(CN) — County prosecutors can sue companies under unfair-competition law for conduct that occurred anywhere in California, the state Supreme Court ruled Thursday.
Reversing a Fourth Appellate District decision, the high court found no evidence in the written statute or legislative history that state lawmakers intended to geographically constrain county prosecutors’ power to enforce consumer protection laws.
“We see no indication that in an enforcement action brought by a district attorney, the Legislature intended to limit civil penalties or restitution to the geographic boundaries of the district attorney’s county,” Justice Goodwin Liu wrote for the court.
The opinion stems from a 2016 lawsuit filed against Abbott Laboratories and other pharmaceutical companies by former Orange County District Attorney Tony Rackauckas. Suing on behalf of the people of California, Rackauckas claimed the drug companies engaged in a “pay-for-delay” scheme to postpone generic versions of the cholesterol drug Niaspan from hitting the market.
In 2018, the Fourth Appellate District overruled a trial court’s decision and granted Abbott’s motion to strike claims in the lawsuit based on conduct that occurred outside of Orange County. The appeals court held that a district attorney is a county officer whose jurisdiction and power is limited to that county’s physical borders.
The state’s high court rejected that reasoning in a 27-page opinion Thursday, finding no evidence that lawmakers intended to limit local prosecutor’s power to enforce the law.
“There is no specific indication in the voluminous legislative record of the UCL that the Legislature intended to grant statewide enforcement authority to district attorneys or to withhold such authority from them,” Liu wrote. “But what the record does reveal is a clear trajectory toward greater and overlapping public enforcement at all levels of government.”
Addressing concerns that such a holding might usurp the California Attorney General’s role of enforcing laws on behalf of the entire state, the court pointed out that the attorney general can still intervene or take control of any district attorney’s civil enforcement action if the AG finds it does not adequately serve the public interest.
In an amicus brief filed in the case, California Attorney General Xavier Becerra took no position on the drug company’s arguments but noted that the Orange County DA’s position could present “conflicts of interest” for local prosecutors, who would be representing the interests of statewide victims but might have an incentive to secure a better outcome for local constituents.
Responding to that argument, the court noted that such concerns were presented to the state Legislature when it repeatedly enacted legislation to expand authority for district attorneys to enforce the law.
The court concluded that such concerns “may induce the Legislature to consider amending the UCL to add procedures to minimize the risks of conflicting enforcement efforts.”
In a 4-page concurring opinion, Justice Leondra Kruger suggested one way the Legislature could address those concerns is by requiring DAs to notify the Attorney General’s Office when they file a lawsuit seeking to enforce the unfair-competition law for violations occurring outside their borders.
Kruger wrote that would be a significant step “toward facilitating coordination and collaboration between different enforcing authorities in the future.”
Justices Kruger, Ming Chin, Mariano-Florentino Cuéllar, Carol Corrigan joined Liu joined Chief Justice Tani Cantil-Sakauye and Carin Fujisaki, a First Appellate District Justice assigned to the case, in concurring with Liu’s opinion.
Todd Spitzer defeated Rackauckas in a 2018 election and now serves as Orange County’s District Attorney.
Sptizer’s office and Abbott Laboratories did not immediately return emails requesting comment Thursday.
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