Supreme Court Rules "Continuous Accrual Doctrine" Applies to UCL Statute of Limitations

Publish Date:Feb 01, 2013
Summary:
In a unanimous opinion filed on January 24, 2013, the California Supreme Court ruled in Aryeh v. Canon Business Solutions, Inc. that the four-year statute of limitations in California’s Unfair Competition Law (UCL) is subject to the continuous accrual doctrine which holds that a cause of action accrues each time a wrongful act occurs, triggering a new limitations period.
In a unanimous opinion filed on January 24, 2013, the California Supreme Court ruled in Aryeh v. Canon Business Solutions, Inc. that the four-year statute of limitations in California’s Unfair Competition Law (UCL) is subject to the continuous accrual doctrine which holds that a cause of action accrues each time a wrongful act occurs, triggering a new limitations period. Applying the doctrine in this case allowed the survival of some UCL claims that would have been barred by the strict enforcement of the four-year statute of limitations.

Jamshid Aryeh entered into copier lease agreements in 2001 and 2002 with Canon Business Solutions. The agreements set a maximum copy allowance. If Aryeh exceeded the monthly allowance, he was required to pay an additional per copy charge. 

Beginning in 2002, Aryeh noticed discrepancies between the meter readings taken by Canon employees and the actual number of copies Aryeh made. Aryeh concluded that Canon charged him for the test copies which Canon employees made between February 2002 and November 2004. These test copies resulted in Aryeh exceeding his monthly allowances and owing excess charges to Canon.

In January 2008, Aryeh filed a UCL lawsuit against Canon, alleging that Canon charged him unfair prices. At the pleading stage of the case, Canon responded that Aryeh’s suit was barred by the UCL’s statute of limitations which states, “Any action to enforce any cause of action pursuant to [the UCL] shall be commenced within four years after the cause of action accrued.” The trial court ruled in favor of Canon. In a 2-1 decision, the Court of Appeal affirmed the trial court’s ruling.

The Supreme Court reversed the Court of Appeal’s judgment. The Court explained that courts have developed a number of equitable exceptions to the usual rules governing limitations periods. Statutes of limitations are construed in light of these equitable exceptions unless the Legislature declares that the exceptions should not apply. The Court examined the language and legislative history of the UCL and concluded that the Legislature left the courts free to determine whether any of the equitable exceptions should apply to the UCL’s four-year statute of limitations.

The doctrine of continuous accrual is one of the equitable exceptions recognized by courts. The Court observed that under the doctrine “a series of wrongs or injuries may be viewed as each triggering its own limitations period, such that a suit for relief may be partially time-barred as to older events but timely as to those within the applicable limitations period.” The Court found that the doctrine of continuous accrual applied to Aryeh’s UCL complaint against Canon.

The Court’s ruling did not allow Aryeh to recover for Canon’s entire course of conduct. The continuous accrual doctrine only supports recovery “for damages arising from those breaches falling within the limitations period.” Thus, Canon’s recurring duty not to impose unfair charges in its monthly bills was a continuously accruing claim and those breaches that occurred within four years of the filing of Aryeh’s UCL lawsuit (i.e., from January 2004 forward) could be pursued. The charges prior to that time were barred.

The Supreme Court’s opinion is available at www.courts.ca.gov
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