Wednesday, May 19, 2004
Measure Targeting ‘Shakedown’ Suits Qualifies for Ballot
By a MetNews Staff Writer
An initiative measure that proponents say targets lawsuits used by unscrupulous attorneys to “shake down” businesses has qualified for the November ballot, its sponsors said Monday.
The measure would amend Business and Professions Code Sec. 17204 to require that the plaintiff in an unfair competition suit establish standing by showing he or she has “suffered injury in fact and has lost money or property” as a result of the challenged practice. The restriction would not apply to suits brought by the state attorney general or by local prosecutors.
Californians to Stop Shakedown Lawsuits said it has been notified by the Secretary of State’s Office that the measure has qualified for the ballot. The group, which calls the measure the “Stop Shakedown Lawsuits Initiative,” says the amendment would “close a legal loophole” in state unfair competition law.
But a spokesperson for a consumer group said yesterday the measure is backed by big corporations and would block the “vast majority of environmental suits.”
Carmen Balber of the Foundation for Taxpayer and Consumer Rights said it is “next to impossible to find an injured plaintiff who’s lost money or property when you’ve polluted their water or poisoned their air.” Environmental litigation is frequently brought under the unfair competition statute, which permits injunctive relief upon a showing that a business practice violates any law, Balber explained.
She warned that while the measure “sounds perfectly logical,” it would take the bite out of consumer protection law by barring litigation intended to “prevent a harm from happening.”
“That’s really the power of this law,” Balber said.
She cited litigation against grocery giant Safeway over the company’s alleged practice of changing expiration dates on meat products. That suit might never have been brought if public interest litigators were required wait until they could find someone who had eaten the potentially unsafe meat, become sick, and accumulated medical bills, Balber declared.
Safeway is among the measure’s backers, she added.
Allan Zaremberg, president of the California Chamber of Commerce and CSSL co-chair, said in a statement that the state’s small businesses “have been held hostage by the threat of frivolous lawsuits for too long and they have cost consumers and working families too much.”
The group’s Web site cites, among other alleged abuses, suits against auto repair and body shops. Attorneys with the Trevor Law Group were forced to resign from the State Bar last year after Attorney General Bill Lockyer sued them for a series of suits against Orange County businesses allegedly aimed at forcing quick settlements under which most of the money was pocketed by the lawyers.
Outrage over the attorneys’ practices led to proposals for reforming unfair competition statutes, but the Legislature adjourned without enacting any of them.
The ballot measure also provides that penalties collected by the Attorney General or prosecutors in unfair competition suits must be used for the enforcement of consumer protection laws, and would make it more difficult to bring unfair competition actions on behalf of groups of similarly situated plaintiffs.
Copyright 2004, Metropolitan News Company