In Yokell v. Draper, 2018 U.S. Dist. LEXIS 117427, U.S. Magistrate Judge Jacqueline Scott Corley wrote that "California Code of Civil Procedure section 1029.8 provides a private right of action for persons harmed by "[unlicensed persons who cause injury or damage . . . as a result of providing goods or performing services for which a license is required." The statute, however, expressly states the opposite: "This section shall not be construed to confer an additional cause of action or to affect or limit any other remedy, including, but not limited to, a claim for exemplary damages".
However, the statute does bestow some additional remedies for those who have been injured or damaged by unlicensed broker-dealers and investment advisers. If a license is required under either Chapter 2 (broker-dealers) or Chapter 3 of Part 3 of the Corporate Securities Law, the court is authorized to award three times the amount of damages. In addition, the court in its discretion may award costs and attorney's fees.
The punitive sting of Section 1029.8 is tempered considerably by the fact that the amount damages awarded under the statute is capped at $10,000. Furthermore, the statute does not apply to persons provide services under the good faith belief that they are properly licensed and acting within the proper scope of that licensure.
A licensed broker-dealer may be tempted to try to collect treble damages under Section 1029.8 by suing its unlicensed competitor under the unfair traded practices of California's Business & Professions Code. The statute, however, is not available to "a person who holds a license that is required, or closely related to the license that is required, to engage in those activities performed by the unlicensed person".
Section 1029.8 extends to several other categories of unlicensed persons and there are additional exceptions that may be applicable.