The UCL Practitioner
Tuesday, June 22, 2004
Moradi-Shalal reaffirmed
In a decision handed down late last month, the Court of Appeal reaffirmed the rule that the UCL cannot be used to "end-run" Moradi-Shalal, which held that consumers have no private right of action against insurance companies who violate the Unfair Insurance Practices Act ("UIPA") (Ins. Code § 790 et seq.). Textron Fin. Corp. v. National Union Fire Ins. Co., 118 Cal.App.4th 1061 (May 20, 2004). The Textron court held that because "the specific allegations of wrongful conduct" were "the type of activities covered by the UIPA," no UCL claim based on those activities could proceed—as a matter of law. This rule, first announced in Safeco Ins. Co. v. Superior Court, 216 Cal.App.3d 1491 (1990), is an anomaly in 17200 practice. Ordinarily, any violation of law may form the basis of an unfair competition claim, regardless of whether the underlying law creates a private right of action. Fortunately, only the insurance industry enjoys this kind of exemption from UCL coverage.
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