In a recent unpublished opinion, Muranaka Farm, Inc. v. Huacuja, no. B183656 (Nov. 16, 2006), the Court of Appeal (Second Appellate District, Division Two), approved this UCL "unfair" prong jury instruction:
For purposes of statutory unfair competition law, conduct is unfair if the harm to the victim outweighs the utility of the conduct to the defendant.
Slip op. at 14 n.5. This jury instruction presumably derived from State Farm Fire & Cas. Co. v. Superior Court, 45 Cal.App.4th 1093 (1996), under which a UCL "unfair" prong claim is established if "the gravity of the harm to the alleged victim" outweighs "the utility of the defendant's conduct." Id. at 1103-04 (quoting Motors, Inc. v. Times Mirror Co., 102 Cal.App.3d 735 (1980)).
On appeal, the defendant argued that the narrower Cel-Tech formulation of "unfair" applied and that the instruction should have been different. The Court of Appeal held that (1) the defendant waived the argument by not raising it below, and that (2) any error was harmless because substantial evidence supported the jury's findings of liability for breach of fiduciary duty, conversion, and common law unfair competition, which in turn supported liability under the UCL's "unlawful" prong. Slip op. at 12-15. This part of the opinion is noteworthy because it amounts to explicit acknowledgment by an appellate court that a UCL "unlawful" prong claim may be predicated on a violation of common law (not just statutory law). (See this post for more on that issue.)
You may be wondering, as I did, why the UCL claim went to the jury at all. UCL claims are equitable in nature and are normally tried to the court. The Court of Appeal held that the defendant waived the issue by not raising it below and that any error was harmless:
Appellant further contends that the trial court improperly submitted respondent’s claim of statutory unfair competition under Business & Professions Code section 17200 (hereafter section 17200) to the jury. Respondent asserts that appellant waived this claim because he did not object to the statutory unfair competition claim being decided by the jury or demand, as he does now on appeal, that the trial court prepare a statement of decision for this claim. Appellant has not responded to respondent’s claim of waiver as to the submission of the statutory unfair competition claim to the jury. Thus, we consider this issue to be waived. In any event, there is no reason to believe that the trial court would have ruled differently than the jury on this claim, since it was based on the same facts supporting the jury’s findings of liability on the other causes of action. Therefore, we also find that any error in submitting this equitable claim to the jury was harmless.
Slip op. at 7 n.3. Thanks to the reader who emailed me about this unpublished opinion.