Robinson v. U-Haul Co. of California
4 Cal. App. 5th 304
| Cal. Ct. App. | 2016Background
- Robinson was a U-Haul independent dealer who terminated his dealer contract in 2006 and began renting Budget trucks; U-Haul sued him (Robinson I) to enforce a contractual noncompetition covenant tied to Yellow Pages advertising.
- The dealer contract’s noncompetition covenant barred dealers from representing competitors while directory ads remained in print and an addendum could extend the restriction further; such covenants are generally void under California law (§ 16600).
- U-Haul lost a preliminary injunction motion in Robinson I and dismissed its complaint; Robinson alleged U-Haul’s covenant was void and that U-Haul had a pattern of suing former dealers to intimidate competition.
- Robinson then sued for malicious prosecution and under the UCL (Robinson II). A jury found U-Haul lacked a reasonable belief in trade secret misuse and awarded Robinson damages for malicious prosecution; the trial court separately held the covenant was void as a matter of law.
- The trial court entered a permanent injunction prohibiting U-Haul from initiating or threatening to initiate judicial proceedings in California to enforce the noncompetition covenant, and later awarded Robinson $834,008.09 in attorney’s fees under Code of Civil Procedure section 1021.5 as a private attorney general.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether a permanent injunction was proper despite U-Haul’s claimed abandonment of enforcement | Robinson: U-Haul has a long-standing pattern of knowingly inserting and enforcing illegal covenants; voluntary cessation was not shown to be in good faith and injunction is needed to prevent recurrence | U-Haul: It abandoned enforcement in California, changed contract language to "void where prohibited," and thus injunction is unnecessary or moot | Court: Affirmed injunction — substantial evidence U-Haul’s past practice, limited contract change, and lack of credible statewide notice justified injunction; voluntary cessation not dispositive |
| Standing under the UCL to seek injunctive relief | Robinson: He was directly injured (sued, incurred fees) and is a victim of a pattern of anticompetitive litigation, so he has UCL standing | U-Haul: Robinson lacks §17204 standing because he did not suffer injury in fact from the broader conduct | Court: Robinson has standing — he suffered particularized injury (litigation costs) from U-Haul’s unfair practice |
| Whether Robinson II is barred by collateral estoppel from Robinson I mootness ruling | U-Haul: Judge Beeman’s mootness ruling in Robinson I should preclude further relief in Robinson II | Robinson: The issues differ (UCL injunctive relief vs. declaratory relief/fraud) and mootness ruling was not a decision on the merits | Court: Collateral estoppel does not apply — prior mootness was not a merits determination and issues were not identical |
| Whether trial court properly allowed late filing and awarded fees under §1021.5 | Robinson: Good-cause mistake about procedural posture justified extension under Rule 3.1702(d); fees appropriate as private attorney general | U-Haul: Motion was untimely and procedural errors bar fee award | Court: No abuse of discretion — trial court permissibly found good cause for extension; fee award under §1021.5 affirmed (no prejudice to U-Haul) |
Key Cases Cited
- Edwards v. Arthur Andersen LLP, 44 Cal.4th 937 (Cal. 2008) (California law generally voids garden-variety noncompetition covenants)
- Marin County Bd. of Realtors, Inc. v. Palsson, 16 Cal.3d 920 (Cal. 1976) (broad-public-interest exception to mootness; voluntary discontinuance does not necessarily moot issues of recurring public concern)
- Amalgamated Transit Union, Local 1756 v. Superior Court, 46 Cal.4th 993 (Cal. 2009) (standing requirements under Proposition 64 for UCL suits require injury in fact and loss of money or property)
- Nelson v. Pearson Ford Co., 186 Cal.App.4th 983 (Cal. Ct. App. 2010) (a defendant’s voluntary cessation may bar injunction only if there is no realistic prospect of recurrence)
- Lewow v. Surfside III Condominium Owners Assn., 203 Cal.App.4th 128 (Cal. Ct. App. 2012) (Rule 3.1702(d) is remedial and courts have discretion to grant extensions for filing attorney-fee motions)