In West v. JPMorgan Chase Bank, N.A., ___ Cal.App.4th ___ (Mar. 18, 2013), the Court of Appeal (Fourth Appellate District, Division Three) nicely summarized the three-way split in authority on "unfair" conduct in UCL consumer actions:
Several definitions of “unfair” under the UCL have been formulated. They are:
1. “An act or practice is unfair if the consumer injury is substantial, is not outweighed by any countervailing benefits to consumers or to competition, and is not an injury the consumers themselves could reasonably have avoided.” (Daugherty v. American Honda Motor Co., Inc. (2006) 144 Cal.App.4th 824, 839.)
2. “‘[A]n “unfair” business practice occurs when that practice “offends an established public policy or when the practice is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.” [Citation.]’ [Citation.]” (Smith v. State Farm Mutual Automobile Ins. Co. (2001) 93 Cal.App.4th 700, 719.)
3. An unfair business practice means “‘the public policy which is a predicate to the action must be “tethered” to specific constitutional, statutory or regulatory provisions.’” (Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 940.)
Slip op. at 28. The Court held that the plaintiff's complaint adequately alleged that the defendant "engaged in unfair business practices under any of the three definitions," and that the trial court had improperly sustained the defendant's demurrer to the UCL cause of action. Id. at 29.