ARYEH v. CANON BUSINESS SOLUTIONS

Appellant's Opening Brief on the Merits

Cal.November 19, 2010

S184929 In the SUPREME COURSupreme Court EREE cour State of California NOV 19 2019 Frederick K. Ohtrich Clark Deputy JAMSHID ARYEH, Plaintiffand Appellant, V. CANON BUSINESS SOLUTIONS,INC., Defendant and Respondent. AFTER A DECISION BY THE CALIFORNIA COURT OF APPEAL SECOND APPELLATE DISTRICT - DIVISION EIGHT - CASE NO. B213104 SERVICE ON THE CALIFORNIA ATTORNEY GENERAL AND THE LOS ANGELES COUNTY DISTRICT ATTORNEY PURSUANTTO BUSINESS & PROFESSIONS CODE§ 17209 AND C.R.C, RULE 8.29 OPENING BRIEF ON THE MERITS R. DUANE WESTRUP,Esq. (58610) LINDA GUTHMANN KRIEGER,ESQ. (148728) MARK L. VAN BUSKIRK,Esa. (190419) TERRENCEB. KRIEGER, ESQ. (162399) JENNIFER L. CONNOR, ESQ. (241480) KRIEGER & KRIEGER WESTRUP KLICK, LLP 249 East Ocean Boulevard, Suite 750 444 Ocean Boulevard, Suite 1614 Long Beach, California 90802 Long Beach, California 90802-4524 (562) 901-2500 Telephone (562) 432-2551 Telephone (562) 901-2522 Facsimile (562) 435-4856 Facsimile Attorneysfor Plaintiff, Appellant and Petitioner Jamshid Aryeh g COUNSELPRESS- (800) 3-APPEAL PRINTED ON RECYCLED PAPER &S TABLE OF CONTENTS Page(s) TABLE OF AUTHORITIES ........ 0.0... ccceecccceeeceeveeues iii QUESTIONS PRESENTED FOR REVIEW ..........c0cccceeeeeee 1 INTRODUCTION 1.0.0... c ccc cece cece tenn eeenvevnney 2 SUMMARYOF THE CASE ........0... ccc ccc cece eeneeeueues 7 ARGUMENT....... ccc cece cece cece eee neeeeentteennns 12 I. Plaintiff's UCL Claim Accrued Each Time Defendant Invaded Plaintiff's Rights And Caused Injury........... 12 A. _ Plaintiffs Position Is Consistent With The Rules Governing Accrual Of Claims Generally ......... 12 B. Plaintiff's Position Is Consistent With The Continuous Accrual Doctrine Specifically ....... 15 1. Periodic Payments Pursuant To Statute ..... 19 2. Periodic Payments Pursuant To Contract ... 23 II. While Not Applicable To The Matter Sub Judice, The Delayed Discovery Doctrine Should Apply To The UCL wo... ccc eee eee en eeeeeaes 26 A. Application OfThe Delayed Discovery Doctrine To The UCLIs Unsettled And The Subject Of An Appellate Court Split ............0..0..0.,. 27 B. The Delayed Discovery Doctrine Is Well-Recognized And Application To The UCLIs Justified ....... 28 Ill. The Court Of Appeal’s Only Cited Supporting Precedent, The Snapp Case, Is Not Controlling ................0. 34 A. Snapp Is Factually Inapposite.................. 36 B. Snapp Is Legally Inapposite ................... 37 IV. While Not Applicable To The Matter Sub Judice, Blanket | Rejection OfThe Applicability OfThe Continuing Violation Doctrine To The UCL Is Unwarranted ........ 39 V. Fundamental ConsumerProtection And Fair Competition Policies OfThe UCL Would Be Frustrated By The Court Of Appeal’s Holding That The First Violation Establishes NCS )46 A. The Unprecedented Use Of Plaintiff's Discovery .......... ccc e eee e eee 47 B. The Practical Effect Of Accrual At First-Occurrence .........0ccce ce eecceeaes 49 CONCLUSION ....... 0... ccc cece eee n een ene eaneeeenes 51 CERTIFICATE OF WORD COUNT ............ 0. cece cece ee eees 52 DECLARATION OF SERVICE il TABLE OF AUTHORITIES Page(s) STATE CASES Alch v. Superior Court, (2004) 122 Cal.App.4th 339, 19 Cal.Rptr.3d 29 ..............., 40 Allen v. Sundean, (1982) 137 Cal.App.3d 216, 186 Cal.Rptr. 863 ............... 29 April Enterprises, Inc. v. KTTV, (1983) 147 Cal.App.3d 805, 195 Cal.Rptr. 421 ......... 28-30, 33 Armstrong Petroleum Corp.v. Tri-Valley Oil & Gas Co., (2004) 116 Cal.App.4th 1375, 11 Cal.Rptr.3d 412....... 18, 25, 26 Bernson v. Browning-Ferris Industries, (1994) 7 Cal.4th 926, 30 Cal.Rptr.2d 440 ................ 31, 32 Brandon G.v. Gray, (2003) 111 Cal.App.4th 29, 3 Cal.Rptr.3d 330................ 31 Broberg v. Guardian Life Ins. Co. OfAmerica, (2009) 171 Cal.App.4th 912, 90 Cal.Rptr.3d 225........ 28, 32, 33 Cain v. State Farm Mut. Auto. Ins. Co, (1970) 62 Cal.App.3d 310, 132 Cal.Rptr. 860 ................ 29 Californiansfor Disability Rights v. Mervyn’s, (2006) 39 Cal.4th 223, 46 Cal.Rptr.3d57 ...............000. 14 Cleveland v. Internet Specialties West, Inc., (2009) 171 Cal.App.4th 24, 88 Cal.Rptr.3d 892............... 31 Community Assisting Recovery, Inc. v. Aegis Ins. Co., (2001) 92 Cal.App.4th 886, 112 Cal.Rptr.2d 304........... 14, 43 Daugherty v. American Honda MotorCo., Inc., (2006) 144 Cal.App.4th 824, 51 Cal.Rptr.3d 118........... 13,49 ili STATE CASES(Cont’d.) Dryden v. Board OfPension Commrs. (1936) 6 Cal.2d 575, 59 P.2d 104.0... . cece eee ee 18 Fletcher v. Security Pacific National Bank, (1979) 23 Cal.3d 442, 153 Cal.Rptr.28 0.0.0.0... 0... cee eee, 49 Fox v. Ethicon Endo-Surgery, Inc., (2005) 35 Cal.4th 797, 27 Cal.Rptr.3d 661 ..... 3, 4, 13, 26, 27, 33 Green v. Obledo, (1981) 29 Cal.3d 126, 172 Cal.Rptr. 206 .............. 18, 21, 22 Grisham v. Philip Morris U.S.A., Inc., (2007) 40 Cal.4th 623, 635, 54 Cal.Rptr. 3d 735 ..... 27, 28, 33, 34 Gryczmanv. 4550 Pico Partners, Ltd., (2003) 107 Cal.App. 4th 1, 131 Cal.Rptr.2d 680 .............. 30 Hogar Dulce Hogar v. Community Dev. Com’n OfCity OfEscondido, (2003) 110 Cal.App.4th 1288, 2 Cal.Rptr.3d 497..... 17, 18, 20, 21 Howard Jarvis Taxpayers Association v. City OfLa Habra, (2001) 25 Cal.4th 809, 107 Cal.Rptr.2d 369 ............. passim In re TobaccoII Cases, . (2009) 46 Cal.4th 298, 93 Cal.Rptr.3d 559 ........... cee 15 Jones v. Tracy SchoolDistrict, (1980) 27 Cal.3d 99, 165 Cal.Rptr. 100 ...........000. 18, 22, 23 Klein v. Earth Elements, Inc., (1997) 59 Cal.App.4th 965, 69 Cal.Rptr.2d 623 ................ 5 Komarova v. National Credit Acceptance, Inc., (2009) 175 Cal.App.4th 324, 95 Cal.Rptr.3d 880........... 40, 42 Korea Supply Co. v. Lockheed Martin Corp., (2003) 29 Cal.4th 1134, 131 Cal.Rptr.2d29 ................. 49 iv STATE CASES(Cont’d.) Lee v. Escrow Consultants, Inc., (1989) 210 Cal.App.3d 915, 259 Cal.Rptr. 117 .............0., 32 Manguso v. Oceanside Unified School Dist., (1979) 88 Cal.App.3d 725, 152 Cal.Rptr.27 ................. 29 Massachusetts Mutual Life Ins. Co. v. Superior Court, (2002) 97 Cal.App.4th 1282, 1295, 119 Cal.Rptr.2d 190........ 28 McConnell v. Merrill Lynch, Pierce, Fenner & Smith, Inc., (1983) 33 Cal.3d 816, 191 Cal.Rptr.458 ..................04. 2 Moreno v. Sanchez, (2003) 106 Cal.App.4th 1415, 131 Cal-Rptr.2d 684............ 30 Neel v. Magana, Olney, Levy, Cathcart & Gelfund, (1971) 6 Cal.3d 176, 98 Cal.Rptr. 837 ........... 000.000.0802 29 Oakes v. McCarthy Co., (1968) 267 Cal.App.2d 231, 73 Cal.Rptr. 127 ............0.0.. 29 Richards v. CH2MHill, Inc., (2001) 26 Cal.4th 798, 111 Cal.Rptr.2d 87 .......... 5, 39, 40, 41 Salenga v. Mitsubishi Motors Credit OfAmerica, Inc., (2010) 183 Cal.App.4th 986, 107 Cal.Rptr.3d 836............. 14 Seelenfreund v. Terminix ofNorthern California, Inc., (1978) 84 Cal.App.3d 133, 148 Cal.Rptr. 307 ................ 29 Snapp & Associates Ins. Services, Inc. v. Robertson, (2002) 96 Cal.App.4th 884, 117 Cal Rptr.2d 331.......... passim Tsemetzin v. Coast Federal Savings And Loan Assn, (1997) 57 Cal.App.4th 1334, 67 Cal.Rptr.2d 726..... 18, 23, 24, 25 Warrington v. Charles Pfizer & Co., (1969) 274 Cal.App.2d 564, 80 Cal.Rptr. 130 ................ 29 STATE CASES(Cont’d.) Wyatt v. Union Mortgage Company, (1979) 24 Cal.3d 773, 157 Cal.Rptr. 392 0.0.0... cece eee ee 40 Yanowitz v. L’Oreal USA, Inc., (2005) 36 Cal.4th 1028, 32 Cal.Rptr.3d 436 ........... 39, 40, 41 FEDERAL CASES Betz v. Trainer Wortham & Co., Inc., (9" Cir. 2007) 236 Fed. Appx. 253 .......... 35, 36, 39, 40, 45, 46 Gruen vy, Edfund, (N.D. Cal. 2009) 2009 WL 2136786 .......... 0.000 e eee, 40, 42 Havens Realty Corp. v. Coleman, (1982) 455 U.S. 363, 380, 102 S.Ct. 1114, 71 LEd.2d214...... 46 Joseph v. J.J. Mac Intyre Companites, L.L.C., (N.D. Cal. 2003) 281 F.Supp. 1156 ..............000..0. 39, 42 Lauter v. Anoufrieva, (C.D. Cal. 2009) 2009 WL 2192362 .......... cece eee eee 40 Pace Industries, Inc. v. Three Phoenix Co., (9Cir, 1987) 813 F.2d 234 oo... cece cece eee eae 39 Process Specialties, Inc. v. Sematech, (E.D. Cal 2001) 2001 WL 36105562 .......... 0... ccc eee 39 Rambus,Inc. v. Micron Technology,Inc., (N.D. Cal. 2007) 2007 WL 1792310 ....... 0... eee eae 40 Suh v. Yang, (N.D.Cal. 2997) 987 F.Supp. 783 ......ceeececeeeee. 40, 44, 45 vi STATUTES & RULES Business & Professions Code § 17200 ...... 0... ccc cece eevee passim Business & Professions Code § 17204 1.0.0... cc ccc ccc ceeeeece 12, 13 Business & Professions Code § 17208 ..... 0... cece cuecccee 8, 12, 38 Civil Code § 3426.1 0... ccc cece ccc c cent eee enenaeas 36, 38 Civil Code § 3426.6 22... . ccc ccc ccc cece ene n eens eeeeevenuneny 38 Civil Code § 3439.01 0... ccc ccc eee cence ee eenaeeus 36, 37 Code ofCivil Procedure § 338(a) ..... ccc cece ccc cece te evnnes 21 Code ofCivil Procedure § 338(d) oo... . cece ec c ccc ecu aeeae 32 Labor Code § 1197.5 . 0... ccc ccc cece ence eee e ee eeeeeeseunnnns 22 Vii QUESTIONS PRESENTED FOR REVIEW The issues presented, as stated on the docket page, are as follows: 1) Maythe continuing violation doctrine, under which a defendant maybe held liable for actions that take place outside the limitations period if thoseactionsare sufficiently linked to unlawful conductwithin thelimitations period, be asserted in an action under the Unfair Competition Law (Bus. & Prof. Code § 17200 et seq)? 2) May the continuous accrual doctrine, under which each violation of a periodic obligation or duty is deemedto giverise to a separate cause of action that accruesat the time ofthe individual wrong, be asserted in such an action? 3) Maythe delayed discovery rule, under which a cause ofaction does notaccrue until a reasonablepersonin theplaintiffs position has actual or constructive knowledge offacts giving rise to a claim, be asserted in such an action? INTRODUCTION “Necessity is the motherof invention.” - Plato. The issues raised by this Court reflect the wide-range of analyses required to reach the innumerably varying fact situations which are intended to be addressed by Bus. & Prof: Code § 17200 et seq. (Unfair Competition Law (“UCL”)). The purpose of the UCL is to provide remedies in cases presenting vastly different facts throughits prohibition against any “unlawful, unfair or fraudulent businessact or practice.” Therefore, the analysis of the statute of limitations applicable to a UCL claim must necessarily be sufficiently flexible to address those diverse facts and legal prongs. Underthe UCL,“onesize doesnotfit all” and, consequently, courts have adapted their approachesso asto achieve substantial justice for the parties. Asthis Court stated in McConnell v. Merrill Lynch, Pierce, Fenner & Smith, Inc., the general equitable principles underlying the Bus. & Prof. Code, [vests the trial court with broad authority to fashion a remedy that will prevent unfair trade practices and will deter the defendant and others from engaging in such practices in the future. McConnell v. Merrill Lynch, Pierce, Fenner & Smith, Inc., (1983) 33 Cal.3d 816, 821, 191 Cal.Rptr. 458. As explained below,the direct answerto each ofthe three questions presented for review by the Court is “yes”, with the governing approachcontrolled by the facts of each case presented. This particular case presents the important and unsettled legal issue of how to apply the statue oflimitations in a UCL case involving multiple, repeated wrongful acts, whereby each separate act is a stand-alone wrong occurring both within andoutside thestatute oflimitations. In this matter, the Second District Court of Appeal was asked to resolve the issue of whether there is a single accrualor multiple accruals for purposes ofthe UCLstatute of limitations. The Second District concluded that Plaintiffs UCL claim accrued only once at the time ofthe initial occurrence. See, Aryeh v. Canon Business Solutions, Inc., (June 22, 2010, B213104) Slip Opinion p. 6-7 (hereinafter, “Slip Opn.”) (stating,“whenallegations regarding a defendant’s conduct covers a period oftime the cause of action accruesat the time of the initial conduct.”). For reasonsset forth herein, the Second District’s ruling is contrary to the generalrule governing accrual ofclaims, ignores the applicable continuous accrual doctrine, contravenes public policy, and overlooks the flexibility required to achieve the goals of the UCL. In this action, Plaintiff contends that his UCL claimsare timely under the general rule governing accrual because he seeks recovery only for free- standing actionable wrongs occurring within the last four years beforefiling suit. As a generalrule, a cause of action accruesat the time whenthe cause of action is complete with all of its elements. Fox _v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 807, 27 Cal.Rptr.3d 66. The fact patterns giving rise to application of the doctrine of continuousaccrual are best summarized in the cases involving periodic payments. Howard Jarvis Taxpayers Association v. City OfLa Habra(2001) 25 Cal.4th 809, 107 Cal.Rptr.2d 369. As Justice Rubin explained in his ten-page dissenting opinion, continuous accrual “[a]cknowledgesthereality that similar acts can continue to occur: one can breach the same contract over and over again in substantially the same manner. Earlier conduct is not extended, but repeated.” Slip Opn.- Dissent, p. 5. [emphasis in original] Thus, the continuous accrual doctrine is an applicationof, not an exception to, the traditional rule governing accrual of claims. Under the rule governing accrual of claims, generally, and the continuousaccrual doctrine, specifically, Plaintiff's UCL causeofaction is timely. Thereare, however, exceptionsto the generalrule ofaccrual,including: 1) the delayed discovery doctrine; and 2) the continuing violation doctrine. The delayed discovery doctrine is an exception to the general rule that postpones accrual of a cause ofaction until the plaintiff discovers, or has reason to discover, the cause of action. Fox, supra, 35 Cal.4th at 807. The continuing violation doctrine is an exceptionto the general rule that holds a defendantliable for actions that take place outside the limitations period if those actionsare sufficiently linked to conduct within the limitations period. Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 802, 111 Cal.Rptr.2d 87. Both ofthese exceptions delay the accrualofclaims and reach conduct outside the limitations periods based on equitable considerations. Here, the majority opinion fails to take into accounttherealities of the various factual situations whicharise under the UCLandits goal of providing remedies for recurring conduct, as well as single-isolated offenses.' The Second District’s outright rejection of the delayed discovery doctrine and the continuing violation doctrine to the UCLis erroneousand attemptsto find a simplistic answer to complex issues. Further, although Plaintiffdisavowedapplication ofdelayed discovery and equitable tolling, the Court of Appealused Plaintiff's knowledge,not to extend accrual, but rather to bar claims based on independent acts that occurred within the limitations period. Slip Opn., pp. 8 and 11-12. In other words, the Second District uses a plaintiff's discovery to “cut short” the running of the statutory clock. The Second District’s “reverse” use of "The 1992 Amendment to Bus. & Prof Code § 17200 changed the formerly plural term “practices”to the singular term “practice” and added the singular term “act” precededby the singular modifier “any.” Klein v. Earth Elements Inc. (1997) 59 Cal.App.4th 965, 969, 69 Cal.Rptr.2d 623 (observingthat the plain meaning of the amendmentis that the UCL now coverssingleacts of misconduct.) Plaintiff's discovery of wrongdoingto bar recovery of independent conduct occurring within the limitations period is unprecedented and ignores the intended broad reach of the UCL. Resolving the question ofwhether the UCLstatute oflimitations begins to run onthe first-occurrence of a series of actionable wrongs or runs anew with each subsequent free-standing violation greatly impacts the extent to which victims of unfair business practices can vindicate their rights. The practical effect of the Second District’s holding that, when a defendant’s wrongful acts cover a period oftime, a UCL cause ofaction accrues only once at the timeoftheinitial act is far-reaching.Ifthe statutory clock beginsto run when the first violation occurs, irrespective of a defendant’s subsequent repeated wrongfulacts, then plaintiffs who do not bring UCL claims within four years ofthefirst violation will lose the ability to seek recourseforever for subsequentviolations. Ifthe first violation establishes accrual without regard to subsequent, repeated violations, then defendants, who“escape”the statutory time frame, will be given carte blanche to continue to invade a plaintiff's rights indefinitely. Thus, the Second District’s ruling encourages the very types of conductthat the UCLis intended to prevent. For these reasons, this Court should reverse the judgment ofthe Court ofAppealand remandwith directions to enter an order summarily overruling Defendant’s demurrer. To the extent the operative complaintis held untimely or deficient on other grounds, the Court should reverse the judgmentofthe Court of Appeal and remand with directions to allow Plaintiff to file an amended complaint in the trial court seeking to satisfy the guidelines announcedin this Court’s opinion. SUMMARY OF THE CASE The facts of this case are straightforward and undisputed. In November 2001, Jamshid Aryeh (“Plaintiff”) entered into a lease agreement with Canon Business Solutions, Inc. (“Defendant” or “Canon”) for the lease of a black and white copier. Slip Opn., p. 2. Under the agreement, Plaintiff agreed to pay a monthly fee in return for a monthly copy allowance,and also agreedto pay additional excess copy charges for each additional copy beyond the monthly allotment. In February 2002, Plaintiff entered into a second lease agreement with Canonfor the lease of a color copier under similar terms. Shortly after entering into the copy rental agreements, Plaintiff began to notice that monthly meter readings taken by Canon’s servicemen did not accurately reflect the actual number of copies made. Consequently, Plaintiff began keeping his ownrecords ofthe numberofcopies made on each machine and determined that he was being charged for “Test Copies” made when Canon personnel repaired or serviced the machines. Slip Opn., p. 3. Whenever problemsarose or maintenance on a copier was required, Canon dispatched personnelto repair or service the copier, during which time the serviceman would run Test Copies on the copier. These Test Copies caused Plaintiff to exceed the monthlytotal allowable photocopies for a given month and incur additional fees. Despite Plaintiff's attempts to have Canoncorrect the “excessive” copying charges, Canon failed to reimburse Plaintiff for the overcharges and also charged him late fees. Id. On January 31, 2008, Plaintiff filed a consumerclass action complaint on behalf of himself and similarly-situated persons residing in the State of California who entered into copy rental agreements with Canon and who were overchargedfor copies. SlipOpn., p.3. The complaintalleged a single cause of action for unfair competition pursuant to the UCL (Bus. & Prof. Code § 17200 et seq.) and soughtrestitution for overcharges. The reliefrequested was limited to recovery for improper charges incurred during the four year period immediately preceding the filing of the action. Canon demurred to the complaint and asserted, among other grounds, that the claims were barred by the four-year statute of limitations under Business & Professions Code § 17208. Basedonits finding that Plaintiff had notice ofthe overcharges since at least 2002, the trial court sustained the demurrer with leave to amend. Id. Plaintiff then filed his first amended complaint which incorporated an amendment wherebyPlaintiff omitted his prior reference to first discovering the overcharges“shortly after entering into the copy rental agreements” and substituted in lieu thereof a listing of 17 specific dates and instances of overcharges spanningfrom February 6, 2002 through November16, 2004. Slip Opn., p. 3-4. Specifically, Plaintiffalleged the following unauthorized charges for Test Copies: February 6, 2002 100 Test Copies March12, 2003 100 Test Copies March 13, 2003 100 Test Copies June 5, 2003 100 Test Copies February 24, 2004 870 Test Copies February 27, 2004 700 Test Copies March 24, 2004 116 Test Copies April 1, 2004 421 Test Copies April 2, 2004 490 Test Copies April 5, 2004 260 Test Copies April 6, 2004 622 Test Copies April 9, 2004 250 Test Copies May6, 2004 169 Test Copies June 9, 2004 204 Test Copies June 16, 2004 179 Test Copies October 1, 2004 294 Test Copies November 16, 2004 53 Test Copies {Appellant’s Appendix filed in support of Appellant’s Appeal, p. 57]. Ofthe 17 itemizedinstances,Plaintiffpursued UCL claims and soughtredress for the 13 charges occurring on dates within thefour years preceding the filing of the suit - in other words, after January 2004. Slip Opn., p. 4 Plaintiff alleged that “Each time [Canon’s] servicemen ran Test Copies...was independent of any prior occasions when [Canon’s] servicemen ran Test Copies”and each date “resulted in a separate anddistinct violation giving rise to separate and distinct damage.” Id. Canon demurred to the amended complaintandthetrial court again sustained the demurrer with leave to amend. Id. Pursuant to the trial court’s directive, with the filing of the second amended complaint, Plaintiff attached copies of the November 2001 and November 2002 lease agreements, Id. Canon demurred again based on the statute of limitation and also argued that Plaintiff's claims were barred by laches. Thetrial court determined the second amended complaint wasbarred by the statute of limitations. Thetrial court stated that “there is no continuing practices doctrine that applies here” andthat, No equitable tolling that I can see that could possibly apply; [under section] 17200, when the act occurs the clock starts, and here were havean allegation that there was actual knowledgein February of 2002 in an earlier pleading. Slip Opn.,p. 5. ? Specifically, Plaintiff alleged “By this complaint, Plaintiff seeks to recover for amounts wrongfully obtained by Defendants from Plaintiff, and others similarly situated, in connection with Test Copies ran by Defendants from January 31, 2004 (fouryearspriorto the filing ofthis action) through the date ofjudgmentin this action.” [Appellant’s Appendix,p. 59] 10 Having concluded thatPlaintiffwas “concededly” aware ofhis claim “almost six years in advance ofthe suit being filed,” the trial court sustained the demurrer without leave to amend. Id. Plaintiff filed a timely appeal. On June 22, 2010, the Court of Appeal, Second District filed its published opinion affirmingthetrial court’s dismissal. In affirmingthetrial court’s ruling, the SecondDistrict held that whenthe allegations regarding a defendant’s conduct covers a period oftime,the cause ofaction accruesat the time ofthe initial conduct. Slip Opn., pp. 6-7. Since Plaintiff knew “shortly after” he entered into the second contractin February 2002 ofCanon’s alleged overcounting of copies and overcharging for them, the Second District found that Plaintiff's claims accruedsix years earlier. Slip Opin., p. 8. Further, the Second District found no precedent or policy considerations to support applying the continuingviolation doctrine to UCL claims. The SecondDistrict concluded: Here, once appellant was aware he wasbeing “overcharged”for test copies andthat his protests to Canon were futile, he could and should have taken diligent action. He could not wait for years until the agreement expired while more “overcharges” accumulated before filing a complaint. Slip Opin., pp. 11-12. Rejecting Plaintiff's assertion that the statutory clock started anew each distinct time Canon invaded Plaintiffs rights, the Second District held Plaintiff's UCL claims untimely. 11 ARGUMENT I. Plaintiff's UCL Claim Accrued Each Time Defendant Invaded Plaintiff's Rights And Caused Injury. Statutes oflimitations serve to protect entities and persons from having to defend againststale claims. If individuals let too muchtime lapse between the accrual ofa claim ofwrongdoing and seekingredress,statues oflimitations will declare the lawsuit time-barred. The statute of limitations for actions brought under the UCLis “four years after the cause of action accrued.” Bus. & Prof. Code § 17208. With respect to the unfair competition laws, the limitations period begins to run whena putative plaintiff has been subjected to “any unlawful, unfair or fraudulent business act or practice” and “has suffered injury in fact and lost money orproperty as a result of the unfair competition.” Bus. & Prof. Code §§ 17200 and 17204. Simply put, as to a private party plaintiff, the alleged wrongful act and the resulting sustained injury are the “triggering events” that start the runningofthestatutory clock. In the context of a continuing wrong where the same offending act is independently actionable and repeated, the statutory clock runs anew with each offending act and resulting injury. A, Plaintiff’s Position Is Consistent With The Rules Governing Accrual OfClaims Generally. A cause of action accrues at the time when the cause ofaction is 12 complete with all of its elements. Fox v. Ethicon Endo-Surgery,Inc. (2005) 35 Cal.4th 797, 807, 27 Cal.Rptr.3d 661. Generally, a cause of action accrues and the statute of limitations begins to run when a suit may be maintained. Ordinarily this is when the wrongful act is done and the obligation or liability arises, but it does not ‘accrue until the party owningit is entitled to begin and prosecute the action thereon.’ In other words,‘[a] cause of action accrues ‘upon the occurrenceofthe last element essential to the cause ofaction.’ Howard Jarvis Taxpayers Assn. v. City OfLa Habra (2001) 25 Cal.4th 809, 815, 107 Cal.Rptr.2d 369. [emphasis added] The elements of a UCL claim are found in the definition of “unfair competition”set forth as “any unlawful, unfair or fraudulent business act or practice...” Bus. & Prof. Code § 17200. Therefore, underthestatute, there are three varieties of unfair competition: practices which are unlawful, unfair or fraudulent. Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 837, 51 Cal.Rptr.3d 118. While certainly the date of defendant’s initial misconduct - be it allegedly “unlawful, unfair or fraudulent” - is essential, it is not necessarily controlling. Since the passage of Proposition 64, private suits may only be filed under the UCL upon a showingthatthe plaintiff “has suffered injury in fact and has lost money or property as a result of such unfair competition.” Bus. & Prof. Code § 17204. This Court has admonishedthat Proposition 64’s procedural modifications concerning standing, “left entirely unchanged the 13 substantive rules governing business and competitive conduct. Nothing a business might lawfully do before Proposition 64 is unlawful now, and nothing earlier forbidden is now permitted.” see, Californians for Disability Rightsv. Mervyn’s (2006) 39 Cal.4th 223, 232, 46 Cal.Rptr.3d 57. Because this standing requirementis necessary for a private party to invoke the judicial process,it is essential to calculating the accrualdate for a UCLclaim. Salenga v. Mitsubishi Motors Credit Of America, Inc. (2010) 183 Cal.App.4th 986, 1000-1002, 107 Cal.Rptr.3d 836 (allowing appellant to amend pleading to allege that she incurred actual injury and UCL standing within thestatutory period). Applying standard accrualprinciples, aUCL cause ofaction accruesfor a private party plaintiff when there has been a violative act and sustained injury. In other words, the statutory clock accrues uponthe occurrenceofthe latest of: 1) unfair competition (e.g., “unlawful, unfair or fraudulent act or practice”), and 2) injury (e.g., “loss of money or property”). Notably absent from the substantive elements of a UCL claim is any inquiry into a party’s intent or knowledge. On the contrary, the UCLis a strict liability statute and it is not necessary to show that a defendant intended to injure anyone. Community Assisting Recovery,Inc. v. Aegis Ins. Co. (2001) 92 Cal.App.4th 886, 891, 112 Cal.Rptr.2d 304. The focus of the UCL is “on defendant’s 14 conduct, rather than the plaintiff's damages,in service ofthestatute’s larger purpose ofprotecting the general public against unscrupulous business practices.” Inre TobaccoII Cases (2009) 46 Cal.4th 298, 312, 93 Cal.Rptr.3d 559. [emphasis added] Thus, the UCL claim is not, and should not be, dependent upon plaintiff's knowledge of the wrongdoing, but upon the wrongdoingitself. Here, Canon engagedin a new violative act under the UCL each time it overchargedPlaintiff for Test Copies and Plaintiff overpaid. In concluding that only the first-occurrence of the wrongful conduct triggers the statutory clock without regard to subsequent, repeated violations, the Court of Appeal shields wrongdoers from liability for free-standing acts occurring within the limitations period. Such a rule departs from traditional principles governing accrual of claims and ignores the purpose of the UCL. B. Plaintiff's Position Is Consistent With The Continuous Accrual Doctrine Specifically. Notwithstanding applicationoftraditional accrualprinciples,here, the parties dispute whetherthere wasa single accrual versus multiple accruals for the UCLstatute of limitations purposes. The Second District correctly articulated the dispute as follows: 15 However, appellantasserts the statutory clock not only starts at the time of the first occurrence - i.e., the time an allegedly offending act was committed and causedinjury - but rather “re- starts” each time the defendantinvadestheplaintiff's rights and causes injury. Slip Opn., pp.6-7. Ultimately, the Second District rejected Plaintiff's contentions and concluded that “whenallegations regarding a defendant’s conductcovers a period of time, the cause of action accruesat the time ofthe initial conduct.” Thus, the Second District’s ruling ignores the recurring misconduct of a defendant. In briefing and argument before the Second District and lower court, Plaintiff incorrectly recommended application of the “continuing violation” doctrine. Justice Rubin, writing for the dissent, correctly suggests that what Plaintiff advocates is better termed the “continuous accrual” instead of the “continuous violation” doctrine. Slip Opn. - Dissent, pp. 2 and 5. The confusion arose because both similarly-named doctrines involve conduct occurring both within and withouta statutory period. The conceptuallydistinct continuousaccrual doctrine, however, seeks to remedy only those claimsthat accrued within the relevant statutory period; it does not seek to delay ortoll accrual of claims that would otherwise fall outside that period. Slip Opn.- Dissent, p. 5. As pleaded and unambiguously stated in his briefing, Plaintiff is not pursuingclaims for charges incurred outsidethe statutory period, but only the 16 thirteen (13) overcharges made by Canon duringthefour-yearperiodprior to filing his Complaint. Regardless of name, however, the Second District rejected the proposition that whenan “unfair, unlawful, or fraudulent conduct” recurs, a cause ofaction accrues each time a wrongful act occurs. Outside of the UCL, California courts have long recognized whatis commonlyreferred to as, the “continuous accrual” doctrine, often attributed to Justice Werdegar’s reference in the Howard Jarvis Taxpayers Association v. City OfLaHabra (2001) 25 Cal.4th 809, 107 Cal.Rptr.2d 369 decision. The “continuous accrual” doctrine recognizes that, traditionally, a statute of limitations accrues when plaintiff has the right to sue on a causeofaction, but addressesthe factual circumstance that, “when an obligation orliability arises on a recurring basis, a cause ofaction accrues each time a wrongfulact oceurs, triggering a new limitations period.” Hogar Dulce Hogar v. Community Development _Com’n Of City Of Escondido (2003) 110 Cal.App.4th 1288, 1295, 2 Cal.Rptr.3d 497. [emphasis added] Thus, the “continuous accrual” doctrine does not delayortoll the limitations period, but rather acknowledgesthe reality that actionable wrongs can be repeated and allows recovery for those wrongful acts that accrued within the statutory period. 17 The continuousaccrualdoctrine has been applied ina variety ofactions involvingthe obligation to make periodic payments under California statute or regulations. See, e.g., Howard Jarvis Taxpayers Assn., supra, 25 Cal.4th at 818-825 [refundofillegal taxes]; Green v. Obledo (1981) 29 Cal.3d 126, 144, 172 Cal.Rptr. 206 [welfare benefits]; Jones v. Tracy School Dist. (1980) 27 Cal.3d 99, 105-106, 165 Cal.Rptr. 100 [back pay wages]; Dryden v. Board Of Pension Commrs. (1936) 6 Cal.2d 575, 580-582 [pension benefits]. The continuous accrual doctrine has also been applied in actions involving breaches of contractual arrangements with periodic payments. See, e.g., Armstrong Petroleum Corp. v. Tri-Valley Oil & Gas Co. (2004) 116 Cal.App.4th 1375, 1388-1389, 11 Cal.Rptr.3d 412 [paymentsperoil and gas operating agreement] Tsemetzin v. Coast Federal Savings And Loan Assn. (1997) 57 Cal.App.4th 1334, 1344-1345, 67 Cal.Rptr.2d 726 [unpaid rent on lease agreement]. In instances of long-standing breachesor violations, the continuous accrual rule effectively limits the amount ofretroactiverelief a plaintiff can obtain to the benefits or obligations which came due within the limitations period. Hogar, supra, 110 Cal.App.4th at 1295. Thus, the continuousaccrual doctrine addresses the misconductofthe defendant without providing a windfall to the plaintiff. 18 1) Periodic Payments Pursuant To Statute This Court applied the continuous accrual doctrine to the plaintiffs’ claims in Howard Jarvis Taxpayers Association v. City OfLa Habra (2001) 25 Cal.4th 809, 107 Cal.Rptr.2d 369. In Howard,while the original enactment of the City’s Ordinance wasan eventgivingrise to plaintiffs’ cause ofaction to invalidate a tax, it was not the only event. Id. at 819. The Court found that taxpayers had alleged an ongoing violation based on the City’s continued imposition of a tax without voter approval and that the statute of limitations began anew with each collection. See, Howard, supra, 25 Cal.4th at 813 (stating that “if, as alleged, the tax is illegal, its continued imposition and collection is an ongoing violation, upon which the limitations period begins anew with each collection.”) The Court also limited the claims to “injuries occurring in the statutory three-year period before suit is brought andapplies only to plaintiffs injured by tax collections within the three-year period.” Id. at 825. Like the City ofLa Habra’s continuedcollection ofan illegal tax onits residents, Canon’s continuedcollection ofunfair charges for Test Copiesis an ongoing violation, upon which the limitations period begins anew with each collection. In arguing the correctness of the Court of Appeal’s decision, Defendantpresents precisely the samerationale that was rejected by this Court 19 in Howard, The Court of Appeal’s decision was correct. It is beyond dispute that Plaintiff's cause ofaction was “complete with all of its elements” as of February 2002 - whenPlaintiff alleges that Canonfirst charged him “excess copy charges”for “test copies,” and he apparently paid such chargesdespite his beliefthat they were improper. Plaintiff's UCL claim accrued then because Plaintiff could have, at that point, commenced legal action seeking restitution for the allegedly improper charges, and an injunction preventing Canon’s further imposition of such charges. Answer To Petition For Review, p. 12. [emphasis added] Defendant’s position is diametrically opposed to this Court’s pronouncement that plaintiffs’ [c]auses ofaction are not barred merely because similar claims could have been madeatearlier times asto earlier violations...” Howard, supra, 25 Cal.4th at 821-822. [emphasis added] This Court’s refusal to be influenced byclaimsthat could have been broughtearlier is consistent with the generalrule ofaccrual;it simply acknowledgesthat claims betweenparties can accrue more than once and furthers the purpose ofthe UCL. The Courts ofAppealhave likewise recognizedthe applicability ofthe continuous accrual doctrine. In Hogar Dulce Hogar v. Community Development Com’n Of City Of Escondido (2003) 110 Cal.App.4th 1288, 1298, 2 Cal.Rptr.3d 497, a nonprofit association filed a writ of mandate and declaratory relief action alleging that a redevelopment agency miscalculated and underpaid its Housing Fund obligations pursuant to community 20 redevelopment law. The Fourth District found that plaintiff's claims were subject to the continuous accrual rule and held that the statute oflimitations began on each date that the redevelopment agency’s payments wereactually due. Since the agency’s obligation to pay the Housing Fund twenty percent of its gross (as opposed to net) tax increment receipts was a recurring annual duty, a cause of action arose each year whenthe agencyfailed to properly pay the fund. Id. at 1296. Relying on Code OfCivil Procedure § 338(a), however, the Court held that defendant could only be required to reimburse the Housing Fund amounts due within the three years preceding the date ofplaintiff's complaint. Id. In reaching its decision, the Hogar court explores. prior decisions applying the continuous accrual doctrine in a broad range of subject matters, including the employmentcontext. For example, quoting Green v. Obledo, the Fourth District observes: Ourcourts have viewed the obligation of a governmentalentity to pay welfare benefits pursuant to law as a debt due the recipient as of the date he first became entitled to them. [Citations] Such a debt is analogous to the obligation of a governmental entity to make payments of back wages unlawfully withheld from its workers or of pension benefits unlawfully withheld from its retirees: each such payment becomes a debt due to the employee as of the date he was entitled to receive it. It is settled that in such cases each deficient paymentconstitutes a separate violation triggering the running of a new period of limitations, and hence that the employee can recover only those payments which accrued 21 within the period of the applicable statute of limitations preceding the filing of his complaint. [Citations.] See, Hogar, supra, 110 Cal.App.4th at 1296 (citing Green,supra, 29 Cal.3d at 141). [emphasis added] Greenillustrates the continuousaccrual doctrine extendedto the employment context where employee back wagesare involved. In fact, application of the continuous accrual doctrine to employee wages was recognized bythis Court in, Jones v. Tracy SchoolDistrict (1980) 27 Cal.3d 99, 165 Cal.Rptr. 100, as early as 1980. In Jones,the plaintiffwas unlawfully discriminated against because ofher sex and portion ofhersalary was withheld from 1968 and 1974 in violation of California’s “equal pay” provision under Labor Code § 1197.5. Section 1197.5 had a twoyearstatute oflimitations and the issue in Jones was whetherplaintiffcould recoverfor the entire six-yearperiodorfor only the two years preceding plaintiff's complaint. Jones, supra, 27 Cal.3d at 103. Interpreting the Labor Code, the Court found it significant that the Legislature required an employer keep wagerecordsfor only two years and held that “The application of this ‘separate violation’ rationaleto suits filed under section 1197.5 wouldallow recovery for the same period during which employers must retain wage records.” Id., at 106. The “separate violation” rationale - where “each deficient payment created a separate and distinct violation, triggering the running of a new limitation period”- is an application of the continuousaccrual doctrine. Id., at 105. 22 Today, the continuous accrual doctrine (or “separate violation” rationale) is implicitly acknowledged in every wage and hourlawsuit brought by employees whose continued exposure to their employers’ misconduct exceeds the limitations period. Like Jones, the scope of recovery may be limited, but the right to recover is not. Application of the Second District’s holding, however, would leave employees without remedy for continuing Labor Code violations and provide employersa license to engage in further misconduct. 2) Periodic Payments Pursuant To Contract Even more analogous to Plaintiff’s claims, however, is that the California courts likewise recognize application of the continuous accrual doctrine in actions involving breaches of contractual arrangements with periodic payments. In Tsemetzin v. Coast Federal Savings And Loan Association, plaintiff and defendant entered into a written lease agreement regarding certain ground and building property in California. Tsemetzin v. Coast Federal Savings And Loan Association (1997) 57 Cal.App.4th 1334, 1338, 67 Cal.Rptr.2d 726. The lease agreementdid not specify the amount of rent, but rather set out a formula for calculating the rent. Id. By 1982, a dispute had arisen between the parties over the amount which wasrequired to be paid under the lease formula, Id. at 1339. Plaintiff repeatedly 23 communicated to defendantthat it was underpayingonits rent obligations and in breach ofthe lease agreement. Id. Plaintiff Tsemetzin even began keeping a running accountofthe rental arrearages owed by defendant. Id. In April 1993, having waited eleven (11) years, plaintiff brought suit against defendantforall unpaid rental installments. Id. Relying on the lapse of eleven years since the parties initial dispute, defendant argued that plaintiff's claims were barred by the four-year statute of limitations for recovery on a written lease. Id. at 1344. While unwilling to allow plaintiffto recover all eleven years of back rent, the Second District held plaintiff was entitled to recover unpaid rent during the four-years preceding his lawsuit. Id. Significantly, the Second District concluded that periodic monthly payments called for by a lease agreement create severable contractual obligations where the duty to make each rental payment arises independently and thestatute begins to run from the time performance of each is due. Id. Since defendant’s obligation to pay increased rent commenced each month when such payment was due and notpaid, plaintiff was permitted to recoverall unpaid rental installments falling within the four-year statutory period. Id. The Tsemetzin case and its accrual analysis is analogous to this litigation. Like Tsemetzin, the parties dispute the calculation of periodic paymentobligations pursuant to a written lease agreement. In Tsemetzin, the 24 controversy surrounded square footage and escalation intervals for real property rent; here, the controversy surrounds monthly charges for Test Copies made onleased photocopiers. Like Tsemetzin, Plaintiffkept records ofthe on- going overcharges. While Tsemetzin waited elevenyears, Plaintiffwaited six years from Canon’s initial wrongful overchargeto bring suit. Both defendants raised a statute of limitations defense seeking to completely bar Plaintiffs recovery. Forthe legal claims of breach of contract and the UCL,the statute of limitations runs from when each claim accrues. Accordingly,Plaintiff's UCL claims are subject to the same continuous accrual doctrine, and like Tsemetzin, it should be recognized that where, the factual predicates of Defendant’s misconductrecur, the statute of limitations runs anew. It is the repetitive nature of a defendant’s misconductthatis the focal point of the analysis of the continuous accrual doctrine. The Fifth District affirmed application of the continuous accrual doctrine to contractual arrangements with periodic payments in Armstrong Petroleum Corp., supra, 116 Cal.App.4th at 1388-1389. Like Plaintiff's multiple and recurring charges for Test Copies pursuantto a lease, the Fifth District held that, where periodic monthly rental payments are involved, “[e]ach cause of action for breach of a divisible part may accrue at a different time for purposes of determining whether an action is timely under the applicable statute of limitations.” 25 Armstrong, supra, 116 Cal.App.4th at 1389. Having repeatedly acknowledged the continuousaccrual doctrine in the context ofillegal taxes, employee wages,statutory violations, and contractual breaches,thereis nojustification to exclude it from the UCL. Liketraditional principles governing accrual ofa UCLclaim,the continuousaccrual doctrine examines the sameprecipitating events: the misconduct of defendant. The continuousaccrual doctrine recognizes recovery within the limitations period precedingsuit because each separate act ofmisconductis a stand-alone wrong. Like anystatute of limitations, it gives plaintiff a reasonable time to seek redress and holds defendant accountable each timeit acts. Thus, continuous accrual is nothing more than the normalapplication ofa statute of limitations measured againsta series ofacts ofmisconduct, rather than one individual act. II. While Not Applicable To The Matter Sub Judice, The Delayed Discovery Doctrine Should Apply To The UCL. The delayed discovery doctrine is an exception to the general rule of accrual that postponesaccrualofa causeofaction until the plaintiffdiscovers, or has reason to discover, the cause of action. Fox, supra, 35 Cal.4th at 807. A plaintiffhas reason to discover a cause of action when heor she “has reason at least to suspect a factual basis for its elements.” Id. Under the discovery tule, suspicion of one or more of the elements of a cause of action coupled with knowledge of any remaining elements,will generally trigger the statute 26 of limitations period. Id. Thus, notwithstanding that the elements of a cause of action have been met, the doctrine of delayed discovery delays accrual of a cause ofaction until plaintiff gains (or should have gained) knowledge. Here, Plaintiffhas and continues to disavow application ofthe delayed discovery doctrine because he learned that he was being charged for Test Copies in February 2002. Although Plaintiffalleges that Defendant’s charges for Test Copies are a fraudulent business practice, the delayed discovery doctrine is not applicable because Plaintiff is not seeking to recover overcharges paid outside the four-year period preceding his lawsuit. Notwithstanding its inapplicability to the matter subjudice, Plaintiffurges the Court to recognizethat the delayed discovery doctrine is an exception that should supplement the general rule of accrual with regard to UCL cases in order to take into accountthe realities of Defendant’s misconduct. A, Application OfThe Delayed Discovery Doctrine To The UCL Is UnsettledAnd The Subject OfAn Appellate Court Split. This Court previously recognizedthe currentsplit in appellate authority regarding use of the delayed discovery rule to the UCL. Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 635, fn. 7, 54 Cal.Rptr. 3d 735. Without deciding it, in Grisham, the Court assumed, for purposes ofits discussion, that the delayed discovery rule applies to unfair competition claims, but observed that the delayed discovery ruleis “currently notsettled 27 under California law.” Id. At that time, the Court identified the appellatesplit as the SecondDistrict’s Snapp & AssociatesIns. Services, Inc, v. Robertson (2002) 96 Cal.App.4th 884, 891, 117 Cal Rptr.2d 331 (delayed discovery rule does not apply) versus the Fourth District’s Massachusetts Mutual Life Ins. Co. v. Superior Court (2002) 97 Cal.App.4th 1282, 1295, 119 Cal.Rptr.2d 190 (delayed discovery rule “probably” applies). Grisham, supra, 40 Cal.4th at 635, fn.7. Recently, in Broberg v. Guardian Life Ins. Co. Of America, the SecondDistrict again tackled the delayed discovery issue and held that a UCL cause of action premised on fraudulent conduct starts to run only when a reasonable person would have discovered the factual basis for a claim. Broberg v. Guardian Life Ins. Co. OfAmerica, (2009) 171 Cal.App.4th 912, 921,90 Cal.Rptr.3d225. Faced with conflicting appellate authority, California and federal courts are now equally divided. B. The Delayed Discovery Doctrine Is Well-Recognized And Application To The UCL Is Justified. Outside of the UCL context, the delayed discovery rule is a well- recognized doctrine used by plaintiffs to assert claims in which the conduct occurredoutsidethestatutory limitations period. The rationale for the delayed discovery rule is that, in certain circumstances whereplaintiffs, through no fault of their own, are unaware of defendants’ misconduct, then plaintiffs should not be penalized and barred from vindicating their rights. April 28 Enterprises, Inc. v. KTTV (1983) 147 Cal.App.3d 805, 826, 195 Cal.Rptr. 421. As the April Enterprises court explained, [T]he discovery rule reflects concern for the practical needs of plaintiffs. It avoids dismissing a suit on groundsoflimitation whena plaintiff is blamelessly ignorant of his cause of action. Id. at 826-827. Although an exceptionto the general rule of accrual,it is one whichis used in a growing numberofactions. Id. at 828 (stating “However, our research reveals the discovery rule has replaced the date-of-injury accrual rule in a growing numberofactions in California.”)’ In April Enterprises, the court applied the delayed discovery rule to the rather unique circumstancesofa difficult-to-detect breach of contract action. There the court foundit factually persuasive that, where the evidence of the breach, television videotapes, remained within defendant’s exclusive custody ° For example, the delayed discovery doctrine has been applied in the following types of cases: 1) professional malpractice (see e.g., Neel _v. Magana, Olney, Levy, Cathcart & Gelfund (1971) 6 Cal.3d 176, 194, 98 Cal.Rptr. 837); 2) underground trespass (see e.g., Oakes v. McCarthy Co. (1968) 267 Cal.App.2d 231, 255, 73 Cal.Rptr. 127); 3) personal injury from negligently manufactured drugs(see e.g., Warrington v. Charles Pfizer & Co. (1969) 274 Cal.App.2d 564, 569-570, 80 Cal.Rptr. 130); 4) invasion of the right to privacy (see e.g., Cain v. State Farm Mut. Auto. Ins. Co (1970) 62 Cal.App.3d 310, 315, 132 Cal.Rptr. 860); 5) damages for libel (see e.g., Manguso v. Oceanside Unified SchoolDist. (1979) 88 Cal.App.3d 725, 731, 152 Cal.Rptr. 27); 6) damages for latent defects in real property (see e.g., Allen v. Sundean (1982) 137 Cal.App.3d 216, 222, 186 Cal.Rptr. 863); and 7) breaches of fiduciary duty (see e.g., Seelenfreund v. Terminix of Northern California, Inc. (1978) 84 Cal.App.3d 133, 137, 148 Cal.Rptr. 307). 29 and control, application of the delayed discovery rule was appropriate. April Enterprises, supra, 147 Cal.App.3d at 832. In examining other cases where courts have applied the delayed discovery exception, the court noted: A commonthread seemsto run throughall the types of actions wherecourts have applied the discovery rule. The injury or the act causing the injury, or both, have been difficult for the plaintiffto detect. In most instances,in fact, the defendant has been in a far superior position to comprehendthe act and the injury. And in many, the defendant had reasonto believe the plaintiff remained ignorant he had been wronged. Thus, there is an underlying notionthatplaintiffs should not suffer where circumstances prevent them from knowing they have been harmed. Andoftenthis is accompanied by thecorollary notion that defendant should not be allowed to knowingly profit from their injuree’s ignorance. Id. at 831. [emphasis added] See also, Gryezman v. 4550 Pico Partners, LTD (2003) 107 Cal.App.4th 1, 5-6, 131 Cal.Rptr.2d 680. Thus, the delayed discovery doctrine is an equitable principle designed to effect substantial justice between the parties. In fact, the delayed discovery rule is founded on such important public policy considerations that contractual efforts to eviscerate the delayed discovery rule have been declared void as against public policy. Morenov. Sanchez (2003) 106 Cal.App.4th 1415, 1430- 1433, 131 Cal.Rptr.2d 684. In light of the broad-sweeping, equitable nature of the UCL, these public policy considerations should apply with equal force. Frequently, UCL victims are unwittingly exposed to a defendant’s unlawful, unfair, or fraudulent business acts and practices, but are without sufficient means of 30 discovering the wrongdoing. For example, consumersof latently defective productsor products soldin violation an administrative regulation (e.g., FDA, FTC, NHSTA)intended to protect the consuming public’s safety, may not learn of the defect or violation,if ever, until something goes wrong. In such ~ Situations, the manufactureris in a superior position to comprehendits conduct and the natural consequencesthat flow therefrom. Similarly, in the antitrust context, consumers who pay supracompetitive prices for products are often unaware of the monopolistic and unfair competition practices by businesses that indirectly influenced the purchase price. Where a plaintiff is blamelessly ignorant of his UCL cause ofaction, the delayed discovery doctrine should apply to delay accrual until such timeasthe plaintiff knew, or should have known,ofthe misconduct forming the basis of the UCL claim. One area where application of the delayed discovery is undisputedly pervasive is in the context of fraud. Cleveland v. Internet Specialties West, Inc. (2009) 171 Cal.App.4th 24, 33, 88 Cal.Rptr.3d 892 (findinga triable issue of fact whether plaintiff had knowledge of facts sufficient to make a reasonable prudent person suspicious of fraud); Brandon G. v. Gray (2003) 111 Cal.App.4th 29, 35, 3 Cal.Rptr.3d 330 (finding that plaintiffs cause of action accrues whentheplaintifflearnsoris put on notice that a representation wasfalse); Bernson v. Browning-Ferris Industries (1994) 7 Cal.4th 926, 932, 31 30 Cal.Rptr.2d 440 (comparing delayed discovery rule and fraudulent concealment principles); Lee_v. Escrow Consultants, Inc. (1989) 210 Cal.App.3d 915, 921, 259 Cal.Rptr. 117. In fact, the California Legislature codified the delayed discovery doctrine by explicitly providing that, in cases involving fraud or mistake, the cause of action is deemed not to accrue until the aggrieved party discovers the facts constituting the fraud or mistake. Code of Civil Procedure § 338 (d) (providing a three-year statute oflimitations for fraud or mistake). In light ofthe statutorily mandated andjudicially recognized use ofthe delayed discovery doctrine in cases involving fraud, substantial justification exists for applying the doctrine to those cases implicating the “fraud” prong of the UCL. This focus-on-fraud approach to the UCL wasrecently recognized in Broberg v. Guardian Life Ins. Co., Atleast in the context ofunfair competition claims based on the defendant’s allegedly deceptive marketing materials and sales practices, which is simply a different legal theory for challengingfraudulent conduct and where the harmfrom the unfair conduct willnot reasonably be discovered until afuture date, we believe the better view is that the timeto file a section 17200 cause ofaction starts to run only when a reasonable person would have discovered the factual basis for a claim. Broberg, supra, 171 Cal.App.4th at 920-921. [emphasis added] In analogizing deceptive advertising to commonlaw fraud cases, the Broberg court explained that “the nature of the right sued on, not the form of the 32 action...determines the applicability of the statue of limitations.” Id. at 921 (citing April Enterprises, supra, 147 Cal.App.3d at 828). Accordingly, the Broberg court allowed plaintiff to bring a UCL claim thirteen years after purchasinghis life insurance policy because he did not discover the falsity of the “vanishing premium” marketing materials until eleven yearslater. In Grisham, this Court assumed the delayed discovery doctrine without deciding the issue, but its analysis is instructive. Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 54 Cal.Rptr.3d 735. Plaintiff Grisham started smoking after reading cigarette advertising marketed by Philip Morris in 1962 and 1963. Id. at 629. In 2002, Grisham broughtsuit alleging, among other claims an unfair competition cause of action. Id. at 630. Grisham’s theory was, that after relying on defendant’s advertising as a minor, she becameaddicted to cigarettes causing her economicinjury. Id. at 634. Significantly, however, the Court explained that “California law recognizes ageneral, rebuttablepresumption,that plaintiffs have ‘knowledge ofthe wrongful cause ofan injury.” Id. (citing Fox, supra, 35 Cal.4th at 808). [emphasis added] To rebut that presumption,a plaintiff must plead facts to show whenheorshe discovered the claimsandthe inability to have made that discovery earlier despite reasonable diligence. Id. Having attempted to plead discovery within the limitations period, Grisham failed to rebut that 33 presumption. Id. at 639. The Court concluded that Grisham knew,orat least suspected, her tobacco addiction and economic injury when she joined Nicotine Anonymousin 1993-1994,outside the limitations period. Id. at 638- 639. Based on the strong public policy against dismissing suits when a plaintiff is blamelessly ignorantofa cause ofaction application ofthe delayed discovery doctrine, especially coupled with the practicalrealities involving a “fraudulent” business act or practice, application of the delayed discovery doctrine to the UCL is warranted. Il. The Court Of Appeal’s Only Cited Supporting Precedent, The Snapp Case, Is Not Controlling. In ruling that the first occurrence of wrongdoing commenced the runningofthe statute of limitations andbars claimsarising from any separate and independentrepeated acts occurring within the four-years preceding the lawsuit, the Second District unambiguously found Snapp & AssociatesIns. Services, Inc. v. Robertson (2002) 96 Cal.App.4th 884, 891, 117 Cal.Rptr.2d 331, controlling. Slip Opn., p. 8 (stating “We find Snapp to be controlling”). But the Second District’s interpretation that Snapp involves “allegedly wrongful collection of fees on a recurring basis” and characterization as a “multiple violations” case is erroneous. Slip Opn., p. 8. The wrongdoing alleged in Snapp wasthe single act ofmisappropriation of client accounts by 34 an insurancebroker, albeit the broker later collected insurance premiums. Snapp,supra, 96 Cal.App.4th at 888-889. The confusion arises because the issue ofwhenthat single misappropriation occurred was hotly-contestedby the parties in Snapp with variousdates being proposed- e.g., 1993, 1994, or 1995 - for the purposeofeither salvaging or defeatingthe statute oflimitations.‘ Legally, the confusion is compounded because the Snapp court,in its discussionofthe applicable statutes oflimitations, is actually addressing two (2) separate statutes both with a four-year limitation period, but measured differently - the UCL andthe fraudulent transfer claims. Snapp, supra, 96 Cal.4th at 891. Snapp concernsthe delayed discovery rule, but is completely silent as to the “continuing violation” or “continuous accrual” doctrines. Snapp, supra, 96 Cal.4th 884 (discussing delayed discovery, but no where using the terms“continuingviolation”or “continuing accrual”). See also, Slip Opn.- Dissent, p. 8 (stating that Snapp begins and ends with rejection of equitable tolling and delayed discovery and fails to discuss continuing violation or continuous accrual). The Ninth Circut case of Betz v. Trainer Wortham & Co., Inc. (9" Cir. 2007) 236 Fed. Appx. 253 is equally instructive * The Second District’s own observation about Snapp that “The trial court rejected plaintiff's claim that the statute did not commencerunning until the defendant purchased the TRG accounts from the salesman in February 1994,” Slip Opn., p. 7 [emphasis added], reflects inquiry about when a single act of misconduct occurred. 35 on the Snapp case. In Betz, the Ninth Circuit stated: The defendants claim that Snapp [citation omitted] stands for the proposition that the continuing violation doctrine does not apply to unfair business practices claims under California law. However, it does not appearthat the court in Snapp directly considered the argumentthat the plaintiff’s claim was not time-barred becauseit allegedmultiple, continuousacts, some of which occurred inside the limitations period. 236 Fed. Appx.at 256,fn. 4. [emphasis added] Thus, the Second District relied on authority which did not consider the relevant issues, is not germane to the subject case, and cannot support its decision. A, Snapp Is Factually Inapposite. There are persuasive factual reasons to understand Snappas single violation case despite use of the words “initially” and “on-going” in the opinion. Factually, the case arose and wasprosecutedas a result ofdefendant Robertson’s alleged taking ofasingle set ofaccounts, the TRG accounts, once belonging to Snapp and then stolen by a former employee, Gwin. While asserting multiple legal, claims the underlying focus in Snapp was on the wrongful conversion of the TRG accounts. Snapp, supra, 96 Cal.App.4th at 887-889. Snapp sued Robertson, who purchased the TRG accounts from former employee, Gwin, for: 1) conversion; 2) misappropriation of trade secrets in violation of Uniform Trade Secrets Act (Civ. Code § 3426.1); 3) fraudulent transfer in violation ofthe Uniform Fraudulent Transfer Act(Civ. 36 Code § 3439.01); 4) unfair competition (Bus. & Prof. Code § 17200); 5) interference with contract; 6) intentional interference with economic advantage; and 7) fraudulent concealment. Id. at 889. These causesofaction emphasize a wrongful taking or inappropriate acquisition, as opposedto the mere wrongful collection of fees as suggested by Defendant and the Second District. Additionally, the Snapp court describes the wrongdoing as follows: “It is alleged in the cause of action for misappropriation of trade secrets that the misappropriation of client information occurred in May 1993.” 1d. [emphasis added] The importanceis that the Snapp court viewedthe cause of action as accruing only once, in 1993, even as it acknowledgedthe continuing damagesin lost commissions flowing therefrom. B. Snapp Is Legally Inapposite. Legally, as the Snapp court recognized,a cause ofaction for conversion requiresplaintiff's ownership or right to possession ofthe property at the time of the alleged conversion. Snapp, supra, 96 Cal.App.4th at 892, fn. 2. The parties in Snapp disputed when the alleged conversion occurred. While the Snapp court ultimately concluded it was when defendant Robertsonfirst began his brokeringactivity on the TRG accounts, as both a factual and legal matter, the conversion of the TRG accounts could only, and did only, occur once. Also,it is worth noting thatthe statute of limitations for Snapp’s claim 37 for misappropriation oftrade secrets (Uniform Trade Secrets Act, Civil Code § 3426.1) explicitly does not recognize a “continuing misappropriation” theory. Section 3426.6 of the Civil Codestates: An action for misappropriation must be brought within three yearsafter the misappropriationis discovered orby the exercise of reasonable diligence should have been discovered. For the purposes of this section, a continuing misappropriation constitutes a single claim. Civil Code § 3426.6. [emphasis added] Thus, even assuming arguendo that defendant Robertson’s misappropriation could be construed as“continuing”or “on-going” conduct, for purposesofthe UTSAstatute oflimitations,it is treated as a “single claim.” Similar language is noticeably absent from Section 17208 of the Business & Professions Code prescribing the UCL’s limitations period. Finally, to the extent Snapp foundthatplaintiffhad notice and “knew ofpotential claims against Robertson for his retention of commissions on the TRG accounts more than four years beforeit filed its complaint,” see, Snapp, supra, 96 Cal.App.4that 891, that discussionis relevantto the four-year statute of limitations on thefraudulent transfer claim (Uniform Fraudulent Transfer Act, Civil Code § 3439.01), not the UCL. Because the Snapp court was measuring the statute of limitations for a cause of action that accrued only once, it is in no way relevantto Plaintiffs discussion of a cause of action subject to multiple accrual. The most that can be said is that the Snapp case 38 is a “delayed discovery” decision and, because Plaintiff is not relying on delayed discovery,it is irrelevant and should notdictate the result here. Thus, the Second District’s reliance on Snapp for the proposition that the UCL statute oflimitationsstarts only once at the first occurrence ofwrongdoing and that Plaintiff's knowledge bars misconduct occurring within the four-year statutory period is erroneous. IV. While Not Applicable To The MatterSub Judice, Blanket Rejection OfThe Applicability OfThe Continuing Violation Doctrine To The UCLIs Unwarranted. The continuing violation doctrine is another exception to the general rule ofaccrualthat holds a defendant liable for actions that take place outside the limitations period if these actions are sufficiently linked to unlawful conduct within the limitations period. Richards v. CH2M Hill, Inc. (2001) 26 Cal.4th 798, 812, 111 Cal.Rptr.2d 87. Unfortunately, the continuing violation doctrine is not just “arguably the most muddled area in all of employment discrimination law,” Id., it is arguably the most muddled doctrine in a vast range oflegal areas.’ As the Court recognized “[t]he doctrine refers not to a * See, e.g., application of the continuing violation doctrine in the following contexts: antitrust (see, Process Specialties, Inc. v. Sematech (E.D. Cal 2001) 2001 WL 36105562 and Pace Industries, Inc. v. Three Phoenix Co. (9" Cir. 1987) 813 F.2d 234); employmentretaliation (see, Yanowitz v. L’Oreal USA Inc. (2005) 36 Cal.4th 1028); hostile work environment (see, Richards v. CH2M_ Hill, Inc. (2001) 26 Cal.4th 798 and Joseph v. J.J. Mac Intyre Companites, L.L.C. (N.D. Cal. 2003) 281 F.Supp.1156); securities (see, Betz 39 single theory, but to a numberofdifferent approaches, in different contexts and using a variety offormulations”to extendthestatute of limitations. Id. [emphasis added]. While Plaintiff mistakenly referred to the continuing violation doctrine in his argument before the Court ofAppeal andtrial court, Justice Rubin correctly suggests that the doctrineis not applicable to the matter subjudice becausePlaintiffdoes not seek to recover Test Copy chargesfalling outside the statutory period. Slip Opn.- Dissent, pp. 3-4. Accordingly, while Plaintiff no longer contendsthat the continuing violation doctrine applies to his case, he does contend that the SecondDistrict’s blanket rejection of the continuing violation doctrine to the UCL is unwarranted. While the continuing violation doctrine is no longer exclusive to employmentdiscrimination casesin California law,thatis still the prevailing context. See, e.g., Richards, supra; Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 32 Cal.Rptr.3d 436; Alch v. Superior Court (2004) 122 Cal.App.4th 339, 19 Cal.Rptr.3d 29. In the employmentarena, v. Trainer Wortham& Co., Inc. (9" Cir. 2007) 236 Fed. Appx. 253); trademark (see, Suh v. Yang (N.D. Cal. 2997) 987 F.Supp. 783); patent infringement (see, Rambus, Inc. v. Micron Technology, Inc. (N.D. Cal. 2007) 2007 WL 1792310); civil conspiracy (see, Wyatt v. Union Mortgage Company (1979) 24 Cal.3d 773); malicious prosecution (see, Lauter v. Anoufrieva (C.D.Cal. 2009) 2009 WL 2192362,infra) and debt collection cases (see, Komarova v. National Credit Acceptance,Inc. (2009) 175 Cal.App.4th 324, 95 Cal.Rptr.3d 880 and Gruen v. Edfund (N.D. Cal. 2009) 2009 WL 2136786,infra). 40 The continuing violations doctrine comes into play when an employeeraises a claim based on conductthat occurred in part. outside the limitations period. Providedthat at least one ofthe acts occurred within the statutory period, the employer may be liable for the entire course of conduct, including acts predating the statutory period, under the continuing violations doctrine. Richards, supra, 26 Cal.4th at 812. [emphasis added] The commonpolicy gleaned from these employmentdiscrimination casesis that certain causesofaction only arise after a cumulation ofindividual bad acts - a courseofconduct (e.g., a course ofharassmentorretaliatory conduct) - as opposedto one single discrete bad act. Yanowitz, supra, 36 Cal.4th at 1058. In such instances, California courts hold that, instead ofrunning the statutory clock from the first act of misconduct, which standing alone would not be actionable, the continuing violation doctrine will defer runningthe statutory clock until the “totality ofacts” renders the cause ofaction accrued. Yanowitz, supra, 36 Cal.4th at 1058 (noting in the absence of the continuingviolation doctrine, the statute of limitations would start running upon thefirst act of retaliation, even if that act would not be actionable standing alone). Thus, without the continuing violation doctrine, plaintiffs subject to employment discrimination or harassment would be encouragedto bringlitigation too early and seek adjudication of unripe claims. In anewly emergingline ofcases, the continuingviolation doctrine has also been applied to debt collection practices. These cases analogize the 41 repeated and harassing acts prohibited by the Fair Debt Collection Practices Act (“FDCPA”) to the continuing violation doctrine used in the hostile work environmentcases. See, e.g., Komarovav. National Credit Acceptance,Inc. (2009) 175 Cal.App.4th 324, 95 Cal.Rptr.3d 880; Gruen v. Edfund (N.D.Cal. 2009) 2009 WL 2136786. In Komarova, the court used the continuing violation doctrine to permit recovery for unlawful debt collection acts occurring outside the statutory period because harassing phonecalls were a continuing course of conduct that extendedinto the limitations period.Id. at 344-345 (finding that “unreasonably frequent calling is clearly a continuing course of conduct underthis test because the violation occurs only through repetition.”) Relying on the standard set by preceding employmentcases, the First District observed that the test of the continuing violation doctrine is whether the violations constitute “a continuing pattern and course of conduct” or “unrelated discrete acts.” Id. at 344 (citing Joseph v. J.J. Mac Intyre Companies, LLC (N.D. Cal. 2003) 281 F.Supp.2d 1156, 1161.) This distinctionis also helpful in discerningthe difference betweenthe “continuing violation” versus the “continuous accrual” doctrines. Here, in wholly rejecting application of the continuing violation doctrine to the UCL, the SecondDistrict remarked that, 42 [R]outinely billing and collecting for ‘test’ copies is not the type of harassing and egregious conduct the continuing violation doctrine is designed to deter. No comparable policy considerations compel applying the continuing violations doctrine to violations ofthe UCL.” Slip Opn., p. 12. [emphasis added] But there is no authority to support the Court of Appeal’s limiting of the continuing violation doctrine to “harassing and egregious” conduct. The Second District’s suggestion that application of the continuing violation doctrine is only warranted if a heightened degree of egregious conductis involved is inconsistent with the UCL’s liberal consumer protections. Community Assisting Recovery, supra, 92 Cal.App.4th at 494. (recognizing that the UCL imposesstrict liability and “it is not necessary to show that the defendant intendedto injure anyone.”) Given that the UCLis available to remedy “unlawful” and “unfair” conduct, along with businesspractices that constitute a “pattern of ongoing conduct,” it would work an absurd result if plaintiffs alleging employment discrimination or unfair debt collection, could timely assert and recoverfor the underlying statutory violations(e.g., FEHA, Titile VII, or FDCPA) pursuant to the continuing violation doctrine, but be barred pursuant to California’s UCL.® Accordingly, the Second District’s blanket refusal to apply the °Forpurposesofthis discussion,it is assumedthat the relief soughtis indeed recoverable restitution pursuant to the UCL. 43 continuing violation doctrine to the UCL,in amy context, ignorestherealities of a defendant’s misconductin favor ofa single bright line rule. Federal courts also substantially rely on the continuing violation doctrine, albeit typically in the realms of trademark infringement, securities, patent, and antitrust. One relevant case, Suh v. Yang (N.D.Cal. 1997) 987 F.Supp. 783, recognized in the UCL context the notion of multiple claims, some of which occurred within the statute of limitations and some of which wereoutside the statute. In Suh,the plaintiffalleged trademark infringement and unfair competition claims based on defendant’s use of “Kuk Sool Won” and “Wold Sook Sool Won Association” logo marks that were first used approximately nine yearsprior to the filing of the complaint. Id. at 795. Rejecting defendant’s statute of limitations defense, the district court found that plaintiff was subjected to a series of multiple wrongsin that the allegedly infringing display of defendant’s service name on products and advertisements could create a separate cause of action for unfair competition and trademark infringement. Id. at 796. Specifically, the Suh court stated, [p]laintiff's claims for unfair competition would not be barred by the four-year statute of limitations since the alleged wrongs (i.e., the wrongful use and dilution of Suh’s service marks) are multiple, continuous acts, and some of these acts have occurred within the limitations period. Id. at 795. [emphasis added] The district court concluded thatthe plaintiff's claims involved repeated acts 44 ofwrongful appropriation, each creating “a separate causeofaction for unfair competition and trademarkinfringement.” Id. at 796. Without using the term “continuous accrual” or “continuing violation,” Suh involved multiple, continuousacts, some within and withoutthe limitations period, and allowed recovery for acts within the statutory period pursuant to the UCL.’ The Ninth Circuit likewise allowed recovery pursuant to the UCL for “multiple, continuous acts,” some of which occurred within the limitations periodin the securities case of Betz v. Trainer Wortham & Co., Inc. (2007) 236 Fed.Appx. 253. After recognizing that, under Californialaw,it is an open question whetherthe delayed discovery rule applies to the UCL or whether the statute of limitations begins to run as soon as the claims accrue, the Ninth Circuit stated: Regardless, a claim for unfair businesspractices is not barred by the four-year statute of limitations if the alleged wrongs are “multiple, continuousacts,” some ofwhich occurred within the limitations period. Id. at 256 (citing Suh, supra). [emphasis added] Relying on Betz’s contention that the defendants made continuous 7 Justice Rubin characterizes Suh as a “continuous accrual” case, Slip Opn.- Dissent, pp. 9-10, but that conclusion is not readily apparent becauseit is not clear that Suh allowed recovery for infringement occurring prior to the four years before commencing suit. The distinction is necessary to decipher whether Suh is an example ofthe continuousaccrual or continuing violation doctrine. 45 misrepresentations from 1999 until June 2002, the court declinedto find the plaintiff's unfair business practices claims untimely as a matter of law. Id. See also, Havens Realty Corp. v. Coleman (1982) 455 U.S. 363, 380, 102 S.Ct. 1114, 71 L.Ed.2d 214 (recognizing and applying the continuing violation doctrine in the Fair Housing Act context). Thus, the Second District’s outright rejection of the “continuing violation” doctrine to the UCLis problematic for future litigants with different fact scenarios who might, except for the Second District’s opinion, seek to avail themselvesofthe “continuing violation” doctrine. Beyondthe confines of this case, the Second District’s rejection of the “continuing violation” doctrine negatively impacts UCLlitigants by unconditionally barring recovery for prior misconduct outside, but closely related to misconduct occurring within the statutory period, that would be recoverable except that a UCL claim is implicated. The purposes ofthe UCL necessitate requiring more innovative approaches which recognize the varied forms of misconduct to be remedied. Vv. Fundamental ConsumerProtection And Fair Competition Policies Of The UCL Would Be Frustrated By The Court Of Appeal’s Holding That The First Violation Establishes Accrual. The impact of the Second District’s holding that, when a defendant’s wrongful acts cover a period oftime, a UCL causeofaction accrues only once at the time ofthe initial act is far-reaching. Ifthe statutory clock beginsto run 46 when the first violation occurs, irrespective of a defendant’s subsequent repeated misconduct, then plaintiffs who do not bring UCL claimswithin four years will lose the ability to seek recourse forever. If the first violation establishes accrual without regard to subsequent, repeated violations, then defendants who “escape”the statutory time frame will be given carte blanche to continue to invadea plaintiff's rights indefinitely. The effects would be devastating on consumers, employees, the elderly, and other membersofthe public who are most vulnerablein our society. For example, in the consumer context, if hypothetically, a creditor repeatedly charged fraudulent amounts to consumers’ credit cards,andthefirst violation wasthe only one that could be sued upon, then consumers whopaid the longest and suffered the most would be left without any remedyatall, while new consumers could recoverfor the violations they suffered. Both sets of consumers suffered the same violation during the limitations period, but they will be treated differently in that those subjected to wrongdoing more than four years ago will be completely denied recovery while more recent victims can sue. A, The Unprecedented Use OfPlaintiff's Discovery. The Second District’s ruling presents a paradox. Unwilling to recognize that a plaintiffs inability to discover wrongdoing “extends” the 47 runningofthe statutory clock, the SecondDistrict uses a plaintiff's discovery to “cut short” the running of the statutory clock. As a result, the Second District has employed an unprecedented sort of reverse “delayed discovery” rule against Plaintiff to preclude recovery entirely. Assuming arguendo that the SecondDistrictproperly refused to extend the delayed discovery doctrine to the UCL,then a plaintiff's knowledge should beirrelevantto calculating the statute of limitations - neither improving, nor impeding a plaintiff's access to the courts. In addition, the Court of Appeal speculatively imputesplaintiff's knowledge ofa single wrongful act, coupled with the decision not to seek judicial recourse, as consent to unforseen repeated wrongful acts occurring more than four years into the future. In the employmentcontext, if a non-exempt employee worked off-the- clock for his employer during the entirety of his employment, but never received wages for all hours worked; a savvy defendant would argue that the employee learned of his claims when hereceivedhis first pay check. If that same employee waits until he is terminated six years later to assert claims for his off-the-clock hours,his claims would be barred as untimely and he would be unable to recover unpaid wages- evenfor those very lastpay checks which clearlyfell within the statutory timeframe- clearly frustrating the purpose of the UCL. 48 California public policy affirmsthe fairness ofallowing individuals to bring suit where they remain victims of unfair business practices. The UCL doesnot proscribespecific acts, but broadly prohibits “any unlawful, unfair or fraudulent business act or practice” and being framed in the disjunctive, a business act or practice need only meet one of the three criteria to be considered unfair competition. Daugherty v. AmericanHonda Motor Co.., Inc. (2006) 144 Cal.App.4th 824, 83, 51 Cal.Rptr.3d 118. A UCLaction is equitable in nature; damages cannot be recovered. Under the UCL,prevailing plaintiffs are generally limited to injunctive relief and restitution. Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1133, 131 Cal.Rptr.2d 29. This distinction reflects the UCL’s focus on the defendant’s conduct, rather than the plaintiff's damages, in service ofthe statute’s larger purpose of protecting the general public against unscrupulous business practices. Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 453, 153 Cal.Rptr. 28. Given that knowledge is not a required element, using plaintiff's discovery ofwrongdoing to bar a UCL causeofaction as untimely would be antithetical to its purpose. B. The Practical Effect OfAccrualAt The First Occurrence. Reminiscent of this Court’s pronouncement in Howard that causes of action are not barred merely because similar claims could have been madeat 49 earlier times, Justice Rubin correctly opinedin his dissent that “The injunctive relief authorized by the UCL should not be automatically unavailable following recent misconductmerely becausethefirst unfair practice took place several years earlier.” Slip Opn.- Dissent,p. 7. Underthe SecondDistrict’s holding, the employee who worksoff-the- clock without receiving full and proper compensation pursuant to California wagelaws would be required to make a choice: eitherfile a lawsuit against his current employer immediately in order to protect his rights against the possibility of future transgression; or waive the ability to use the UCL to vindicate his rights if his employer violates those same wage laws sometime four years into the future. These are not attractive options for an employee whose livelihood depends on wages and is incompatible with the broad protections afforded by the UCL’s prohibition against “unlawful, unfair, or fraudulent” businessacts or practices. Ifthe Second District’s holdingis affirmed, the practical effect will be to require litigants to run to court at the first instance of misconduct in order to preservetheir rights for fear that failing to do so will result in waiver should the same conduct everrepeatitself over four years into the future. Under the Second District’s rule, for those individuals whoallow four yearsto lapse after being subjected to misconduct withoutfiling suit, their consent to such an 50 invasion oftheir rights by that actor would be implied indefinitely. CONCLUSION The complaint before this Court is timely and easily satisfies the UCL statute of limitations pursuantto traditional principles governing accrual of claims, generally, and the continuous accrual doctrine, specifically. Accordingly, Plaintiff respectfully asks the Court to reverse the judgmentof the Court of Appeal and remandwith directions to enter an order summarily overruling Defendant’s demurrer. To the extent the operative complaintis held untimely or deficient, Plaintiff respectfully asks this Court to reverse the judgmentofthe Court ofAppeal and remand with directionsto allow Plaintiff to file an amended complaintin the trial court seeking to satisfy the guidelines announced in this Court’s opinion. Date: November 18, 2010 Respectfully submitted, WESTRUP KLICK, LLP By: Goubet.Uput Jennifer L. Connor Attorney for Plaintiff, Appellant and Petitioner Jamshid Aryeh 51 CERTIFICATE OF WORD COUNT (Cal. Rules of Court, Rule 8.504(d)(1)) I, Jennifer L. Connor, an attorney at law duly admitted to practice before all the courts ofthe State of California and an associate attorney ofthe: law offices of Westrup Klick, LLP, attorneys of record herein for plaintiff, appellant, and petitioner Jamshid Aryeh,herebycertify that this OpeningBrief On The Merits document (including the memorandum ofpoints and authorities, headings, footnotes, and quotations, but excludingthe tables of contents and authorities, and this certification) complies with the limitations ofRule ofCourt 8.520(c)(1) in that itis set ina proportionally-spaced 13-point typeface and contains 11,810 words as counted by the Corel Word Perfect version 10 word-processing program used to generate this document. I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct. Executed November18, 2010 in Long Beach,California. LeuaperL. oan /Jennifer L. Connor 52 State of California ) Proofof Service by: County ofLos Angeles ) v US Postal Service ) Federal Express ], Stephen Moore , declare that I am nota party to the action, am over 18 years of age and my business addressis: 354 South Spring St., Suite 610, Los Angeles, California 90013. On 11/18/2010 declarant served the within: Opening Brief on the Merits upon: 1 Copies FedEx ¥ USPS Copies FedEx USPS To each personlisted on the attached Service List. Copies FedEx USPS Copies FedEx USPS the address(es) designated bysaid attorney(s) for that purpose by depositing the numberof copies indicated above, of same, enclosed in a postpaid properly addressed wrapperin a Post Office Mail Depository, under the exclusive custody and care of the United States Postal Service, within the State of California, or properly addressed wrapper in an Federal Express Official Depository, under the exclusive custody and care of Federal Express, within the State of California I further declare that this same day the original and copies has/have been hand delivered for filing ORthe original and 13 copies has/have been filed by ¥ third party commercialcarrier for next business day delivery to: Office ofthe Clerk SUPREME COURTOF CALIFORNIA 350 McAllister Street San Francisco, California 94102-4797 I declare underpenalty ofperjury that the foregoingis true and correct: Signature: e— SERVICE LIST Kent Schmidt DORSEY & WHITNEY LLP 38 Technology Drive, Suite 100 Irvine, California 92618-5310 Attorneyfor Canon Business Solutions Richard H.Silberberg Robert G. Manson DORSEY & WHITNEY LLP 250 Park Avenue New York, New York 10177-1500 Attorneyfor Canon Business Solutions ConsumerProtection Division Los Angeles District Attorney's Office 201 North Figueroa Street, Suite 1600 Los Angeles, California 90012 Office of the Clerk CALIFORNIA COURT OF APPEAL Second Appellate District, Division Eight Ronald Reagan State Building 300 South Spring Street, Second Floor Los Angeles, California 90013 Office of the Clerk SUPERIOR COURT OF CALIFORNIA County of Los Angeles (Central District) Stanley Mosk Courthouse 111 North Hill Street (Department 24) Los Angeles, California 90012 Appellate Coordinator Office of the Attorney General Consumer LawSection Ronald Reagan State Building 300 South Spring Street Los Angeles, California 90013-1230