Plaintiff borrower appealed a decision of the United States District Court
Procedural Posture
Plaintiff borrower appealed a decision of the United States District Court for the Southern District of California, which dismissed its claims against defendant lender for usury, fraud, unfair competition under Cal. Bus. & Prof. Code § 17200, and RICO under 18 U.S.C.S. § 1962(a)-(d). The district court also denied the borrower's motion to add the lender's counsel as defendants.
Overview
Civil trial lawyers provide legal advice related to civil case and represent clients in pretrial hearings, depositions, arbitration, mediation, and trials. The borrower alleged that the lender engaged in a conspiracy to defraud through a bait and switch scheme in which it replaced the promise of a joint venture arrangement with a high-interest loan. The district court dismissed the borrower's claims. On appeal, the court held: (1) the district court properly dismissed the borrower's usury claim because the borrower fell within the "sophisticated borrower" exemption in Cal. Corp. Code § 25118(f)(2); (2) the district court erred in holding that the borrower's fraud claim was time-barred under Cal. Code Civ. Proc. § 338(d) because the borrower alleged that the last overt act in the conspiracy to defraud was the credit bid on the property, which occurred within the statutory period; (3) the district court erred in dismissing the borrower's unfair competition claim because the borrower alleged that the lender engaged in the unlawful business practice of lending without a license in violation of Cal. Fin. Code § 22100; and (4) the district court erred in dismissing the borrower's RICO claims because the borrower alleged that the lender engaged in a bait and switch scheme involving high interest that was not necessarily usurious.
Outcome
The court affirmed the district court's dismissal of the borrower's usury claim, the district court's dismissal of the borrower's unfair competition claim on the basis of the unlawful business practices of usury, and the district court's denial of the borrower's motion to add the lenders' counsel as defendants. The court reversed the district court's dismissal of the borrower's remaining claims.
Procedural Posture
Appellant individual challenged a decision of the Superior Court of Alameda County (California), which dismissed appellant's complaint against respondent drug stores that alleged respondent had engaged in unfair competition under Cal. Bus. & Prof. Code §§ 17200- 17204 because respondent failed to post a saccharin notice required by the Food, Drug, and Cosmetics Act, 21 U.S.C.S. 343(p).
Overview
Appellant individual sought an injunction against respondent drug stores for unfair competition under Cal. Bus. & Prof. Code §§ 17200- 17204 in order to enjoin respondent's alleged false advertising and unfair business practices. Appellant alleged that respondent engaged in unfair competition because respondent failed to display a notice that its stores sold products that contained saccharin, as required by the Food, Drug, and Cosmetics Act, 21 U.S.C.S. 343(p). Respondent demurred to appellant's complaint and the trial court dismissed the complaint. Appellant sought review. The court reversed the judgment of the trial court. The court held that appellant had stated a cause of action for unfair competition sufficient to withstand a general demurrer because respondent engaged in an unlawful business activity when it failed to post the required saccharin notice. Appellant had standing under Cal. Bus. & Prof. Code § 17204 because appellant brought the action for the interests of the general public. Appellant's action was not expressly preempted under 21 U.S.C.S. 337(a), nor did federal law impliedly preempt the action because the federal regulatory scheme was not pervasive.
Outcome
The court reversed the judgment of the trial court that dismissed appellant individual's complaint against respondent drug stores because appellant stated a cause of action because respondent had unlawfully failed to post the saccharin notice required under the Food, Drug, and Cosmetics Act, appellant had standing to bring the action, and federal law did not preempt the claim.