CC - Item 8B - AB 69 - Reform of Unfair Competition Law - Box 070~ l
Il
TO: HONORABLE MAYOR
AND MEMBERS
ROSEMEAAD CITY COUNCIL
FROM: BILL CR&E/ , CITY MANAGER
DATE: APRIL 22, 2003
RE: . AB 69 (CORREA) - REFORM OF UNFAIR COMPETITION LAW - SUPPORT
Attached for the City Council's review is a copy of AB 69 (Correa), current bill status, and complete
bill history for this measure to reform the state's Unfair Competition Law.
At your January 28 s meeting, the City Council supported reform of this important state consumer
protection law, in order to reduce the possibility for further abuses and restrict frivolous and
extortionist lawsuits. Additionally, staff and the City's legislative advocate were directed to seek
sponsors for legislative reform.
Chairman Lou Correa (Santa Ana-D), of the Assembly Business and Professions Committee, has
introduced legislation that is designed to restrict extortionist-type lawsuits, like those that recently hit
local restaurant and auto repair businesses.
RECOMMENDATION:
It is recommended that the City Council support AB 69 (Correa).
ODUNCIL AGGENDA
APR 2 2 2003
CC-13
ITEM No.
AB 69 Assembly Bill - AMENDED
BILL NUMBER: AS 69 AMENDED
BILL TEXT
AMENDED IN ASSEMBLY APRIL 3, 2003
INTRODUCED BY Assembly Member Correa
DECEMBER 11, 2002
An act to add Chapter 6 (commencing with Section 17300) to
Part 2 of Division 7 of the Business and Professions Code,
relating to business.
LEGISLATIVE COUNSEL'S DIGEST
AS 69, as amended, Correa. Business: unfair competition.
- Thie 19 1 weu!4
Existing law provides remedies for acts of unfair competition, as
defined, that may be bought by the Attorney General or other
designated public governmental law agencies or by a private person
acting for the interest of itself, its members, or the general
public.
This bill would impose specified requirements on an unfair
competition action brought on or after January 1, 2004, by a private
person acting for the interests of the general public, which the bill
would designate as a representative cause of action. The bill would
require that a representative cause of action be verified and
accompanied by a statement under penalty of perjury attesting to
specified information. The bill would impose additional
requirements, including notification of specified agencies of the
filing of a representative cause of action. The bill would prohibit
a private person acting for the interests of the general public from
soliciting a settlement or resolution of an alleged act of unfair
competition without first filing a complaint with the court.
By adding new perjury crimes, the bill would impose a
state-mandated local program.
The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
This bill would provide that no reimbursement is required by this
act for a specified reason.
Vote: majority. Appropriation: no. Fiscal committee:
148 yes State-mandated local program:
Re yes
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. The Legislature finds and declares the following:
(a) The provisions of law in Chapter 5 (commencing with Section
17200) of Part 2 of Division 7 of the Business and
Professions Code (hereafter the unfair competition law), are intended
to protect consumers and the businesses that serve them from fraud
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AB 69 Assembly Bill - AMENDED
, misconduct, and deception in the advertising and
practice of commerce.
(b) The unfair competition law is an important tea!
provision of law that has provided great benefit
to the people of California in -;;•_'_t_-_;
preventing, halting, and remedying consumer and
public market abuses.
(c) Representative actions by private attorneys -~~,E
e€ brought for the primary purpose of protecting
consumers are a valuable component of the unfair competition law and
permit appropriate enforcement of the law when public entities lack
the resources to do so.
(d) --any= The improper or unethical
use of the unfair competition law damages the legitimacy and
undermines the original intent of that law. These abuses
a36e- hamper the ability of legitimate businesses to operate
efficiently and provide the jobs, goods, prices, and
services ee494 desired by the
consumers of this state.
(e) Law-abiding business owners of California have a right to
ampeet reasonable protection from unlawful,
unethical, repetitive, -e-1 and
disproportionate lawsuits or settlement demands when the
public good has not been appreciably endangered.
SEC. 2. Chapter 6 (commencing with Section 17300) is added to Part
2 of Division 7 of the Business and Professions Code, to read:
CHAPTER 6. REPRESENTATIVE ACTIONS ON BEHALF OF THE PUBLIC
17300. This chapter applies to a representative cause of action
filed on or after January 1, 2004. A representative cause of action
is a cause of action asserted by a private plaintiff on behalf of the
general public under Section 17204. A private plaintiff is a person
other than the Attorney General, district attorney, county counsel,
city attorney, or city prosecutor.
17301. A private plaintiff may,plead a representative cause of
action on behalf of the interests of the general public under Section
17204 only if the requirements of this chapter are satisfied.
17302. (a) The private plaintiff shall separately plead the
representative cause of action in the complaint and shall designate
it as being brought "on behalf of the interests of the general public"
under Section 17204. The complaint shall be verified pursuant to
Section 446 of the Code of Civil Procedure.
(b) The complaint shall include a statement under penalty of
perjury by the private plaintiff and by his or her attorney of record
that they do not have a conflict of interest or other impediment to
their faithful representation of the interests of the general public
they represent. A representative cause of action is not valid if
filed without this statement, and the court may in its discretion
take appropriate action to dismiss the action and award costs and
attorney's fees to the defendant.
17303. (a) At the time of filing a representative cause of
action, the private plaintiff shall notify and submit a copy of the
complaint to the Attorney General, the district attorney for the
county in which the complaint is filed, and the state or local body
responsible for regulating the defendant named in the representative
cause of action.
(b) Filing of the complaint constitutes a representation to the
court that the notice described in subdivision (a) has been or will
be given as required by this section. Failure to provide notice as
required by this section is subject to the imposition of sanctions
pursuant to Section 128.7 of the Code of Civil Procedure.
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AB 69 Assembly Bill - AMENDED
17304. The private plaintiff shall provide notice of any
application for preliminary relief to the parties designated in
Section 17303 in the same manner as notice is given to the defendant.
17305. (a) The State Bar of California shall prepare and make
publicly available by June 1, 2004, a "Disclosure of Defendant's
Rights" that describes, in simple and easy to understand terms, the
legal rights and privileges applicable to a defendant in a
representative cause of action. The document shall also include a
description of abusive settlement tactics and instructions for
contacting the Attorney General and the State Bar to report unethical
conduct or any suspected abusive lawsuits. The document shall be
made publicly available in English and in other languages principally
spoken in this state.
(b) The private plaintiff shall serve the defendants in a
representative cause of action with the "Disclosure of Defendant's
Rights." This document shall be served on the defendants with the
complaint. Only the "Disclosure of Defendant's Rights" developed by
the State Bar shall be used for this purpose.
17306. (a) A private plaintiff may not have a conflict of
interest that reasonably could compromise the good faith
representation of the interests of the general public pled in the
complaint. The attorney for a private plaintiff shall be an adequate
legal representative of the interests of the general public pled in
the complaint.
(b) On a noticed motion of a party or on the court's own motion,
the court shall determine whether the requirements of subdivision (a)
are satisfied. The determination may be based on the pleadings, or
the court in its discretion may permit discovery on the issues. In
making its determination, the court shall consider standards applied
in class actions. If the court determines that the requirements of
subdivision (a) are not satisfied, the representative cause of action
shall be stricken from the complaint.
(c) This section does not preclude the court from granting
appropriate preliminary relief before making a determination under
subdivision (b).
17307. (a) Before entry of a judgment or any modification of a
judgment that is a final determination of the representative cause of
action and before any settlement shall become effective, the court
shall determine if all of the following requirements have been
satisfied:
(1) The proposed judgment and any stipulations and associated
agreements are lawful, fair, reasonable, noncollusive, and adequate
to protect the interests of the general public pled in the complaint.
(2) Any award of attorney's fees included in the judgment or in
any stipulation or associated agreement complies with applicable law.
(3) All other requirements of this chapter have been satisfied.
(b) If the court finds that the requirements of this chapter have
not been satisfied, the court may impose sanctions pursuant to
existing provisions of law.
17308. (a) At least 45 days before the date of the hearing
described in Section 17307, the private plaintiff shall give notice
of the proposed terms of the judgment or modification, including all
stipulations and associated agreements between the parties, together
with notice of the time and place set for the hearing on the entry of
the judgment or modification, to all of the following:
(1) The Attorney General.
(2) The district attorney of the county where the action is
pending.
(3) The state or local body responsible for regulating the
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AB 69 Assembly Bill - AMENDED
defendant.
(4) Other parties known to the plaintiff with cases pending
against the defendant based on substantially similar facts and
theories of liability.
(5) Each person who has filed with the court a request for notice
of the terms of the judgment.
(6) Other persons as ordered by the court.
(b) On motion of a party or on the court's own motion, the court
for good cause may shorten or lengthen the time for giving notice
under subdivision (a).
17309. Judgments, stipulations, and associated agreements in a
representative cause of action are public documents.
17310. Any notice provided to the Attorney General, a district
attorney, or a regulatory body pursuant to this chapter imposes no
duty on any of those offices. The Attorney General, district
attorney, or regulatory body is not precluded from taking any action
as a consequence of not acting in response to a notice provided under
this chapter.
17311. The determination of a representative cause of action in a
judgment approved by the court is conclusive and bars any further
actions or causes of action brought by any private plaintiff against
the same defendant based on substantially similar facts and theories
of liability.
17312. A representative cause of action may not be dismissed,
settled, or compromised, and no payments or monetary consideration
may be collected or received by the plaintiff or its counsel without
the approval of the court and a determination that the disposition of
the representative cause of action satisfies the requirements of
this chapter.
17313. No private person acting for the interests of the general
public may solicit a settlement or resolution of an alleged act of
unfair competition without first filing a complaint complying with
the requirements of this chapter.
SEC. 3. No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XISI B of the California
Constitution.
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AB 69 Assembly Bill - Status
CURRENT BILL STATUS
MEASURE : A.B. No. 69
AUTHOR(S) Correa.
TOPIC Business: unfair competition.
HOUSE LOCATION ASM
+LAST AMENDED DATE 04/03/2003
TYPE OF BILL :
Active
Non-Urgency
Non-Appropriations
Majority Vote Required
State-Mandated Local Program
Fiscal
Non-Tax Levy
LAST HIST. ACT. DATE: 04/07/2003
LAST HIST. ACTION Re-referred to Com. on JUD.
COMM. LOCATION ASM JUDICIARY
TITLE An act to add Chapter 6 (commencing with Section 17300)
to Part 2 of Division 7 of the Business and Professions
Code, relating to business.
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AB 69 Assembly Bill - History
COMPLETE BILL HISTORY
BILL NUMBER : A.B. No. 69
AUTHOR Correa
TOPIC Business: unfair competition.
TYPE OF BILL :
BILL HISTORY
2003
Active
Non-Urgency
Non-Appropriations
Majority Vote Required
State-Mandated Local Program
Fiscal
Non-Tax Levy
Page 1 of I
Apr. 7 Re-referred to Com. on JUD.
Apr. 3 Referred to Com. on JUD. From committee chair, with author's
amendments: Amend, and re-refer to Com. on JUD. Read second time
and amended.
Jan. 6 Read first time.
2002
Dec. 12 From printer. May be heard in committee January 11.
Dec. 11 Introduced. To print.
http://www.leginfo.ca.gov/pub/bill/asm/ab 0051-0100/ab 69_bill_20030407_history.html 4/15/2003
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROSEMEAD
NOMINATING COUNCILMEMBER CLARK TO REPRESENT CITIES
WITHOUT PRESCRIPTIVE WATER PUMPING RIGHTS ON THE BOARD
OF THE SAN GABRIEL BASIN WATER QUALITY AUTHORITY
MOTION BY COUNCILMAN IMPERIAL, SECOND BY COUNCILMAN' TAYLOR
that the Council adopt Resolution No. 2003-12. Vote resulted:
Yes:
Imperial, Taylor, Vasquez, Clark, Alarcon
No:
None
Absent:
None
Abstain:
None
The Mayor declared said motion duly carried and so ordered.
VII. CONSENT CALENDAR.
CC-A APPROVAL OF TRACT MAP NO. 53377 - 8723-8729 MISSION DRIVE
C-B AB 69 (CORREA) - REFORM OF UNFAIR COMPETITION LAW -
SUPPORT
CC-C CITY GENERAL PLAN UPDATE
CC-D AUTHORIZATION TO REJECT CLAIM AGAINST THE CITY FROM
WAYNE ROBINSO? '
CC-E REVISIONS TO PARKS AND RECREATION DEPARTMENT FACILITY
USE FORM-RULES AND REGULATIONS AND DEPOSIT
REIMBURSEMENT POLICIES AND PROCEDURES
CC-F AUTHORIZATION TO SUBMIT ANNUAL FUNDING REQUEST UNDER
CALIFORNIA BEVERAGE CONTAINER RECYCLING AND LITTER
REDUCTION ACT
MOTION BY COUNCILMAN TAYLOR, SECOND BY COUNCILMAN'
IMPERIAL that the Council approve the aforementioned items on the Consent Calendar. Vote
resulted:
Yes: Imperial, Taylor, Vasquez, Clark, Alarcon
No: None
.Absent: None
Abstain: None
The Mayor declared said motion duly carried and so ordered.
CC/CDC JOINT MEG: 422-03
Paee -°5
AGENDA
REGULAR MEFT'ING
ROSEMEAD CITY COUNCIL.
CTIY HALL COUNCIL CHAMBERS
ROSENUAD, CALIFORNIA
MAY 13, 2003, AT 8:00 P.M.
CALL iMGETING TO 0It1)E11
PLEDGIT TO T111 FLAG
INVOCATION:
ROLL CALL OF OFFICERS:
APPROVAL OF MINUTES
5
800 P.M.
MAYOR VASQUEZ
BANTE CI LAO CHU OF THE LOS ANG~-LES
BUDDHIST MONASTERY fi-
COUNCILMEMBERS ALARCON, IMPERIAL,
TAYLOR, MAYOR PRO TENS CLARK, MAYOR
VASQUEZ_ N4t.4
D1 CEMBIER 10, 2002 - REGULAR MEETING
APRIL 22, 2003 -.JOINT MEETING OF TtIE
ROSEMEAD CITY COUNCIL AND THE ROSEMEAD
COMMUNITY DEVELOPMENT COMMISSION AND
THE REGULAR MEETING OF THE CITY COUNCIL
OF INTEREST TO CITIZEN S WISHING TO PARTICIPATE
1) Those wishing to speak on any Agenda Item, including public hearing, should have their
Speaker Request Form submitted to the City Clerk no later than the time immediately
Ibllowing Oral Communications.
2) Immediately alter approval of the minutes and again at the end of the meeting, there is a
period of time set aside for those persons wishing to address the Council on matters not
listed on the Agenda entitled: ORAL COMMUNICATIONS FROM THE AUDTENCE
(please complete the Speaker Request Form stating your preference to speak either at the
beginning or at the end of the meeting).
3) Upon request, this agenda will be made available in appropriate alternative formals to
persons with disabilities, as required by Section 202 of the Americans with Disabilities
Act of 1990. Any person with a disability who requires a modification or .
accommodation in order to participate in a meeting should direct such request to the City
Clerk's office at 626/569-2171 at least 48 hours before the meeting, if possible.
PRESENTATIONS:
ORAL COMMUNICATIONS FRONI THE AUDIENCE
IL PUBLIC HEARINGS-EXPLANATION OF I FIE PUBLIC HEARING
PROCEDURES BY THF. CITY ATTORNEY
D C A. PUBLIC LIEARING REGARDING ADOPTION OF THE ANNUAL FUNDING
PLAN FOR THE COMMUNITY DEVELOPMENT BLOCK GRANT (CDBG)
AND HOME PROGRAMS FOR FISCAL YEAR 2603-04.
The City held its first public hearing-on Tuesday, April 8, 2003, regarding its One
Year Annual Funding Plan. The 30-day comment period ends on May 12, 2003.
CCAOIiN DA: s_t 3-03
Page If I
Recommendation: A(fer receiving public testimony, discussion and after any
amendments, the Council approve the revised capital improvement finding
request, approve the public service funding; approve submission of the Annual
Funding Plan; and authorize the City Manager to execute all appropriate
certifications and submit to HUD.
I3. PUBLIC HEARING -TENTATIVE TRACT MAP 53447; CONDITIONAL
US[-; PERMITS 02-888 THROUGH 02-894 - APPEAL - 8719 MISSION
DRIVE - CONTINUED FROM 4/08/03
Nevis Homes has submitted applications for the subdivision ofthree existing lots
into sixteen parcels for the development of sixteen single-family residences, each
with a living area over 2,500 square feet located at 8719 Mission Drive in tile R- I
(Single-Family Residential) zone. This it was continued from the City Council
meeting of April 8, 2003.
Recommendation: Approve Tentative Tract Map 53447; Conditional Use
Permits 02-888 through 02-894.
t0
WV " ~
III. LEGISLATIVE l"~ .
y_d
A. '"RESOLUTION NO. 2003-14 - CLAIMS AND DEMANDS
Recommendation: Adopt Resolution No. 2003-14, for payment ofCity
expenditures.
~B. RF OLUIION NO. 2003-15 - A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF ROSEMEAD APPOINTING SPECIFIC REPRESENTATIVES
TO THE SAN GABRIEL VALLEY COUNCIL 01; GOVERNMENTS
Mayor Pro Tem Clark currently serves on the San Gabriel Valley Council of
Governments as the City's Governing Board Representative. Former
Councilman Bruesch served as the City's alternate. This resolution designates
Mayor Vasquez as the Alternate and re-designates Mayor Pro Tem Clark as the
Governing Board Representative.
Recommendation: Adopt Resolution No. 2003-15.
1V CONS NT CALENDAR- RECOINIM1,'NDATION: APPROVAL
`y~\ \ CCIA RELEASE OF BONDS - PARCEL MAP 26466 - 4621 DELTA AVENUE
A Faithful Performance Bond and a Labor Bond and Material Bond were required
to guarantee construction of sewer house lateral, drive approaches, curb and
gutter, AC pavement and sidewalk. In lieu of bonds, a Cash Deposit was issued
to the City in the amount of5l 1,025. The improvements have been installed
satisfactorily.
r Rec emendation: Accept the Public improvements and authorize refund of the
ash 9eposit, including accrued interest.
~D
C-13 A EPTANCE OF EASEMENT - 9117 GARVEY AVENUE
This item provides for the dedication of an easement at 911.7 Garvey Avenue for
traffic signal loop detectors placed in the driveway to facilitate traffic signal
operation on Garvey Avenue at the Garvey Community Center.
Recommen ration: Accept the decd and direct the City Clerk to record the deed
together with the Certification of Acceptance.
CCAUP:N[)A 5-13.03
1'ngc 112
CC-C AUTiIORIZA'1'ION TO ALLOCA"rE JUVENILE ACCOUNTABILI-fY
INCENrIV1 BLOCK GRANT FUNDS TO .THE COUNTY OF LOS ANGEI-F-S
DISTRICT ATT'ORNEY'S OFFICE
The District Attorney annual requests that Rosemead assign Juvenile
Accountability Incentive Block Grant (JAIBG) funding to the District Attorney's
Office to support on-going enforcement programs serving Rosemead's serious
juvenile offenders.
CC-D APPROVAL OF h1REWORKS S-1-AND LOCA-rIONS
All deposits have been received and certifications of insurance are on file.
Recommendation: Approve the list of stands and locations and waive electrical
permit fees.
V_ MATTERS FOR DISCUSSION AND ACTION
7~/ A. L~ REQUEST FROM COMMISSIONER BILL ORT17_ FOR REAPPOINTMENT
( TO THE PLANNING COMMISSION
Commissioner Ortiz has requested reappointment to the Planning Commission
VI. STATUS REPORT'S _ xff -
- LL-
VII. MATTERS FROM OFFICIALS ~J°~~" ~X ✓ - U
c . V
VIII. ORAL COMMIJ IJNTCATI ONS FROM THE AUDIENCE
IX. AD.10URNMENI` YI`
Till: CITY COUNCIL WILL, ADJOURN TO MAY 20, 2003 AT~00 P.M. FOR A STUDY
SESSION TO DISCUSS CAPITAL IMPROVEMENT PROD -S.
Posted 72 hours in advance of the meeting at the City Hall, 8838 E. Valley'Boulevard,
Rosemead; the L.A. County Library, Rosemead Branch, 8800 E. Valley Boulevard, Rosemead;
and other locations pursuant to RMC Sec. 1-08.020.
C'CAO;NDA:5-13-03
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