Diversion of Resources Enough for UCL Standing, Holds California Supreme Court

In 2004, California amended its unfair competition law to eliminate associational standing–that is, membership organizations could no longer bring claims based on injuries to their members. Only claims based on injuries to the organizations themselves could serve as a basis for suit.

Yesterday, in California Medical Association v. Aetna Health of California, the California Supreme Court unanimously held that an organization can satisfy the UCL standing requirements by pointing to its diversion of its own resources to combat allegedly unfair competition, relying on the Havens doctrine for standing that applies in federal courts.  While this case involved a professional association of doctors challenging a health insurance company’s policy regarding out-of-network referrals, the holding could potentially open the door to a number of consumer-protection suits in California state court brought by consumers rights organizations.

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