Also known as: unfair competition laws · unfair competition · UCL · § 17200 · B&P 17200
Written by attorneys · grounded in primary & secondary sources — see below
A body of state law that prohibits business practices causing injury to competitors or consumers through deception, misappropriation, or other unfair methods. The doctrine supplies a cause of action that federal courts may hear under supplemental jurisdiction when the claim shares a common nucleus of operative facts with a substantial federal copyright, patent, or trademark claim.
Spotlight Stage sues Horizon Arts Foundation in federal court for copying its production materials in a festival. Spotlight adds a state unfair competition claim alleging that Horizon used the copied materials to win an exclusive sponsorship. The federal court exercises supplemental jurisdiction over the state claim because both theories rest on the same acts of appropriation.
Metro Distributors engages in an illegal restrictive trade practice harming multiple competitors. A rival seeks an injunction for unfair competition. The court weighs the public interest in continued tax revenue and employment against the harm, recognizing that an injunction could affect the broader community even though the claim involves business torts.
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A federal court may exercise supplemental jurisdiction over the state claim when both arise from the same common nucleus of operative facts. The claims share a single controversy when the unfair competition theory rests on the same acts of appropriation that support the copyright claim.
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No. Once a federal court has original jurisdiction over a related federal claim, it may hear the state unfair competition claim without a separate jurisdictional ground so long as the claims form part of the same constitutional case or controversy.
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Courts balance community interests such as tax revenue, employment, and essential services against the need for relief. When an injunction would cause substantial public loss, those interests may weigh against granting the injunction even if the underlying conduct constitutes unfair competition.
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No. References to federal law that merely anticipate defenses or rebut expected arguments do not convert a state unfair competition claim into one arising under federal law. Jurisdiction depends on the face of the well-pleaded complaint.
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