California Business and Professions Code Section 17203 - Interpretation

Business and Professions Code Section 17203 provides: "Any person who engages, has engaged, or proposes to engage in unfair competition may be enjoined in any court of competent jurisdiction. The court may make such orders or judgments, including the appointment of a receiver, as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition, as defined in this chapter, or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition. Any person may pursue representative claims or relief on behalf of others only if the claimant meets the standing requirements of Section 17204 and complies with Section 382 of the Code of Civil Procedure, but these limitations do not apply to claims brought under this chapter by the Attorney General, or any district attorney, county counsel, city attorney, or city prosecutor in this state." In Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, the Court reaffirmed its rejection of the argument that the general grant of equitable authority in section 17203 implicitly permitted a disgorgement remedy. (29 Cal.4th at p. 1147.) Instead, the court found that because "there was nothing in the express language of the statute or its legislative history indicating that the Legislature intended to provide such a remedy, the remedy was not available." (Ibid. concluding a court is not authorized to order a defendant to disgorge all profits to a plaintiff who lacked an ownership interest in those profits.) In reaching its decision in Korea Supply, the court looked to the language of section 17203 and the policy objectives underlying the statute and found it "clear that the equitable powers of a court are to be used to 'prevent' practices that constitute unfair competition and to 'restore to any person in interest' any money or property acquired through unfair practices. ( 17203.) While the 'prevent' prong of section 17203 suggests that the Legislature considered deterrence of unfair practices to be an important goal, the fact that attorney fees and damages, including punitive damages, are not available under the UCL is clear evidence that deterrence by means of monetary penalties is not the act's sole objective. A court cannot, under the equitable powers of section 17203, award whatever form of monetary relief it believes might deter unfair practices. The fact that the 'restore' prong of section 17203 is the only reference to monetary penalties in this section indicates that the Legislature intended to limit in individual private actions brought under the UCL the available monetary remedies under the act." (Korea Supply, supra, 29 Cal.4th at pp. 1147-1148 & fn. 6.)