SAN FRANCISCO (CN) — The California Supreme Court ruled Thursday that businesses accused of false advertising and unfair business practices by state and local government officials are not entitled to a jury trial.
In the majority opinion, Chief Justice Tani Cantil-Sakauye said the state Legislature intended for actions brought under California’s half-century-old unfair competition and false advertising laws to be decided by a judge, rather than a jury, as such cases involve nuanced and complex questions of whether a business’s actions could be considered unfair and misleading, and its advertising practices deceptive or confusing to the public.
Both laws allow the attorney general and county district attorneys to go after violators for substantial civil penalties, of which debt repayment company Nationwide Biweekly Administration faced at least $19 billion.
The company is currently appealing a $7 million non-jury verdict in a separate federal case brought by the U.S. Consumer Financial Protection Bureau in 2017.
In May 2015, the district attorneys of Alameda, Monterey, Kern and Marin counties filed a civil complaint in Alameda County Superior Court against the company, claiming it was operating without a license, didn’t disclose the full amount of its fees and overstated the amount of savings clients could expect from using its services.
In 2018, a state appellate court found the company had the right for a jury to decide on its liability, though any amount in penalties would be up to a trial judge.
The high court’s ruling Thursday concluded that the state constitution affords no right to a jury trial under under the unfair competition or false advertising law, including one brought by a government official seeking civil penalties.
Cantil-Sakauye distinguished the company's case from Tull v. U.S., a U.S. Supreme Court decision that found a real estate developer accused of violating the Clean Water Act by dumping fill on wetlands was entitled to a jury trial under the Seventh Amendment of the U.S. Constitution.
She said the lower court in the company's case erred by relying too heavily on Tull, which concerns federal rather than state proceedings.
"In California, the constitutional right to a civil jury trial under the California Constitution is entirely independent of the federal constitutional civil jury trial right under the Seventh Amendment and past California cases have not hesitated to decline to follow the federal interpretation of the Seventh Amendment when the federal interpretation has been found inconsistent with a proper reading of the California provision,” she wrote.
Lawyers representing the company did not immediately respond to phone calls and email seeking comment late Thursday.
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