(April 13, 2004) California Chamber-led coalition, Californians to Stop Shakedown Lawsuits, submitted sufficient signatures to the Secretary of State yesterday to qualify the unfair competition law reform initiative for the November Ballot.

The initiative will close the loophole in California’s Business and Professions Code section 17200 through which lawyers are able to file lawsuits mainly against small businesses and demand fees with no real client or proof of harm.

Reform of Section 17200 would amend the current code so that private lawyers could no longer file lawsuits without a client or proof of financial loss. The initiative will still protect consumers from unfair competition and deceptive advertising, as well as provide relief to businesses from the frivolous lawsuits.

”California is the only state in the U.S. that allows private attorneys to shakedown companies for fees when no one has been injured and no one has asked that a lawsuit be filed,” said Allan Zaremberg, President and CEO of the California Chamber of Commerce and co-chair of Californians to Stop Shakedown Lawsuits.  “Passage of this initiative is not only necessary to protect consumers and businesses, it is an essential component in California’s economic recovery.”

Legislative attempts to stop the law’s abuse have for years been blocked by the personal injury lobby, whose members hold seminars on using “17200” to build new law practice and extracting higher settlements.

This initiative would provide relief to the hundreds of large and small businesses in California that are being targeted by private lawyers using the shakedown process.  This measure will prohibit private lawyers from filing lawsuits and demanding 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.

For more information on this initiative pleas visit the Business Issues page of our website at www.calchamber.com, or the coalition website at www.stopshakedownlawsuits.com.