California lawmakers have taken great efforts to ensure consumers are protected from unscrupulous companies. For example, California’s Unfair Competition Law (UCL) protects consumers from any “unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.”
However, it is important to note that California’s UCL is not only applicable in consumer protection situations, but may also be used in certain disputes between businesses and in allegations of commercial fraud.
Business Disputes and California’s UCL
Under California law, private plaintiffs are permitted to seek remedies for actions that violate the UCL; however, in 2004 lawmakers amended the requirements for whom is actually allowed to bring these types of actions.
Previously, private claims could be brought by any person acting on behalf of the general public, but the 2004 change now requires the plaintiff be able to show they suffered an injury in fact as a result of the unfair competition before they are permitted to bring a claim under California’s UCL. Given that “persons” are defined by statute to include corporations, firms and partnerships, many businesses can still bring private suits under the UCL as long as they can meet the updated injury and standing requirements.
As for the unfair business practices governed by California’s UCL, there is no all-encompassing enumerated list of conduct prohibited ― thus it has been interpreted broadly in the past to include a wide range of unfair or deceptive conduct. For example, a company that engages in pricing practices that effectively harms competition may be considered unfair and in violation of the UCL, even if the purpose of the pricing practice was not intended to injure competitors; however, merely because another company cannot compete against the prices does not by itself deem the pricing practice unfair.
Unfair Competition Law Remedies
The remedies available in California’s UCL are generally equitable in nature, meaning damages are not recoverable. Consequently, companies that prevail in a UCL claim may only be entitled to injunctive relief or restitution. But, it is important to note that many UCL claims can be brought in conjunction with other business litigation claims. For instance, a company may pursue injunctive relief under the UCL while seeking damages under various business torts or contract claims.
The law surrounding California’s Unfair Competition Law can become quite complicated and difficult to comprehend completely. As such, if you are a business owner who believes another company may have injured your business using unfair business practices, it is important to speak with an experienced unfair business practice attorney to be advised of your rights and options.