Keeping "Competition" in California’s Unfair Competition Law

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California’s Unfair Competition Law (UCL) provides broad protections to both consumers and businesses, prohibiting any form of conduct that can be found to be an “unlawful, unfair or fraudulent business act or practice.”  (California Business & Professions Code § 17200)  The UCL is particularly powerful because it can reach conduct that is not specifically illegal under any other law, and can also provide a remedy for any acts or omissions that are prohibited under other state or federal laws even if those laws do not allow private citizens to sue when they are violated.  A recent example is the case of Law Offices of Mathew Higbee v. Expungement Assistance Services, in which a lawyer used the UCL to sue a credit repair service that was not licensed to practice law. The lawyer alleged that he too was in the credit repair business and, as a result of the defendant’s violations of California’s attorney licensing requirements,  the competing lawyer was required to lower his prices and spend more money on advertising, lost clients and revenue, and the value of his law firm had diminished. Ordinarily, the statutes requiring a license to practice law cannot be enforced by private citizens. But here, the UCL was held to “borrow” the statutory violation to show an “unlawful business act or practice” that gave the plaintiff a claim.

Those already familiar with UCL know that it was modified by Proposition 64 in 2004, tightening the standing requirements so that an action could only be brought by a “person who has suffered injury in fact and has lost money or property” as a result of the alleged unfair competition. (B&PC section 17204)  Some courts had struggled with this new requirement, at times suggesting that the plaintiff would have to show that the defendant had directly taken money from the plaintiff as a result of the unfair competition.  Such a requirement would effectively eliminate “competition” out of the Unfair Competition Law:  It is rare that a business competitor could show that it gave money or property directly to a competitor as a result of unfair competition – and if it did happen, the plaintiff would probably have a breach of contract or fraud claim and probably would not need to use the UCL.

But over time it has become clear that Prop 64 did not not eliminate unfair competition claims between competitors.  In the Law Offices of Mathew Higbee case, the Court of Appeal in Orange County held that the UCL does not require that the parties have had direct dealings with each other in order to succeed “in alleging at least an identifiable trifle of injury as necessary for standing under UCL.”  The Court surveyed the law before and after Prop 64, and found the cases supportive of a rule that permitted business competitors to make unfair competition claims.  The standing requirement does not require in every instance that the parties have had direct dealings with each other. The Court emphasized that, provided that the “identifiable trifle of injury” resulting from the acts of unfair competition can be shown, “the UCL does not leave the court hamstrung, unable to even consider an action seeking injunctive relief just because the defendant engages in its purportedly unlawful activity via the Internet and has not had any direct business dealings with the plaintiff.”

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CK&E Lawyers CRASH Santa Monica Superior Court

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Conkle, Kremer & Engel lawyers John Conkle and H. Kim Sim recently volunteered their time and expertise to the Santa Monica Superior Court, serving as attorney volunteers in the Court’s Civil Referee Assisted Settlement Hearing (CRASH) mediation program.  Mediation is an alternative dispute resolution (ADR) process in which a neutral person (usually an experienced lawyer or retired judge) meets with the opposing parties to discuss the merits and risks of their claims and defenses, to try to reach a negotiated settlement.

The services of John and Kim were in high demand due to severe budget cuts affecting California courts. In an effort to deal with a significant budget shortfall for the 2013-14 fiscal year, the Los Angeles Superior Court announced in March the implementation of a countywide consolidation plan that will create regional hubs for certain types of cases. Personal injury civil cases filed in local courthouses are slated for transfer to the Stanley Mosk Courthouse in downtown Los Angeles, and when they come up for trial they can be transferred to be tried anywhere in Los Angeles County. The CRASH mediation program took on increased importance as parties in those personal injury cases – in danger of being transferred out of Santa Monica – were sent to participate in mediation conducted by attorney volunteers in a final attempt to settle and avoid a transfer.

CK&E attorneys seldom handle personal injury matters, but they are well practiced in the ways that insurance can be used to help resolve claims.  John and Kim also brought to the table their extensive experience in alternative dispute resolution (ADR) practice, including the mixture of law and psychology that is mediation.  But it was a different experience for them to sit at the center as a neutral, rather than as one of the advocates.  The Court and litigants were not the only beneficiaries of their work.  Volunteering for this program enhanced their insight into the mediation process and will enhance their effectiveness as client advocates.

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Announcing Conkle, Kremer & Engel’s New Website

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Conkle, Kremer & Engel started in 1982 as Conkle & Olesten, Professional Law Corporation.  After 25 years, in 2007 the firm changed its name from Conkle & Olesten to Conkle, Kremer & Engel, Professional Law Corporation. Since 1982, the firm has operated continuously without change to its practice, and with complete commitment to service of its clients.

When we created our first website in the mid-1990’s, the Conkle & Olesten homepage featured “The Gavel” to announce our entries about recent case developments.  It apparently was a memorable image because some of our visitors still ask about The Gavel.  It seems appropriate to bring The Gavel back to announce the launch of the revamped CK&E website.

Conkle & Olesten Gavel

Conkle & Olesten Gavel

We hope you enjoy the website and find the articles and posts helpful.  Please let us know if there are any topics that you suggest we address in future posts, or if there are any questions about previous articles and posts.

Conkle & Olesten Homepage

Conkle & Olesten Homepage

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