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How important is "actual injury" to Prop 64?

In an earlier post, I had written: "Public Citizen and others in the litigation lobby successfully persuaded the California Supreme Court to review Pfizer v. Superior Court; the plaintiffs' bar is asking the Court to gut the reliance requirement that that initiative added to California's infamous � 17200, and returning California to the abusive pre-Prop 64 world."

Law student Matthew Butterick writes in response:

This is incorrect. Prop 64 altered the standing requirements for plaintiffs bringing s.17200 claims. The lower Pfizer decision interpreted Prop 64 as also adding a substantive requirement (showing actual proof of reliance vs. presuming reliance).

If the Calif Supreme Court reverses Pfizer, it will roll back the substantive requirement but leave the Prop 64 standing requirement intact. In other words, we won't be going back to the "pre-Prop 64 world".

True, 17200 will continue to be a different law if the California Supreme Court overturns Pfizer. The de facto result of eliminating the reliance requirement does, however, gut the substantive "actual injury" requirement of 17200. Take for example Kasky v. Nike. Pre-Prop 64, activists could sue Nike over advertising just because they felt like it. If the reliance requirement is overturned, the activists can still sue Nike over advertising just because they feel like it: the only effect of reliance-less Prop 64 is to require the activists to buy a single pair of sneakers before filing suit (and meet commonality requirements, though those are rarely enforced strictly in California (e.g., Jan. 7, Jun. 29, 2004), even if they already know they dislike Nike's advertising. I think my characterization is fair, though others may disagree whether being able to bring harm-less lawsuits notwithstanding an "actual injury" requirement is a "gutting" of that requirement, or whether such lawsuits are abusive.

NB that in the original "No on Prop 64" site, the litigation lobby argued that Prop 64 would "only allows cases by injured individuals after someone has lost money or property - not for other types of loss, such as environmental degradation, loss of health, or for being deceived." Public Citizen is now arguing in Pfizer that Prop 64 does allow suits "for being deceived" even if there was no reliance.

The California courts website has taken the original appellate decision down, but it's worth reading for its excellent analysis; here is the Google cache. Jonathan Wilson wrote a good post on the subject Jul. 19 when the intermediate court opinion first came down.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.