GameStop, Inc. v. Superior Court of Riverside Cnty.

236 Cal. Rptr. 3d 874, 26 Cal. App. 5th 502
CourtCalifornia Court of Appeal, 5th District
DecidedAugust 22, 2018
DocketE068701
StatusPublished
Cited by3 cases

This text of 236 Cal. Rptr. 3d 874 (GameStop, Inc. v. Superior Court of Riverside Cnty.) is published on Counsel Stack Legal Research, covering California Court of Appeal, 5th District primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
GameStop, Inc. v. Superior Court of Riverside Cnty., 236 Cal. Rptr. 3d 874, 26 Cal. App. 5th 502 (Cal. Ct. App. 2018).

Opinion

RAMIREZ, P. J.

Following an investigation into violations of the Secondhand Dealers Law (SDL), the People, by and through the District Attorneys of Riverside and Shasta Counties, filed an action pursuant to Business and Professions Code section 17200 et seq., (Unfair Competition Law or UCL) to enjoin petitioner GameStop, Inc., (GameStop) against noncompliance. GameStop filed a motion to remove the action from the County of Riverside pursuant to Code of Civil Procedure 1 section 394, claiming that the district attorney, as an official elected by the County of Riverside, was a local governmental entity. The trial court denied the motion, giving rise to this petition for writ of mandate by GameStop.

We issued an order to show cause why the relief prayed for should not be granted. After considering the arguments in the return, traverse, reply, and the briefs of amici curiae,2 we deny the petition.

BACKGROUND

We base our opinion on the following operative facts from the return, the traverse, and the exhibits.3

Following investigations by the Redding Police Department, Shasta District Attorney's Office, and law enforcement agencies in Riverside County, the People of the *876State of California (real party in interest) filed a law enforcement action under Business and Professions Code section 17200 et seq., against GameStop, Inc., for violations of the SDL on April 7, 2017. ( Bus. & Prof. Code, §§ 21641, 21628, 21636.) The action was filed by the District Attorneys of Riverside and Shasta Counties.4

The facts underlying the complaint alleged that GameStop has over 500 stores in California, and that it uses a buy-sell-trade model, providing customers with an opportunity to trade in their used consoles, phones, tablets, and other products for store credits that can be applied toward merchandise. To prevent theft and "fencing" of stolen property, and to recover stolen property for the victims of theft, Business and Professions Code section 21625 et seq., regulates the purchase and resale of preowned "tangible personal property" by "secondhand dealers."

The SDL requires secondhand dealers to report the name, address, and photo identification of the seller, a complete description of the serialized property, a certification from the seller that she or he is the owner of the property, and a fingerprint of the seller. ( Bus. & Prof. Code, § 21627, subd. (a).) The secondhand dealer must retain the "tangible personal property" for a period of 30 days ( Bus. & Prof. Code, § 21636 ), and produce the property to law enforcement, upon request, within one business day ( Bus. & Prof. Code, § 21636, subd. (c) ).

During the time period enumerated in the complaint, GameStop failed to comply with the reporting, holding, and inspection requirements of the SDL. In Shasta County, police investigated a burglary involving a video game console that was traded or sold to GameStop in Redding by the thief; the Redding store was not in compliance with the SDL. In Riverside County, only two out of 16 stores were in compliance with requirements for obtaining required customer information, submitting that information to law enforcement, or holding the traded merchandise. In Contra Costa County, eight out of 12 stores were noncompliant, and in Tulare County, 50 percent of the stores were noncompliant.

On May 10, 2017, in lieu of an answer, GameStop filed a motion to transfer the action based on the provisions of sections 394, subdivision (a), and 397, subdivision (b). The trial court denied GameStop's motion and denied requests for judicial notice made in support of the motion.

GameStop then petitioned for extraordinary writ relief. After receiving an informal response from the People, we issued an order to show cause. The parties have filed a return and a traverse, which we have now considered along with briefing and a review of the exhibits. We now deny the petition.

DISCUSSION

GameStop contends that the instant action falls within section 394, subdivision (a), requiring a change of venue when a county or local agency brings a civil suit in its county against a nonresident corporate defendant. Its argument is grounded on the assertion that the District Attorneys for the Counties of Riverside and Shasta have an exclusive financial interest in the outcome of the suit, making the UCL plaintiff in the underlying action a "local agency." We disagree. To explain our reasoning, we first examine the nature of the of the SDL and the UCL, and then the venue provisions of section 394.

*8771. The Secondhand Dealers and Unfair Competition Laws.

California law provides a statewide mechanism for licensing, regulating, and overseeing parties who are secondhand dealers. ( Bus. & Prof. Code, § 21625.) The UCL provides an enforcement mechanism respecting the SDL by permitting the Attorney General, or a district attorney, or a county counsel, to seek preventive relief to enforce a penalty, forfeiture or penal law in a case of unfair competition. ( Bus. & Prof. Code, §§ 17202, 17204.) The nature of the UCL and SDL statutory schemes are central to the questions of venue for the action, and whether the district attorney is a plaintiff. Thus, a review of the relevant provisions of the UCL as it pertains to SDL actions is helpful.

Looking at the legislative intent, the SDL was enacted to "curtail the dissemination of stolen property and to facilitate the recovery of stolen property by means of a uniform, statewide, state-administered program of regulation of persons whose principal business is the buying, selling, trading, auctioning, or taking in pawn of tangible personal property and to aid the State Board of Equalization to detect possible sales tax evasion." ( Bus. & Prof. Code, § 21625.)

Secondhand dealers are required to make daily reports after receipt or purchase of secondhand property to CAPSS.5 ( Bus. & Prof. Code, § 21628, subd. (a).) The reports are made to the Department of Justice of the State of California. (See Bus. & Prof. Code, § 21628, subd. (a)(7).) Additionally, all tangible personal property reported by a secondhand dealer must be retained for 30 days, during which time the chief of police or sheriff may for good cause, as specified by the Department of Justice, authorize prior disposition of the property. ( Bus. & Prof. Code, § 21636, subd. (a).)

Local laws or ordinances relating to secondhand dealers that are not inconsistent with the SDL are not prohibited, but no city, county, or city and county, or any other state agency shall adopt local laws relating to the holding, reporting or identification of coins, monetized bullion, or commercial grade ingots of gold, silver or other precious metals ( Bus. & Prof. Code, § 21638, subd. (a) ), or respecting the identification, holding, or reporting requirements for the acquisition of tangible personal property, in the ordinary course of business, by pawnbrokers and secondhand dealers, other than as set forth in the SDL ( Bus. & Prof. Code, § 21638, subd. (b) ).

Thus, additional regulation of secondhand dealers by local government is authorized by the Legislature, so long as it does not exceed the scope permitted by the SDL. ( Malish v. City of San Diego

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Cite This Page — Counsel Stack

Bluebook (online)
236 Cal. Rptr. 3d 874, 26 Cal. App. 5th 502, Counsel Stack Legal Research, https://law.counselstack.com/opinion/gamestop-inc-v-superior-court-of-riverside-cnty-calctapp5d-2018.