In Gabana Gulf Distribution, Ltd. v. GAP Intern. Sales, Inc., 2008 WL 111223 (N.D. Cal. Jan. 9, 2008), the Court (Judge Charles R. Breyer) held that a UCL "unlawful" prong claim may be predicated on violation of a common-law rule (specifically, breach of the implied covenant of good faith and fair dealing):
Because the Court has denied summary judgment to Gap on the breach of covenant claim, summary judgment must also be DENIED as to the § 17200 claim because Gabana may use the covenant claim as a predicate for § 17200 liability. Although the state of § 17200 jurisprudence is in rapid flux, California courts have not yet foreclosed common law theories--such as breach of the covenant of good faith--as a basis for actions pursuant to § 17200. See Mercado v. Allstate Ins. Co., 340 F.3d 824, 828 n. 3 (9th Cir.2003); Diaz v. Allstate Ins. Group, 185 F.R.D. 581, 595 (C.D.Cal.1998) ("[A]llegations of fraudulent and unfair business activity are sufficient to state a cause of action for relief under the UCA.").
As I explained in this prior post, such a holding is significant because few decisions have confirmed that an "unlawful" prong claim may be predicated on violation of a common-law rule (although plenty of published opinions say in general terms that violations of "court-made" law are actionable under the "unlawful" prong).