California Supreme Court Opens Door To Organizational Unfair Competition Law Claims

• Published date: 19 July 2023
• Subject Matter: Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Class Actions, Trials & Appeals & Compensation
• Law Firm: Allen Matkins Leck Gamble Mallory & Natsis LLP
• Author: Mr Keith P. Bishop

Sections 17200 to 17210 of the California Business and Professions Code are commonly referred to as the unfair competition law. Stop Youth Addiction, Inc., v. Lucky Stores, Inc., 17 Cal.4th 553, 558, fn. 2 (1998). The UCL law, however, is not narrowly limited to competition, it defines "unfair competition," to "include any unlawful, unfair or fraudulent business act or practice." Cal. Bus. & Prof. Code ' 17200 (emphasis added). The voters tempered the broad scope of the law somewhat by approving an initiative measure, Proposition 64, that limited the set of eligible private UCL plaintiffs to those persons who have "suffered injury in fact" and "lost money or property as a result of" the business act or practice at issue.

In 2009, the California Supreme Court held that a membership organization may not base standing to sue on injuries to its members, but only on those to the organization itself. Amalgamated Transit Union, Local 1756, AFL-CIO v. Superior Court, 46 Cal.4th 993, 1003-1004 (2009). Yesterday, the Supreme Court held that the "UCL's standing requirements are satisfied when an organization, in furtherance of a bona fide, preexisting mission, incurs costs to respond to perceived unfair competition that threatens that mission, so long as those expenditures are independent of costs incurred in UCL litigation or preparations for such litigation"...