Nationwide Biweekly Admin., Inc. v. Superior Court of Alameda Cnty.

N

ationwide Biweekly Administration, Inc., Loan Payment Administration, LLC, and Daniel S. Lipsky, the alleged alter ego, principal and sole shareholder of Nationwide and Loan Payment (collectively petitioners) operate a debt payment service that claims to reduce the amount of interest owed by accelerating debt repayment via an extra annual payment. The California Department of Business Oversight and the District Attorneys of four counties (collectively the People) challenge a number of petitioners' business practices and in the underlying action seek civil penalties under Business and Professions Code sections 17200 and 17500, and Financial Code section 12105, subdivision (d), as well as injunctive relief, restitution, disgorgement, the voiding of petitioners' allegedly unlawful contracts, costs and attorney fees. In conjunction with their answer, petitioners demanded a jury trial, which the People successfully moved to strike.

Petitioners sought writ relief, which we initially denied. On review, our Supreme Court transferred the matter back to this court, with directions to issue an order to show cause why petitioners do not have a right to a jury trial "where the government seeks to enforce the civil penalties authorized under Business and Professions Code sections 17206 and 17536 and Financial Code section 12105, subdivision (d)."

We now grant petitioners' request for extraordinary relief, in part, concluding the "gist" of the statutory causes of action asserted against them are legal, thereby giving rise to a right to jury trial. However, following the approach taken by the

such a cause of action, the Constitution prevails and a jury trial cannot be denied." ( Shaw , supra , 2 Cal.5th at p. 994, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .)

Whether petitioners are " 'constitutionally entitled to a jury trial ... is a pure question of law that we review de

rather by the nature of the rights involved and the facts of the particular case-the gist of the action. A jury trial must be granted where the gist of the action is legal, where the action is in reality cognizable at law.' " ' " ( Shaw , supra , 2 Cal.5th at p. 995, 216 Cal.Rptr.3d 643 , 393 P.3d 98 , quoting 1941 Chevrolet , supra , 37 Cal.2d at p. 299, 231 P.2d 832 .) The right to jury trial " 'embraces cases of the same class thereafter arising.... The introduction of a new subject into a class renders it amenable to its general rules, not to its exceptions.' " ( 1941 Chevrolet , at p. 300, 231 P.2d 832 .)

"Determining whether the gist of a claim is in law or equity 'depends in large measure upon the mode of relief to be afforded.' " ( Asare v. Hartford Fire Ins. Co. (1991) 1 Cal.App.4th 856 , 867, 2 Cal.Rptr.2d 452 .) " '[I]f the action is essentially one in equity and the relief sought "depends upon the application of equitable doctrines," the parties are not entitled to a jury trial. [Citations.] Although we have said that "the legal or equitable nature of a

The Seventh Amendment provides in pertinent part: "In Suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved...." ( U.S. Const., 7th Amend.) The Tull court reiterated that the court has long "construed this language to require a jury trial on the merits in those actions that are analogous to 'Suits at common law.' Prior to the Amendment's adoption [in 1791], a jury trial was customary in suits brought in the English law courts. In contrast, those actions that are analogous to 18th-century cases tried in courts of equity or admiralty do not require a jury trial." ( Tull , supra , 481 U.S. at p. 417, 107 S.Ct. 1831 , italics omitted; see Granfinanciera, S.A. v. Nordberg (1989) 492 U.S. 33 , 41-42, 109 S.Ct. 2782 , 106 L.Ed.2d 26 ( Granfinanciera ) [" 'the thrust of the Amendment was to preserve the right to jury trial as it existed in 1791' "].)

Accordingly, the high court has adopted a two-step analysis. "First, we compare [a] statutory action to 18th-century actions brought in the courts of England prior to the merger of the courts of law and equity. [Citations.] Second, we examine the remedy sought and determine whether it is legal or equitable in nature." ( Tull , supra , 481 U.S. at pp. 417-418, 107 S.Ct. 1831 .) "Our search is for a single historical analog, taking into consideration the nature of the cause of action and the remedy as two important factors." ( Id . at p. 421, fn. 6, 107 S.Ct. 1831 .) "[C]haracterizing the relief sought is 'more important' than finding a precisely analogous common-law cause of action in determining whether the Seventh Amendment guarantees a jury trial." (

provide equitable relief" to "extract compensation or restore the status quo," and thereby authorizes relief that was "available only in a court of law" and to which the right of jury trial attaches. ( Id. at pp. 422-423, 107 S.Ct. 1831 .)

The high court also made clear that the fact the Act also authorizes equitable relief does not foreclose the right to jury trial. "[I]f a 'legal claim is joined with an equitable claim, the right to jury trial on the legal claim, including all issues common to both claims, remains intact. The right cannot be abridged by characterizing the legal claim as "incidental" to the equitable relief sought.' " ( Tull , supra , 481 U.S. at p. 425, 107 S.Ct. 1831 , citing Curtis v. Loether (1974) 415 U.S. 189 , 196, fn. 11, 94 S.Ct. 1005 , 39 L.Ed.2d 260 .)

However, the court went on to explain that the defendant's right to jury trial did not extend to determining the amount of the penalty. ( Tull , supra , 481 U.S. at pp. 425-426, 107 S.Ct. 1831 .) "At the time [the] case was tried, [the Act] did not explicitly state whether juries or trial judges were to fix the civil penalties." ( Id. at p. 425, 107 S.Ct. 1831 .) The Act was subsequently amended, however, to specify that trial judges are to perform "the highly discretionary calculations necessary to award civil penalties after liability is found." ( Ibid. ) The court thus also had to determine whether Congress can, "consistent with the Seventh Amendment, authorize judges to assess civil penalties." ( Tull , at p. 425, 107 S.Ct. 1831 .)

The Supreme Court concluded Congress can permissibly do so. ( Tull , supra , 481 U.S. at pp. 426-427, 107 S.Ct. 1831 .) The Seventh Amendment " 'was designed to preserve the basic institution of jury trial in only its most fundamental elements,' " and "[t]he assessment of a civil penalty is not one of the 'most fundamental elements.' " ( Tull , at p. 426, 107 S.Ct. 1831 , quoting Galloway v. United States (1943) 319 U.S. 372 , 392, 63 S.Ct. 1077 , 87 L.Ed. 1458 .) "[H]ighly discretionary calculations that take into account multiple factors are necessary in order to set civil penalties under the Clean Water Act," and "[t]hese are the kinds of calculations traditionally performed by judges." ( Tull , at p. 427, 107 S.Ct. 1831 .) Thus, because fixing the amount "of a civil penalty is not an essential function of a jury trial," the "Seventh Amendment does not require a jury trial for that purpose in a civil action." ( Tull , at p. 427, 107 S.Ct. 1831 .)

Accordingly, Tull appears to provide substantial guidance on the question that our high court has asked us to address. Indeed, in 1941 Chevrolet , our Supreme Court, in extensively canvassing historic English common law, not only concluded that government forfeiture actions, like the one before it, were actions tried in the Court of Exchequer in which there was a right to jury trial, but also observed that "[c]ases involving penalties to the Crown, other than forfeiture of conveyances and

The People nevertheless maintain Tull is inapplicable and we should disregard the United States Supreme Court's discussion and resolution of the "historical question" of whether, under the early English common law, there was a right to jury trial in governmental actions seeking civil penalties. In their return, the People asserted the mere fact Tull was "decided under the Seventh Amendment to the United States Constitution ... [which] does not apply to the States" made the case inapplicable. As they correctly observed, "[t]he civil jury trial provision of the Seventh Amendment has been applied only in federal judicial proceedings." ( Shaw , supra , 2 Cal.5th at p. 993, fn. 8, 216 Cal.Rptr.3d 643 , 393 P.3d 98 , italics omitted.) However, this point is immaterial if, in substance, the analytical template employed by the United States Supreme Court under the Seventh Amendment is essentially the same as that used by our own high court under article I, section 16 of the California Constitution.

Thus, at oral argument, the People urged that the analysis the United States Supreme Court employs in resolving civil jury trial issues (and which it employed in Tull ) is different from the approach the California Supreme Court now employs. While acknowledging that the jury trial analysis our high court used in 1941 Chevrolet was, in substance, the same as that used by the United States Supreme Court in Tull , the People maintained that since 1941 Chevrolet , the California high court has taken "its own path" (and one that is "more thoughtful and more nuanced") in analyzing the right to jury trial. The People pointed to C & K Engineering and our high court's most recent jury trial decision in Shaw , as reflecting this supposed different, and apparently more restrictive, approach to analyzing the right to jury trial.

In our view, neither C & K Engineering nor Shaw reflect a departure from the jury trial analysis our high court enunciated and applied in 1941 Chevrolet .

In C & K Engineering , the court considered whether the defendant subcontractor, which had supplied a bid to the plaintiff general contractor but then reneged on it, was entitled to a jury trial in a lawsuit brought by the general and "based entirely upon the equitable doctrine of promissory estoppel." ( C & K Engineering , supra , 23 Cal.3d at p. 5, 151 Cal.Rptr. 323 , 587 P.2d 1136 .) As the court explained, the general contractor had no viable legal claim against the subcontractor because, although the general contractor relied on the subcontractor's bid, the parties never actually enter into a contract; rather, the subcontractor had made only a "gratuitous" promise to perform. ( Id. at pp. 5-6, 9, 151 Cal.Rptr. 323 , 587 P.2d 1136 .) However, given the importance of such bids and the severity of harm that flows from a subcontractor's refusal to perform as promised, the courts have embraced the doctrine of promissory estoppel to provide relief to the jilted general contractor. ( Id. at p. 6, 151 Cal.Rptr. 323 , 587 P.2d 1136 .) The court thus described the doctrine as "essentially equitable in nature, developed to provide a remedy

(namely, enforcement of a gratuitous promise) which was not generally available in courts of law prior to 1850." ( Id. at p. 8, 151 Cal.Rptr. 323 , 587 P.2d 1136 .)

The C & K Engineering court reiterated that the state constitutional right to jury trial " 'is a matter of right in a civil action at law, but not in equity.' " ( C & K Engineering , supra , 23 Cal.3d at p. 8, 151 Cal.Rptr. 323 , 587 P.2d 1136 , quoting

C & K Engineering , our high court quoted from and cited extensively to 1941 Chevrolet , as well to other earlier jury trial opinions. What the C & K Engineering court, applying the same standard it had applied in 1941 Chevrolet , concluded is that there is no historical English common law analog to an action based solely on the equitable doctrine of promissory estoppel and, accordingly, there is no state constitutional jury trial right in such a case. The court also made clear that the fact the plaintiff general contractor sought "damages" did not change the "historical" and fundamental fact that the contractor's claim had its origins solely in the courts of equity in which there was no right to jury trial.

In Shaw , the court considered whether a health care worker had a right to jury trial in connection with a cause of action for retaliatory discharge against her former employer under the Health and Safety Code section 1278.5, subdivision (g). ( Shaw , supra , 2 Cal.5th at p. 987, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .) Pursuant to that claim, the plaintiff sought compensatory and emotional distress " 'damages,' " as well as lost salary and benefits, and fees

California law by which a plaintiff can obtain a jury trial on a claim for damages for retaliatory termination." ( Id. at pp. 1003-1004, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .) "[U]nder the terms of [Health and Safety Code] section 1278.5 itself, the cause of action established by section 1278.5(g) is expressly in addition to any other remedy a health care whistleblower otherwise possesses." ( Id. at p. 1004, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .) "One such remedy, of course, is a health care employee's right to bring a civil action for retaliatory termination under this court's decision in Tameny " ( ibid. ), as to which there is a right to jury trial. ( Id. at p. 1005, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .) Thus, "in the retaliatory termination context[,] a health care employee who chooses to bring both a Tameny cause of action and a cause of action under [Health and Safety Code] section 1278.5(g) retains the right in the Tameny action to have a jury determine whether he or she is entitled to recover damages and the amount of damages to be recovered for such unlawful termination." ( Id. at p. 1006, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .)

The Shaw court additionally addressed a lurking procedural issue, namely the holdings in some cases that, in a case involving both legal and equitable claims, a trial court "has discretion to rule first on the equitable claim" which "may obviate a jury trial of the legal claim if the trial court's ruling is dispositive of an issue crucial to the legal claim." ( Shaw , supra , 2 Cal.5th at p. 1006, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .) The high court ruled the trial court could not take such a course-"the court may not deprive the plaintiff of the right to a

examining " ' " 'the nature of the rights involved and the facts of the particular case.' " ' " ( Shaw , supra , 2 Cal.5th at p. 995, 216 Cal.Rptr.3d 643 , 393 P.3d 98 , quoting C & K Engineering , supra , 23 Cal.3d at pp. 8-9, 151 Cal.Rptr. 323 , 587 P.2d 1136 , quoting 1941 Chevrolet , supra , 37 Cal.2d at p. 283, 231 P.2d 832 .) The United States Supreme Court's phraseology is almost the same-the court "must examine both the nature of the action and [ ] the remedy sought." ( Tull , supra , 481 U.S. at p. 417, 107 S.Ct. 1831 .)

The only substantive variance between the federal and state civil jury trial analyses that we can see is that the federal analysis looks to the common law as of 1791, when the Seventh Amendment was adopted, while California's analysis looks to the common law as of 1850, when the California Constitution was adopted. (See Granfinanciera , supra , 492 U.S. at pp. 41-42, 109 S.Ct. 2782 ; 1941 Chevrolet , supra , 37 Cal.2d at pp. 286-287, 231 P.2d 832 .) The People have not "adduced any authority," however, "suggesting that any change occurred in the common law between 1791 ... and 1850." ( Wisden v. Superior Court (2004) 124 Cal.App.4th 750 , 756, 21 Cal.Rptr.3d 523 ( Wisden ) ). Thus, Wisden recognized that federal jury trial cases are persuasive authority in analyzing the right to jury trial secured by our state constitution. ( Id. at pp. 756-757, 21 Cal.Rptr.3d 523 .)

Accordingly, Tull's discussion of the historical legal facts establishing the types of actions triable by jury at common law is highly pertinent to the instant case. (See Wisden , supra , 124 Cal.App.4th at pp. 757-759, 21 Cal.Rptr.3d 523 [the relevance of federal jury trial cases "lies not in [their] holding under the Seventh Amendment, but in [their] recitation of the historical facts establishing that an action ... was triable by a jury at common law in late 18th-century England"].) And we therefore follow the United States Supreme Court's instruction that as a matter of purely "historical" legal fact "English courts had held that a civil penalty suit was a particular species of an action in debt that was within the jurisdiction of the courts of law." (

and Admiralty and the Ecclesiastical Courts. The Courts of Common Law before the passing of the Judicature Acts, 1873-5, were the three Royal Courts of King's Bench, Common Pleas or Common Bench, and Exchequer...." [Citation.] The Court of Exchequer was not a criminal court; and all suits for penalties, though for the King, were considered as civil. [Citation.] ... The proceedings of the Court of Exchequer were originally confined to bills by the Attorney General to recover money or property for the Crown. [Citation.] It was originally, and continued to be, a common-law court.' " ( Id . at pp. 288-289, 231 P.2d 832 , fn.omitted.) The court further added, " [c]ases involving penalties to the Crown, other than forfeiture of conveyances and goods , were also tried by a jury in the Court of Exchequer." ( Id . at p. 295, 231 P.2d 832 , italics added.) The court then cited over 25 English cases, from the 1600's through the 1800's, in support of this historical fact. ( Id . at p. 295, fn. 15, 231 P.2d 832 .)

Similarly, in Grossblatt v. Wright (1951) 108 Cal.App.2d 475 , 239 P.2d 19 , the Court of Appeal analyzed English common law and concluded statutory penalties were recoverable in an action for debt at common law. The specific issue in Grossblatt was whether there was a right to jury trial in an action to recover treble damages under the United States Housing and Rent Act of 1947. ( Id . at p. 477, 239 P.2d 19 .) The court concluded such treble damages were "in the nature of penalties." ( Id. at p. 485, 239 P.2d 19 .) "Statutory penalties existed at common law, and debt was the appropriate action for the recovery thereof where no other remedy was specified, because the money due under such statute gave rise to a debt, the underlying theory being an implied promise which the law annexed to the liability." ( Id . at pp. 484-485, 239 P.2d 19 .) In short, what the common law of England in the 1800's established, said the court, was that " '[i]f an act of parliament inflict a certain penalty for a particular act, an action of debt will lie for the penalty.' " ( Id. at p. 484, fn. 18, 239 P.2d 19 , italics omitted, citing Archbold, Plead. & Evid. (Civ. Actions) (1837), p. 17.) Accordingly, an "action (writ) of debt was the general remedy at common law for the recovery of all sums certain, or sums readily reducible to a certainty, whether the legal liability arose from contract or was created by statute." ( Grossblatt , at p. 484, 239 P.2d 19 , fn. omitted.) This historical fact has not changed.

Thus, both the United States Supreme Court and the California Supreme Court have unequivocally stated that a government action seeking civil penalties for retribution and/or deterrence purposes is the kind of case that, under the historic

discussed, the People have not presented any cogent reason why we should not follow the lead of the United

C. Prior UCL Cases Either are Not on Point or Did Not Fully Analyze the Jury Trial Issue

The People maintain that, should we conclude petitioners have a right to jury trial in this case, we will be parting from "an unbroken line of appellate decisions finding no right to a jury trial in UCL or FAL actions, all where the People sought penalties." An examination of these cases shows that this is not so.

In Spot , for example, the People brought a civil enforcement action against medical marijuana distributors, alleging violations of the local municipal code, the Health and Safety Code, and the UCL. ( People ex rel. Feuer v. Superior Court (Cahuenga's The Spot ) (2015) 234 Cal.App.4th 1360 , 1364, 184 Cal.Rptr.3d 809 ( Spot ).) Citing

"the relief sought in the complaint was essentially equitable in nature and the fact that imposition of civil penalties might also result did not serve to change the nature of the case." ( Id. at p. 916, 132 Cal.Rptr. 767 , italics added.) Read in context, the trial court's reference to the "nature of the case," meant the government's request for penalties did not effectively make it a criminal case. ( Ibid . ) This is confirmed by the Court of Appeal's holding-that " '[t]he statutory action before us was not rendered criminal in nature because the People therein sought civil penalties.... In short, the punitive nature of a civil penalty does not make an action to obtain it completely criminal in nature. [Citation.] This being so, the right to a trial by jury '[i]n all criminal prosecutions' guaranteed by the Sixth Amendment to the United States Constitution does not apply in this case.' " ( Bestline , at p. 916, 132 Cal.Rptr. 767 , italics added.)

In People v. Superior Court ( Kaufman ) (1974) 12 Cal.3d 421 , 115 Cal.Rptr. 812 , 525 P.2d 716 , the government sought statutory penalties for both unfair competition and deceptive advertising. ( Id . at p. 424, fn. 1, 115 Cal.Rptr. 812 , 525 P.2d 716 .) However, the issue before the California Supreme Court was not whether the defendant had a right to jury trial. Rather, the issue was whether the trial court had jurisdiction to grant the defendant immunity from criminal prosecution and compel him to answer deposition questions he claimed would elicit incriminating responses. ( Id . at pp. 424-425, 115 Cal.Rptr. 812 , 525 P.2d 716 .) Moreover, in concluding that the trial court could compel the defendant to answer after issuing an appropriate protective

cases because there is no right to a jury trial in such cases," citing to People v. Toomey (1984) 157 Cal.App.3d 1 , 203 Cal.Rptr. 642 ( Toomey ) but providing no additional analysis. ( First Federal , at pp. 732-733, 128 Cal.Rptr.2d 542 .)

In Toomey , the People sued for unfair business practices and false advertising and obtained preliminary injunctive relief, enjoining the defendant from certain business practices, including making untrue or misleading representations in the sale of coupons. ( Toomey , supra , 157 Cal.App.3d at pp. 6-7, 203 Cal.Rptr. 642 .) Because the defendant "admittedly made no significant changes in his business practices," the trial court found him in violation of the injunction and imposed a fine under Business and Professions Code section 17535.5. ( Toomey , at pp. 7, 17 & fn. 6, 203 Cal.Rptr. 642 .) The defendant claimed the violation determination and imposition of the fine were akin to a contempt proceeding, and therefore he was entitled to a jury trial. ( Id . at p. 17, 203 Cal.Rptr. 642 .) The Court of Appeal rejected this assertion, stating "it is now firmly established than an action brought pursuant to the unfair business practices act seeks only civil penalties, and accordingly the due process rights which apply in criminal actions , including the right to a jury trial, need not be provided." ( Id. at p. 18, 203 Cal.Rptr. 642 , italics added.)

Thus, virtually all of the cases the People cite as establishing a supposed "line" of opinions holding there is no right to jury trial under the UCL and FAL, considered only the Sixth Amendment right to jury trial in criminal cases. We agree these cases make clear defendants cannot look to the Sixth Amendment as the source of any jury trial right in a statutory enforcement action seeking civil penalties, and, indeed, we agree these courts were correct in so holding. However, as we have discussed in the preceding sections of this opinion, the salient issue is not whether there is a Sixth Amendment

the right to jury trial. (See Tull , supra , 481 U.S. at pp. 418-425, 107 S.Ct. 1831 ; 1941 Chevrolet , supra , 37 Cal.2d at p. 295, fn. 15, 231 P.2d 832 .)

Finally, the People point to this court's decision DiPirro , in which the court held there was no right to jury trial in an action by a private individual seeking injunctive relief, restitution, and civil penalties, as well as costs and attorney fees under the Safe Drinking Water and Toxic Enforcement Act of 1986 ( Health & Saf. Code, § 25249.5 et seq. ) commonly referred to as Proposition 65. ( DiPirro v. Bondo Corp. (2007) 153 Cal.App.4th 150 , 164, 62 Cal.Rptr.3d 722 .) The defendant supplied " 'Proposition 65' " warnings in the paperwork accompanying the .44 fluid once bottles of " 'touch up' " paint it manufactured, but did not include warnings on the bottles, themselves. ( Id . at p. 164, 62 Cal.Rptr.3d 722 .) The parties stipulated to first trying a potentially dispositive affirmative defense (the "warning exemption defense"), and the trial court, rather than a jury, decided the issue in favor of the defendant. ( Id. at pp. 164-165, 175, 62 Cal.Rptr.3d 722 .)

The DiPirro court recognized that in applying the "gist of the action" analysis, it was required to first compare the statutory cause of action to early English common law actions prior to merger of the courts of law and equity. ( DiPirro , supra , 153 Cal.App.4th at p. 180, 62 Cal.Rptr.3d 722 .) The court pronounced the Proposition 65 statutory scheme as "thoroughly infused with equitable principles," stating the "essential character and purpose of the [Safe Drinking Water and Toxic Enforcement] Act is equitable" and it is a " ' "remedial statute intended to protect the public." ' " ( Ibid. , quoting Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454 , 461-462, 110 Cal.Rptr.2d 627 .) It then stated "[t]he foremost consideration" before it was "that the remedies sought through an enforcement action under the Act are equitable in nature." ( DiPirro , at p. 181, 62 Cal.Rptr.3d 722 .) "An action that seeks to enforce the consequences of the listing of a chemical," said the court, "fundamentally seeks a form of declaratory relief-that the product requires a warning under the Act-which is equitable in nature." ( Ibid. )

The court went on to conclude the fact the plaintiff sought civil penalties did not "itself" require a jury trial ( DiPirro , supra , 153 Cal.App.4th at pp. 181-182, 62 Cal.Rptr.3d 722 ), observing " ' "an action is one in equity where the only manner in which the legal remedy of damages is available is by application of equitable principles." ' " ( Id. at p. 182, 62 Cal.Rptr.3d 722 , quoting Interactive Multimedia Artists, Inc. v. Superior Court (1988) 62 Cal.App.4th 1546 , 1555, 73 Cal.Rptr.2d 462 .) The court then cited to Tull , but only for the proposition that "[w]here ... the statute has delegated the assessment of civil penalties in accordance with a highly discretionary calculation ..., this is the kind of calculation traditionally performed by judges rather than a jury, and does not require a jury trial for that purpose in a civil action" (the point the Tull court

made

which reached the same conclusion as Tull as to the fundamentally legal character of an action by the government seeking statutory penalties.

We also cannot reconcile the DiPirro court's apparent view that only "damages" that compensate a plaintiff for actual injury are "legal" in character. In fact, the very point the DiPirro court made as to the government's "primary right" to recover statutory penalties-that they are a "punitive exaction" designed to "deter misconduct and harm" ( DiPirro , supra , 153 Cal.App.4th at p. 183, 62 Cal.Rptr.3d 722 )-is exactly why the Supreme Court

United States Supreme Court in Tull v. United States (1987) 481 U.S. 412 , 107 S.Ct. 1831 , 95 L.Ed.2d 365 ( Tull ), we also conclude the right to jury trial extends only to the issue of liability and that the amount of statutory penalties, as well as whether any equitable relief is appropriate, is properly determined by the trial court.

The People have alleged six causes of action against petitioners-engaging as a "prorater" without a business license ( Fin. Code, §§ 12200, 12200.1 ),

Tull , at p. 421, 107 S.Ct. 1831 .) In that regard, "[w]e have recognized the 'general rule' that monetary relief is legal, [citation], and an award of statutory damages may serve purposes traditionally associated with legal relief, such as compensation and punishment." ( Feltner v. Columbia Pictures Tel. (1998) 523 U.S. 340 , 352, 118 S.Ct. 1279 , 140 L.Ed.2d 438 .)

The Tull court therefore first focused of the historic character of governmental actions seeking civil penalties, explaining that a "civil penalty was a type of remedy at common law that could only be enforced in courts of law. Remedies intended to punish culpable individuals, as opposed to those intended simply to extract compensation or restore the status quo, were issued by courts of law, not courts of equity." ( Tull , supra , 481 U.S. at p. 422, 107 S.Ct. 1831 .) "Actions by the Government to recover civil penalties under statutory provisions therefore historically have been viewed as one type of action in debt requiring trial by jury." ( Id. at pp. 418-419, 107 S.Ct. 1831 , citing United States v. Regan (1914) 232 U.S. 37 , 34 S.Ct. 213 , 58 L.Ed. 494 [assuming right to jury trial in civil penalty actions]; Hepner v. United States (1909) 213 U.S. 103 , 115, 29 S.Ct. 474 , 53 L.Ed. 720 [affirming directed verdict in statutory penalty case].)

goods, were also tried by jury in the Court of Exchequer." ( 1941 Chevrolet , supra , 37 Cal.2d at p. 295, 231 P.2d 832 .)

Southern Pac. Transportation Co. v. Superior Court (1976) 58 Cal.App.3d 433 , 436, 129 Cal.Rptr. 912 .) Then, quoting favorably from 1941 Chevrolet , the court stated: " ' "If the action has to deal with ordinary common-law rights cognizable in courts of law, it is to that extent an action at law. In determining whether the action was one triable by a jury at common law, the court is not bound by the form of the action but rather by the nature of the rights involved and the facts of the particular case[,] the gist of the action." ' " ( C & K Engineering , at p. 9, 151 Cal.Rptr. 323 , 587 P.2d 1136 , italics omitted, quoting 1941 Chevrolet , supra , 37 Cal.2d at p. 299, 231 P.2d 832 .) "On the other hand, if the action is essentially one in equity and the relief sought 'depends on the application of equitable doctrines,' the parties are not entitled to a jury trial." ( C & K Engineering , at p. 9, 151 Cal.Rptr. 323 , 587 P.2d 1136 .) As the court had explained, the complaint against the subcontractor sought "relief which was available only in equity, namely the enforcement of defendant's gratuitous promise to perform its bid through application of the equitable doctrine of promissory estoppel." ( Ibid. )

The court also distinguished a prior opinion in which it had upheld a right to jury trial, pointing out the court had "stressed" in that case that "dual theories of traditional breach of contract and promissory estoppel" had been tried, and thus, promissory estoppel " 'was only one of two alternative theories of recovery.' " ( C & K Engineering , supra , 23 Cal.3d at p. 10, 151 Cal.Rptr. 323 , 587 P.2d 1136 , italics omitted, quoting Raedeke v. Gibraltar Sav. & Loan Assn. (1974) 10 Cal.3d 665 , 674, 111 Cal.Rptr. 693 , 517 P.2d 1157 ( Raedeke ).) That was not so in the case before it.

The high court also explained why the plaintiff general contractor's request for "damages" did not make the case a legal one. Regardless of how the relief sought might be characterized, the action, based solely on the doctrine of promissory estoppel, was "one recognized only in courts of equity" and was not an " 'action at law,' involving, to use the Raedeke language, the 'incidental adoption of equitable sounding measures.' " ( C & K Engineering , supra , 23 Cal.3d at p. 10, 151 Cal.Rptr. 323 , 587 P.2d 1136 .) "The only manner in which damages have been recognized in such cases of gratuitous promises is by application of the equitable doctrine of promissory estoppel. ... Without the employment of this doctrine, essentially equitable, there was no remedy at all." ( Ibid. )

We discern nothing in C & K Engineering reflecting a departure from the court's analytical approach explicated in 1941 Chevrolet. On the contrary, in

jury determination of the Tameny cause of action by ruling first on the [Health and Safety Code] section 1278.5(g) claim." ( Ibid. ) "[C]onsistent with the purpose of [Health and Safety Code] section 1278.5, subdivision (m), when a plaintiff seeks a jury trial in a Tameny cause of action the court must permit the jury to resolve the Tameny claim and thereafter give effect to the jury's resolution in its determination of any remaining issues in the section 1278.5(g) cause of action." ( Ibid. )

Again, we see nothing in Shaw that suggests our high court has distanced itself from the analytical template it approved and applied in 1941 Chevrolet . Indeed, the court's single most comprehensive paragraph in Shaw on the nature of the state constitutional right to jury trial consists of a lengthy block quote from C & K Engineering quoting 1941 Chevrolet. ( Shaw , supra , 2 Cal.5th at p. 995, 216 Cal.Rptr.3d 643 , 393 P.3d 98 .)

Accordingly, in our view, there is little distinction between the federal constitutional right to jury trial analysis the United States Supreme Court has set forth and applied in cases like Tull , and the nature-of-the-action and remedy analysis our Supreme Court has mandated under California's constitutional right to jury trial. Divining the "gist" of an action and the remedies sought, as required under our state constitutional law, is no different than examining the "nature" of an action under federal constitutional law. As our high court has repeatedly stated, the "gist" of an action is determined by

Tull , supra , 481 U.S. at p. 418, 107 S.Ct. 1831 ; see C & K Engineering , supra , 23 Cal.3d at p. 8, 151 Cal.Rptr. 323 , 587 P.2d 1136 ; 1941 Chevrolet , supra , 37 Cal.2d at pp. 287-289, 295, 231 P.2d 832 .) Thus, Tull's pronouncement that as a matter of historical fact a "civil penalty was a type of remedy at common law that could only be enforced in courts of law" ( Tull , at p. 422, 107 S.Ct. 1831 ) is entirely applicable to this case.

Indeed, as we have pointed out, our high court said the same thing about government civil penalty actions in 1941 Chevrolet . ( 1941 Chevrolet , supra , 37 Cal.2d at p. 295 & fn. 15, 231 P.2d 832 .) In conducting a detailed historical analysis of the common law, the California court explained, " 'At common law the trial of actions for forfeiture to the Crown of property used in violation of law was in the Court of Exchequer. "The term 'Common Law' often refers to those principles of English Law which were evolved in the Common Law Courts, as opposed to the principles which were applied in the Courts of Chancery

People v. Witzerman (1972) 29 Cal.App.3d 169 , 105 Cal.Rptr. 284 ( Witzerman ), the Spot court summarily concluded there was no right to jury trial because "the gist of an action under the UCL is equitable." ( Spot , at p. 1384, 184 Cal.Rptr.3d 809 .)

Witzerman , in turn, was an enforcement action under the FAL. The defendants claimed they had a right to jury trial because "the case was a criminal prosecution for fines in all but name." ( Witzerman , supra , 29 Cal.App.3d at pp. 173, 176, 105 Cal.Rptr. 284 .) The Witzerman court held "[t]he statutory action before us was not rendered criminal in nature because the People therein sought civil penalties." ( Id. at p. 177, 105 Cal.Rptr. 284 .) "This being so, the right to a trial by jury '[in] all criminal prosecutions' guaranteed by the Sixth Amendment ... does not apply in this case." ( Witzerman , at p. 177, 105 Cal.Rptr. 284 , italics added.) The court added that, even if the civil penalties were considered a legal remedy, rather than a form of equitable relief, "we do not believe that in this case such issues could have been severed from the equitable ones." ( Id . at pp. 176-177, 105 Cal.Rptr. 284 .) The Witzerman court provided no analysis as to why this was so. (See Hoopes v. Dolan (2008) 168 Cal.App.4th 146 , 156, 85 Cal.Rptr.3d 337 [in "most instances" where cases involve both legal and equitable claims, the issues "are 'kept distinct and separate,' with legal issues triable by a jury and equitable issues triable by the court"].) Nor did the court discuss Tull or any other case addressing the right to jury trial in statutory penalty cases. (See Tull , supra , 481 U.S. at p. 425, 107 S.Ct. 1831 [that Clean Water Act authorized both equitable relief and statutory penalties did not vitiate the right to jury trial on liability].)

People v. Bestline Products, Inc. (1976) 61 Cal.App.3d 879 , 916, 132 Cal.Rptr. 767 similarly focused on the Sixth Amendment. In that case, the defendant allegedly violated the UCL by violating Penal Code section 327, which prohibits " 'endless chain' " marketing schemes. ( Bestline , at p. 886, fn. 3, 132 Cal.Rptr. 767 .) The trial court ruled the defendant was not entitled to a jury trial because

right to jury trial in a civil enforcement action seeking statutory penalties. Rather, the pertinent question is whether there was a right to jury trial under early English common law in cases of this nature which is preserved by article I, section 16 of the California Constitution -an issue none of these cases addressed.

In only one case that the People cite, People v. Bhakta (2008) 162 Cal.App.4th 973 , 978-979, 76 Cal.Rptr.3d 421 ( Bhakta ), did the appellate court apply the gist-of-the-action analysis to conclude a government enforcement action was properly tried by the court. In that case, the government sought injunctive relief and statutory penalties under the Red Light Abatement Law ( Pen. Code, § 11225 et seq. ) and the UCL, against a motel owner who allegedly ran a prostitution ring. ( Bhakta , at p. 976, 76 Cal.Rptr.3d 421 .) The government first obtained preliminary injunctive relief, which was affirmed on appeal, and then obtained a permanent injunction and $10,000 in statutory penalties. ( Ibid. ) The Court of Appeal rejected the defendant's claim that he was

and seeking statutory penalties. Rather, there is a line of cases holding that the Sixth Amendment right to jury trial in criminal cases is inapplicable to the UCL-a proposition with which we agree. Only one case, Bhakta , has concluded there is no right to a jury trial in a UCL enforcement action under article I, section 16 of the California Constitution. However, as we have discussed, in our view the Bhakta 's court's analysis was incomplete and failed to take into account that statutory penalties are a significant remedy under the UCL and such penalties, under historic English common law, would have been sought in the courts of law, thus securing to defendants

in concluding, secondarily, that a trial court can constitutionally determine the amount of a statutory penalty). ( DiPirro , at p. 182, 62 Cal.Rptr.3d 722 .)

The DiPirro court devoted most of the rest of its discussion to making the point that the plaintiff, in asking for statutory penalties, was not seeking "compensation" for his own injuries, such compensation, said the court, being the hallmark of a " 'legal' " claim. ( DiPirro , supra , 153 Cal.App.4th at pp. 183-184, 62 Cal.Rptr.3d 722 .) In contrast, civil penalties under the Safe Drinking Water and Toxic Enforcement Act are "a statutory punitive exaction determined on the basis of equitable principles, designed to deter misconduct and harm, not to compensate the plaintiff for actual damages sustained." ( Id. at p. 183, 62 Cal.Rptr.3d 722 .) In fact, said the court, "[t]he primary right to bring an action for civil penalties pursuant to the Act is also given to the state rather than individuals seeking compensation." ( Ibid. ) Indeed, a private plaintiff did not even need to prove that he or she sustained any damage at all in order to prosecute a Proposition 65 case. ( Id. at p. 184, 62 Cal.Rptr.3d 722 .) "As such, the statutory remedies afforded by the Act, including civil penalties, are not damages at law, but instead constitute equitable relief appropriate and incidental to enforcement of the Act," and as such, concluded the DiPirro court do not give rise to a right to jury trial. ( Ibid. )

The conclusion the DiPirro court reached as to Proposition 65 is not, of course, determinative of the right to jury trial under the UCL and the FAL. Furthermore, on reexamination of that case, and particularly the similarities between the relevant remedial language of Proposition 65 ( DiPirro , supra , 153 Cal.App.4th at p. 181, fn. 20, 62 Cal.Rptr.3d 722 ) and that of the Clean Water Act ( Tull , supra , 481 U.S. at p. 422, 107 S.Ct. 1831 ; 33 U.S.C. § 1319 (d) ), we have serious concerns that the DiPirro court overlooked the fact that Tull reached two significant conclusions-that a right to jury trial does exist as to liability in a government enforcement action seeking statutory penalties under the Clean Water Act, but such right does not exist as to the amount of the penalties.

The DiPirro court did not, for example, discuss any aspect of the Supreme Court's first holding in Tull , that a right to jury trial exists as to liability for statutory penalties, even though the entirety of DiPirro 's analysis concerned the right to jury trial on the issue of liability. Thus, DiPirro made no mention of the Supreme Court's extensive discussion of historic English common law and determination that as a matter of "historical fact" actions by the government seeking civil penalties were tried to a jury in the courts of law. Rather, the DiPirro court made mention only of the high court's second holding, that the constitutional right to jury trial does not extend to determining the amount of a statutory penalty. However, whether there was a jury trial as to the amount of statutory penalties was not an issue the DiPirro court ever reached. The DiPirro court also made no mention at all of 1941 Chevrolet ,

concluded in Tull that such recovery by the government is "analogous to the 18th-century action in debt" which the courts have "rightly assumed" requires jury trial. ( Tull , supra , 481 U.S. at pp. 420, 422, 107 S.Ct. 1831 ["Remedies intended to punish culpable individuals, as opposed to those intended simply to extract compensation or restore the status quo, were issued by the courts of law, not courts of equity."].)

Accordingly, not only did DiPirro not address the jury trial issues that are before us in this case, we cannot endorse DiPirro 's analysis in any event, given its tension with Tull and our own high court's decision in 1941 Chevrolet .

T

he petition for writ of mandate is granted in part and the order to show cause is discharged. A peremptory writ of mandate shall issue directing the respondent court to vacate its order striking petitioners' request for jury trial, and allowing jury trial of all issues except the determination of the amount of any statutory penalties to be awarded under Business and Professions Code sections 17206 and 17536 or Financial Code section 12105, subdivision (d).

We concur:

Margulies, Acting P.J.

Dondero, J.