New UCL "unfair" prong opinion: Aspiras v. Wells Fargo Bank, N.A.

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 oflegislative policy embodied in the Legislature's subsequent enactment ofa 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 lawsagainst dual tracking as the underlying basis for a UCL cause of action wherethe assertedly unfair conduct occurred before January 1, 2018, as here, is toeffectuate an improper retroactive application of the law.  Where a plaintiff predicates a claim of anunfair act or practice on public policy, it is not sufficient to merely allegethe act violates public policy or is immoral, unethical, oppressive orunscrupulous.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1365.)  Rather, this court on numerous occasions hasheld that to establish a practice is "unfair," a plaintiff must provethe defendant's "conduct is tethered to an[] underlying constitutional,statutory or regulatory provision, or that it threatens an incipient violationof an antitrust law, or violates the policy or spirit of an antitrustlaw."  (Id., at p. 1366; Levinev. Blue Shield of California (2010) 189 Cal.App.4th 1117, 1137; Scripps Clinic v. Superior Court (2003) 108 Cal.App.4th 917, 940; Byarsv. SCME Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134, 1147.) 

Here,plaintiffs' operative complaint fails to state a claim under the unfairnessprong of the UCL because they cannot allege Wells Fargo's alleged dualtracking, when it occurred in 2010, offended a public policy tethered to anyunderlying constitutional, statutory or regulatory provision.  (Durell v. Sharp Healthcare, supra, 183 Cal.App.4th at p.1366.)  The trial court properlysustained Wells Fargo's demurrer to that cause of action without leave toamend.

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.