CMA v. Aetna: Expanded Access to the Courts for Non-Profits, Labor Unions, and Other Organizational Plaintiffs
On July 17, 2023, the California Supreme Court issued two important opinions that expanded access to the California state courts, the first for employees who have suffered violations of the California Labor Code (Adolph v. Uber, see here) and the second for organizations challenging unlawful, unfair or fraudulent business practices by corporate defendants. Altshuler Berzon LLP attorneys successfully argued both cases.
In California Medical Association v. Aetna Health of California, Inc., which was Justice Kelli Evans’s first majority opinion as a Supreme Court Justice, the Court unanimously held that an organization satisfies the standing requirement of California’s Unfair Competition Law (“UCL”) if “in furtherance of a bona fide, preexisting mission, [the organization] incurs costs to respond to perceived unfair competition that threatens that mission, so long as those expenditures are independent of costs incurred in UCL litigation or preparations for such litigation.”
Proposition 64, which was enacted by the voters in 2004, limited the scope of UCL standing by requiring plaintiffs to demonstrate, as a condition of bringing a UCL suit, that they “suffered injury in fact and [have] lost money or property as a result of the unfair competition.” In CMA, the Court unanimously held that an organization satisfies that requirement when it has “expended staff time or other resources on responding to a new threat to its mission, diverting those resources from other projects.” As long as the organization devoted staff resources to addressing the challenged practice and did so in a manner that sought to further its underlying mission, the standing requirements of Proposition 64 would be fully satisfied, according to the Court.
The CMA decision will substantially expand the ability of organizational plaintiffs, including labor unions, non-profits, and civil rights groups, to pursue legal challenges under the UCL to unlawful, unfair, or fraudulent business practices that threaten their missions.
Whatley Kallas LLP also represented CMA in this case. The decision is available here.