Class Action

Ninth Circuit "unlawful" prong decision: Shroyer v. New Cingular Wireless Services

By Kimberly A. Kralowec

I have not previously reported on Shroyer v. New Cingular Wireless Services, 606 F.3d 658 (9th Cir. 2010), issued in May and amended in September, in which the Ninth Circuit addressed the UCL's "unlawful" prong:

In his complaint, Shroyer alleged that New Cingular violated the common law of unfair competition and breached his contract. These practices alone do not amount to a violation of the ?unlawful? prong of § 17200; Shroyer must also allege that New Cingular engaged in a business practice ?forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made.? Saunders v. Superior Court, 27 Cal. App. 4th 832, 838-39 (Cal. Ct. App. 1994). In other words, a common law violation such as breach of contract is insufficient. See Allied Grape Growers v. Bronco Wine Co., 203 Cal. App. 3d 432, 450-54 (Cal. Ct. App. 1988) (finding a § 17200 violation only after finding three violations of the California Food and Agriculture Code); see also Nat?l Rural Telecomms. Coop. v. DIRECTV, Inc., 319 F. Supp. 2d 1059, 1074-75 (C.D. Cal. 2003) (holding that a violation of common law can support a § 17200 claim, provided that the conduct is also unlawful, unfair, or fraudulent). Because Shroyer does not go beyond alleging a violation of common law, he fails to state a claim under the unlawful prong of § 17200.

Slip op. at 14421 (emphasis added). Given the emphasized language that the panel quoted from the Saunders decision (which finds support in many other California appellate decisions), I'm not sure how the panel could then conclude that a common-law violation cannot support a UCL "unlawful" prong claim.  The other cases the panel cites provide scant support, and the case law in California is generally to the contrary.

Full post as published by The UCL Practitioner on January 19, 2011 (boomark / email).