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Unfair Business Competition in California

  • By: Robert Klein

I often litigate unfair business competition cases.  These cases can arise in a variety of settings including actions for trademark infringement, trade secret misappropriation, or business torts including interference with contractual relations.  In Federal Court, the Lanham Act is the federal unfair competition statute that protects consumers from trademark infringement or false advertising.

In California there is also an unfair competition law.  California’s unfair competition law (Business & Professions Code § 17200 et seq., UCL) “is a notoriously broad statute.”  This law defines the breath of the statute by stating: “… unfair competition shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising…”

Virtually any law or regulation including federal or state, statutory or common law, can serve as predicate for a § 17200 “unlawful” violation.  If a “business practice” violates any law literally it also violates § 17200 and may be redressed under that section. [People v. E.W.A.P., Inc. (1980) 106 CA3d 315, 319, 165 CR 73, 75] .  As the California Supreme Court has said, § 17200 “borrows” violations of other laws and treats them as unlawful practices independently actionable under § 17200. [Farmers Ins. Exch. v. Sup.Ct. (1992) 2 C4th 377, 383]

In 2004 the California voters passed Proposition 64 which limited lawsuits brought under this law.  The limitation required the person bringing the lawsuit to have suffered an actual injury and instead of allowing what was referred to as representative actions, they are now required to be class action lawsuits and follow the strict requirements of such lawsuits.

Robert Klein

About the Author Attorney Robert Klein is a former CPA and known for
finding creative solutions to complex business lawsuits.