149-1152.) As the Supreme Court explained, “The breadth of standing under this act allows any consumer to combat unfair competition by seeking an injunction against unfair business
practices. Actual direct victims of unfair competition may obtain restitution as well.”(Id. at p. 1152; italics added.) In the present case, plaintiff Tucker is not an actual direct victim of AT&T Wireless’s early termination fee and is acting only as a private attorney  general. She has no monetary remedies under the UCL, even assuming arguendo that her claims remain viable. (See fn. 4, ante.) At most, her remedy is injunctive relief, and, as we have said, the claims for injunctive relief are not arbitrable.

Contact our Vermont Arbitration Lawyer Now!

	Did You Know?
	There is one drawback to arbitration. There are no guarantees that arbitration will be a fair process. Once a decision is rendered in a binding arbitration, the parties are generally stuck with that decision. Without the right to appeal, there is always the risk of being subject to the whims and prejudices of the arbitrator. Overall, this is probably the biggest drawback to the arbitration process.