Can "sophisticated" plaintiffs sue for UCL violations?
In a recent unpublished order, a federal district judge in Minnesota held that a "sophisticated business entity dealing at arm's length with a business associate" may not sue that business associate for violating the UCL because UCL claims must involve some sort of "public" or "consumer" harm. C.H. Robinson Worldwide, Inc. v. Ghirardelli Chocolate Co., 2004 WL 1630873, 2004 U.S. Dist. LEXIS 13943 (D. Minn. Jul. 19, 2004). That holding is very strange and seems entirely inconsistent with the text of the UCL and the caselaw interpreting it. The UCL permits a plaintiff to bring suit on behalf of itself alone and to seek redress for a single unfair business act. The statute does not require harm to the "public" or to "consumers." Indeed, the Supreme Court acknowledged in Cel-Tech that business competitors can sue each other for UCL violations. The C.H. Robinson order says there are no California decisions involving a UCL claim brought by a "sophisticated business entity," but Cel-Tech itself—in which cell phone retailers sued a cell phone service provider for unfair business practices—is a prime example of such a case.
- posted by Kim Kralowec @ 9:00 AM