Procedural Posture 2
Plaintiff investor sought review of a judgment from the Superior Court of Santa Clara County (California), which dismissed a class action asserting violation of the unfair competition law (UCL), Bus. & Prof. Code, § 17200 et seq., after sustaining the demurrer of defendants, an issuer of stock research reports and its former employee.
Overview:
The complaint alleged the issuance of biased stock research reports to gain favor with investment banking clients, to the detriment of investors. The complaint sought class certification, an injunction, disgorgement of profits, and other relief. The trial court held that the UCL did not authorize nonrestitutionary disgorgement. The court, in affirming, stated that the remedy of nonrestitutionary disgorgement was not available in statutory unfair competition cases, even those brought as class actions. Although a trial court could certify a UCL claim as a class action under the authority of Bus. & Prof. Code, § 17203, when the requirements of Code Civ. Proc., § 382, were met, class action status could not enlarge the remedies available or otherwise alter the parties' underlying substantive rights. The UCL did not permit nonrestitutionary fluid class recovery. The investor's challenge to the trial court's denial of injunctive relief, which was raised for the first time in his reply brief on appeal, was procedurally foreclosed. The court noted that, in any event, there was no basis for injunctive relief because the record showed that the alleged wrongful practices had ended.
Outcome
The court affirmed the trial court's judgment.