(October 8, 2004) Despite 10 years of proposed reforms, the Legislature has consistently failed to stop shakedown lawsuits and missed numerous opportunities to close the legal loophole that allows for this legal extortion.

Meanwhile a handful of unprincipled lawyers are abusing consumer protection laws by shaking down thousands of California businesses each year — without clients or any evidence of harm.

To stop these extortion lawsuits, the California Chamber of Commerce and a broad-based coalition of more than 1,000 small and large employers, consumers, taxpayers, elected officials and associations have brought reasonable, responsible reforms to the voters with Proposition 64.

Governor Arnold Schwarzenegger has urged voters to support Proposition 64 to stop shakedown lawsuits and keep the momentum of California’s economic recovery going in the right direction.

Trial lawyers, who can generate enormous fees under the statute, argue that Proposition 64 will end consumer and environmental protection. That’s simply wrong.

Commonsense Reform
Proposition 64 is a simple commonsense reform that will carve out abusive frivolous lawsuits while enhancing funding for consumer protection efforts.

The initiative takes a targeted approach to eliminating shakedown lawsuits by merely requiring a private attorney to actually have a client who has been harmed before filing a lawsuit. That means the right of every consumer who has been harmed or suffered a financial loss is protected.

Proposition 64 also increases the ability of public officials (the attorney general, district attorneys and some city attorneys) to enforce California’s consumer and environmental protection laws by dedicating more funding to these efforts.

This reform keeps California in the forefront of consumer protection in a reasonable way.

Environmental Protection
Contrary to opponents’ claims, Proposition 64 will not prevent enforcement of the important laws that protect our environment, including the Clean Water Act, Clean Air Act, Proposition 65 and the California Environmental Quality Act.

In fact, a review of cases by an experienced environmental attorney and the former legislative counsel of California found no significant environmental victory on behalf of a citizen group was won because it used the law Proposition 64 seeks to fix.

End Frivolous Lawsuits
Proposition 64 will simply stop the sort of frivolous lawsuits that unscrupulous attorneys have used to disrupt all types of businesses, including many small operations. For example:

• Personal injury lawyers sued a pizzeria owner twice for minor health code violations that the Los Angeles County Department of Health Services already had cited and corrected. The violations were so slight the restaurant still received the highest health rating.
• One lawyer sued a large number of nail salons for using the same bottle of nail polish on more than one customer, although the state Board of Barbering and Cosmetology considers this a standard industry practice.
• A plaintiffs’ lawyer formed an unincorporated association consisting of himself, his girlfriend, his paralegal and his paralegal’s wife to sue a national direct marketing company over its handling and shipping charges and demanded more than $20 million in “restitution” be paid to his association, and not a dime to consumers.
• Lawyers demanded thousands on behalf of the “general public” because a homebuilder used the term “APR” instead of spelling out “Annual Percentage Rate” in its advertisement.

Yes on Proposition 64
The commonsense reforms in Proposition 64 can put a stop to outrageous lawsuits like these and enable businesses to focus on building their companies and jobs rather than fighting costly litigation.

At the same time, Proposition 64 will protect consumers’ right to sue if they have truly been harmed and will boost the ability of state and local public officials to enforce consumer and environmental protection laws.

All that’s needed is for voters to say “yes” to Proposition 64 on November 2.

Allan Zaremberg is president and chief executive officer of the California Chamber of Commerce and co-chair of Californians to Stop Shakedown Lawsuits, the broad-based coalition working to win passage of Proposition 64. For more information on Proposition 64 or to join the coalition, please visit www.yesprop64.org.