How To Prove A California Unfair and Deceptive Trade Practices – Below Cost Sales Claim

 

How To Prove A California Unfair and Deceptive Trade Practices - Below Cost Sales Claim

 

In California, a claim of Unfair and Deceptive Trade Practices – Below Cost Sales is defined as:

Below cost sales, also known as “predatory pricing,” refer to a pricing strategy in which a business deliberately sells products or services at a price lower than their production or acquisition cost. The primary goal of below cost sales is to undercut competitors and potentially drive them out of the market, thereby gaining a dominant position in the industry or marketplace.

It simply means:

Using unethical methods to gain business.

There are 4 elements of the claim:

  • Element 1. The defendant offered to sell or sold a product or service at a price that was below cost or gave away a product or service. A defendant is accused of selling a product or service for less than what it cost them to make or provide, or of giving it away for free, which can be seen as unfair competition in business practices.

    Facts that might support this element look like:

    * The defendant advertised a premium product at a price significantly lower than the cost of production, leading consumers to believe they were receiving a superior deal.
    * During a promotional event, the defendant sold a popular service at a price that was 30% below the market average, raising concerns about the sustainability of their pricing strategy.
    * The defendant distributed free samples of their product to attract customers, effectively undermining competitors who could not afford to match such giveaways.
    * Internal documents revealed that the defendant intentionally set prices below cost to eliminate competition in the local market.
    * The defendant’s pricing strategy included frequent discounts that consistently fell below the cost of goods sold, indicating a pattern of below-cost sales.

  • Element 2. The defendant’s purpose was to injure competitors or destroy competition. In a case about unfair sales practices, it must be shown that the defendant aimed to harm their competitors or eliminate competition by selling products at prices lower than their costs.

    Facts that might support this element look like:

    * The defendant consistently sold products at prices significantly lower than their cost, indicating an intent to undermine competitors’ market positions.
    * Internal communications revealed that the defendant aimed to drive competitors out of business by engaging in predatory pricing strategies.
    * The defendant’s pricing practices were accompanied by aggressive marketing campaigns targeting the customers of competing businesses.
    * Market analysis showed that the defendant’s below-cost sales coincided with the exit of several competitors from the market.
    * The defendant’s executives publicly stated their goal of achieving market dominance by eliminating competition through unsustainable pricing.

  • Element 3. The plaintiff was harmed. The plaintiff was harmed means that the person or business making the complaint suffered negative effects, like financial loss or damage to their reputation, because of the unfair or deceptive sales practices of another party, such as selling products at prices lower than what it costs to make them.

    Facts that might support this element look like:

    * The plaintiff experienced a significant decline in sales after the defendant began selling similar products at prices below cost.
    * The plaintiff lost a substantial number of customers who switched to the defendant due to the lower prices, impacting their revenue.
    * The plaintiff incurred additional marketing expenses to counteract the defendant’s below-cost sales strategy, straining their financial resources.
    * The plaintiff’s market share decreased by 20% within six months of the defendant’s pricing practices, demonstrating direct harm to their business.
    * The plaintiff was forced to lay off employees as a result of reduced profits stemming from the defendant’s unfair pricing tactics.

  • Element 4. The defendant’s conduct was a substantial factor in causing the plaintiff’s harm. The defendant’s actions played a significant role in causing the harm that the plaintiff experienced, meaning that what the defendant did directly contributed to the problems the plaintiff faced in the context of unfair sales practices.

    Facts that might support this element look like:

    * The defendant sold products at prices significantly below their cost, attracting a large number of customers away from competitors.
    * The plaintiff experienced a marked decrease in sales following the defendant’s below-cost pricing strategy, leading to financial losses.
    * The defendant’s pricing practices created an unfair competitive advantage, directly impacting the plaintiff’s market share.
    * The plaintiff’s inability to compete with the defendant’s pricing resulted in layoffs and reduced operational capacity.
    * The defendant’s actions were a direct response to the plaintiff’s market presence, indicating intent to harm the plaintiff’s business.

(See California Civil Jury Instructions (CACI), No. 3301. California Business and Professions Code Section 17200.)
If you’re representing yourself in court and plan to assert a claim of Unfair and Deceptive Trade Practices – Below Cost Sales, having a Personal Practice of Law at Courtroom5 is essential. You’ll need to make informed decisions about what to file at each phase of your case and prepare legal documents that are supported by thorough legal research and a strong analysis of the facts. Equip yourself with the tools and knowledge necessary to effectively navigate your case.

Prove Your CA Unfair and Deceptive Trade Practices – Below Cost Sales Claim

U.S. Civil Cases Only

Just a moment please.