Arbitration News

Our Supreme Court Has Left Unresolved The Question Whether A Plaintiff Seeking Restitution As A Private Attorney

Our Supreme Court has left unresolved the question whether a plaintiff seeking restitution as a private attorney general under the UCL can be compelled to arbitrate when the plaintiff is not a party to the arbitration agreement but is acting on behalf of
injured consumers who are parties to the arbitration agreement. (Cruz v. PacifiCare Health Systems, Inc., supra, 30 Cal.4th at p. 320, fn. 7.) We observe that the question has little practical significance, because the same factors that preclude a private attorney general from being compelled to arbitrate also serve to limit the plaintiff’s relief in court.While civil penalties may be assessed when the action is initiated by a governmental prosecutor (Bus. & Prof. Code, § 17206), monetary damages are not recoverable under the UCL. (Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1266.) A private
plaintiff is limited to injunctive relief or restitution, i.e., the return of money obtained through an unfair business practice (Bus. & Prof. Code, § 17203). And restitution requires an ownership or vested interest in the money; nonrestitutionary disgorgement of profits is not available to an individual acting as a private attorney general under the UCL. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1149-1152.) As the Supreme Court explained, “The breadth of standing under this act allows any consumer to combat unfair competition by seeking an injunction against unfair business
practices. Actual direct victims of unfair competition may obtain restitution as well.”(Id. at p. 1152; italics added.) In the present case, plaintiff Tucker is not an actual direct victim of AT&T Wireless’s early termination fee and is acting only as a private attorney  general. She has no monetary remedies under the UCL, even assuming arguendo that her claims remain viable. (See fn. 4, ante.) At most, her remedy is injunctive relief, and, as we have said, the claims for injunctive relief are not arbitrable.

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	Did You Know?
	Arbitration is different than mediation. Mediation is a method of dispute resolution whereby the disputing parties achieve a mutually-satisfactory resolution with the assistance of a mediator. Unlike arbitration sessions, mediation sessions are not “decided” in favor of one party or another; rather, the mediator simply facilitates the negotiation process between the parties. Mediating parties are not bound to resolve their dispute (although mediated settlements, once reached, can be made binding if the parties decide to draft a contract called a settlement agreement). Arbitrating parties, on the other hand, receive a final decision from the arbitrator, which is either binding or non-binding depending on the terms of the arbitration agreement.