California’s Unfair Competition Law presents two threshold questions that are easy to conflate: who has statutory standing to assert the claim, and whether a federal court will exercise equitable power to award the requested relief. Assignment addresses the first question. Sonner addresses the second.
A bare assignment does not create UCL standing
After Proposition 64, a private UCL plaintiff must have suffered injury in fact and lost money or property as a result of the challenged conduct. In Amalgamated Transit Union, Local 1756 v. Superior Court, 46 Cal. 4th 993 (2009), unions attempted to prosecute UCL claims assigned to them by employees. The California Supreme Court held that the assignments did not satisfy the UCL’s standing requirement because the unions themselves had not suffered the required injury.
The practical rule is narrower and more precise than saying every economic interest connected to a UCL claim is categorically nonassignable: an assignment cannot be used to manufacture UCL standing in an assignee that does not independently satisfy Business and Professions Code section 17204. Allowing that result would circumvent the standing restrictions enacted by Proposition 64.
Read Amalgamated Transit Union, Local 1756 v. Superior Court.
State-law remedies and federal equitable power are different questions
The UCL authorizes injunctions and restitution, not compensatory damages. California courts describe those remedies as equitable and possess broad statutory discretion in fashioning them. Cortez v. Purolator Air Filtration Products Co., 23 Cal. 4th 163 (2000), for example, emphasizes both the UCL’s independent remedial scheme and the trial court’s broad equitable discretion.
Read Cortez v. Purolator Air Filtration Products Co.
Federal court adds another layer. In Sonner v. Premier Nutrition Corp., 971 F.3d 834 (9th Cir. 2020), the Ninth Circuit held that a federal court sitting in diversity must apply traditional federal equitable principles before awarding equitable restitution under the UCL or CLRA. A plaintiff seeking restitution for past harm therefore must show that an adequate legal remedy is unavailable.
That requirement is a rule governing the exercise of federal equitable power. It does not rewrite California’s UCL or convert the adequacy-of-remedy question into Article III subject-matter jurisdiction.
Read Sonner v. Premier Nutrition Corp.
Guzman shows why forum can change the result
The distinction became especially important in Guzman v. Polaris Industries Inc., 49 F.4th 1308 (9th Cir. 2022). There, the Ninth Circuit held that a damages remedy could be “adequate” for federal-equity purposes even though the plaintiff’s legal claim was time-barred. The federal court therefore could not award equitable UCL relief merely because the plaintiff had lost the ability to obtain damages.
At the same time, the court recognized that dismissal on this ground does not decide the merits of the UCL claim. California’s UCL has its own remedial and limitations framework, and the inability to proceed in federal equity does not necessarily extinguish a state-court UCL theory.
Read Guzman v. Polaris Industries Inc.
Practical implications
A UCL analysis should separate three questions at the outset:
1. Does the plaintiff personally satisfy section 17204, or is the theory improperly dependent on an assignment? 2. Is the requested monetary relief restitutionary rather than damages? 3. If the case is in federal court, why is the available legal remedy inadequate under Sonner?
Those questions can alter pleading, removal strategy, remedies, and forum choice even when the underlying alleged business practice is identical.
This article is for general informational purposes only and is not legal advice.