(July 17, 2006) California Chamber of Commerce President Allan Zaremberg released the following statement Friday on the recent Proposition 64 ruling in Pfizer Inc., v. Superior Court. The Chamber, jointly with The Civil Justice Association of California, California Manufacturers and Technology Association and California Bankers Association, filed an amicus curiae brief in the appeal of a lower court ruling that the business and legal associations believed ignored or misapplied Prop 64.

“This is a victory for California businesses — and the voters — in the battle against frivolous lawsuits. The Chamber, in its amicus curiae brief, argued that overly broad class actions brought under California’s Unfair Competition Law were unfairly targeting businesses.

“Before voters overwhelmingly approved Chamber-supported Proposition 64 in November 2004, California’s Unfair Competition Law allowed individuals to file lawsuits against businesses even though the individual had suffered no harm or injury — indeed, the plaintiff did not even have to be a customer of or have any connection to the business.

“Even after Proposition 64 was enacted, businesses were forced to defend themselves against frivolous class actions, such as the one in Pfizer, in which persons were allowed to be a part of the lawsuit without showing that they had actually used the product or suffered any injury.

“The most recent appellate court ruling in Pfizer Inc., v. Superior Court (Galfano) preserves the intent of the voters and will help protect California businesses against frivolous UCL lawsuits. The court held that Proposition 64 required not only the named plaintiff but also all members of a class action to have suffered actual injury. In Pfizer, the lower court allowed anyone who had purchased the product in California during a specified six-month period to be part of the class action. The Court of Appeal aptly ruled that the class was ‘plainly overbroad’ because Proposition 64 requires that all class members must have suffered injury in order to be a part of the class.

“A business that causes injury to a consumer through an unfair practice must be held accountable by the law. This ruling affirms the intent of the voters that a consumer must have suffered an actual injury in order to seek legal remedy – clearly an appropriate requirement.”

Staff Contact: Erika Frank