(Los Angeles County Super. Ct. No. BC450218) APPEAL from an order of the Superior Court of Los Angeles County, Rolf Michael Treu, Judge. Reversed and remanded.
The opinion of the court was delivered by: Perluss, P. J.
CERTIFIED FOR PUBLICATION
The district attorneys of Los Angeles, Marin and Fresno Counties on behalf of the People of the State of California filed an action for injunctive relief and civil penalties against E*Poly Star, Inc. and several of its officers and directors under Business and Professions Code sections 17200 (unfair competition) and 17500 (untrue or misleading representations).*fn1 The district attorneys' complaint alleges E*Poly Star, which manufactures and distributes polyethylene and paper products to state and local government entities, has for a period of years and "continuing through the present" misrepresented the length, width, thickness and count of its packaged products and commodities in violation of state law. The trial court sustained E*Poly Star's demurrer to the complaint without leave to amend and dismissed the action, finding the claims were barred by the applicable statutes of limitations, which began to run no later than August 2, 2006 when E*Poly Star was notified by the Weights and Measures Office of the Los Angeles County Department of Agricultural Commissioner that its products were found to be short weighted in violation of several provisions of the Business and Professions Code. Because the district attorneys' have adequately alleged E*Poly Star has violated California's unfair competition law (UCL) (§ 17200 et seq.) within four years of filing this action, we reverse.
FACTUAL AND PROCEDURAL BACKGROUND
Pursuant to sections 17203, 17206, subdivision (a), 17535, and 17536, subdivision (a), on November 29, 2010 the district attorneys of Los Angeles, Marin and Fresno County filed a civil action in the name of the People of the State of California against E*Poly Star and three of its officers and directors, Zhi Zhong Sun (chief executive officer), Steven Choi (executive vice president) and Donald V. Schmahl (director). E*Poly Star manufacturers and imports polyethylene products (plastic bags) and paper products (toilet paper) for sale to various state and local government entities.
The district attorneys' complaint alleges E*Poly Star has violated
California's false advertising law (first cause of action) and the UCL
(second cause of action) by making false and misleading statements
regarding the dimensions, quantity and thickness of its products when
it sold those products to 17 different governmental entities.*fn2
Specifically, E*Poly Star is alleged to have
misrepresented the net quantity of the contents of its packaged
products; misrepresented the length, width, thickness and count of its
packaged products; distributed products without labels; and
distributed products with labels that do not conform to various
statutory and regulatory requirements. The violations are alleged to
have begun "at a date unknown but occurring within four years of the
filing of this Complaint and continuing through the present." In
addition, the complaint alleges, "[u]nless enjoined by order of this
Court, Defendants are likely to continue to engage in such acts of
The complaint prays for injunctive relief, a civil penalty of $2,500 for each violation of section 17500, a civil penalty of $2,500 for each violation of the UCL and costs of suit including the costs of investigation.
2. E*Poly Star's Demurrer and Request for Judicial Notice
On February 14, 2012 E*Poly Star and the individual defendants demurred to the complaint, contending among other grounds the two causes of action asserted by the district attorneys on behalf of the People were barred by the three-year statute of limitations for false advertising claims (Code Civ. Proc., § 338, subds. (a) & (h)) and the four-year limitations period for UCL claims (§ 17208). With their supporting papers defendants requested the trial court take judicial notice, pursuant to Evidence Code section 452, subdivision (c) (official acts of the United States or any State), of an August 2, 2006 notice of violations to E*Poly Star from the Los Angeles County Department of Agricultural Commissioner/Weights and Measures. The notice described several instances in which E*Poly Star's products were found to be "short weight" or "short count" (see § 12024), as well as in violation of the Fair Packaging and Labeling Act (§ 12601 et seq.), based on four inspections that had been conducted between May 25, 2006 and June 23, 2006. Defendants argued the claims asserted in the complaint accrued no later than August 2, 2006 and, as a result, were time-barred.
In opposition the district attorneys explained the complaint alleges E*Poly Star has engaged in an ongoing course of illegal conduct that continued through the date of filing the lawsuit. Accordingly, under the continuing violation doctrine the complaint, filed within the statutory period for the last asserted occurrence of the unlawful practices, was timely. No opposition to E*Poly Star's request for judicial notice was filed.
In its reply memorandum E*Poly Star argued the continuing violation doctrine was developed in discrimination cases and has not been generally applied by California courts outside that context to delay accrual of a cause of action or otherwise toll the running of a governing statute of limitations. According to E*Poly Star, although there may be multiple claims, the cause of action for false advertising or a violation of the UCL accrues upon discovery of the first act, which here was no later than August 2, 2006. In support of its argument E*Poly Star cited and discussed the Court of Appeal's decision in Aryeh v. Canon Business Solutions, Inc. (2010) 185 Cal.App.4th 1159, review granted Oct. 20, 2010 (S184929) (Aryeh), explaining, "While the case is not precedent, nor citable, its decision is instructive."
3. The Trial Court's Order Sustaining the Demurrer Without Leave To Amend
The court heard argument on E*Poly Star's demurrer on March 30, 2011. The court's tentative ruling was to sustain the demurrer without leave to amend, finding both causes of action had accrued on August 2, 2006 and were time-barred. The written tentative ruling cited the Court of Appeal decision in Aryeh, noted Supreme Court review had been granted, provided a paragraph description of the case, and then stated, "Even though Arye[h] is not citable, the Court has reviewed it for the purpose of considering its analysis. The Court agrees with Arye[h]'s analysis; there is no reason to ...