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BUSINESS & PROFESSIONS CODE

Division 7 General Business Regulations

§ 17206. Civil penalty for violation of chapter

(a) Any person who engages, has engaged, or proposes to engage in unfair competition shall be liable for a civil penalty not to exceed two thousand five hundred dollars ($2,500) for each violation, which shall be assessed and recovered in a civil action brought in the name of the people of the State of California by the Attorney General, by any district attorney, by any county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, by any city attorney of a city, or city and county, having a population in excess of 750,000, with the consent of the district attorney, by a city prosecutor in any city having a full-time city prosecutor, or, with the consent of the district attorney, by a city attorney in any city and county, in any court of competent jurisdiction.

(b) The court shall impose a civil penalty for each violation of this chapter. In assessing the amount of the civil penalty, the court shall consider any one or more of the relevant circumstances presented by any of the parties to the case, including, but not limited to, the following: the nature and seriousness of the misconduct, the number of violations, the persistence of the misconduct, the length of time over which the misconduct occurred, the willfulness of the defendant's misconduct, and the defendant's assets, liabilities, and net worth.

(c) If the action is brought by the Attorney General, one-half of the penalty collected shall be paid to the treasurer of the county in which the judgment was entered, and one-half to the State General Fund. If the action is brought by a district attorney or county counsel, the penalty collected shall be paid to the treasurer of the county in which the judgment was entered. Except as provided in subdivision (d), if the action is brought by a city attorney or city prosecutor, one-half of the penalty collected shall be paid to the treasurer of the city in which the judgment was entered, and one-half to the treasurer of the county in which the judgment was entered. The aforementioned funds shall be for the exclusive use by the Attorney General, the district attorney, the county counsel, and the city attorney for the enforcement of consumer protection laws.

(d) If the action is brought at the request of a board within the Department of Consumer Affairs or a local consumer affairs agency, the court shall determine the reasonable expenses incurred by the board or local agency in the investigation and prosecution of the action.

Before any penalty collected is paid out pursuant to subdivision (c), the amount of any reasonable expenses incurred by the board shall be paid to the state Treasurer for deposit in the special fund of the board described in Section 205. If the board has no such special fund, the moneys shall be paid to the state Treasurer. The amount of any reasonable expenses incurred by a local consumer affairs agency shall be paid to the general fund of the municipality or county that funds the local agency.

(e) If the action is brought by a city attorney of a city and county, the entire amount of the penalty collected shall be paid to the treasurer of the city and county in which the judgment was entered for the exclusive use by the city attorney for the enforcement of consumer protection laws. However, if the action is brought by a city attorney of a city and county for the purposes of civil enforcement pursuant to Section 17980 of the Health and Safety Code or Article 3 (commencing with Section 11570) of Chapter 10 of Division 10 of the Health and Safety Code, either the penalty collected shall be paid entirely to the treasurer of the city and county in which the judgment was entered or, upon the request of the city attorney, the court may order that up to one-half of the penalty, under court supervision and approval, be paid for the purpose of restoring, maintaining, or enhancing the premises that were the subject of the action, and that the balance of the penalty be paid to the treasurer of the city and county.


Added Stats 1977 ch 299 § 1. Amended Stats 1979 ch 897 § 2; Stats 1991 ch 1195 § 2 (SB 709), ch 1196 § 2 (AB 1755).
Amended Stats 1992 ch 430 § 4 (SB 1586); Stats 1997 ch 17 § 11 (SB 947). Amendment approved by voters, Prop. 64 § 4, effective November 3, 2004.

ANNOTATIONS

Amendments:

1979 Amendment:
(1) Designated the former first sentence to be subd (a) and the former second, third and fourth sentences to be subd (b); (2) added "the action is" before "brought by the" in the first sentence of subd (b); and (3) added subd (c).

1991 Amendment:
(1) Amended subd (a) by substituting (a) "by any county counsel authorized by agreement with the district attorney in actions involving violation of a county ordinance, or any city attorney of a city, or city and county," for "any city attorney of a city"; and (b) "having a full-time city prosecutor or, with the consent of the district attorney, by a city attorney in any city and county," for "or city and county"; (2) amended subd (b) by (a) adding "or county counsel" after "district attorney" in the second sentence; and (b) substituting "Except as provided in subdivision (d), if" for "If" at the beginning of the third sentence; and (3) added subd (d). (As amended Stats 1991 ch 1196, compared to the section as it read prior to 1991. This section was also amended by an earlier chapter, ch 1195. See Gov C § 9605.)

1992 Amendment:
(1) Substituted "engages, has engaged, or proposes to engage in unfair competition" for "violates any provision of this chapter" after "Any person who" at the beginning of subd (a); (2) added subd (b); and (3) redesignated former subds (b)-(d) to be subds (c)-(e).

1997 Amendment:
In addition to making technical changes, (1) added "the action is" both times it appears in subd (c); and (2) substituted "subdivision (c)" for "subdivision (b)" in the last paragraph of subd (d).

2004 Amendment:
Added (1) the fourth sentence of subd (c); and (2) "for the exclusive use by the city attorney for the enforcement of consumer protection laws" in the first sentence of subd (e).

Historical Derivations:
Former CC § 3370.1, as added Stats 1972 ch 1084 § 2, amended Stats 1974 ch 746 § 2.

Note:
Proposition 64, effective November 3, 2004, provides:
SEC. 7. In the event that between July 1, 2003, and the effective date of this measure, legislation is enacted that is inconsistent with this measure, said legislation is void and repealed irrespective of the code in which it appears.
SEC. 8. In the event that this measure and another measure or measures relating to unfair competition law shall appear on the same statewide election ballot, the provisions of the other measures shall be deemed to be in conflict with this measure. In the event that this measure shall receive a greater number of affirmative votes, the provisions of this measure shall prevail in their entirety, and the provisions of the other measures relating to unfair competition law shall be null and void.
SEC. 9. If any provision of this act, or part thereof, is for any reason held to be invalid or unconstitutional, the remaining provisions shall not be affected, but shall remain in full force and effect, and to this end the provisions of this act are severable.

Editor's Notes--
For legislative intent, see the 1992 Note following B & P C § 17200.
Collateral References:
Cal Forms Pl & Practice (Matthew Bender) ch 565 "Unfair Competition" IB
Witkin Summary (9th ed) Contracts § 584, Equity § 93, Sales § 320
Cal Jur 3d (Rev) Consumer and Borrower Protection Laws § 81

NOTES OF DECISIONS
Lack of express authorization for a district attorney to prosecute violations of the Mobile Home Parks Act does not preclude prosecution of an action pursuant to applicable Business and Professions Code sections for unfair competition. Specific power to prosecute such violations, moreover, exists under B & P C §§ 17204, 17206, authorizing the district attorney to maintain a civil action for either injunctive relief or civil penalties for acts of unfair competition, and B & P C § 17205, providing that remedies and penalties available in an unfair competition action are similar to remedies and penalties available under state laws, unless otherwise expressly provided. Neither the Mobile Home Parks Act nor other statutes expressly provide that violations of the act may not be prosecuted as acts of unfair competition. People v McKale (1979) 25 Cal 3d 626, 159 Cal Rptr 811, 602 P2d 731
Under Bus. & Prof. Code, § 17536, providing for a civil penalty of $2500 or less for each violation of the false or misleading advertising statute, Bus. & Prof. Code, § 17500, a single false or misleading publication in a newspaper advertisement constitutes a minimum of one violation with as many additional violations as there are persons who read the advertisement or who responded to the advertisement by purchasing the advertised product or service or by making inquiries concerning such product or service. Thus, in an action by a district attorney against a real estate firm seeking civil penalties and injunctive relief for the alleged dissemination of false and deceptive newspaper advertisements in violation of Bus. & Prof. Code, §§ 17200 and 17500 (the unfair competition statute), the trial court erred in ruling that each appearance of a false advertisement in a single edition of a newspaper constituted only a single violation of § 17500 and of § 17200 for which a maximum penalty of $5,000 could be imposed. In determining the reasonableness of a penalty under § 17536, the court must consider all pertinent factors including the kind of misrepresentations or deceptions, whether they were intentionally made or the result of negligence, the circulation of the newspaper, the nature and extent of the public injury, and the size and wealth of the advertising enterprise. People v Superior Court of Orange County (1979, 4th Dist) 96 Cal App 3d 181, 157 Cal Rptr 628, cert den 446 US 935, 64 L Ed 2d 787, 100 S Ct 2152
The unfair competition statutes (Bus. & Prof. Code, § 17500 et seq.), providing for civil penalties, and the Cartwright Act (Bus. & Prof. Code, § 16700 et seq.), providing for treble damages and criminal sanctions, provide cumulative remedies for acts restraining trade. Cartwright Act violations are also unlawful business practices under the unfair competition statutes. Civil penalties may be necessary if no victim of a Cartwright Act violation has an individual stake great enough to warrant suit. When a meaningful deterrent and incentive is necessary before positive antitrust policies will be implemented, civil penalties as found in Bus. & Prof. Code, § 17206, are not superfluous. People v National Asso. of Realtors (1981, 4th Dist) 120 Cal App 3d 459, 174 Cal Rptr 728, 1981-1 CCH Trade Cases P 64102, 22 ALR4th 79, appeal after remand (4th Dist) 155 Cal App 3d 578, 202 Cal Rptr 243, 1984-1 CCH Trade Cases P 66020
Civil penalties of $3,000 imposed against an automotive repair business and its owner pursuant to Bus. & Prof. Code, § 17206, subd. (a), for false advertising (Bus. & Prof. Code, § 17500), and violations of the Automotive Repair Act (Bus. & Prof. Code, §§ 9884.7 [invalidation of registration for negligent or fraudulent work], 9884.9 [providing written estimate to customer]) did not violate the double jeopardy clause (U.S. Const., 5th Amend.), even though the same business and owner had been ordered to pay $4,600 in reimbursement for investigation costs, and the business had been closed for two weeks and placed on probation for three years, following a prior administrative proceeding. There were no monetary penalties in the prior administrative proceeding: The $4,600 sum ordered in the administrative action was remedial, to reimburse the costs of investigation. Furthermore, the purpose of the act (including its provisions for administrative action to suspend or revoke the dealership revocation) is protection of the public, not punishment. Since administrative actions do not involve punishment, they are not foreclosed by prior criminal actions and do not bar subsequent criminal proceedings. People v Damon (1996, 3rd Dist) 51 Cal App 4th 958, 59 Cal Rptr 2d 504
In an unfair competition action brought by a private individual and others against a ski resort, after defendant, while litigation was pending, cut down more than 1,800 trees to carry out its planned project to develop additional ski runs, the trial court did not abuse its discretion in ordering $223,000 in monetary penalties. Bus. & Prof. Code, § 17206, subd. (a), requires a court to impose a penalty for each unlawful business practice committed. However, the amount of the penalty lies within the court's discretion. Here, the penalties imposed were modest in light of defendant's egregious behavior. The trial court imposed less than the maximum $2,500 per violation in several cases, did not impose a separate fine for defendant's failure to have a registered forester on the scene at the cutting, and counted a later cut as only one violation. Hewlett v Squaw Valley Ski Corp. (1997, 3rd Dist) 54 Cal App 4th 499, 63 Cal Rptr 2d 118
Plaintiff's cause of action against an insurer for which plaintiff performed plumbing and insurance claim work, for unfair competition, was dismissed with leave to amend. Private individuals cannot seek damages for unfair business practices under B & P C § 17200. Private remedies are limited to equitable relief; and civil penalties are recoverable only by specified public officers (B & P C §§ 17200, 17203-17206). Also, a cause of action for unfair competition under B & P C § 17500 was dismissed with leave to amend. B & P C § 17500 provides only for criminal penalties. Individuals may seek remedy for violations of B & P C § 17500 through B & P C § 17200. However, private remedies are limited to equitable relief; civil penalties are recoverable only by specified public officers (B & P C §§ 17500, 17535). Brown v Allstate Ins. Co. (1998, SD Cal) 17 F Supp 2d 1134
Unfair competition laws prohibit any unfair, deceptive, or unlawful business or other practice violating false advertising laws. The Attorney General may obtain injunctive relief and civil penalties, and the remedies are cumulative to those available under other provisions of the law. The court may impose civil penalties of $2,500 for each violation of Business and Professions Code sections 17200 and 17500. People v Orange County Charitable Services (1999, 4th Dist) 73 Cal App 4th 1054, 1076, 87 Cal Rptr 2d 253
A property owner who diverted most of the flow from a creek for use on his ranch without notifying the Department of Fish and Game was subject to a fine for an unfair business practice under Cal. Bus. & Prof. Code § 17206. People v Murrison (2002, 3rd Dist) 101 Cal App 4th 349, 124 Cal Rptr 2d 68
Cal. Bus. & Prof. Code § 17206(b) provides that in assessing the amount of a civil penalty the trial court shall consider, among other factors and if relevant, the defendant's assets, liabilities, and net worth. "Relevance" is given broader application under the Cal. Bus. & Prof. Code § 17200 et seq., the "unfair competition law;" a defendant's financial condition is considered relevant to determine whether such condition precludes the imposition of a penalty considered sufficient to deter such future conduct. People ex rel. Bill Lockyer v Fremont Life Ins. Co. (2002, 2nd Dist) 104 Cal App 4th 508, 128 Cal Rptr 2d 463
Cal. Bus. & Prof. Code § 17200 et seq., the "unfair competition law." provides for injunctive relief independent of the mandatory imposition of penalties. §§ 17203, 17206, 17535, 17536. There is no requirement that the fact of an injunction be considered in imposing civil penalties. People ex rel. Bill Lockyer v Fremont Life Ins. Co. (2002, 2nd Dist) 104 Cal App 4th 508, 128 Cal Rptr 2d 463
Cal. Bus. & Prof. Code § 17200 et seq., the "unfair competition law." provides for injunctive relief independent of the mandatory imposition of penalties. §§ 17203, 17206, 17535, 17536. There is no requirement that the fact of an injunction be considered in imposing civil penalties. People ex rel. Bill Lockyer v Fremont Life Ins. Co. (2002, 2nd Dist) 104 Cal App 4th 508, 128 Cal Rptr 2d 463
Life insurance company that engaged in deceptive practices in connection with the sale of certain annuity policies was subject to $ 2.5 million in civil penalties and ordered to pay restitution for violating California's unfair competition law. Trial court's imposition of cumulative remedies was not an abuse of discretion. People ex rel. Bill Lockyer v Fremont Life Ins. Co. (2002, 2nd Dist) 104 Cal App 4th 508, 128 Cal Rptr 2d 463
Reprehensible standard adopted by the United States Supreme Court when assessing punitive damages is not applicable to an action for damages under Cal. Bus. & Prof. Code § 17200 et seq., the "unfair competition law." People ex rel. Bill Lockyer v Fremont Life Ins. Co. (2002, 2nd Dist) 104 Cal App 4th 508, 128 Cal Rptr 2d 463
Where the trial court found 300 separate violations of Cal. Bus. & Prof. Code § 17200 et seq., as well as 400 violations of Cal. Bus. & Prof. Code § 17500 et seq., the imposition of civil penalties and issuance of a permanent injunction were affirmed because Cal. Bus. & Prof. Code §§ 17206, 17536 did not require the State to present evidence of an appellant's financial condition in that the court was required to impose a penalty even in the absence of any evidence as to an appellant's financial status, statutory penalties did not equate with punitive damages, the trial court did not abuse its discretion in assessing the penalty amount or in holding the appellants jointly and severally liable, and the trial court did not abuse its discretion in issuing the permanent injunction because the individuals were principals of the corporation who acted unscrupulously. People v First Federal Credit Corp. (2002, 2nd Dist) 104 Cal App 4th 721, 128 Cal Rptr 2d 542
Under B & P C § 17206, prevailing plaintiffs are generally limited to injunctive relief and restitution. Korea Supply Co. v Lockheed Martin Corp. (2003) 29 Cal 4th 1134, 131 Cal Rptr 2d 29, 63 P3d 937
In an action against landlords who violated a rent control ordinance by requiring prospective tenants to sign long-term leases as a condition of tenancy, the trial court did not abuse its discretion in determining the number of violations and in ordering restitution. People v Beaumont Investment, Ltd. (2003, Cal App 6th Dist) 2003 Cal App LEXIS 1215

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