People v. Overstock.com, Inc.

It was not an abuse its discretion to assess defendant $6.8 million in civil penalties for false advertising and UCL violations in light of factual findings that defendant falsely advertised its products using price comparisons with similar (but not the same) products, choosing the highest available price rather than average price for comparison, and using formulas rather than real list prices.  The trial court did not abuse its discretion in assessing $6.8 million in civil penalties against Overstock.com for false advertising and UCL violations.  Overstock had falsely advertised its products using price comparisons with similar, not the same products, choosing the highest available price rather than average price for comparison, and using formulas rather than real list prices.  The trial court properly considered the statutory factors of nature and seriousness of the offense, the length of time over which the violations occurred, the number of violations and persistence of misconduct, the willfulness of the misconduct and the defendant’s assets, income and net worth.  Only the nature and seriousness of the offense weighed slightly in Overstock’s favor.  The rest weighed in favor of a stiff penalty.  The trial court explained its reasoning, cited the correct considerations, and arrived at a penalty that, if indeed bigger than any other upheld in a prior opinion, was reasonable and not the crushing maximum penalty it could have assessed.  That prosecutors delayed prosecution didn’t weigh against the penalty since Overstock continued its illegal practice despite being aware the prosecutors were challenging them.  The trial court also did not err in entering injunctive relief against Overstock even though Overstock had stopped its illegal practices, it might resume them anytime.

California Court of Appeal, First District, Division 4 (Rivera, J.); June 2, 2017 (partial publication); 2017 WL 2391814

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