Companies may face litigation in California under the state’s Business and Professions Code Section 17200. This consumer protection code prohibits fraudulent, unfair and illegal business practices and actions.
Review the terms of this state law so you can avoid or defend your company against unfair business practices litigation.
Types of unfair business practices
While you may hear this law called California’s Unfair Competition Law, its broad provisions extend beyond the public understanding of the term unfair competition. Some of the business practices and actions considered unlawful under Section 17200 include:
- Misleading, untrue or deceiving advertisements
- Practices that cause consumers undue financial injury
- Oppressive, unethical, unscrupulous and immoral practices
- Deprivation of property or money owed to a consumer
- The diminishment of a consumer’s current or future interest in a property
- Intellectual property infringement
- Bait-and-switch marketing
- Price manipulation
Section 17200 lawsuits
If your company faces this type of lawsuit, the plaintiff must show that he or she has lost property or money as a result of unfair business practices. When the plaintiff is a private citizen, the judge may order an injunction to stop the unfair business practice and restitution up to the amount he or she lost because of these unfair actions. A government agency filing this type of lawsuit can also claim up to $2,500 per day in civil penalties. When the court issues an injunction, failing to cease the practices in question can result in fines of up to $6,000 per day.
Consumers have four years to file a lawsuit under California’s Section 17200. After that, you can request a dismissal of this type of claim as outside the statute of limitations.