Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-02573/USCOURTS-cand-4_18-cv-02573-4/pdf.json

Nature of Suit Code: 890
Nature of Suit: Other Statutory Actions
Cause of Action: 28:2201 Declaratory Judgement

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UNITED STATES DISTRICT COURT 

NORTHERN DISTRICT OF CALIFORNIA 

LEGALFORCE RAPC WORLDWIDE P.C., ET 

AL., 

Plaintiffs, 

vs. 

UPCOUNSEL, INC., 

Defendant.

CASE NO. 18-cv-02573-YGR 

ORDER GRANTING IN PART AND DENYING 

IN PART MOTION TO DISMISS FIRST 

AMENDED COMPLAINT

Re: Dkt. No. 49 

Now before the Court is defendant UpCounsel, Inc.’s (“UpCounsel”) motion to dismiss 

plaintiffs Legalforce RAPC Worldwide P.C.’s (“LegalForce RAPC”) and LegalForce, Inc.’s 

(“Trademarkia”) first amended complaint. (Dkt. No. 49 (“MTD”).) Having carefully considered 

the pleadings in this action, the papers submitted, and the oral argument held on November 6, 

2018, and for the reasons set forth below, the Court GRANTS IN PART AND DENIES IN PART

UpCousel’s motion.1 

I. BACKGROUND

UpCounsel is an online marketplace for legal services that enables users (primarily 

entrepreneurs and businesses) to find and hire attorneys via its website UpCounsel.com. (First 

Amended Complaint (“FAC”) ¶ 16, Dkt. No. 45.) California attorney Raj Abhyanker started both 

plaintiff companies approximately four years before UpCounsel launched. (Id. ¶¶ 13–15.) 

Plaintiff LegalForce RAPC is a law firm wholly owned by Abhynaker, which practices corporate 

and intellectual property law. (Id. ¶ 7.) Plaintiff Trademarkia offers law firm automation and free 

trademark search services through its website Trademarkia.com. (Id. ¶ 8.) UpCounsel and 

 1

 Given the sheer number of statements addressed in this Order, the Court summarizes that 

those which contain specific representations have survived the motion to dismiss, as have the 

allegations regarding UpCounsel’s fee structure. 

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plaintiffs compete to provide individuals and small businesses with affordable access to attorneys. 

(Id. ¶ 2.) 

Plaintiffs allege that UpCounsel’s false advertising and unfair competition have caused 

consumers to purchase UpCounsel’s services instead of LegalForce RAPC’s services. (Id. ¶ 114.) 

Among the challenged conduct by UpCounsel is its (i) acting as an unregistered lawyer referral 

service, (ii) acting as a runner and capper to solicit potential clients, (iii) fee sharing with 

attorneys; (iv) aiding and abetting its attorneys to violate California Rule of Professional Conduct 

1-400 and 37 C.F.R. section 11.703; and (v) use of certain advertisements and promotional 

statements which plaintiffs allege are false and/or misleading to reasonable consumers. Plaintiffs 

claim that UpCounsel’s alleged misconduct has resulted in lost sales opportunities, lost asset 

value, lost market share, lost revenue, and rising costs per client acquisition for LegalForce RAPC. 

(Id. ¶¶ 114–16.) 

 On September 11, 2018, plaintiffs filed their FAC, asserting therein three claims for relief: 

(1) “False Advertising and Unfair Competition [under] the Lanham Act, 15 U.S.C. § 1125(a)”; (2) 

“California False & Misleading Advertising [under] Cal. Bus. & Prof. Code § 17500 et seq. 

[(‘FAL’)]”; and (3) “California Unfair Competition in Violation of Cal. Bus. & Prof. Code § 

17200 et seq. [‘UCL’].”2 The instant motion followed. 

II. LEGAL STANDARD

Dismissal under Rule 12(b)(6) of the Federal Rules of Civil Procedure “can be based on 

the lack of a cognizable legal theory or the absence of sufficient facts alleged under a cognizable 

legal theory.” Balistreri v. Pacifica Police Dep’t, 901 F.2d 696, 699 (9th Cir. 1990). Rule 8(a)(2), 

however, “requires only ‘a short and plain statement of the claim showing that the pleader is 

entitled to relief[.]’” Bell Atl. Corp. v. Twombly, 550 U.S. 544, 555 (2007) (quoting Fed. R. Civ. 

P. 8(a)(2)). Consequently, “a complaint attacked by a Rule 12(b)(6) motion to dismiss does not 

need detailed factual allegations[.]” Id. Nonetheless, “a plaintiff’s obligation to provide the 

 2

 Specifically, LegalForce RAPC asserts all three claims, while Trademarkia asserts only a 

claim under the UCL. 

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grounds of his entitlement to relief requires more than labels and conclusions, and a formulaic 

recitation of the elements of a cause of action will not do[.]” Id. (internal quotation marks, 

citation, and alterations omitted). 

In analyzing a motion to dismiss, a district court must accept as true all material allegations 

in the complaint and construe them in the light most favorable to the nonmoving party. NL Indus., 

Inc. v. Kaplan, 792 F.2d 896, 898 (9th Cir. 1986). “To survive a motion to dismiss, a complaint 

must contain sufficient factual material, accepted as true, to ‘state a claim to relief that is plausible 

on its face.’” Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly, 550 U.S. at 570). 

“Factual allegations must be enough to raise a right to relief above the speculative level[.]” 

Twombly, 550 U.S. at 555 (citation omitted). Courts “are not bound to accept as true a legal 

conclusion couched as a factual allegation[.]” Iqbal, 556 U.S. at 678 (internal quotation marks 

omitted). 

On a motion to dismiss, a court can consider documents attached to the complaint, 

documents incorporated by reference in a complaint, or documents subject to judicial notice. U.S. 

v. Ritchie, 342 F.3d 903, 908 (9th Cir. 2003). The court is not required to accept as true 

allegations that contradict such documents. Daniels-Hall v. Nat’l Educ. Ass’n, 629 F.3d 992, 998 

(9th Cir. 2010). 

III. FIRST CLAIM FOR RELIEF: FALSE ADVERTISING AND UNFAIR COMPETITION (LANHAM 

ACT, 15 U.S.C. § 1125(A)) 

The Lanham Act prohibits any person from using, “on or in connection with any goods or 

services, . . . any . . . false or misleading description of fact, or false or misleading representation 

of fact, which . . . misrepresents the nature, characteristics, [or] qualities . . . of his or her or 

another person’s goods, services, or commercial activities[.]” 15 U.S.C. § 1125(a)(1)(B). 

LegalForce RAPC’s Lanham Act claim is based generally on ten allegedly “false and 

misleading advertising [s]tatements . . . relat[ing] to descriptions or representations of fact that 

misrepresent the nature, characteristics, and quality of UpCounsel’s services.” (FAC ¶¶ 118–19.) 

UpCounsel argues that all of the challenged statements are non-actionable. 

In its motion, UpCounsel generally sorts plaintiffs’ false advertisement allegations into 

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four groups.3 As a result, UpCounsel’s position with respect to each statement asserted in the 

FAC was difficult for the Court to discern. The Court instead understands UpCounsel’s motion as 

attacking eight statements, or categories of statements, which are addressed in turn. (See infra 

Sections III.A–H.)4 

A. “UpCounsel is the world’s largest law firm.” 

Plaintiffs allege six iterations of the statement that “UpCounsel is the world’s largest 

virtual law firm.” According to plaintiffs, all of them were “made with an intent to deceive 

consumers into thinking the statement ‘UpCounsel is the world’s largest virtual law firm’ is 

trustworthy and legitimate.” (FAC ¶ 25.) “Since UpCounsel is not a law firm,” plaintiffs contend 

that “these statements are false and misleading to average consumers. . . . Clearly, UpCounsel 

sells itself as a law firm, acts like a law firm, and therefore is a law firm despite its self-serving 

statements to the contrary.” (Id. ¶ 26.) 

UpCounsel generally argues, without specifically addressing each iteration, that the 

statement that UpCounsel is “equivalent to the world’s largest law firm” is non-actionable puffery. 

(MTD at 12.)5 The Court addresses each of the six iterations in turn. 

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 Those groups include: “behind-the-scenes HTML source code or ‘search engine 

optimization’ (‘SEO’) efforts,” “quotes suggesting that UpCounsel is ‘equivalent to the world’s 

largest virtual law firm’ or that available lawyers are, for example, the ‘best patent lawyers’ in a 

particular city,” “whether UpCounsel’s fee structure is ‘false and misleading,’” and “serious but 

spurious allegations that some lawyers advertised on UpCounsel’s website are ‘not even licensed 

to practice law’ in a particular state, or in any state.” (See MTD at 9–10.) 

4

 Any statements not addressed herein are those that were not clearly the subject of 

UpCounsel’s motion to dismiss. 

5

 UpCounsel also argues as a general matter that “[p]laintiffs cannot rest their Lanham Act 

claims on UpCounsel’s executives’ statements, both as a matter of fact and as a matter of law.” 

(MTD at 13.) It cites L.A. Taxi Cooperative, Inc. v. Uber Technologies, Inc., 114 F. Supp. 3d 852 

(N.D. Cal. 2015) in support thereof. However, that case is distinguishable because the challenged 

statements, which were made by Uber representatives to journalists and published in independent 

online articles, were “‘inextricably intertwined’ with the reporters’ coverage of a matter of public 

concern, i.e. whether Uber is safe for riders[.]” Id. at 864 (emphasis supplied). For this reason, 

the court in L.A. Taxi determined that the statements could not constitute commercial speech 

actionable under the Lanham Act. Unlike the statements in L.A. Taxi, the challenged statements 

here do not implicate matters of public concern. Thus, this argument fails, and the Court does not 

address it further. 

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1. Statements on the website of UpCounsel’s business partner inDinero Inc. 

On the website of UpCounsel’s business partner inDinero Inc., UpCounsel made the 

following statements: “We are the world’s largest virtual law firm for businesses of any size. We 

allow businesses to get high-quality, cost-effective legal services. While our lawyers serve as 

outside general counsel to many companies, we also assist with specialized legal work like IP, 

immigration, commercial contracts, litigation, and much more.” (FAC ¶ 19; id. Exh. 35 at 1.) 

First, as plaintiffs’ counsel conceded at oral argument, the phrase “world’s largest virtual 

law firm” constitutes non-actionable puffery. (See Transcript of Proceedings held on November 6, 

2018 (“Hearing Tr. 2”) at 13:23–14:3, Dkt. No. 71.) Second, LegalForce RAPC’s reliance on 

these statements as a basis for its Lanham Act claim does not persuade, in light of the context in 

which the statements were made, which the Court may consider. Namely, on its website inDinero 

also states: “Every day, we have the pleasure of working with innovative startups that are making 

a true difference in the world around us. This Customer Spotlight, we’d like to introduce you to 

UpCounsel. They make it easy for you to find talented and local attorneys at an affordable rate.” 

(FAC Exh. 35 at 1 (emphases supplied).) UpCounsel’s motion is thus GRANTED as to these 

statements. 

2. Statements by UpCounsel’s customers 

In an article entitled “6 Lexoo Competitors Connecting Lawyers and Clients with Online 

Legal Platforms,” DataFox, a customer of UpCounsel, stated: “UpCounsel is the world’s largest 

virtual law firm. With UpCounsel, businesses can access and manage a high-quality and ondemand legal workforce. Today, both big and small businesses use UpCounsel to supplement or 

replace their traditional service providers.” (FAC ¶ 20; id. Exh. 36 at 2.) 

LegalForce RAPC’s reliance on these statements similarly does not persuade. In the 

article, UpCounsel is featured as one of six private companies “that could help the legal services

technology market grow . . . .” (FAC Exh. 36 at 1 (emphasis supplied).) UpCounsel’s motion is 

thus GRANTED as to these statements. 

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3. Statements by UpCounsel’s Co-founder and Chief Executive Officer in an 

interview 

On March 15, 2015, Mimesis Law, a strategic communications consultancy firm, 

published a video it produced of an interview with UpCounsel’s Co-founder and CEO, Matthew 

Faustman, entitled “Competitor or Collaborator? What UpCounsel’s Growth Means for BigLaw.” 

(FAC ¶ 21.) In the interview, Faustman made the following statement: “So, what we’ve created 

at UpCounsel is equivalent to the world’s largest virtual law firm.”6

 

The Court already dismissed the Lanham Act claim to the extent it is based on this 

statement, in the context of UpCounsel’s previous motion to dismiss the initial complaint in this 

action. (See Transcript of Proceedings Held on August 28, 2018 (“Hearing Tr. 1”) at 9:25–10:20, 

Dkt. No. 46; see also Dkt. No. 42 (“MTD Order”) at 1.) To reiterate, LegalForce RAPC’s reliance 

on this statement is disingenuous. While Faustman, indeed, remarks in the video that “what we’ve 

created at UpCounsel is equivalent to the world’s largest law firm,” he immediately goes on to say, 

“But, as I’m sure you know, and many of your viewers know, we aren’t a law firm. We are a 

venture-backed technology company. We’ve started with technology and we end with technology, 

where we’ve created a [sic] intelligent technology platform that makes it easy to discover and 

work with a community of attorneys.”7 UpCounsel’s motion is thus GRANTED as to these 

statements. 

4. Statements by Faustman at Persian Tech Conference 

On December 12, 2014, Faustman made the following statements: “[W]e have created 

what is essentially the world’s largest virtual law firm . . . . We’re able to deliver high-quality, 

cost-effective, and faster solutions than what the traditional law firms are actually able to 

provide.”8

LegalForce RAPC’s reliance on these statements also does not persuade. Between the two 

 6

 See https://www.youtube.com/watch?v=FG1ZBCL181I&app=desktop&t=0m44s; 

see also FAC ¶ 21. 

7

 See https://www.youtube.com/watch?v=FG1ZBCL181I&app=desktop&t=0m52s. 

8

 See https://www.youtube.com/watch?v=jaS7kuEv1Y4&t=0m35s; 

https://www.youtube.com/watch?v=jaS7kuEv1Y4&t=1m22s; see also FAC ¶ 22. 

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sentences plaintiffs quote, Faustman states the following: “We essentially allow independent 

talented lawyers throughout the world through a mobile device or a laptop to plug into the 

UpCounsel marketplace and accept work, and essentially work freely as independent contractors. 

We then bundle this up and we go to our companies. We go to our clients, which are businesses 

between 5 and 1000 employees. . . .”9 UpCounsel’s motion is thus GRANTED as to these 

statements. 

5. Statements made up UpCounsel’s Co-founders in online video titled “Inside 

UpCounsel’s Mission to Modernize the Legal Industry” 

In a September 21, 2015 online video, Faustman made the following statement: “This is a 

very high-trust kind of industry, and in order to make any movement people have to associate you 

with very high quality [that] is as good as using a law firm.”10 In addition, Mason Blake, Cofounder and Chief Technology Officer of UpCounsel, stated: “The beauty of UpCounsel is that 

it’s essentially a virtualized law firm in a box . . . .”11

LegalForce RAPC’s reliance on Faustman’s statement is unpersuasive because the 

statement itself indicates that using UpCounsel is as good as using a law firm. As for Blake’s 

statement, the preceding statement made by the moderator of the discussion is the following: 

“One of the things that gets me really excited about UpCounsel too is . . . your primary offering is 

that connection—is the back office for the lawyers and then being able to use your platform to 

communicate, you know a small business and the lawyer they’re working with—but you can also 

assemble a team of lawyers who help you with different things.”12 Thus, the subsequent statement 

by Blake which describes UpCounsel as a “virtualized law firm in a box” ties back to the notion 

that UpCounsel is a technology platform that makes it easy to discover and work with a 

community of attorneys. UpCounsel’s motion is thus GRANTED as to these statements. 

 9

 See https://www.youtube.com/watch?v=jaS7kuEv1Y4&t=0m44s (emphasis 

supplied). 

10 See https://www.youtube.com/watch?v=eKe3y2aEG2I&app=desktop&t=8m19s; 

see also FAC ¶ 23(a). 

11 See https://www.youtube.com/watch?v=eKe3y2aEG2I&app=desktop&t=2m23s; 

see also FAC ¶ 23(b). 

12 See https://www.youtube.com/watch?v=eKe3y2aEG2I&app=desktop&t=2m02s. 

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6. Statements by Faustman in an interview with San Gabriel Valley Tribune 

In an article published on March 26, 2015 and updated on August 30, 2017, Faustman was 

quoted as describing UpCounsel as “equivalent to the largest virtual law firm in the world.” (FAC 

¶ 24; id. Exh. 40 at 2.) 

LegalForce RAPC’s reliance on this statement does not persuade because the quote by 

Faustman immediately following this one states: “We are a venture-backed technology company 

based out of San Francisco . . . . We have a marketplace structure, and we power that with a 

group of top-tier attorneys.” (FAC Exh. 40 at 2 (emphases supplied).) UpCounsel’s motion is 

thus GRANTED as to these statements. 

7. Conclusion 

In sum, the Court does not accept as true plaintiffs’ allegations with respect to the 

aforementioned statements as they are contradicted by the documents attached to, and 

incorporated by reference in, the FAC. Accordingly, UpCounsel’s motion to dismiss LegalForce 

RAPC’s Lanham Act claim is GRANTED WITHOUT LEAVE TO AMEND to the extent the claim is 

based on the statement that “UpCounsel is the world’s largest law firm.” 

B. “Top 5% of {Practice Area} Lawyers in {City}” 

Plaintiffs allege that “UpCounsel has made tens of thousands of false and misleading 

statements in the format of ‘Top 5% of {Practice Area} Lawyers in {City}’ in tens of thousands of 

web pages on its website.” (FAC ¶ 27; see generally, e.g., id. Exhs. 26–29.) Plaintiffs contend 

that “[b]y indicating ‘5%’, UpCounsel implies that there exists an independent and publicly 

trusted ranking system in each and every city and the attorneys that UpCounsel lists on its city 

pages are chosen from the top 5% of such a list. In reality, no such list exists.” (FAC ¶ 30.) 

Plaintiffs allege that this statement misled customers, as evidenced by a review of UpCounsel on 

Yelp from a customer who said the reason he selected UpCounsel was because he believed it was 

“a network for only the most top notch legal reps in the area” and “[t]he attorneys offered with 

them are at the top of their game and you will get what you pay for.” (FAC ¶ 32 (emphasis 

removed); id. Exh. 39 at 2.) Separately, a customer wrote on Quora that he was deceived when he 

saw an advertisement on a search engine because “[o]ffering ‘Business Legal Services OnCase 4:18-cv-02573-YGR Document 95 Filed 01/10/19 Page 8 of 29
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Demand by Top Attorneys,’ UpCounsel also promised attorneys who could do the job for much 

less money.” (FAC ¶ 32 (emphasis removed); id. Exh. 72 at 2.) The customer wrote: “Well, the 

bottom line in this review of UpCounsel: I wish I had never used UpCounsel and I’m warning all 

startups, business and companies out there to never make the same mistake!” (FAC ¶ 32 

(emphasis removed); id. Exh. 72 at 2.) 

UpCounsel argues that the examples and related exhibits plaintiffs provide are Google 

search results, not statements made by UpCounsel. (MTD at 12.) In any event, even if 

UpCounsel had made these statements, UpCounsel argues that they would still be “general 

assertions” and “mere puffery.” (Id.) 

As a preliminary matter, the Lanham Act claims based on the “Top 5% of Trademark 

Attorneys” already survived dismissal on the basis of puffery. (See MTD Order at 2; Hearing Tr. 

1 at 16:14–17.) That the FAC adds similar statements pertaining to other types of attorneys, 

namely patent, intellectual property, copyright, and startup attorneys, (see FAC ¶ 27), does not 

affect the Court’s ruling as to this category of statements.13 

 13 UpCounsel cites Hackett v. Feeney, No. 2:09-cv-02075-RLH-LRL, 2011 WL 4007531 

(D. Nev. Sept. 8, 2011) in support of its argument that, in order to be actionable under the Lanham 

Act, the statement must answer the “critical question ‘[Top 5%] as determined by whom[?]’” 

(Reply at 11 (emphasis supplied).) However, that case is distinguishable. First, it involves a #1 

claim, namely “Voted #1 Best Show in Vegas!” Id. at *4; see also In re Century 21-RE/MAX Real 

Estate Advert. Claims Litig., 882 F. Supp. 915, 923 (C.D. Cal. 1994) (“The word[] . . . ‘#1’ 

convey[s] no specific meaning and thus cannot be considered literally false.”). Moreover, the full 

quote from Hackett cited by UpCounsel provides: “the[] words (voted, considered, rated, etc.) in 

combination with ‘#1 Best Show in Vegas’ begs the question: By whom?” Hackett, 2011 WL 

4007531, at *5 (emphasis supplied). Here, unlike in Hackett, none of the 5% statements say 

UpCounsel was voted/considered/rated as top 5%. Moreover, the “#1 Best Show in Vegas” 

statement at issue in Hackett is classic puffery because it made no reference to the category in 

which the show “The Rat Pack is Back” was number one. Here, on the other hand, the 5% 

statement specifies a particular category as to which the 5% statement applies, namely the 

specific practice area. It cannot be said that no reasonable consumer would rely on such an 

assertion. 

UpCounsel also cites Southland Sod Farms v. Stover Seed Co., 108 F.3d 1134 (9th Cir. 

1997) in its reply brief, arguing that “[m]ost of” plaintiffs’ “supposedly false claims” are “general 

assertions and vague claims of ‘lower costs and superiority’ . . . .” (Defendant UpCounsel Inc.’s 

Reply in Support of Motion to Dismiss Plaintiffs’ First Amended Complaint (“Reply”) at 11, Dkt. 

No. 59.) However, for the reasons discussed herein, the Court disagrees and finds that they are 

instead “quantifiable” and/or “make[] a claim as to the specific or absolute characteristics” of 

UpCounsel’s services, provided by the attorneys who use its platform. Newcal Indus., Inc. v. Ikon 

Office Sol., 513 F.3d 1038, 1053 (9th Cir. 2008) (internal quotation marks omitted). 

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As for UpCounsel’s Google search result argument, the Court finds it unpersuasive at the 

motion to dismiss stage. Plaintiffs allege that the search results “republish” statements originally 

made by UpCounsel. (FAC ¶ 27.) The issue of who actually made the statements (i.e., the search 

results) is a factual issue to be resolved at summary judgment. 

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

DENIED to the extent the claim is based on statements in the format of “Top 5% of {Practice Area} 

Lawyers in {City}.” 

C. “The 10 Best {Practice Area} Lawyers in {State} NEAR ME” 

Plaintiffs allege that “UpCounsel has made over 1,000 false and misleading statements in 

the format of ‘The 10 Best {Practice Area} Lawyers in {State} NEAR ME’ in over 1,000 web 

pages on its website.” (FAC ¶ 33; see also id. Exh. 52.) According to plaintiffs, “[t]hese 

statements are false because individuals listed in each resulting page are not usually near the 

customer who did the search, and often not even in the same state.” (Id. ¶ 35.) 

While LegalForce does not address this category of statements directly, it appears to fall 

within the second of its four groups, namely the group encompassing “quotes suggesting that 

UpCounsel is ‘equivalent to the world’s largest virtual law firm’ or that available lawyers are, for 

example, the ‘best patent lawyers’ in a particular city.” (MTD at 9–10.) Against this backdrop, 

the argument that statements in the format of “The 10 Best {Practice Area} Lawyers in {State} 

NEAR ME” are Google search results fails for the reasons previously stated, as does the 

contention that the statement must answer the question “as determined by whom[?]” Moreover, 

statements in the format of “The 10 Best {Practice Area} Lawyers in {State} NEAR ME” are not 

puffery because UpCounsel is advertising a top-10 list of the best attorneys practicing in a specific 

area of law in a geographically limited area. See Newcal, 513 F.3d at 1053 (explaining that 

“[u]ltimately, the difference between a statement of fact and mere puffery rests in the specificity or 

generality of the claim”). A reasonable consumer reading these statements could conclude that 

UpCounsel attorneys are objectively and measurably superior to other “{practice area} lawyers in 

{state}” near the consumer. (FAC ¶ 33.) 

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

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DENIED to the extent the claim is based on statements in the format of “The 10 Best {Practice 

Area} Lawyers in {State} NEAR ME.” 

D. “{City} {Practice Area} Lawyers 5.0 ***** Based on {X number of} reviews” 

Plaintiffs allege that in a total of 51,700 landing pages, “there is a Page Summary Block 

which shows ‘{City} {Practice Area} Lawyers 5.0 ***** Based on {X number of} reviews.’” 

(FAC ¶ 38.) For example: 

(See id. Exh. 61 at 1.) According to plaintiffs, the statement “Cotati Intellectual Property Lawyers 

5.0 ***** Based on 5450 reviews” is a false statement, namely: “It is impossible for Cotati 

Intellectual Property Lawyers to have 5,450 reviews on UpCounsel. Cotati is a small town in 

Northern California with a population of 7,455. There are only 21 attorneys in the city of Cotati 

licensed to practice law in California, and none of these 21 attorneys are listed on UpCounsel.” 

(Id. ¶ 39.) Thus, plaintiffs maintain that “UpCounsel manipulates [Google’s search optimization] 

technique to deceive Google crawlers and other search engines so that Google will display 

UpCounsel’s fabricated and false ratings and reviews on the first page search result.” (FAC ¶ 42.) 

As a result, UpCounsel “steers away potential clients from [p]laintiffs and hinders [p]laintiffs’ 

ability to compete.” (Id.) 

UpCounsel argues that use of search-engine optimization techniques “as a means to its 

advertising ends” does not suffice to state a claim under the Lanham Act because UpCounsel’s 

“software code” is not a statement that was seen or relied on by customers. (MTD at 10 (emphasis 

in original).) UpCounsel also maintains that its advertising statements regarding five-star reviews 

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are non-actionable puffery. 

 Whether UpCounsel’s software code is a statement that was seen and relied on by 

customers is a factual issue to be resolved at summary judgment. As for UpCounsel’s argument 

that the statements themselves are non-actionable puffery, it does not persuade. The statements 

indicate a specific area of law in a geographically limited area and also a specific number of 

reviews. A reasonable consumer reading these statements could conclude that UpCounsel 

attorneys are objectively and measurably superior to other “{city} {practice area} lawyers.” (FAC 

¶ 38.) 

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

DENIED to the extent the claim is based on the Page Summary Block on UpCounsel’s landing 

pages which shows “{City} {Practice Area} Lawyers 5.0 ***** Based on {X number of} 

reviews.” 

E. “***** Rating: 5 – {X number of} reviews” 

Plaintiffs allege that “when a customer searches ‘intellectual property lawyer in cotati, ca,’ 

UpCounsel makes another false and misleading statement,” which appears beneath the separate 

false and misleading statement “Top 5% Intellectual Property Lawyers in Cotati, CA,” namely 

“***** Rating: 5 – {X number of} reviews.” (FAC ¶ 43.) For example: 

(Id. Exh. 33-G at 1.) According to plaintiffs, “[t]he display of the invariable 5-star rating followed 

by the number of reviews is achieved by manipulating Google search results through deceptive, 

unethical, and fraudulent search engine optimization techniques. . . . UpCounsel’s deceptive 

aggregations of reviews mislead [consumers] into believing the reviews came from actual 

customers in those cities and states.” (Id. ¶ 45.) In addition, “[t]o keep its pages at the top of 

search results,” plaintiffs allege that UpCounsel “underhandedly tricks Google by ‘refreshing’ its 

reviews through a posting regularly updated, fabricating reviews directly on each webpage on the 

UpCounsel website.” (Id. ¶ 49.) 

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UpCounsel repeats its argument regarding HTML code and search-optimization techniques 

and generally asserts that statements that attorneys have five-star reviews are non-actionable 

puffery. (MTD at 12.) 

The former argument fails for the reasons discussed in the previous section. As for 

UpCounsel’s argument that the statements are puffery, it does not persuade. The statements are 

“quantifiable,” namely they indicate a five-star rating based on a specific number of reviews, and 

are thus actionable. Newcal, 513 F.3d at 1052. 

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

DENIED to the extent the claim is based on statements in the format of “***** Rating: 5 – {X 

number of} reviews.” 

F. Review and Web Page Source Code Deception 

Plaintiffs allege generally that UpCounsel’s presentation layer code (i.e., “software code 

that is executed on a client side device and which is responsible for displaying textual and 

graphical elements printed on a webpage to users throughout their monitors”) reveals that 

UpCounsel “intentionally and purposefully, and in bad faith, attempts to deceive Google search 

crawlers and the public that uses Google to search for legal services.” (FAC ¶ 50.) For example, 

“UpCounsel’s tag for its 5450 fabricated reviews for attorneys in Cotati is based on a fraudulent 

data field called ‘reviewCount’ which is printed on each page,” and “UpCounsel’s page source for 

each of its tens of thousands of reviews includes the following line of code: <div 

itemprop=‘aggregateRating’ itemscope itemtype= ‘http://schema.org/AggregateRating’>,” the sole 

purpose of which is to “trick search engines into recognizing UpCounsel’s aggregate ratings as 

trustworthy.” (FAC ¶¶ 52, 53; id. Exh. 76 at 26.) “Specifically,” plaintiffs allege, “this descriptor 

indicates that UpCounsel is attempting to fraudulently utilize the ‘AggregateRating’ class or 

library on the website www.schema.org to trick search engines into recognizing its ratings and 

reviews as honest and reputable, when in fact they are aggregated fraudulently to generate a 

fabricated city rating.” (Id. ¶ 54.) The lines of code are depicted in the FAC as follows: 

\\ 

\\ 

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(Id. ¶ 52.) According to plaintiffs, “[w]hen adding this library of code, UpCounsel intentionally 

violates (1) the technical and content guidelines of Google, which require legitimate reviews and 

(2) provisions of the Google Technical guidelines.” (Id. ¶ 57.) The core of plaintiffs’ allegations 

regarding review and web page source code deception is thus that “UpCounsel fraudulently and 

unethically employs techniques published on Schema.org to deceive Google and average 

consumers into thinking that when they search on Google, they are receiving trustworthy reviews 

of real attorneys in their city or ‘near them’ when in fact, the reviews are a manufactured 

hodgepodge of unrelated UpCounsel attorneys who often have no connection to the particular city 

or state.” (Id. ¶ 59.) UpCounsel, in turn, has “greatly benefited from deceptive, unethical, and 

fraudulent search engine optimization techniques.” (Id. ¶ 62.) Namely, plaintiffs claim that 

“UpCounsel’s false and misleading advertising has propelled it to secure 10,000+ customers” and 

that “[a] percentage of these clients would have become clients of RAPC.” (Id. ¶ 64.) 

UpCounsel argues that its “software code,” or the pages of HTML “page source” that 

plaintiffs use in their brief, are not statements that were seen and relied on by customers. (MTD at 

10.) As for the corresponding search results, UpCounsel argues that plaintiffs cannot rest a false 

advertising claim—which requires a false statement made by the defendant—on search results that 

plaintiffs have elicited from a third party using words that plaintiffs have chosen. (Id. at 11.) 

The Court agrees in part. Specifically, the Court finds that standing on their own, the 

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software code and HMTL page source are not actionable statements. However, plaintiffs have tied 

the software code and HTML page source to specific actionable statements. (See Plaintiffs’ 

Opposition to Defendant’s Motion to Dismiss First Amended Complaint (“Opp.”) at 16, Dkt. No. 

55 (“UpCounsel . . . carefully tags the statements in the website coding so that Google includes the 

false and misleading statements in search results for consumers.”).) Thus, the software code and 

HTML page source represent UpCounsel’s purported intent when making the statements, namely 

to mislead consumers. Accordingly, allegations pertaining to the same, while not sufficient to 

give rise to a separate Lanham Act claim, shall not be dismissed.14

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

DENIED to the extent the claim is based on UpCounsel’s alleged review and web page source code 

deception. 

G. Distant, Unlicensed Attorneys 

Plaintiffs allege that “UpCounsel deceives customers by steering them to attorneys and 

non-attorneys who are not located anywhere close to their city, or authorized to practice in their 

respective state” or in any state. (FAC ¶ 65; see also id. ¶ 66.) For instance, plaintiffs “take issue 

. . . with UpCounsel listing . . . patent agents as lawyers.” (Opp. at 26.) 

UpCounsel concedes that the three examples that plaintiffs cite in the FAC (see FAC ¶¶ 

66–68) are, as indicated in the corresponding exhibits, patent prosecutors. However, UpCounsel 

argues that it does not steer anyone to unlicensed attorneys and that plaintiffs identify nothing on 

UpCounsel’s website that represents that these individuals are attorneys. In addition, UpCounsel 

reiterates its argument that Google search results are not statements. (See Reply at 13) (“That 

leaves Plaintiffs with just one allegation: that Google is somehow displaying these individuals 

under misleading headings.”) (emphasis in original).) Without some false statement by 

 14 As for UpCounsel’s argument regarding the corresponding search results, the fact that 

plaintiffs formulated the searches which triggered the results is of no moment. UpCounsel does 

not dispute that the search results and information contained therein are accessible to the broader 

public. As previously stated, the issue of who actually made the statements (i.e., the search 

results), whether it be UpCounsel or a third party, is a factual issue to be resolved at summary 

judgment. (See supra p. 10.) 

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UpCounsel, UpCounsel insists that LegalForce RAPC has no Lanham Act claim. 

Accepting as true plaintiffs’ allegation that the search results “republish” statements 

originally made by UpCounsel, as the Court must in analyzing UpCounsel’s motion to dismiss, 

UpCounsel cannot reasonably argue at this stage that it has not made false statements by way of 

the search results. Indeed, UpCounsel does not refute that the patent prosecutors are linked to 

search results advertising attorney services, and in different states. (See, e.g., FAC Exh. 57 at 1 

(“Mark Levenda Attorney Profile on Upcounsel”) (emphasis supplied); id. Exh. 37 at 1 (search 

result heading is “Bend Attorneys & Lawyers for Hire On-Demand” but description states “Mark 

Levenda is a patent attorney with over 12 years of experience. He is licensed to practice law in 

Arizona and is also a member of the Arizona patent bar”) (emphasis supplied)); see also, e.g.,

FAC Exhs. 32 at 3 & 56 at 1, 2 (patent agent appears as “Top 5%” immigration lawyer in 

Blackfoot Idaho and as an “Oregon Attorney[] & Lawyer[] for Hire On-Demand” through 

UpCounsel).) 

Accordingly, UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is 

DENIED to the extent the claim is based on UpCounsel’s alleged “dece[ption] [of] customers by 

steering them to attorneys and non-attorneys who are not located anywhere close to their city, or 

authorized to practice in their respective state.” (FAC ¶ 65.) 

H. False and Misleading Fee Structure 

Plaintiffs allege that “UpCounsel deceptively hides exactly how much in fees consultant 

users or employer users pay as part of its success fee, ranging from 15% to 24%.” (FAC ¶ 76.) 

Specifically, “th[e] 15% mark up in its terms is materially inconsistent with its invoices, in which 

the mark up spikes to 24%.” (Id. ¶ 78.) In addition to these alleged misrepresentations regarding 

the mark up, plaintiffs allege: “UpCounsel attempts to ‘mask’ this ‘processing fee’ from its 

Employer Users by including it as part of the hourly fee paid to each lawyer. Specifically, the 

initial hourly rate shown to each potential client after a proposal is provided by an attorney is 

silent as to whether it includes the processing fee.” (Id. ¶ 79.) 

UpCounsel argues that plaintiffs are “either confused or intentionally obfuscating the 

truth.” (MTD at 13.) Namely, “[t]here is no ‘range’ from 15% to 24%; those are different fees 

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charged for entirely different services.” (Id.) Regarding the former, UpCounsel explains that 

Section 7.1 of its Terms of Service, (see FAC Exh. 11), has nothing to do with work performed by 

attorneys through UpCounsel’s platform. Rather, it sets out the referral fee an employer is to pay 

UpCounsel if it decides to employ—on a full-time basis in the future—an attorney it met through 

the platform. (MTD at 13; See FAC Exh. 11 at ECF pp. 57–58.) The amount of that referral fee is 

“determined by the start date of that employment, and how close in time it is to when those parties 

first met through UpCounsel.” (Reply at 12.) Regarding the latter, UpCounsel contends that it 

makes clear that its “processing fee”—not a referral fee—“amounts to 24% of your total invoice.” 

(MTD at 13 (citing FAC ¶ 78 n.8).) “In other words, if an attorney performs an hour’s work for an 

UpCounsel client and charges $250, the client pays that attorney $250 and, in addition, pays 

UpCounsel 24% (or $60) in processing fees.” (MTD at 13.) In any event, UpCounsel maintains 

that its fee structure does not constitute a statement, in interstate commerce or advertising, that is 

literally false. 

The Court finds that the disagreement between the parties boils down to a factual dispute 

appropriate for resolution at summary judgment, not on a motion to dismiss. Accordingly, 

UpCounsel’s motion to dismiss LegalForce RAPC’s Lanham Act claim is DENIED to the extent it 

is based on UpCounsel’s allegedly false and misleading fee structure. 

I. Conclusion 

LegalForce RAPC’s Lanham Act claim is subject to dismissal only to the extent the claim 

is based on the statement that “UpCounsel is the world’s largest law firm.” Otherwise, the claim 

survives UpCounsel’s motion to dismiss. 

IV. SECOND CLAIM FOR RELIEF: CALIFORNIA FALSE & MISLEADING ADVERTISING (CAL.

BUS. & PROF. CODE § 17500 ET SEQ.) 

California’s FAL prohibits the dissemination of any advertising “which is untrue or 

misleading.” Cal. Bus. & Prof. Code § 17500; see also In re Sony Gaming Networks & Customer 

Data Sec. Breach Litig., 996 F. Supp. 2d 942, 985–86 (S.D. Cal. 2014). 

UpCounsel argues that LegalForce RAPC’s FAL claim fails for the same reasons as its 

Lanham Act and UCL claims. First, UpCounsel contends that plaintiffs have not alleged a false or 

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misleading statement sufficient to state a false advertising claim. Second, UpCounsel argues that 

LegalForce RAPC does not have standing under the FAL because it has not suffered an injury in 

fact or lost money or property as a result of a violation.15 

As a preliminary matter, because the Court previously ruled in plaintiffs’ favor on the issue 

of standing under both the FAL and UCL, UpCounsel’s motion based on lack of standing is 

DENIED. (See MTD Order at 2.)16 Otherwise, because LegalForce RAPC’s FAL claim is based in 

its entirety on conduct which forms the basis of its Lanham Act claim, this claim rises and falls 

with LegalForce RAPC’s Lanham Act claim. See Walker & Zanger, Inc. v. Paragon Indus., Inc., 

549 F. Supp. 2d 1168, 1182 (N.D. Cal. 2007) (“[C]laims of . . . false advertising under state 

statutory and common law are ‘substantially congruent’ to claims made under the Lanham Act.”) 

(quoting Cleary v. News Corp., 30 F.3d 1255, 1263 (9th Cir. 1994)). Accordingly, UpCounsel’s 

motion as to the FAL claim is GRANTED IN PART AND DENIED IN PART in accordance with the 

Court’s aforementioned rulings regarding LegalForce RAPC’s Lanham Act claim. 

V. THIRD CLAIM FOR RELIEF: CALIFORNIA UNFAIR COMPETITION (CAL. BUS. & PROF. CODE § 17200 ET SEQ.) 

The UCL proscribes business practices that are “unlawful, unfair[,] or fraudulent.” Cal. 

Bus. & Prof. Code § 17200; see also In re Sony, 996 F. Supp. 2d at 985. Because the statute is 

written in the disjunctive, it applies separately to business practices that are (1) unlawful, (2) 

unfair, or (3) fraudulent. See Pastoria v. Nationwide Ins., 112 Cal. App. 4th 1490, 1496 (2003). 

Plaintiffs assert claims under the unlawful and unfair prongs only. The Court discusses 

each prong in turn after addressing the threshold issue of Trademarkia’s standing. 

A. Trademarkia’s Standing 

At the hearing on the instant motion, UpCounsel addressed the issue of Trademarkia’s 

 15 UpCounsel’s motion actually makes these arguments as to “plaintiffs,” i.e., both 

LegalForce RAPC and Trademarkia. However, only LegalForce RAPC asserts a claim under the 

FAL. (See FAC at p. 42 (indicating that the FAL claim is asserted “[a]gainst UpCounsel by 

RAPC”).) UpCounsel’s standing argument in the context of the FAL claim therefore pertains to 

LegalForce RAPC only, and the Court thus proceeds with its discussion accordingly. 

16 See also discussion at infra pp. 19–20. 

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standing to pursue its UCL claim against UpCounsel, arguing for the first time that plaintiffs’ 

allegations in the FAC regarding “lost sales and increased costs,” namely those contained in FAC 

¶¶ 114–116, pertain to LegalForce RAPC only, and not Trademarkia. (See Hearing Tr. 2 at 11:2–

25.) While UpCounsel is correct regarding these specific allegations, its argument that 

Trademarkia lacks standing to pursue its UCL claim against UpCounsel does not persuade. 

Because UpCounsel did not distinguish at the hearing between Article III standing and statutory 

standing, the Court addresses both.17 

A plaintiff asserting a UCL claim must satisfy both the Article III and UCL standing 

requirements. Birdsong v. Apple, Inc., 590 F.3d 955, 960 n.4 (9th Cir. 2009). To have standing to 

assert a UCL claim, the plaintiff must show that “she hast lost ‘money or property’ sufficient to 

constitute an ‘injury in fact’ under Article III of the Constitution.” Rubio v. Capital One Bank, 

613 F.3d 1195, 1203–04 (9th Cir. 2010). Thus, the plaintiff asserting a UCL claim must have 

Article III standing in the form of economic injury. Cardenas v. NBTY, Inc., 870 F. Supp. 2d 984, 

991 (E.D. Cal. 2012); see also Birdsong, 590 F. 3d at 960 n.4 (“[T]he UCL incorporates Article 

III’s injury in fact requirement . . . .”) (citation omitted). 

The UCL’s loss of “money or property” requirement is broadly expansive as to what sort 

of economic injury suffices. See Kwikset Corp. v. Superior Court, 51 Cal. 4th 310, 323 (2011). 

The California Supreme Court instructs that “[t]here are innumerable ways in which economic 

injury from unfair competition may be shown.” Id.; see also Law Offices of Mathew Higbee v. 

Expungement Assistance Servs., 214 Cal. App. 4th 544, 561 (2013) (“[T]he notion of ‘lost money’ 

under the UCL is not limited.”). Loss of business to a competitor as a result of unfair competition 

is a paradigmatic, and indeed the original, variety of loss contemplated by the UCL. See Law 

Offices of Mathew Higbee, 214 Cal. App. 4th at 560–61 (explaining that while the UCL has 

developed into an important consumer-protection statute, its “original purpose . . . was to protect 

 17 Moreover, because UpCounsel’s standing point at oral argument was limited to 

Trademarkia’s purported injuries, and because the Court previously ruled on the issue of plaintiffs’ 

standing under the UCL, (see Dkt. No. 42 at 2), the Court limits its discussion herein accordingly. 

Thus, the Court does not address the causation or redressability requirements of Article III 

standing. 

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against wrongful conduct in commercial enterprises which resulted in business loss to another, 

ordinarily by the use of unfair means in drawing away customers from a competitor”) (internal 

quotation marks omitted). A decrease in business value has also been deemed sufficient to show 

“an identifiable trifle of injury as necessary for standing under the UCL.” Id. at 561. 

Here, plaintiffs make the following allegations of economic injury, inter alia, with respect 

to both Trademarkia and LegalForce RAPC: 

 “UpCounsel . . . deceive[s] Google crawlers and other search engines so that Google will 

display UpCounsel’s fabricated and false ratings and reviews on the first page search 

result. As such, UpCounsel steers away potential clients from [p]laintiffs and hinders 

[p]laintiffs’ ability to compete.” (FAC ¶ 42.) 

 “Plaintiffs’ value of their business has been directly reduced and negotiations with 

potential acquirers have stalled.” (Id. ¶ 115.) 

 “UpCounsel prevented competition from [p]laintiffs by unfairly gaining potential clients 

through illegal solicitation and sharing legal fees with lawyers. But-for [sic] UpCounsel’s 

unlawful and unfair competition, a good percentage of these potential clients would have 

otherwise gone to [p]laintiffs.” (Id. ¶ 140.) 

 “If UpCounsel did not engage in the alleged unlawful solicitation and unethical fee 

sharing, [it] would not have made false and misleading advertisements on Google and 

would not have unfairly competed with [p]laintffs. Therefore, UpCounsel’s conduct of 

unfair competition took away potential sales belonging to [p]laintiffs and proximately 

caused injury to [p]laintiffs.” (Id. ¶ 141.) 

The Court concludes that allegations of “plaintiffs’,” i.e. LegalForce RAPC’s and Trademarkia’s, 

lost business and decrease in business value, in the overall context of the FAC and its allegations 

of wrongfully denied business opportunities, suffice to plead standing under the UCL’s expansive 

standing doctrine. Because these allegations also suffice for pleading injury in fact under Article 

III,18 UpCounsel’s argument regarding Trademarkia’s lack of standing is without merit. 

B. Unlawful Prong 

“The unlawful prong of the UCL prohibits anything that can properly be called a business 

practice and that at the same time is forbidden by law.” In re Adobe Sys., Inc. v. Privacy Litig., 66 

 18 See Kwikset, 51 Cal. 4th at 325 (“If a party has alleged or proven a personal, 

individualized loss of money or property in any nontrivial amount, he or she has also alleged or 

proven injury in fact.”). 

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F. Supp. 3d 1197, 1225 (N.D. Cal. 2014) (internal quotation marks omitted). “Generally, violation 

of almost any law may serve as a basis for a UCL claim.” Jordan v. Paul Fin., LLC, 745 F. Supp. 

2d 1084, 1098 (N.D. Cal. 2010) (internal quotation marks omitted). However, a UCL claim “must 

identify the particular section of the statute that was violated and must describe with reasonable 

particularity the facts supporting the violation.” In re Anthem, Inc. Data Breach Litig., 

162 F. Supp. 3d 953, 989 (N.D. Cal. 2016) (internal quotation marks omitted). Plaintiffs asserts 

five predicates for their “unlawful” UCL claim: California Business and Professions Code sections 

(1) 6152(a) and (2) 6155; (3) 37 C.F.R. section 11.504; and California Rules of Professional 

Conduct (“RPC”) (4) 1-320 and (5) 1-400. (See FAC ¶ 138(a)–(d).) 

UpCounsel contends that plaintiffs “may not ‘plead around an absolute bar to relief by 

recasting the cause of action as one for unfair competition.’” (MTD at 5 (quoting Cel-Tech 

Commc’ns Inc v. L.A. Cellular Tel. Co., 20 Cal. 4th 163, 182 (1999)).) Specifically, UpCounsel 

argues that plaintiffs’ “unlawful” UCL claim fails because “its purported statutory hooks expressly 

forbid private rights of action . . . .” (MTD at 5.) Plaintiffs, in opposition, respond that “[a] claim 

under the UCL cannot be brought [only] where the legislature has created an immunity or 

provided a ‘safe harbor’ for that action.” (Opp. at 8 (quoting Cel-Tech, 20 Cal. 4th at 182).) At 

oral argument, UpCounsel agreed with plaintiffs that, in some instances, a statute that does not 

provide a private cause of action can serve as a predicate for a UCL claim. (Hearing Tr. 2 at 10:1–

2 (“I completely agree that if a statute is entirely silent[,] that can serve a statutory hook.”).) 

However, UpCounsel maintained that where a private right of action to enforce a statute has been 

expressly foreclosed, that statute may not serve as a predicate for a UCL claim. Specifically, 

UpCounsel argued that section 6156 forecloses a private cause of action under section 6155 

because the former specifically provides for enforcement actions by public entities or the state of 

California, but not actions by individuals or competitors. (See id. at 9:22–25.) 

It is true that plaintiffs may not “plead around an absolute bar to relief” by recasting the 

cause of action as a claim under the UCL. Cel-Tech, 20 Cal. 4th at 182–83 (internal quotation 

marks omitted). At the same time, California courts have repeatedly stated that a plaintiff may 

bring a UCL claim even when the conduct alleged to constitute unfair competition violates a 

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statute that does not provide a private right of action. See, e.g., Troyk v. Farmers Grp., Inc., 171 

Cal. App. 4th 1305, 1335 (2009); McKell v. Wash. Mut., Inc., 142 Cal. App. 4th 1457, 1475 

(2006); Kasky v. Nike, Inc., 27 Cal. 4th 939, 950 (2002); Stop Youth Addiction, Inc. v. Lucky 

Stores, Inc., 17 Cal. 4th 553, 561–66 (1998), superseded by statute on other grounds as stated in 

Arias v. Superior Court, 46 Cal. 4th 969 (2009). Courts have reconciled these two principles by 

holding that “[t]o forestall an action under the unfair competition law, another provision must 

actually ‘bar’ the action . . . .” Cel-Tech, 20 Cal. 4th at 183. Thus, if a statute explicitly precludes 

private enforcement, or if a statute expressly provides immunity for the conduct alleged, a plaintiff 

may not plead around this bar by bringing a claim under the UCL. Compare Hartless v. Clorox, 

No. 06CV2705 JAH(CAB), 2007 WL 3245260, at *4 (S.D. Cal. Nov. 2, 2007) (holding that a 

UCL claim cannot be predicated on Federal Insecticide, Fungicide, and Rodenticide Act 

(“FIFRA”) due to Congress’ express rejection of private actions to enforce FIFRA), with Fowler 

v. Wells Fargo Bank, N.A., No. 17-cv-02092-HSG, 2017 WL 3977385, at *3 (N.D. Cal. Sept. 11, 

2017) (permitting 24 C.F.R. section 203.558 to serve as predicate for UCL claim because it “does 

not explicitly bar private enforcement”), and Stop Youth Addiction, 17 Cal. 4th at 566 (permitting 

provision of California Penal Code to serve as basis for UCL claim because there was no 

“absolute[] bar[]” to relief). 

With these principles in mind, the Court turns to the five predicates plaintiffs assert for 

their “unlawful” UCL claim, namely California Business and Professions Code sections (1) 6152 

and (2) 6155, California Rules of Professional Conduct (3) 1-320 and (4) 1-400, and (5) 37 C.F.R. 

section 11.504. 

1. Cal. Bus. & Prof. Code §§ 6152 & 6155 

The Court is not persuaded by UpCounsel’s argument that section 6156 forecloses a 

private right of action under section 6155. In Stop Youth Addiction, the California Supreme Court 

considered a similar question, namely “whether the absence of a private right of action to enforce 

the predicate statute compromises a plaintiff’s eligibility to maintain a UCL cause of action.” 17 

Cal. 4th at 563. With respect to Penal Code section 308, one of the two predicates asserted for the 

UCL claim in that case, the court noted: “Undeniably, section 308 provides for its own direct

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enforcement only by public lawyers. It does not follow, however, that a private UCL action that 

that borrows violations . . . of section 308 to establish predicate ‘unlawful’ (§17200) business 

activity is barred.” Id. at 566 (internal quotation marks and citation omitted) (second emphasis 

supplied). The court emphasized that the UCL states, “[u]nless otherwise expressly provided, the 

remedies or penalties provided by this chapter [i.e., ch. 5, Enforcement, Bus. & Prof. Code, §§ 

17200–17209] are cumulative to each other and to the remedies or penalties available under all 

other laws of this state.” Stop Youth Addiction, 17 Cal. 4th 533 at 573 (internal quotation marks 

omitted) (alterations and emphasis in original). The court continued, “[t]he term ‘expressly’ 

means ‘in an express manner; in direct or unmistakable terms; explicitly; definitely; directly.’” Id. 

(quoting City & Cty. of S.F. v. W. Air Lines, Inc., 204 Cal. App. 2d 105, 120 (1962)). The court 

refused to hold that Penal Code section 308 impliedly precluded a private cause of action under the 

UCL, explaining that to do so, the court “would have to read the word ‘implicitly’ into [Business 

and Professions Code] section 17205 or read the word ‘expressly’ out of it.” Id. 

Turning to the case at bar, California Business and Professions Code section 6155 

provides, in relevant part, that “[a]n individual, partnership, corporation, association, or any other 

entity shall not operate for the direct or indirect purpose, in whole or in part, of referring potential 

clients to attorneys,” unless the service is registered with the State Bar of California. Section 6156 

provides: 

Any individual, partnership, association, corporation, or other entity, including, but 

not limited to, any person or entity having an ownership interest in a lawyer referral 

service, that engages, has engaged, or proposed to engage in violations of Section 

6155, shall be liable for a civil penalty . . . , which shall be assessed and recovered 

in a civil action brought: (1) In the manner specified in subdivision (a) of Section 

17206 . . . . (2) By the State Bar of California. 

Section 17206 in turn provides: 

Any person who engages, has engaged, or proposes to engage in unfair competition 

shall be liable for a civil penalty not to exceed two thousand five hundred dollars 

($2,500) for each violation, which shall be assessed and recovered in a civil action 

brought in the name of the people of the State of California by the Attorney 

General, by any district attorney, by any county counsel authorized by agreement 

with the district attorney in actions involving violation of a county ordinance, by 

any city attorney of a city having a population in excess of 750,000, by any city 

attorney of any city and county, or with the consent of the district attorney, by a 

city prosecutor in any city having a full-time city prosecutor, in any court of 

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competent jurisdiction. 

Thus, section 6156 provides for enforcement actions to recover civil penalties under section 6155 

only by public entities or the State Bar of California. As with the court in Stop Youth Addiction, 

this Court concludes that “[i]t does not follow, however, that a private UCL action that borrows 

violations . . . of section [6155] to establish predicate ‘unlawful’ . . . business activity is barred.” 

Stop Youth Addiction, 17 Cal. 4th at 566 (internal quotation marks and citation omitted). Nothing 

in section 6156 creates a bar to plaintiffs’ UCL claim based on section 6155 analogous to an 

“absolute[] bar[].” Stop Youth Addiction, 17 Cal 4th at 566. The Court agrees with the Stop Youth 

Addiction court that a statute does not necessarily bar a private right of action where the statutory 

scheme provides for penal (or, in this case, civil) penalties. Accordingly, UpCounsel’s motion to 

dismiss plaintiffs’ UCL claim based on a violation of section 6155 is DENIED.

19 

 UpCounsel further attacks plaintiffs’ attempt to premise their UCL claim on section 6155, 

arguing that doing so is unprecedented and contradicted by the FAC. According to UpCounsel, it 

neither operates to refer potential clients to attorneys nor takes any referral fee for doing so, but 

rather “allow[s] individuals to post descriptions of their legal needs; get free custom quotes from 

attorneys through the platform; choose whether to engage an attorney, and if so whom; pay the 

attorney his or her full rate, and pay a small processing fee to UpCounsel.” (MTD at 7 (internal 

quotation marks omitted); see also Reply at 4 (UpCounsel is “more like a public bulletin board 

that individuals and companies can consult and consider before choosing a lawyer they like”).) 

Plaintiffs respond that regardless of whether an identical case exists, UpCounsel is clearly 

operating “for the direct or indirect purpose, in whole or in part, of referring potential clients to 

attorneys.” (Opp. at 12 (quoting Cal. Bus. & Prof. Code § 6155(a)).) 

 As a preliminary matter, the fact that no similar case exists is irrelevant to the actual merits 

 19 Citing section 6156, UpCounsel similarly moves to dismiss plaintiffs’ UCL claim based 

on a violation of section 6152 “because that code section specifically provides for enforcement 

actions by public entities . . . or the State Bar of California[.]” (MTD at 5–6 (emphasis removed).) 

However, section 6156 references violations of section 6155 only, and not violations of section 

6152. See Cal. Bus. & Prof. Code § 6156(a) (“Any individual, partnership, association, 

corporation, or other entity . . . that engages, has engaged, or proposes to engage in violations of 

Section 6155, shall be liable for a civil penalty . . . . .”) (emphasis supplied). Thus, UpCounsel’s 

motion to dismiss plaintiffs’ UCL claim based on a violation of section 6152 is DENIED. 

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of plaintiffs’ claim. Moreover, UpCounsel’s argument ignores the broad reach of the UCL’s 

unlawful prong. See CRST Van Expedited, Inc. v. Werner Enters., Inc., 479 F.3d 1099, 1106 (9th 

Cir. 2007) (“The California Supreme Court has given the term ‘unlawful’ a straightforward and 

broad interpretation: The UCL covers a wide range of conduct. It embraces anything that can 

properly be called a business practice and that at the same time is forbidden by law[.]”); Andreoli 

v. Youngevity Int’l, Inc., No. 16-cv-02922-BTM-JLB, 2018 WL 1470264, at *11 (S.D. Cal. Mar. 

23, 2018) (“As to an unlawful business practice, the UCL’s coverage is broad and sweeping . . . .”) 

Next, UpCounsel’s contention that the FAC contradicts plaintiffs’ claim that UpCounsel violated 

section 6155 is disingenuous. Indeed, UpCounsel quotes FAC ¶ 90 in support thereof, but that 

paragraph of the FAC describes UpCounsel’s own attempts at disclaiming being a referral service 

on its website. As for UpCounsel’s argument that it is not operating as a referral service, it 

ignores that plaintiffs’ allegations suffice in this regard, namely: 

Although UpCounsel.com has a disclaimer in fine print stating that it is not a 

“lawyer referral service”, referring attorneys to potential clients is in essence all 

that UpCounsel does. According to the “How It Works” page of UpCounsel, 

customers looking for attorneys first post a job on UpCounsel.com, then the 

website’s proprietary algorithm “matches” customers with certain attorneys, and 

finally customers hire the attorneys instantly through UpCousensel. (See Exhibit 

70.) . . . UpCounsel is thus a de facto “lawyer referral service” . . . . 

(FAC ¶¶ 90, 91 (emphasis in original).) 

2. Rules of Professional Conduct (“RPC”) 1-320 & 1-400 

The result with respect to the RPC differs. The RPC expressly provide: “These rules are 

not intended to create new civil causes of action.” Cal. R. Prof. Conduct 1-100(A). 

The Court acknowledges, as plaintiffs note, that the court in People ex rel. Herrera v. 

Stender, 212 Cal. App. 4th 614 (2012) rejected the argument that violations of the RPC do not 

support a cause of action under the UCL. See id. at 632; Opp. at 9. However, Herrera did not 

involve a private action and was instead brought by the California Attorney General. Plaintiffs 

also cite Estakhrian v. Obenstine, 320 F.R.D. 63 (C.D. Cal. 2017), but the court there neither 

analyzed nor decided whether RPC 1-320 could be the basis of an unlawful prong claim. Rather, 

that class certification decision stands only for the proposition that whether a person who shared 

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legal fees with a non-lawyer was an issue common to the class. See id. at 78. Similarly, in Hoy v. 

Clinnin, No. 17-cv-788-BTM-KSC, 2017 WL 2686216 (S.D. Cal. June 22, 2017), the issue before 

the court was whether to remand a malpractice claim arising under the RPC to state court under 

the local controversy exception to the Class Action Fairness Act. See id. at *1. The court granted 

the motion to remand, and its analysis of the UCL claim at issue was limited to repeating 

Herrera’s holding and a citation to Estakhrian.

20 

In sum, given the RPC’s express bar on private enforcement, plaintiffs are precluded from 

enforcing RPC 1-320 and 1-400 privately by using them as predicates for their UCL claims. 

UpCounsel’s motion to dismiss plaintiffs’ UCL claim based on a violation of these rules is thus 

GRANTED.

21

3. 37 C.F.R. § 11.504 

 Finally, with respect to 37 C.F.R. section 11.504, UpCounsel argues only that “[a]ny UCL 

claim under [the United States Patent and Trademark Office Rules of Professional Conduct] is 

impliedly preempted by federal law,” citing just one case in support thereof. (MTD at 6.) 

However, six days before oral argument on the instant motion was held, the California Supreme 

Court ordered that the cited case be depublished. See Post Foods, LLC v. Superior Court., 25 Cal. 

App 5th 278 (2018), as modified on denial of reh’g (Aug. 14, 2018), review denied and ordered 

not to be officially published (Oct. 31, 2018). Thus, it cannot be cited or relied on by UpCounsel. 

See Cal. Rules of Court 8.1115(a). Absent binding, or at the least citable, authority on the issue, 

the Court is not inclined at this juncture to dismiss plaintiffs’ UCL claim based on a violation of 

37 C.F.R. section 11.504. UpCounsel’s motion to dismiss the same on the sole basis of 

preemption is thus DENIED. 

 20 As for Balukjan v. Virgin Am., Inc., No. 18-cv-00185-SI, 2018 WL 1242179 (N.D. Cal. 

Mar. 9, 2018), the court there stated in dicta that “[v]irtually any state, federal or local law can 

serve as the predicate for an action under section 17200, . . . including . . . rules of professional 

conduct.” Id. at *7. However, the court engaged in no analysis on that point. Instead, it relied on 

Herrera, which, as the Court previously indicated, did not involve a private action. 

21 In light of the Court’s ruling, the Court does not address the parties’ remaining 

arguments regarding the RPC. 

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C. Unfair Prong 

“The ‘unfair’ prong of the UCL creates a cause of action for a business practice that is 

unfair even if not proscribed by some other law.” In re Adobe, 66 F. Supp. 3d at 1125. “The UCL 

does not define the term ‘unfair.’ . . . [And] the proper definition of ‘unfair’ conduct ‘is currently 

in flux’ among California courts.” Id. (internal quotation marks omitted) (alterations in original). 

Although the precise test for the UCL’s “unfair” prong has not been definitively 

established, plaintiffs endorse the Federal Trade Commission (“FTC”) Act section 5 test employed 

in Camacho v. Automobile Club of Southern California, 142 Cal. App. 4th 1394 (2006). Under 

that test, three factors define unfairness: “(1) the consumer injury must be substantial; (2) the 

injury must not be outweighed by any countervailing benefits to consumers or competition; and 

(3) it must be an injury that consumers themselves could not reasonably have avoided.” Camacho, 

142 Cal. App. 4th at 1403; see also FAC ¶ 139(b)–(d). UpCounsel contends that where, as here, 

the plaintiff is a competitor, “the word ‘unfair’ . . . means conduct that threatens an incipient 

violation of an antitrust law, or violates the policy or spirit of one of those laws because its effects 

are comparable to or the same as a violation of the law, or otherwise significantly threatens or 

harms competition.” (MTD at 8 (quoting Cel-Tech, 20 Cal. 4th at 187).) And, UpCounsel argues, 

plaintiffs cannot state an antitrust claim unless they “plead and prove a reduction of competition in 

the market in general and not mere injury to their own positions as competitors.” (MTD at 8 

(internal quotation marks omitted) (emphasis in original).) In that context, UpCounsel contends 

that plaintiffs have not, and cannot, allege harm to general market competition. 

The parties do not dispute that this action is brought by a competitor, and not a consumer, 

nor can they. This point is significant because, in adopting its test for determining what is unfair 

under the UCL, the California Supreme Court in Cel-Tech stated: 

This case involves an action by a competitor alleging anticompetitive practices. 

Our discussion and this test are limited to that context. Nothing we say relates to 

actions by consumers or by competitors alleging other kinds of violations of the 

unfair competition law such as “fraudulent” or “unlawful” business practices or 

“unfair, deceptive, untrue or misleading advertising.” 

Cel-Tech, 20 Cal. 4th at 187 n.12 (emphasis supplied); cf. FAC ¶ 139(a)–(d) (alleging 

anticompetitive practices). In devising this “more precise” test, the court in Cel-Tech “turn[ed] for 

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guidance to the jurisprudence arising under the ‘parallel’ . . . section 5 of the Federal Trade 

Commission Act (15 U.S.C. § 45(a)) (section 5).” Id. at 185. In Watson Labs., Inc. v. RhonePoulenc Rorer, Inc., 178 F. Supp. 2d 1099 (C.D. Cal. 2001), on which plaintiffs rely, the court 

determined that the Cel-Tech test applied, see id. at 1118 n.13, and similarly determined, citing 

Section 5, that certain “federal antitrust decisions provide sound and appropriate standards for 

evaluating [plaintiff’s] § 17200 ‘unfair’ business act claim.” Id. at 1119. However, it did not 

indicate, as plaintiffs appear to argue, that Section 5 provides an alternative applicable test that 

displaces the Cel-Tech test. Plaintiffs also cite the recent decision by Judge Freeman in In re 

Nexus 6P Products Liability Litigation, 293 F. Supp. 3d 888 (N.D. Cal. 2018) because it “noted . . 

. one test for determining what is unfair under California’s UCL is the FTC Act section 5 test . . . 

.” (Opp. at 13.) However, In re Nexus 6P involved a consumer class action, and the court there 

addressed “the proper definition [of the term ‘unfair’] in the consumer context.” Id. at 930 

(emphases supplied). 

 Notwithstanding the foregoing, the Court is not persuaded by UpCounsel’s argument that 

plaintiffs must “state an antitrust claim.” (MTD at 8.) Namely, the Cel-Tech test provides that an 

“unfair” claim under the UCL may be proven only on the basis of “conduct that threatens an 

incipient violation of an antitrust law, or violates the policy or spirit of one of those laws because 

its effects are comparable to or the same as a violation of the law, or otherwise significantly 

threatens or harms competition.” Cel-Tech, 20 Cal. 4th at 187 (emphasis supplied). Against this 

backdrop, plaintiffs have sufficiently alleged facts to establish that UpCounsel’s actions 

“otherwise significantly threaten[] or harm[] competition.” Id. For example, they allege: 

[Attorney ethics rules] have not been revised in the age of the Internet. UpCounsel 

has brazenly ignored law, ethics, and common sense in defiance of healthy 

competition. . . . As a result of UpCounsel’s malfeasance, [p]laintiffs, law firms, 

and legal technology companies across the United States are unable to fairly 

compete with UpCounsel. 

(FAC ¶ 5.) Moreover, plaintiffs allege: “Plaintiffs are not able to compete fairly despite having 

an early start because they cannot fee share with non-attorneys. For this reason, based on 

UpCounsel’s own admissions, UpCounsel has unfairly threatened [p]laintiffs’ business directly by 

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unfairly competing.” (Id. ¶ 111.) Plaintiffs also allege: 

It is unfair to the competition in the practice of law if UpCounsel is able to offer 

legal services by violating state laws, federal regulations[,] and California ethics 

rules without being punished, while the vast majority of attorneys and legal 

technology companies, including [p]laintiffs, abide by the laws, federal 

regulations[,] and California ethics rules. 

(FAC ¶ 139(a).) 

 Accordingly, UpCounsel’s motion to dismiss plaintiffs’ claim under the UCL’s unlawful 

prong is DENIED. 

VI. CONCLUSION

For the foregoing reasons, UpCounsel’s motion to dismiss is GRANTED IN PART AND 

DENIED IN PART as follows: 

 The motion to dismiss LegalForce RAPC’s Lanham Act claim is GRANTED WITHOUT 

LEAVE TO AMEND to the extent the claim is based on the statement that “UpCounsel is 

the world’s largest law firm.” To the extent the Lanham Act claim is based on any 

other statement asserted in the FAC, the motion is DENIED. 

 The motion to dismiss LegalForce RAPC’s FAL claim based on lack of standing is 

DENIED. The motion is otherwise GRANTED IN PART AND DENIED IN PART in 

accordance with the Court’s rulings herein regarding LegalForce RAPC’s Lanham Act 

claim. 

 The motion to dismiss plaintiffs’ UCL claim is GRANTED to the extent the claim is 

based on a violation of Rules of Professional Conduct 1-320 and 1-400. To the extent 

it is based on other predicates, it is DENIED. 

 The motion to dismiss plaintiffs’ claim under the UCL’s unlawful prong is DENIED. 

This Order terminates Docket Number 49. 

IT IS SO ORDERED. 

Dated: January 10, 2019 

 YVONNE GONZALEZ ROGERS

 UNITED STATES DISTRICT COURT JUDGE

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