Thursday, February 27, 2003
Lockyer Sues Trevor Law Group Under Statute It Allegedly Abused
From Staff and Wire Service Reports
Attorney General Bill Lockyer yesterday cited a decades-old consumer protection law to sue Trevor Law Group for abusing that very statute.
The Beverly Hills firm used California’s Unfair Competition Law, Business and Professions Code Sec. 17200, to sue thousands of people, seeking millions of dollars in settlements.
“There’s some delicious irony in using 17200 against people who are abusing it,” Lockyer said after filing the lawsuit in Los Angeles Superior Court. The law allows private attorneys to act on behalf of the public to sue businesses that engage in price-fixing, false advertising or other unfair business practices.
Critics say the law fuels frivolous lawsuits because it lets attorneys sue even if the business did nothing illegal, and legislative efforts to rewrite the law are pending.
“The Trevor Law Group operates a shakedown operation designed to extract attorneys fees from law-abiding small business owners,” Lockyer said. “With its unlawful practices, the Trevor Law Group has abused one of the state’s most important consumer protection statutes and dishonored attorneys.”
No one at the Trevor Law Group would comment yesterday, but last month the firm’s Shane C. Han said the suits that were filed “put unscrupulous businesses on notice.”
The consumer protection action names Han and attorneys Damian Trevor and Allan Hendrickson as defendants, and wants the law firm to drop all the suits and pay restitution of money the defendants made as a result of the alleged violations, as well as civil penalties of $1 million.
According to the complaint, Trevor Law Group has filed 22 lawsuits naming as defendants more than 2,200 auto repair shops, more than 1,000 restaurants and markets and about 210,000 “does.”
Trevor Law filed the actions based on notices of regulatory violations they found on government agency Web sites, which regulators deemed insufficient to warrant disciplinary action, according to the attorney general’s office. Shortly after filing the suits, Trevor Law would send form letters to the businesses, telling them it would cost anywhere from $6,000 to $26,000 for a quick settlement.
One settlement offer, printed on red paper and obtained by The Associated Press, read: “Either pay even more money to fight in court or settle out of court and get on with business.”
The Consumer Enforcement Watch Corp., a plaintiff in many of the suits Trevor Law filed, is a defendant in this one. The complaint alleges that the businesses targeted by the defendants were falsely told, in form letters from the law firm, that settling the claims would protect them from similar lawsuits filed by other plaintiffs.
Further, the complaint alleges, Trevor Law and Consumer Enforcement Watch demanded the settlements be kept secret from the public, whose interests the defendants purported to serve. Trevor Law and Consumer Enforcement Watch are also accused of entering into an illegal agreement which called for the firm to share with some of the money it received from settlements with the for-profit corporation.
In a related development, State Bar President James Herman invited lawyers and advocates to a seminar on Sec. 17200 at the State Bar’s Los Angeles office this weekend. He did not mention the Lockyer suit in his release, but noted that the law “has become highly controversial in recent months due to an extraordinary number of lawsuits filed by a handful of law firms—many against minority-owned small businesses.”
“While outraged citizens and legislators are calling the suits frivolous and the filers extortionists, many recognize that attorneys working in the public interest have successfully used the law for its intended purpose, and that reform is in order.”
The program, sponsored by the State Bar and its Antitrust & Unfair Competition Law Section, will be held Saturday from 9:30 a.m.—12:30 p.m. The bar’s offices are located in the Transamerica Building at 1149 S. Hill Street, and the seminar is open to all State Bar members and “public advocates,” although Herman asked for RSVPs to firstname.lastname@example.org.
The State Bar announced last December that it had launched an investigation after Assemblywoman Judy Chu, D-Monterey Park, and others said the firm targeted businesses owned by immigrants and non-English speakers. Chu said that 270 of the defendants were from her district, and that she had urged them to seek legal counsel rather than settle.
The State Bar is expected to complete its investigation by mid-April.
Assemblyman Lou Correa, D-Santa Ana, congratulated the attorney general. Trevor Law Group is a firm of “two-bit shakedown lawyers who have been extorting my constituents,” he said in a statement.
Assembly Judiciary Committee Chair Ellen Corbett, D-San Leandro, who held hearings on the matter in January, also praised Lockyer. She added in a release that she was “continuing to work with the Attorney General and my legislative colleagues to determine what, if any, additional actions are needed to further protect Californians from this type of abuse.”
Lockyer said his office was continuing to investigate four other law firms and their named-plaintiff organizations for possible abuses of Sec. 17200. He named Brar & Gamulin of Long Beach and Consumer Watchdog; Callahan, McCune & Willis of Tustin and Citizens for Fair Business Practices; Brian Kindsvater of Sacramento and Consumer Action League; and David Byers of Sacramento and Californians for Fair Business Practices.
Copyright 2003, Metropolitan News Company