In Goonewardene v. ADP, LLC, ___ Cal.App.4th ___ (Nov. 4, 2016), the Court of Appeal (Second Appellate District, Division Four) affirmed the trial court's dismissal of the plaintiff's FAL and UCL claims for lack of Prop. 64 standing and for other reasons. Slip op. at 45-53.
As for the FAL claim, the complaint alleged that the defendant made numerous false statements to the public, but did not allege that the plaintiff saw or relied on them for any reason. Id. at 47. (The plaintiff alleged that she worked for a company who hired the defendant to handle its payroll and wage statements.) The opinion discusses Kwikset at some length. See id. at 47-49.
The portion of the opinion discussing the UCL claim is more interesting. The opinion does not acknowledge the three-way split in authority on the definition of "unfair" conduct. Instead, it holds that the plaintiff failed to state a claim under the post-Cel-Tech "tethering" test, under which, in the words of this opinion, "the public policy necessary to establish an unfair practice must be closely tied to a statute." Slip op. at 50-51. The lack of a statutory tether defeated not only the "unfair" prong claim, but also the "unlawful" prong claim, to the extent predicated on non-statutory, common-law violations (including negligence and breach of contract). Id. at 51-52. (I think the latter holding was error, but it might not matter, because the opinion allows those common-law claims to proceed on their own. That said, it would be unfortunate if this opinion had the effect of eroding the broad scope of the UCL's "unlawful" prong as construed by the Supreme Court.)
As for the "fraudulent" prong claim, this failed for lack of allegations of reliance, and also because the complaint alleged no losses that could be recoverable from the payroll company as restitution. Id. at 52-53. The plaintiff allegedly lost wages because of the payroll company's misconduct, but the company "derived no benefit" from the lost wages. Id. (citing Bradstreet v. Wong, 161 Cal.App.4th 1440, 1444 (2008)). In other words, it's not the payroll company, but rather the employer, who owed the plaintiff any lost wages or penalties, and the payroll company had acquired no money from the plaintiff, either directly or indirectly, by means of its alleged payroll mistakes (or misrepresentations).