Judge Christian R. Gullon, Case Number: 20PSCV00381, Date: 2023-12-11 Tentative Ruling

Judge: Christian R. Gullon, Case: 20PSCV00381, Date: 2023-12-11 Tentative Ruling

The Court may change tentative rulings at any time. Therefore, attorneys are advised to check this website to determine if any changes or updates have been made to the tentative ruling.

Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument.

The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

The City of El Monte’s Application for Default Judgment is DENIED without prejudice. Should UCL be a viable COA with such facts, the court will allow Plaintiff to file a supplemental brief at least 10 court days before the hearing.

This is a nuisance action. Plaintiff City of El Monte (“Plaintiff”) alleges the following against Defendants CHUN C. Li and ALICE LI (Li Defendants): In 2019, the city police executed a search warrant and seized marijuana. On that basis, Plaintiff alleges that Defendants engaged in illegal commercial marijuana activities at the property.[1]

On June 9, 2020, Plaintiff filed a complaint for the ABATEMENT, INJUNCTION, EQUITABLE RELIEF, AND CIVIL PENALTIES.

On December 31, 2020, Plaintiff filed an amendment to complaint naming Shi Chang Chen as Doe 1.

On May 12, 2021, Li Defendants filed a cross-complaint against Chen, who was the tenant on the property.

On July 14, 2023, the court denied the default judgment application without prejudice.

Plaintiff has addressed and cured some of the court’s previous defects. However, whether damages under the 4^th COA for Unfair Competition Law (UCL) are recoverable remains unclear.

To state a cause of action under Business & Professions Code § 17200, a plaintiff must allege (1) a business practice, (2) that is unfair, unlawful or fraudulent; and (3) an authorized remedy.

As explained by the California Supreme Court in Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134:

An action under the UCL is not an all-purpose substitute for a tort or contract action.’ [citation omitted]. Instead, the act provides an equitable means through which both public prosecutors and private individuals can bring suit to prevent unfair business practices and restore money or property to victims of these practices. As we have said, the ‘overarching legislative concern [was] to provide a streamlined procedure for the prevention of ongoing or threatened acts of unfair competition.’ [Citation omitted]. Because of this objective, the remedies provided are limited. While any member of the public can bring suit under the act to enjoin a business from engaging in unfair competition, it is well established that individuals may not recover damages.’ [Citation].

Injunctive relief and restitution are the only remedies available under the UCL; damages cannot be recovered. (See Korea Supply Co., supra, 29 Cal.4th at p. 1144 [“While the scope of conduct covered by the UCL is broad, its remedies are limited. [Citation omitted]. A UCL action is equitable in nature; damages cannot be recovered.”]); see also Bank of the West v. Sup. Ct. (1992) 2 Cal.4th 1254, 1266 [Damages are not available under section 17203, which incorporates the broad, statutory definition of unfair competition. “The only nonpunitive monetary relief available under the Unfair Business Practices Act is the disgorgement of money that has been wrongfully obtained or, in the language of the statute, an order ‘[r]estor[ing] ... money ... which may have been acquired by means of ... unfair competition.’”]; see also Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.App.4th 163, 179 [Under the UCL, prevailing plaintiffs “are generally limited to injunctive relief and restitution.”].)

As clearly stated by the Korea Supply court, restitution is limited to either “money or property that defendants took directly from plaintiff” or “money or property in which [plaintiff] has a vested interest.” (Korea Supply, supra, 29 Cal.4th at pp. 1146-47.) For example, disgorgement of profits exist in circumstances wherein a defendant is ordered to disgorge the rents collected on properties owned by a plaintiff (see e.g., People ex rel. Harris v. Aguayo (2017) 11 Cal.App.5th 1150) or wherein an employer is ordered to restore unpaid wages to its employees and former employees because once earned, those unpaid wages became property to which the employees were entitled (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163).

Here, Plaintiff has not alleged nor is arguing that Defendants wrongfully took marijuana that belonged to the City such that disgorgement from the sale of that marijuana would be permissible. Rather, it is an amount based upon statutory penalties. When statutory remedies are adequate, equitable relief under the UCL is precluded. (Prudential Home Mortgage Co. Inc. v. Superior Court (1998) 66 Cal.App.4th 1236, 1249.)

In short, it isn’t apparent from the pleadings whether UCL is even a viable COA with such facts.

Based on the foregoing, the application is again denied without prejudice. Should UCL be a viable COA with such facts, the court will allow Plaintiff to file a supplemental brief at least 10 court days before the hearing.

[1] Located at 11915 Ramona Blvd. in the city of El Monte.

[2] A review of the POS filed on 5/26/23 indicates that Chen was personally served at 2:16 PM on 4/09/22 at 12149 Roseglen Street in the City of El Monte.