A California Court of Appeal has ruled that senior citizen plaintiffs in a Bus. & Prof. Code 17200 unfair practices case may be entitled to three times any remedy obtained in such case, pursuant to the penalty multiplier of Civil Code Section 3345 which was adopted for the benefit of senior citizens and disabled persons.  Under the Section 17200 unfair practices law as affected by California’s Proposition 64, restitution has been understood to be the only monetary relief available to private unfair-practices plaintiffs, and the California Supreme Court has previously held that Section 17200 plaintiffs are not entitled to treble damages under other laws (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone (1999) 20 Cal.App.4th 163, 179).  The new Court of Appeal case finds to the contrary that restitutionary relief is intended to have a deterrent effect, and therefore the Civil Code Section 3345 trebling of a fine or penalty can be applied. 

Section 3345 was originally adopted in 1988 and authorizes treble damages in actions brought by or for “senior citizens or disabled persons”, authorizing a penalty “up to 3 times greater” than otherwise provided by statute, if any one or more of 3 factors is present:  1) Whether defendant’s conduct was directed to one or more senior citizens or disabled persons; 2) whether one or more such persons lost a home, job, nest egg for retirement or care, government benefits or other essential assets; and 3) whether such persons are “substantially more vulnerable than other members of the public to the defendant’s conduct”.  In this case, the defendant was alleged to have used deceptive practices to sell high-commission annuity contracts with large surrender penalties, although Section 3345 by its terms could apply to senior or disabled plaintiffs regardless of any special injury to such persons.  Given that the Court of Appeal reached its result by finding that restitution in a 17200 case is essentially a penalty, and by disregarding the state Supreme Court’s disapproval of treble damages in 17200 unfair-practices cases, the sustainability of this decision may be open to question.  (Clark v. Superior Court (National Western Life Insurance Company), California Court of Appeal No. B212512, May 21, 2009)

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