63 Cal.App.5th 660
Cal. Ct. App.2021Background
- Aetna contracted with in-network physicians and implemented policies to discourage referrals to out-of-network providers (warnings, potential termination, DocFind notices).
- CMA (a 37,000-member physician association) sued Aetna seeking injunctive relief under the Unfair Competition Law (UCL), alleging interference with physicians’ medical judgment and statutory violations.
- The putative class claims were dismissed and CMA proceeded alone as the sole plaintiff on a UCL injunctive claim; no class certification was pursued.
- CMA produced evidence (declaration of its general counsel) that it diverted approximately 200–250 staff hours to investigate Aetna’s practices and to assist/advise members.
- Aetna moved for summary judgment arguing CMA lacked UCL standing because it had not suffered direct economic injury; the trial court granted summary judgment and entered judgment for Aetna.
- On appeal the court considered whether (1) preexisting law permitting associations to sue on members’ behalf supplies UCL standing after Proposition 64, and (2) CMA’s diversion of resources established direct loss of money or property.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether an association may bring a nonclass representative UCL action without showing its own direct economic injury | Association law (representational standing) permits suing on members’ behalf | Proposition 64 requires the plaintiff itself to have suffered injury in fact and lost money or property | No — post‑Proposition 64 UCL plaintiffs (including associations) must show direct economic injury to themselves |
| Whether CMA’s diversion of staff time (200–250 hours) and advocacy expenses constitute UCL injury (lost money or property) | Diverted resources were monies/time spent that would not have been spent but for Aetna’s violations, creating standing (citing ALDF) | The diversion was routine advocacy on behalf of members (part of CMA’s mission) and did not show a distinct economic loss to CMA | No — diversion of routine member‑service efforts did not create the required lost money or property; evidence insufficient |
| Whether ALDF controls to allow organizational standing based on diverted resources | ALDF supports that resource diversion can establish standing | ALDF is distinguishable: it was not a representative action and conflicts with Amalgamated Transit | ALDF is distinguishable and cannot overcome controlling Supreme Court precedent requiring direct injury |
Key Cases Cited
- Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court, 46 Cal.4th 993 (Cal. 2009) (Proposition 64 requires UCL plaintiffs to have suffered injury in fact and lost money or property; representative noninjured assignees cannot sue)
- Kwikset Corp. v. Superior Court, 51 Cal.4th 310 (Cal. 2011) (UCL standing requires a plaintiff personally to have lost money or property caused by defendant’s misconduct)
- Animal Legal Defense Fund v. LT Napa Partners LLC, 234 Cal.App.4th 1270 (Cal. Ct. App. 2015) (organizational diversion of resources can support standing where the organization’s mission itself is directly frustrated; distinguishable here)
- Raven’s Cove Townhomes, Inc. v. Knuppe Development Co., 114 Cal.App.3d 783 (Cal. Ct. App. 1981) (association may bring representative nonclass actions under Code Civ. Proc. § 382 — not controlling for UCL post‑Proposition 64)
- McGill v. Citibank, N.A., 2 Cal.5th 945 (Cal. 2017) (a private plaintiff who has standing may seek public injunctive relief; does not relax the UCL standing requirement)
- Aguilar v. Atlantic Richfield Co., 25 Cal.4th 826 (Cal. 2001) (summary judgment standard and burden shifting guidance)