(January 6, 2003) The California Chamber of Commerce is urging businesses to help gather signatures to place the Stop Shakedown Lawsuits Initiative on the November 2004 general election ballot.

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The initiative would prohibit predatory trial lawyers from targeting businesses with frivolous lawsuits abusing the state’s unfair competition law. The initiative closes a loophole in California law that lets personal injury lawyers threaten shakedown lawsuits and demand attorneys' fees from businesses even though no one has been injured, damaged or misled, and no consumer or other business has asked a lawyer to file the lawsuit.

'California's economy and businesses cannot withstand the additional costs being brought against them by unscrupulous attorneys who exploit current law,' said Allan Zaremberg, Chamber president. '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 is sponsored by Californians to Stop Shakedown Lawsuits, a Chamber-led coalition. It amends the state unfair competition law, Business and Professions Code Section 17200, so that private lawyers can no longer file suits without clients and without evidence of harm or financial loss. It would also allow only public officials (the attorney general, district attorneys and some city attorneys) to file Section 17200 lawsuits on behalf of the general public.

Comprehensive reform of Section 17200 would provide substantial relief from frivolous lawsuits to California businesses, specifically to California's small businesses such as auto repair shops, convenience stores, nail salons, travel agents and restaurants, who have been the most recent victims of these costly lawsuits.

Unsurprisingly, the initiative campaign is running into substantial resistance from trial lawyers that benefit greatly from suing California businesses for alleged unfair competition law violations. These same trial lawyers in recent years have thwarted all legislative attempts to curtail shakedown lawsuits, and to close loopholes that have been exploited to cost businesses millions.

In response to the Stop Shakedown Lawsuits Initiative, trial lawyer groups and their ally organizations have filed eight anti-business initiatives intended to divert attention from the reform initiative and scare California businesses away from supporting the campaign.

One of the trial lawyer initiatives targets car dealers, who are among those hit hardest by costly abuse of the unfair competition law, because they have strongly supported the Stop Shakedown Lawsuits campaign. The remaining seven attack the business community as a whole by attempting to restore disgorgement of profits in lawsuits filed under the state unfair competition law (threatening all profits made by the business), which would essentially allow trial lawyers to drive up costs of such lawsuits substantially even when all a defendant’s victims cannot be located.

In spite of opposition from trial lawyers and others that benefit from shakedown lawsuits, the Chamber and coalition are committed to qualifying the Stop Shakedown Lawsuits Initiative for the November 2004 ballot. California businesses are encouraged to request petitions and aggressively collect signatures to ensure that Californians are given the opportunity to vote to stop shakedown lawsuits. To qualify the initiative, petitions bearing 373,816 valid signatures must be submitted. The campaign's goal is to gather 600,000 signatures by early April.

To request petitions, or for more information on the Stop Shakedown Lawsuits Initiative, visit: www.stopshakedownlawsuits.com.