The California Fourth District Court of Appeals ruled that this standard applies if members of the public are “likely” to be deceived. A UCL claim, therefore, does not have to use the common law definition of fraud that requires showing someone was actually deceived or hurt. This standard applies most certainly to claims of false or misleading advertising — deception need only be “likely.”
California courts have held that virtually any law, if broken, can be the basis for a claim under the UCL.
Examples of unfair competition include so-called “bait and switch” tactics (advertising a product at one price, but then having only higher-priced versions available when the customer comes into the store). Robocalling (or spoofing phone numbers to make robocalls) is another example if it is in violation of Federal Communications Commission (FCC) guidelines. Another example is pretending to be affiliated with or endorsed by a better-known brand.
These three represent just a tip-of-the-iceberg list of potential violations, which can cover a broad range of actions. The UCL itself mentions that distributing handbills (commercial solicitations) to hotel guests constitutes unfair competition.
Who Can Bring a Claim?
Consumers and business competitors can bring claims under the UCL. The Attorney General, district attorneys, county counsels, and city attorneys can also bring lawsuits on behalf of injured citizens.
After widespread use — and abuse — of consumers filing class-action lawsuits on behalf of others even if they had not personally been harmed, California voters passed Proposition 64 in 2004. Following Prop 64, only those who “suffered injury in fact and lost money or property as a result of such unfair competition” can file suit.
Class-action lawsuits are still possible, but they must qualify under established class-action procedures, which require a “community of interest” among the class members, along with other qualifications.
Remedies & Penalties Under the UCL
The UCL provides for fines of $2,500 in civil penalties per violation in legal actions brought by government attorneys. Here again, Prop 64 weighed in, mandating that the fines collected to be used solely for the enforcement of consumer protection laws.
As for the plaintiffs themselves, they can receive restitution in the amount of the loss they actually suffered, and no punitive damages are allowed. The court hearing the case, however, can also impose injunctive relief on the defendant “to prevent the use or employment by any person of any practice which constitutes unfair competition.” This can include the appointment of a receiver to run the business.
In many cases involving consumers, the California Consumer Legal Remedies Act also provides protection against 23 specific activities that it defines as unfair and deceptive.