Allan J. FAVISH, Plaintiff and Appellant, v. REGENTS OF the UNIVERSITY OF CALIFORNIA, Defendant and Respondent.
May the consumer fraud statutes (Bus. & Prof.Code, §§ 17200 1 et seq.) be applied to control the advertising and communications of the Regents of the University of California? Our answer is no. We affirm the judgment.
Plaintiff and appellant Allan J. Favish, an attorney, filed the instant single cause of action complaint against the Regents of the University of California (Regents) alleging the University of California law and medical schools had misleadingly advertised that in admitting applicants, they do not discriminate on the basis of race.
Plaintiff sought an injunction, specific performance (a disclosure table of admissions data), and restitution of application fees to injured applicants. Respondent demurred. The trial court sustained the demurrer, plaintiff declined to amend the complaint, and a judgment of dismissal was entered for defendant. This appeal followed.
As appellant makes clear, this is not a racial discrimination lawsuit. Appellant does not claim to have been an applicant of a University of California law or medical school, let alone a racially discriminated against applicant. In fact, appellant states he “does not challenge [the University of California's] alleged right to discriminate on the basis of race in admissions.”
This lawsuit, appellant assures us, is solely “about telling consumers the truth.” He seeks to enjoin the Regents from representing they do not racially discriminate and to require them to state they do racially discriminate.
Appellant claims he has the right to require the Regents to tell the truth about admission policies and practices, and presumably about all other matters affecting student-consumers, based upon legislation, Business and Professions Code sections 17200 et seq.(See fn. 1.) We disagree.
“[T]he University of California was established as a public corporation by an organic act (Stats.1867–188, ch. 244, p. 248), and was perpetuated as a public trust by the Constitution of 1879 (Cal. Const., art. IX, § 9). The general government and superintendence of the University is vested in the Regents of the University (Cal. Const., art. IX, § 9, subd. (a)).” (Simpson v. Unemployment Ins. Comp. Appeals Bd. (1986) 187 Cal.App.3d 342, 349, 231 Cal.Rptr. 690.)
As our Supreme Court has unanimously stated: “Article IX, section 9, grants the regents broad powers to organize and govern the university and limits the Legislature's power to regulate either the university or the regents. This contrasts with the comprehensive power of regulation the Legislature possesses over other state agencies.
“The courts have also recognized the broad powers conferred upon the regents as well as the university's general immunity from legislative regulation. The Regents have the general rule-making power in regard to the University ․ and are ․ fully empowered with respect to the organization and government of the University․ [T]he power of the Regents to operate, control, and administer the University is virtually exclusive.” (San Francisco Labor Council v. Regents of University of California (1980) 26 Cal.3d 785, 788, 163 Cal.Rptr. 460, 608 P.2d 277. Citations and internal quotation marks omitted.)
The power of the Legislature to intrude upon the administration of the University of California is limited. Article IX, section 9 specifies three areas of such power. It provides: “The University of California shall constitute a public trust, to be administered by the existing corporation known as ‘The Regents of the University of California,’ with full powers of organization and government, subject only to such legislative control as may be necessary to insure the security of its funds and compliance with the terms of the endowments of the university and such competitive bidding procedures as may be made applicable to the university by statute for the letting of construction contracts, sales of real property, and purchasing of materials, goods, and services.” (Italics added.)
Manifestly, the subject statutes (Bus. & Prof.Code, §§ 17200 et seq.) are unrelated to fund security, endowment terms, or bidding procedures.
“In addition to the specific provisions set forth in article IX, section 9, there are three areas of legislative regulation. First, the Legislature is vested with the power of appropriation, preventing the regents from compelling appropriations for salaries.
“Second, it is well settled that general police power regulations governing private persons and corporations may be applied to the university. For example, workers' compensation laws applicable to the private sector may be made applicable to the university.
“Third, legislation regulating public agency activity not generally applicable to the public may be made applicable to the university when the legislation regulates matters of statewide concern not involving internal university affairs.” (San Francisco Labor Council v. Regents of University of California, supra, 26 Cal.3d 785, 789, 163 Cal.Rptr. 460, 608 P.2d 277. Citations omitted.)
Business and Professions Code sections 17200 et seq. cannot be brought within any of the three categories. A provision prohibiting “untrue or misleading advertising” (Bus. & Prof.Code, § 17200) does not constitute an appropriation bill, is not a general police power regulation, and—even if a matter of statewide concern—does involve internal university affairs. (See San Francisco Labor Council v. Regents of University of California, supra, 26 Cal.3d 785, 789–791, 163 Cal.Rptr. 460, 608 P.2d 277; Ishimatsu v. Regents of University of California (1968) 266 Cal.App.2d 854, 863–864, 72 Cal.Rptr. 756; Cal. State Employees' Assn. v. Regents of University of California (1968) 267 Cal.App.2d 667, 73 Cal.Rptr. 449; Newmarker v. Regents of Univ. of Cal. (1958) 160 Cal.App.2d 640, 648, 325 P.2d 558; Goldberg v. Regents of the University of California (1967) 248 Cal.App.2d 867, 57 Cal.Rptr. 463; Wall v. Board of Regents, U.C. (1940) 38 Cal.App.2d 698, 102 P.2d 533; Williams v. Wheeler (1913) 23 Cal.App. 619, 138 P. 937; Erzinger v. Regents of University of California (1982) 137 Cal.App.3d 389, 393–395, 187 Cal.Rptr. 164; Scharf v. Regents of University of California (1991) 234 Cal.App.3d 1393, 1402–1404, 286 Cal.Rptr. 227; Regents of University of California v. Aubry (1996) 42 Cal.App.4th 579, 49 Cal.Rptr.2d 703; 75 Ops.Cal.Atty.Gen. 98 (1992) [University of California not bound by provisions of the Subdivision Map Act]; see generally Horowitz, The Autonomy of the University of California Under The State Constitution, 25 U.C.L.A. L.Rev. 23 (1977); Note, Autonomy and Accountability: The University of California and the State Constitution, 38 Hastings L.J. 927 (1987).)
The administration of a university is based upon communication: admission policies and procedures, course offerings and descriptions, grade criteria, good standing requirements, degree qualifications, rules of behavior, and endless other matters integral to a large, complex, dynamic enterprise.
If every university communication was subject to an “untrue or misleading” challenge—judicially cognizable—then the power of the Regents to govern would suffer “a very significant intrusion.” (Scharf v. Regents of University of California, supra, 234 Cal.App.3d 1393, 1404, 286 Cal.Rptr. 227.)
We hold Business and Professions Code sections 17200 et seq. may not be applied to the advertising and communications of the Regents of the University of California.
The judgment is affirmed. Costs on appeal are awarded to respondent.
1. The section provides: “As used in this chapter, unfair competition shall mean and include unlawful, unfair or fraudulent business practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.”Section 17203 provides: “Any person performing or proposing to perform an act of unfair competition within this state may be enjoined in any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.”
FRED WOODS, Associate Justice.
LILLIE, P.J., and JOHNSON, J., concur.