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Complaint in Hiestand v. City of Sacramento

By Kimberly A. Kralowec

Many thanks to the blog reader who forwarded a copy of the complaint filed on August 11, 2009 in Hiestand v. City of Sacramento.  This UCL class action case was discussed in an article in the Recorder last week (see also this blog post). 

This case illustrates an important principle from Tobacco.  There, the Supreme Court held (among other things) that the "as a result of" standing language "imposes an actual reliance requirement" on the individual named class representative in a UCL "fraudulent" prong case.  In re Tobacco II Cases, 46 Cal.4th 298, 326 (2009).  The Court was careful to clarify, however, that this holding was limited to claims "involving false advertising and misrepresentations to consumers," and that "[t]here are doubtless many types of unfair business practices in which the concept of reliance, as discussed here, has no application."  Id. at 326 n.17. 

Hiestand is one of those cases.  The Hiestand complaint alleges (among other things) a UCL "unlawful" prong claim predicated on violation of Vehicle Code section 22651, which reads, in part:

A peace officer ... of a city, county, or jurisdiction of a state agency in which a vehicle is located, may remove a vehicle located within the territorial limits in which the officer ... may act, under the following circumstances:

....

(n) Whenever a vehicle is parked or left standing where local authorities, by resolution or ordinance, have prohibited parking and have authorized the removal of vehicles. A vehicle shall not be removed unless signs are posted giving notice of the removal.

(Emphasis added.)  Because the defendants allegedly removed Mr. Hiestand's vehicle even though no "signs [were] posted giving notice of the removal," in violation of section 22651, and because Mr. Hiestand incurred and paid towing and storage costs, the standing requirement has been satisfied.  Mr. Hiestand lost money or property "as a result of" the defendants' alleged violation of that law.  He therefore has standing to bring a UCL class action in which neither he nor the unnamed class members will have to prove (at trial) actual "deception, reliance [or] injury."  Tobacco, 46 Cal.4th at 320 (citing Bank of the West v. Superior Court, 2 Cal.4th 1254, 1267 (1992); Committee on Children?s Television, Inc. v. General Foods Corp., 35 Cal.3d 197, 211 (1987)). 

As this case illustrates, it will be important to consider the class representative's standing separate and apart from what must be proven at trial for purposes of liability for a UCL violation.  Tobacco makes clear that, in "fraudulent" prong cases, the "likely to deceive" liability standard is unchanged.  Id.  Moreover, the standard for recovering restitution ("may have been acquired") is also unchanged and is "patently less stringent than the standing requirement."  Id.  The fact that the class representative must establish individual standing therefore should have no impact on the class certification analysis.  In other words, the class certification analysis should be the same now as it was before Prop. 64.

It will be interesting to see how this plays out in the Hiestand case as well as in other cases.  If you are litigating any of these issues at the trial court level, please keep me posted of developments.  I haven't received copies of any relevant rulings in any state court cases yet. 

Full post as published by The UCL Practitioner on August 18, 2009 (boomark / email).