Legislative failure to reform unfair competition law prompts filing
(October 23, 2003) Yesterday the Coalition Against Shakedown Lawsuits filed an initiative with the Attorney General's office to close the loophole that allows unscrupulous personal injury lawyers to file shakedown lawsuits under the state unfair competition law. Coalition members include the California Chamber of Commerce, Civil Justice Association of California, California Motor Car Dealers Association, and small businesses across the state.
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| Allan Zaremberg, California Chamber of Commerce president, opens a press conference announcing the Coalition Against Shakedown Lawsuits effort to place an initiative on the November 2004 ballot to reform the state’s unfair competition law. |
“California’s economy and businesses cannot withstand the additional costs being brought against them by unscrupulous attorneys who exploit current law,” said Allan Zaremberg, president, California Chamber of Commerce. “This initiative will level the playing field by bringing California law in line with other states, while still protecting consumers against unfair business practices.”
The initiative, to appear on the November 2004 statewide ballot, will amend the state unfair competition law, Business and Professions Code Section 17200, so that private lawyers can no longer file lawsuits without clients and without evidence of harm or financial loss.
Also, private lawyers will no longer be able to use Section 17200 to file “representative actions” on behalf of the general public; instead, they will be required to use the class action process that affords court supervision and protections for plaintiffs and defendants. District attorneys will continue to be able to use Section 17200 to protect the general public and business from business practice violations—in fact the initiative will dedicate more funding to this work.
“Year after year the Legislature has been unable to enact even modest legislation to close the 17200 loophole. Time and again, the Legislature has put personal injury lawyers ahead of businesses, jobs and the economy,” said John H. Sullivan, president of the Civil Justice Association of California. “Voters have a dim view of these lawyers’ money-driven agenda.”
Business owners from across the state have banded together to fight these frivolous lawsuits by supporting the reform initiative. Owners of auto repair shops, landscaping businesses, and representatives of the Latino business community have joined in the call for enacting reform on the November 2004 ballot.
“Our dealers are fed up with these abusive, predatory legal practices,” said Peter K. Welch, president of the California Motor Car Dealers Association and co-chair of Californians Against Shakedown Lawsuits. “This initiative provides common-sense reforms that will close the shakedown loophole.”
“Trial lawyers across the state have been targeting hard-working immigrants who are trying to achieve the American dream,” said Araceli Gonzalez, director of the National Latina Business Women Association. “It’s about time the law protect consumers and businesses and not the trial lawyers’ bank accounts.”
Petitions will be available from the coalition web site www.stopshakedownlawsuits.com.
Staff Contact: Sara Lee