Just over a year ago, following numerous scandals about law firms’ filing of mass shakedown suits based on California’s s. 17200 unfair-competition law (UCL), the state’s voters curtailed somewhat the law’s extortive potential by requiring that actual harm to a complainant be shown. Last month, a California appeals court gave the nod to a second, potentially powerful way of restraining unwarranted s. 17200 suits, namely countersuits from outraged defendants. As Kimberly Kralowec notes (Dec. 20), “the Court of Appeal held that the litigation privilege did not bar a suit against lawyers accused of filing Trevor-like ‘shakedown’ suits under the former UCL. [The Trevor Law Group was the most notorious filer of shotgun UCL suits — ed.] In a now-familiar irony, the lawyers were themselves sued for violating the UCL, as well as for intentional interference with prospective economic advantage.” The case (Word document format) is American Products Co. v. Law Offices of Geller, Stewart & Foley, LLP.
Tom Leykis’s highly successful Westwood One radio show is geared to reach men 25-34, an advertiser-coveted demographic. When Marty Ingels, a 67-year-old talent agent and former sitcom actor (1962’s I’m Dickens, He’s Fenster) called in to the show, he was eventually put on the air, but Leykis launched into a series of japes poking fun at his age. Ingels proceeded to sue under California’s super-broad Unruh civil rights act and its equally super-broad s. 17200 unfair competition law, but an appeals court has now agreed with the broadcaster’s request to throw out the suit as violative of the state’s SLAPP statute, which is aimed at restricting some lawsuits that threaten free speech. (Kenneth Ofgang, “C.A. Rejects Age Bias Suit Over Exclusion From Radio Talk Show”, Metropolitan News-Enterprise, May 31; Ingels v. Westwood One, opinion in PDF format courtesy FindLaw; Silicon Valley Media Law Blog, May 26).
Animal-rights extremist group PETA has failed in its effort to invoke California’s s. 17200 unfair-practices act to suppress a state advertising campaign characterizing California dairy products as coming from “happy cows”. Without comment, the state Supreme Court has denied review of an appeals court decision throwing out the lawsuit, which had held that official government activity (in this case that of the state’s farmer-funded milk advisory board) is not covered by the statute (see Nov. 30, 2004 and Jan. 16, 2005). (Bob Egelko, “State justices refuse PETA a hearing on the life of cows”, San Francisco Chronicle, Apr. 21).
California’s s. 17200, while handy in kneecapping private businesses which try to defend themselves in public controversies, can’t be used to silence speech by government: “An animal rights group’s challenge to a ‘Happy Cows’ advertising campaign by a state advisory board was rejected by a California appeals court in San Francisco today. The Court of Appeal said that a government entity can’t be sued for false advertising under the state’s Unfair Business Practices Act.” (“Animal rights group loses lawsuit against ‘Happy Cows’ commercial”, San Mateo County Times, Jan. 12; Mike McKee, “PETA Loses Suit Over California Cow Ads”, The Recorder, Jan. 13)(see Nov. 30). Update Apr. 23: California Supreme Court denies review.
One of the most justly unpopular of animal-rights groups is hoping to exploit the speech-suppressing potential of the California law invoked in Nike v. Kasky: “People for the Ethical Treatment of Animals Inc. accused the California Milk Advisory Board of violating the state’s unfair competition law by portraying an idyllic lifestyle for California dairy cows while knowing they endure a “harsh, uncomfortable and often painful existence.” The group is appealing a San Francisco judge’s ruling that the law’s false-advertising provisions cannot be invoked against a governmental entity such as the milk board. (Mike McKee, “PETA Cries Over Cow-Filled Milk Board Ads”, The Recorder, Nov. 18). For more on Nike v. Kasky, see Jul. 1, Jul. 9, Sept. 14, 2003. (Update Jan. 16, 2005: appeals court rules against PETA.)
As readers of this site know, voters in six states are considering legal-reform initiatives on today’s ballot. At my other website, the Manhattan Institute’s PointOfLaw.com, I’m planning to post regularly updated live coverage tonight of election returns on the measures, with special attention to any instances where the vote totals prove to be close. (I might also post the odd comment on other races of interest.)
The ballot measures are: Florida’s Amendment 3 (limiting lawyers’ med-mal fees), lawyer-sponsored Amendment 7 (removes confidentiality of medical peer review) and Amendment 8 (strips licenses of doctors who lose three malpractice verdicts); Wyoming’s Amendments C and D (authorizes legislative limits on med-mal awards); Oregon’s Measure 35 (limits med-mal awards); Nevada’s Question Three (limits med-mal awards) and lawyer-sponsored Questions Four (undercuts med-mal reform) and Five (forbids legislative reductions of liability); Colorado’s lawyer-sponsored Amendment 34 (expands right to sue over alleged construction defects), and California’s Proposition 64 (narrows scope of s. 17200 “unfair competition” law).
The timing: Florida polls close at 8 pm EST, Colorado and Wyoming at 9 pm, Nevada at 10 pm, and California and Oregon at 11 pm. I’m in the Eastern time zone, and intend to stay up until 2 am (11 pm Pacific) if that’s needed to follow any still-unresolved contests.
How readers can help: I’ll have access to standard online sources that cover these sorts of votes (big-city papers, Secretary of State websites) but in the past those sources have sometimes been slow to post totals, especially on “down-ballot” issues. I won’t have much access to local broadcast sources, for the most part. If you’ve got fresh news on your state to report, such as a local news organization’s calling a ballot contest one way or the other, email me at editor (at) pointoflaw – dotcom.
Once again, the liveblogging tonight will be going on at Point of Law, not here. [cross-posted from Point of Law, with slight changes][bumped 2:30 pm]
More about the Magna Carta for California bounty-hunters known as the Unfair Competition Law or s. 17200, which Golden State voters have a chance to rein in tomorrow by approving the much-needed Proposition 64:
* Attorney Harpreet Brar, whose law firm of Brar & Gamulin was among those to arouse public outrage in the shakedown-lawsuit scandal of 2002-03, has been ordered to pay nearly $1.8 million for filing shoddy lawsuits against small businesses and seeking to settle them quickly for cash (see Aug. 20, 2002) (various news sources, via Legal Reader, Oct. 20);
* Justice David Sills’s spirited dissent in the “Six Screws” case in June (mentioned in my Friday WSJ piece) can be found, along with the majority opinion, here. An excerpt from Sills’s opinion to illustrate the flavor:
What is the difference between the $3 million attorney fees award here and the petty shakedowns which made the Trevor Law Group infamous in Southern California? Nothing but the size of the law firm and its target. As this court noted in People ex rel. Lockyer v. Brar (2004) 115 Cal.App.4th 1315, 1316-1317: “The abuse is a kind of legal shakedown scheme: Attorneys form a front ‘watchdog’ or ‘consumer’ organization. They scour public records on the internet for what are often ridiculously minor violations of some regulation or law by a small business, and sue that business in the name of the front organization.”
Thus, if the Trevor Law Group sues an auto body shop over not having its license up to date, that is an abuse of the unfair competition law. But if a more established law firm sues a big corporation over an equally trivial putative violation — it is rewarded with $3 million in fees. The net result is to bless the same kind of abuse in which the Trevor Law Group engaged — looking for a hypertechnical violation of some law by a California business and then going after that business under section 17200 as a profit-making venture — with appellate holy water.
* Rutan & Tucker attorney Layne H. Melzer has published a succinct guide to the headaches s. 17200 can inflict on an unwary California businessperson (“A Step Toward Disarming California’s ‘Business Practice Bandits'”, undated, at Rutan site (PDF))
* On the other hand, as we mentioned Jul. 7, there’s a whole blog about s. 17200, written by a class action lawyer who has filed many cases using the law. She has published on the blog a description and defense of the law and a post in opposition to Prop 64. (Fixed 11/1 to correct description of blog’s author and to add last-mentioned link.)
* Tim Sandefur (Oct. 28) examines allegations that Prop 64 would impair the enforcement of environmental laws.
* According to the latest Field Poll (Oct. 30, PDF), proponents of Prop 64 have been gaining momentum as the word gets out about the measure. In late September the proposition was behind by twelve points, 26 to 38 percent. Now the deficit has been shaved to five points, 37 percent No and 32 percent Yes, with a gigantic 31 percent of likely voters still undecided. And Gov. Schwarzenegger has started storming the state at rallies to promote his “road trip to reform” which includes a Yes vote on 64, further improving the measure’s chances if its supporters can be made to turn out at the polls.
I’ve got an op-ed in today’s Wall Street Journal (Walter Olson, “Stop the Shakedown”, Oct. 29) discussing ballot measures that voters will decide in six states next Tuesday on litigation reform. For more on California’s s. 17200 “unfair competition” law, discussed in the second half of the piece, follow this link; for more on malpractice law, see our medical liability pages (latest/ earlier).
Following revelations that some Kryptonite bicycle locks can be easily picked, the maker has offered to replace all of the locks with new ones free from the flaw. This has however not mollified class action lawyers who’ve been rushing to sue the firm. “What if people don’t want a Kryptonite lock anymore?,” asks Darrell Palmer, one of two lawyers who filed would-be class actions in San Diego County Superior Court. Company spokeswoman Donna Tocci said that the newly revealed security issue “is not just a Kryptonite concern. Anything with a tubular cylinder — vending machines, soda machines, ignition systems, coin-operated laundry and other security products — could be a concern.” And indeed, lawyers pursuing intended class actions (and s. 17200 actions in California) have been suing other makers of U-locks as well, including Master Lock. (Pam Smith, “Plaintiffs Firms Lock Onto Kryptonite”, The Recorder, Sept. 28).
If you’re not reading our sister site PointOfLaw.com, you’re missing out on a lot. I’ve been doing about half my blog writing over there, on topics that include: a powerful new St. Louis Post-Dispatch investigation of asbestos litigation in Madison County, Ill. (here, here and here, with more to come, and note this too); the busy borrowings of Harvard’s Larry Tribe; when “not-for-profits” organize employment suits; Erin Brockovich’s respectability; crime without intent; experts and the CBS scandal; stay open through a hurricane, go to jail; suits over failure to put warnings on sand (yes, sand); West Virginia legal reform; Merrill Lynch/Enron trial; Hayek and the common law, reconsidered; getting creative about tapping homeowners’ policies; AdBusters sues to have its ads run; plaintiff’s lawyers represent criminal defendants to put drugmakers behind the eight ball; update on the law firm that competes on price; Spitzer and investors; Ohio med-mal crisis (and more); a welcome Schwarzenegger veto; dangers of firing your lawyer; ephedra retailer litigation; churchruptcies (if banks can do it…); and hardball in nonprofit hospital litigation.
Plus Ted Frank on tort reform in Mississippi and Jim Copland on California’s Proposition 64 (which would reform the notorious s. 17200 statute); the federal tobacco trial and Boeken; gender bias at work; and Rule 11 revival.
Better bookmark PointOfLaw.com now, before you forget.