Monday, June 27, 2005

New 17200 Case

One of the most versatile and poorly understood statutes in California law, Business & Professions Code Section 17200, has been the subject of much attention in recent years. Section 17200 allows a plaintiff to sue for violation of any California law. Proposition 64 recently limited the class of persons that can bring a 17200 claim, and the remedies under Section 17200 have also been limited by court decisions -- and they are getting more limited all the time. In Madrid v. Perot Systems, the court of appeal addressed two questions about the scope of available relief under Section 17200. First, the court held that "non-restitutionary disgorgement" is not available. Non-restitutionary disgorgement is disgorgement of profits that were not obtained from the plaintiffs. Section 17200 only authorizes restitutionary disgorgement of money obtained from the plaintiffs. Second, the court held that Section 17200 authorizes only prohibitory injunctions to stop an ongoing or threatened unfair business practice. If there is no threat of an ongoing or future unfair business practice, then no injunctive relief is available.

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