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- Title
What Is "Unfair" Conduct in a Franchise Case Under California's Unfair Competition Law?
- Authors
Adams, Kevin A.
- Abstract
California's Unfair Competition Law (UCL)[1] is intended to foster "fair business competition" by curtailing "'anticompetitive business practices' as well as injuries to consumers."[2] At first glance, franchise practitioners may question the general applicability of the UCL to franchise disputes that involve neither antitrust nor consumer claims. The law in this area remains unsettled.[11] Because the typical franchisor-franchisee dispute does not involve competitors or consumers, courts have analyzed UCL "unfairness" claims under a myriad of tests. The UCL does not define which business practices are "unfair", and unlike the "fraud" and "unlawful" theories of liability, courts have struggled to come up with a workable test to identify "unfair" conduct reliably.[31] As explained later, in the aftermath of Cel-Tech, courts now use as many as four tests to evaluate allegedly "unfair" business acts and practices. The franchisees argued that the balancing test controlled.[82] Citing to the Ninth Circuit's decision in Lozano, the court recognized that it could "equally" apply either the tethering test or the balancing test when analyzing claims of "unfairness" under the UCL.[83] However, upon further examination, the court found "at least two reasons to prefer [the tethering test] over the old balancing test."[84] First, the Cel-Tech court's definition of the term unfair "should mean the same thing for all purposes as a matter of statutory construction.".
- Subjects
CALIFORNIA; UNFAIR competition; ANTITRUST law; LEGAL judgments; CIRCUIT courts; STATUTORY interpretation; JUDICIAL opinions
- Publication
Franchise Law Journal, 2021, Vol 40, Issue 3, p385
- ISSN
8756-7962
- Publication type
Article