Beaver v. Tarsadia Hotels, No. 15-55106 (9th Cir. 2016)
Annotate this CasePlaintiffs filed a putative class action against defendants, a group of developers and their agents or affiliates, claiming that defendants' business practices violated California's Unfair Competition Law (UCL), Cal. Bus. & Prof. Code 17200 et seq. Plaintiffs specifically alleged that defendants failed to make certain disclosures as required by the Interstate Land Sales Full Disclosure Act (ILSA), 15 U.S.C. 1701 et seq. Although defendants concede that they failed to comply with the disclosure requirements, they raise certain affirmative defenses. The district court rejected defendants' claims and granted partial summary judgment for plaintiffs. In this interlocutory appeal, the court affirmed the judgment. The court concluded that, because the UCL's four-year statute of limitations and its accompanying accrual rules apply, the district court properly concluded that plaintiffs’ UCL claim is not time-barred; defendants failed to overcome the strong presumption against preemption, and ILSA’s three-year statute of limitations does not bar plaintiffs’ UCL claim; plaintiffs' units are "lots" and are therefore subject to ILSA's disclosure requirements; the Improved Lot Exemption does not extinguish plaintiffs’ claims; the text and interpretive history of the statute lead to the conclusion that the agency’s interpretation of “lot” is reasonable and entitled to Chevron deference; and the 2014 Amendment to ILSA does not retroactively apply to the present action where the amendment was a substantive change in the law. Accordingly, the court affirmed the judgment.
Court Description: California Unfair Competition Law. The panel affirmed the district court’s partial grant of summary judgment in favor of purchasers of non-residential condominiums who claimed that a group of developers and their agents or affiliates committed unlawful business practices in violation of California’s Unfair Competition Law (UCL) by failing to make certain disclosures in the course of sale transactions, as required by the Interstate Land Sales Full Disclosure Act (ILSA). Defendants conceded that they failed to comply with ILSA’s disclosure requirements, but raised a series of affirmative defenses, which the district court rejected. The panel held that the UCL’s four-year statute of limitations applied, and was not preempted, and ILSA’s BEAVER V. TARSADIA HOTELS 3 three-year statute of limitations did not bar plaintiffs’ UCL claim. The panel rejected defendants’ argument that ILSA did not apply because plaintiffs’ condominium units were not qualifying “lots” under ILSA. Guided by agency interpretations of ILSA, the panel concluded that plaintiffs had “exclusive repeated use” of their units, which therefore qualified as “lots.” The panel held that the condominium units were not exempt under ILSA’s Improved Lot Exemption. The panel held that a 2014 amendment to ILSA, passed after the commencement of these proceedings, and exempting condominium sales from ILSA’s disclosure requirements, did not operate to extinguish defendants’ liability. The panel held that the amendment was a substantive change in the law, rather than a clarification, and did not operate retroactively.
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