Health Administration Responsibility Project
Consumer-Oriented Statutes

In California, there are three important consumer-oriented statutes which may be useful in disputes with HMOs and Nursing Homes:
  • the Unfair Competition Law (UCL), BPC §17200
  • the Consumer Legal Remedy Act (CLRA), CC §1750, and
  • the Elder Abuse Act, WIC §15600

    The following points are taken from Mass. Mutual v. Sup. Ct..

    UCL, BPC §17200

    The UCL prohibits as unfair competition "any unlawful, unfair or fraudulent business act or practice", "in whatever context such activity might occur."
    Relief is available without individualized proof of deception, reliance and injury,
    but is limited to injunctive relief and restitution, ie: it does not provide for the recovery of damages or attorney fees.

    It applies not only to unfair practices which have in fact deceived victims, but also those which are likely to deceive them. A perfectly true statement couched in such a manner that it is likely to mislead or deceive the consumer, such as by failure to disclose other relevant information, is actionable under these sections.

    The 'fraud' contemplated by section 17200 bears little resemblance to common law fraud or deception. The test is whether the public is likely to be deceived. This means that a section 17200 violation, unlike common law fraud, can be shown even if no one was actually deceived, relied upon the fraudulent practice, or sustained any damage, so Individual matters of proof are irrelevant to liability under the UCL.

    A company's failure to disclose its own material conclusions to consumers is misleading, and would support restitution under the UCL.

    CLRA, CC §1750

    Unlike the UCL, under CLRA a consumer may recover actual damages, punitive damages and attorney fees.
    However, relief is limited to consumers who suffer any damage as a result of a method, act, or practice unlawful under the act.
    This requires that plaintiffs in a CLRA action show not only that a defendant's conduct was deceptive but that the deception caused them harm.

    This does not make the plaintiffs' claims unsuitable for class treatment. Causation as to each class member is commonly proved more likely than not by materiality. That showing will undoubtedly be conclusive as to most of the class.
    If material misrepresentations were made to the class members, at least an inference of reliance would arise as to the entire class.
    It is not necessary to show reliance upon false representations by direct evidence. The fact of reliance upon alleged false representations may be inferred from the circumstances attending the transaction.
    An inference of reliance arises if a material false representation was made to persons whose acts thereafter were consistent with reliance upon the representation.

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