Facts
- County district attorneys, on behalf of the People of the State of California, filed a civil enforcement action against Nationwide, a debt-payment service provider.
- The complaint alleged unfair, unlawful, or deceptive business practices and false or misleading advertising under the Unfair Competition Law (UCL) and False Advertising Law (FAL).
- The government sought injunctive relief, restitution, and civil penalties.
- Nationwide demanded a jury trial on the UCL and FAL causes of action.
- The trial court struck the jury demand, concluding the claims were equitable and therefore triable to the court.
- The Court of Appeal granted writ relief, holding that seeking civil penalties triggered a California constitutional jury-trial right.
- The California Supreme Court granted review to decide whether a jury trial is required in public UCL/FAL enforcement actions that seek civil penalties along with equitable relief.
Issues
- Whether the California Constitution requires a jury trial when the government seeks civil penalties under the UCL and FAL in addition to injunctive or other equitable remedies.
Decision
- The California Supreme Court held that no jury-trial right attaches to public UCL/FAL causes of action, even when civil penalties are sought with equitable relief.
- The court reversed the Court of Appeal and reinstated the trial court’s order striking Nationwide’s jury demand.
- A concurrence agreed with the judgment that the claims are not jury triable under the California Constitution.
Legal Principles
- California’s constitutional jury-trial right preserves the right as it existed at common law in 1850; the inquiry turns on whether the action is analogous to one at law or in equity at that time.
- Public enforcement actions under the UCL and FAL are equitable in character because they function as regulatory consumer-protection schemes aimed at stopping and remedying unlawful business practices, with injunction and restitution as central remedies.
- The presence of civil penalties does not, by itself, convert an otherwise equitable statutory cause of action into a legal action requiring a jury; the controlling question is the overall nature and historical analogue of the cause of action.
- Federal Seventh Amendment doctrine (including federal jury-trial analysis for civil penalties) does not govern the interpretation of California’s jury-trial provision in state-court civil actions.
Conclusion
The court held that public UCL and FAL enforcement actions seeking civil penalties together with injunctive or other equitable relief are to be tried to the court, not a jury, because the statutory causes of action are equitable under California’s historical jury-trial test.