Yesterday's post concerned discussed Lagrisola v. North American Financial Corp.,  2023 WL 7273708 (Nov. 3, 2023), in which the Court of Appeal held that a borrower had failed to plead a cause of action against an unlicensed lender under Section 22751 of the California Financial Code.  The plaintiffs in that case also asserted actions for violation of Section 17200 of the California Business & Professions Code which is often referred to as the Unfair Competition Law or UCL.  

No Harm, No Standing

In an opinion by Justice Julia C. Kelety, the Court of Appeal found that the plaintiffs lacked standing bring these UCL claims because  they had not established that they suffered an economic injury caused by an alleged unfair or unlawful business practice of the defendant.  These requirements were imposed in 2004 by the voters approval of Proposition 64.  The Court of Appeal noted that the plaintiffs had not alleged that they did not want a loan, that they paid too much for their loan, or that a licensed lender would have provided the same loan at a lower price.  Although the plaintiffs alleged that they would not have agreed to the loan had they known the lender was unlicensed, the Court of Appeal found that the plaintiffs had not pointed to any statement or representation by the defendant about its license status.  The Court of Appeal's decision was not unanimous, however.  In a dissenting opinion Justice William S. Dato argues that the defendant's failure to disclose its license status was a material omission and that it was sufficient for the plaintiffs to allege that they would not have entered into the loan had they known that the lender was unlicensed.