In Jolley v. Chase Home Finance, LLC, ___ Cal.App.4th ___ (Feb. 11, 2013), the Court of Appeal (First Appellate District, Division Two) revived a variety of claims stemming from a lender's attempts to foreclose on a construction loan.
The Court had this to say about the UCL's "unfair" prong:
There is a split of authority on what constitutes an “unfair” practice. (Bardin v. DaimlerChrysler Corp. (2006) 136 Cal.App.4th 1255, 1260-1261.) Some cases hold an “unfair” practice is one that offends established public policy, that is immoral, unethical, oppressive, unscrupulous, or substantially injurious to consumers, or that has an impact on the victim that outweighs defendant’s reasons, justifications, and motives for the practice. (Pastoria v. Nationwide Ins. (2003) 112 Cal.App.4th 1490, 1498; Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 718-719; Podolsky v. First Healthcare Corp. (1996) 50 Cal.App.4th 632, 647.) Others, including at least one from our district (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 853-854), hold that the public policy which is a predicate to a claim under the “unfair” prong of the UCL must be tethered to specific constitutional, statutory, or regulatory provisions. (See also, Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 938.) Either way, unfairness is independently sufficient to state a claim under the statute. (Allied Grape Growers v. Bronco Wine Co. (1988) 203 Cal.App.3d 432, 451; see Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 [indicating that conduct may be “unfair” without being “unlawful”].)
Slip op. at 37-38. There is actually a three-way split in authority on the definition of "unfair" conduct in consumer actions. The so-called "Section 5" test asks whether "(1) the consumer injury is substantial; (2) the injury is not outweighed by any countervailing benefits to consumers or competition; and (3) the injury could not reasonably have been avoided by consumers themselves." Boschma v. Home Loan Center, Inc., 198 Cal.App.4th 230, 253 (2011).
In any event, the Jolley opinion goes on:
With respect to Chase’s own conduct, we have already decided that North’s statements may be construed as misstatements of fact, with possible liability for such conduct left to the trier of fact. That raises a triable issue as to “fraudulent.” We have also concluded that dual tracking has been alleged and supported by Jolley’s declaration. And while dual tracking may not have been forbidden by statute at the time, the new legislation and its legislative history may still contribute to its being considered “unfair” for purposes of the UCL. Summary adjudication of Jolley’s fifth cause of action was improper.
Slip op. at 38 (emphasis added). This is very interesting. Under the post-Cel-Tech formulation, a finding of "unfair" conduct can be predicated on an expression of legislative policy embodied in the Legislature's subsequent enactment of a bill outlawing the conduct.