Bus. & Prof.C. § 17200 Ch. 3-F Bus. & Prof.C. § 17200 Practice William L. Stern Chapter 3. Substantive Reach Of California’s Unfair Business Practices Act (Bus. & Prof.C. § 17200) F. First Substantive Prong Of § 17200—What Is An “Unlawful” Business Practice? 1. [3:53] Prohibition Against “Unlawful” Conduct is Unique to California: California’s § 17200 is unique among the various state “Little FTC Acts.” Unlike other states’ Acts, the UCL permits a cause of action to be brought if a practice violates some other law. In effect, the “unlawful” prong of § 17200 makes a violation of the underlying law a per se violation of § 17200. [Kasky v. Nike, Inc. (2002) 27 C4th 939, 950, 119 CR2d 296, 304; Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 C4th 163, 180, 83 CR2d 548, 561; Farmers Ins. Exch. v. Sup.Ct. (1992) 2 C4th 377, 383, 6 CR2d 487, 491] The complete text of § 17200 and related provisions is set forth in Appendix A. 2. [3:54] Origins of “Unlawful” Prong: Section 17200’s prohibition of “unlawful” business practices was added in 1963. It proscribes “anything that can properly be called a business practice and that at the same time is forbidden by law.” [People v. McKale (1975) 25 C3d 626, 634, 159 CR 811, 815; Barquis v. Merchants Collection Ass’n (1972) 7 C3d 94, 113, 101 CR 745, 759] 3. [3:55] Strategies and Tactics: Claims brought under § 17200 to redress “unlawful” business practices offer five potential advantages over claims brought directly under the law being “borrowed”: • First, § 17204 confers standing to sue on the California Attorney General and the State’s 58 district attorneys even if the actual victims of the business practice would not have had standing (People v. James (1981) 122 CA3d 25, 40, 177 CR 110, 119) and even if the statute being violated does not provide for suits by the Attorney General or district attorneys. [People v. McKale (1979) 25 C3d 626, 632–633, 159 CR 811, 815] • Second, § 17204 allows private parties to seek redress even though they were not personally affected by the practice and thus lack “standing” in the traditional sense. [Hernandez v. Atlantic Finance Co. (1980) 105 CA3d 65, 71–73, 164 CR 279, 284–285] • Third, § 17200 allows a remedy even if the underlying statute confers no private right of action. [Stop Youth Addiction, Inc. v. Lucky Stores, Inc. (1998) 17 C4th 553, 561–567, 71 CR2d 731, 735–740; Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 C3d 197, 210–211, 197 CR 783, 792; California Med. Assn. v. Aetna U.S. Healthcare of Calif., Inc. (2001) 94 CA4th 151, 169, 114 CR2d 109, 123] • Fourth, § 17200 actions permit public prosecutors to seek civil penalties under § 17206. • Fifth, plaintiffs may generally obtain these advantages without sacrificing the advantages of suing under the underlying statute. Remedies under § 17200 are cumulative to remedies provided by the underlying statute. [Bus. & Prof.C. § 17205] See ¶ 8:14 ff. 4. [3:56] Which Laws Qualify for “Borrowing”? Virtually any law or regulation—federal or state, statutory or common law—can serve as predicate for a § 17200 “unlawful” violation. Thus, 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, 6 CR2d 487, 491]
