Opinion ID: 1801796
Heading Depth: 3
Heading Rank: 2

Heading: Purpose and Scope of the Fraud Prong of the UCL

Text: (1) The UCL defines unfair competition as any unlawful, unfair or fraudulent business act or practice . . . . (§ 17200.) Therefore, under the statute there are three varieties of unfair competition: practices which are unlawful, unfair or fraudulent. ( Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 837 [51 Cal.Rptr.3d 118].) We are here concerned with the third prong of the statutean allegation of a fraudulent business act or practice, specifically claims of deceptive advertisements and misrepresentations by the tobacco industry about its products. [7] (2) [T]o state a claim under either the UCL or the false advertising law, based on false advertising or promotional practices, `it is necessary only to show that members of the public are likely to be deceived'' ( Kasky v. Nike, Inc. (2002) 27 Cal.4th 939, 951 [119 Cal.Rptr.2d 296, 45 P.3d 243].) [8] To achieve its goal of deterring unfair business practices in an expeditious manner, the Legislature limited the scope of the remedies available under the UCL. A UCL action is equitable in nature; damages cannot be recovered. [Citation.] . . . We have stated under the UCL, `[p]revailing plaintiffs are generally limited to injunctive relief and restitution.' [Citation.] ( Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1144 [131 Cal.Rptr.2d 29, 63 P.3d 937].) (3) The fraudulent business practice prong of the UCL has been understood to be distinct from common law fraud. A [common law] fraudulent deception must be actually false, known to be false by the perpetrator and reasonably relied upon by a victim who incurs damages. None of these elements are required to state a claim for injunctive relief under the UCL. ( Day v. AT&T Corp. (1998) 63 Cal.App.4th 325, 332 [74 Cal.Rptr.2d 55]; see State Farm Fire & Casualty Co. v. Superior Court (1996) 45 Cal.App.4th 1093, 1105 [53 Cal.Rptr.2d 229].) This distinction reflects the UCL's focus on the defendant's conduct, rather than the plaintiff's damages, in service of the statute's larger purpose of protecting the general public against unscrupulous business practices. ( Fletcher v. Security Pacific National Bank (1979) 23 Cal.3d 442, 453 [153 Cal.Rptr. 28, 591 P.2d 51].)