Monday, June 4, 2007
The California Court of Appeals (Third District) recently held that plaintiffs could base a class action under California's Unfair Competition Law on an "inference of common reliance" (as opposed to actual reliance): McAdams v. Monier.
Plaintiffs alleged that the defendant - a manufacturer of roof tiles - failed to disclose that the color of the tiles would fade away leaving bare concrete. The UCL count required plaintiffs to have "suffered injury in fact...and have lost money ...as a result of" defendant's failure to disclose. (California's UCL was amended by Proposition 64 in 2004; prior to these amendments, no reliance was required under the UCL).
The trial court denied plaintiff's motion to certify the class, finding the amended UCL required a showing of actual reliance, which defeated commonality. The Court of Appeals, however, reversed imposing "an inference of common reliance" standard.