California Supreme Court Sides With Plaintiffs On Key 17200 Statute of Limitations Issue

Resolving a long-festering split among both state and federal courts, the California Supreme Court recently held that the continuous accrual doctrine and similar common law rules that can undermine a statute of limitations defense apply to claims brought under California’s Unfair Competition Law, Business & Professions Code Section 17200, et seq. (the “UCL”).  The unanimous decision, in Aryeh v. Canon Business Solutions Inc., No. S184929, 2013 WL 263509 (Jan. 24, 2013), also applies to the discovery rule and the doctrines of continuing violation, equitable tolling and fraudulent concealment. 

Under the UCL’s statute of limitations provision, “[a]ny action to enforce any cause of action pursuant to [the UCL] shall be commenced within four years after the cause of action accrued.”  Cal. Bus. & Prof. Code § 17208.  The text of the provision, however, is silent on whether common law exceptions to the accrual rule apply.  The Court in Aryeh concluded that the exceptions do apply because “[a] statute will be construed in light of common law decisions, unless its language clearly and unequivocally discloses an intention to depart from, alter, or abrogate the common-law rule concerning the particular subject matter.”  Aryeh, 2013 WL 263509 at *4 (citation omitted).  The Court also found the UCL’s legislative history supports application of the exceptions.  Id.   

Importantly, the Court did not hold that each common law exception is available for all types of UCL claims (i.e., fraudulent, unfair and unlawful).  Rather, noting that there are many types of claims under the UCL, it recognized that “it makes sense to acknowledge that a UCL claim in some circumstances might support the potential application of one or another exception [], and in others might not.”  Id. (citations omitted).  The Court also reiterated that, under the continuous accrual doctrine, each breach or violation gives rise to a separate claim for statute of limitations purposes, and claims accruing more than four years before filing of the complaint are still barred.