USA – CALIFORNIA Law and Practice Contributed by: Steven Kaufhold, Jonathan Gaskin and Urvashi Malhotra, Kaufhold Gaskin LLP
Kaufhold Gaskin LLP 485 Pacific Avenue San Francisco, CA 94133 USA
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1. Policy Development of Collective Redress/Class Action Mechanisms 1.1 History and Policy Drivers of the Legislative Regime As with other states, the development of a regime gov- erning class actions arose in California from the strong need to efficiently resolve common issues among a large number of individuals, due to the impracticalities and strain on judicial and personal resources asso- ciated with bringing numerous individual lawsuits. In California, a specific driver has been consumer pro- tection. A catalyst appears to have been when Federal Rule of Civil Procedure (“FRCP”) 23 governing federal class actions was amended and modernised in 1966. In 1970, California passed the Consumer Legal Rem- edies Act, which codified the consumer right to class actions in California Civil Code § 1781. In 1971, Cali- fornia updated its Code of Civil Procedure (“CCP”) to add § 382, which allowed matters to proceed as class actions “when the question is one of a common or general interest, of many persons, or when the parties are numerous, and it is impracticable to bring them all before the court.” The same year, the California Supreme Court heard Vasquez v Supreme Court , 4 Cal.3d 800, and held that consumers could pursue class relief in fraud cases, recognising that individual damages may be too small to justify separate law- suits. California’s Unfair Competition Law (fashioned after Section 5 of the Federal Trade Commission Act) provides additional statutory support for class actions in consumer protection cases and was strengthened
in 1977 when it was moved to the Business and Pro- fessions Code (§§ 17200, et seq). California has “a public policy which encourages the use of the class action device.” Sav-On Drug Stores v Supreme Court , 34 Cal. 4th 319, 340 (2004). In that spirit, today California trial courts have “an obligation to consider the use of... innovative procedural tools proposed by a party to certify a manageable class” and are urged to be “procedurally innovative.” Id. at 339. 1.2 Basis for the Legislative Regime, Including Analogous International Laws Prior to California’s adoption of its own class action regime, FRCP 23 generally guided the state’s courts. However, after the establishment of CCP § 382 and the state Supreme Court’s subsequent holding in Vasquez, 4 Cal.3d 800 (1971), Rule 23 has acted more akin to a “stopgap,” intended only to provide guidance for those situations that are not directly addressed by California’s rules. The language of California’s CCP § 382 is broader than that of FRCP 23. And California courts have made clear that they did not want to “adopt[] [Rule 23] as a procedural strait jacket,” but should rather “exercise pragmatism and flexibility in dealing with class actions.” Cartt v Supreme Court , 50 Cal.App.3d 960, 970 (1975). There are many differences between California’s regime and the federal rules. Some highlights have been outlined below.
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