Class Action

Recent federal UCL "safe harbor" decision: Williams v. Washington Mutual Bank

By Kimberly A. Kralowec

In Williams v. Washington Mutual Bank, 2008 WL 115097 (E.D. Cal. Jan. 11, 2008), the court (Judge William B. Schubb) had this to say about the Cel-Tech "safe harbor":

California's UCL restricts "any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue, or misleading advertising." Cal. Bus. & Prof.Code § 17200. The UCL " 'borrows' violations from other laws by making them independently actionable as unfair competitive practices." Korea Supply Co. v. Lockhead Martin Corp., 29 Cal.4th 1134, 1143 (2003). However, "[w]hen specific legislation provides a 'safe harbor,' plaintiffs may not use the general unfair competition law to assault that harbor." Cal-Tech [sic] Commc'ns, Inc. v. L.A. Cellular Tel. Co., 20 Cal.4th 163, 182-83 (1999); Schnall v. Hertz Corp., 78 Cal.App. 4th 1144, 1154 (2000). Therefore, plaintiff cannot assert a UCL claim if a federal or state law legalizes defendant's practice. See Augustine v. FIA Card Servs., N.A., 485 F.Supp.2d 1172, 1176 (E.D.Cal.2007) (stating that federal or state law can provide a safe harbor).

As discussed above, [T]ILA authorizes defendant's practice because defendant provides sufficient notice in its initial disclosures. Defendant's practice comes within the UCL's "safe harbor," thus negating plaintiff's ability to challenge the practice under the UCL. C[e]l-Tech Commc'ns, Inc., 20 Cal.4th at 182-83. Accordingly, the court must dismiss plaintiff's third cause of action.

Id. at *4-*5.

Full post as published by The UCL Practitioner on February 07, 2008 (boomark / email).