Back in February, I reported on Jolley v. Chase Home Finance, LLC, 213 Cal.App.4th 872 (2013), in which the Court of Appeal (First Appellate District, Division Two), applying the post-Cel-Tech formulation, held that a finding of "unfair" conduct could be predicated on an expression of legislative policy embodied in the Legislature's subsequent enactment of a bill outlawing the conduct.
In a recently-published opinion, another Division of the Court of Appeal (the Fourth Appellate District, Division One) disagreed with this part of Jolley. Aspiras v. Wells Fargo Bank, N.A., ___ Cal. App. 4th ___ (Aug. 21, 2013; pub. ord. Sept. 17, 2013).
The Aspiras opinion explains:
[I]n our view, use of the Legislature's enactment of laws against dual tracking as the underlying basis for a UCL cause of action where the assertedly unfair conduct occurred before January 1, 2018, as here, is to effectuate an improper retroactive application of the law. Where a plaintiff predicates a claim of an unfair act or practice on public policy, it is not sufficient to merely allege the act violates public policy or is immoral, unethical, oppressive or unscrupulous. (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1365.) Rather, this court on numerous occasions has held that to establish a practice is "unfair," a plaintiff must prove the defendant's "conduct is tethered to an underlying constitutional, statutory or regulatory provision, or that it threatens an incipient violation of an antitrust law, or violates the policy or spirit of an antitrust law." (Id., at p. 1366; Levine v. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1137; Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 940; Byars v. SCME Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134, 1147.)
Here, plaintiffs' operative complaint fails to state a claim under the unfairness prong of the UCL because they cannot allege Wells Fargo's alleged dual tracking, when it occurred in 2010, offended a public policy tethered to any underlying constitutional, statutory or regulatory provision. (Durell v. Sharp Healthcare, supra, 183 Cal.App.4th at p. 1366.) The trial court properly sustained Wells Fargo's demurrer to that cause of action without leave to amend.
Slip op. at 19-20.
This case might be a good one for Supreme Court review. The opinion not only creates a split in authority with Jolley (and, in doing so, articulates principles inconsistent with Rose), but also appears to squarely present the three-way split on the definition of "unfair." The Court applied the post-Cel-Tech formulation, found the allegations inadequate, and ended its analysis. Under the pre-Cel-Tech formulation, which the panel declined to consider, the outcome might have been different. I think that's what it will take for the Supreme Court to accept a case presenting the split. What I can't tell from the opinion is whether the argument has been preserved; possibly, the plaintiffs conceded that the post-Cel-Tech formulation applied.