Recently in Proposition 64 Category

The federal Ninth Circuit Court of Appeals has unplugged a speculative class action filed against Apple by lawyers claiming iPod music players are defective by posing an unreasonable risk of hearing loss to its users.

The court ruled that the plaintiffs -- a California man and a Louisiana man -- lacked standing to assert a claim under California's Unfair Competition Law (UCL) because they "do not claim that they suffered or imminently would suffer hearing loss from use of their iPods."

"To have standing under California's UCL, as amended by California's Proposition 64, plaintiffs must establish that they (1) suffered an injury in fact and (2) lost money or property as a result of the unfair competition," states the opinion, written by Judge David R. Thompson.

"Although the plaintiffs allege that Apple has sold more than 100 million iPods, they do not claim that they, or anyone else, have suffered or are substantially certain to suffer hearing loss from using an iPod. As discussed above, as a result of this omission, the plaintiffs fail to state an implied warranty claim, and they have no standing to assert a UCL claim," he wrote. "The plaintiffs' alleged injury in fact is premised on the loss of a 'safety' benefit that was not part of the bargain to begin with."

Read the opinion here: Birdsong v. Apple Inc.pdf

One of the longest running Unfair Competition Law cases ever has finally been brought to an end -- maybe.

The saga of Benson v. Kwikset began in 2000 and ricocheted between trial courts and the 4th District Court of Appeal in Orange County until a decision a few weeks back.

In a just-published article John H. Sullivan, CJAC's president, tracks the case's journey --before and after voters approved Proposition 64 in 2004 -- and recalls the facts and appellate opinion that made it a poster child for the shakedown lawsuits that the CJAC-sponsored initiative shut down. You can read the article and Appellate Justice David Sills' cut-to-the-chase description of the shakedown gambit in the March 25th Daily Journal legal newspaper on the CJAC web site.

Kwikset was sued by former class action plaintiffs' lawyer Williams Lerach's firm for selling "Made in the USA" locks with screws made in Taiwan. (As Sullivan notes, Lerach, just beginning the second year of a two-year federal prison term for illegally paying class action clients, has become far more familiar with locks than he ever could have imagined when his lawyers first went after Kwikset.)

Proposition 64 brought to the Unfair Competition Law the common sense requirement that a private plaintiff bringing an unfair competition/consumer protection lawsuit must have incurred "injury in fact and lost money or property" to have standing before the court.

The Kwikset case is notable for providing some of the best judicial arguments for fixing the Unfair Competition Law's non-existent standing rule. Justice Sills' observations, Sullivan writes, "are more relevant than ever today as some plaintiffs' lawyers, evidently addressing a shortage of legitimate plaintiffs, are attempting to recast Proposition 64 as overkill intended only to squelch" no-name lawyers bringing serial small-stakes shakedown lawsuits.

Rewriting Proposition 64 -- and essentially undercutting its intent to bring common sense to California's class action law -- would lead to clogged courts and decreased court access to those with legitimate claims, according to John H. Sullivan, president of the Civil Justice Association of California (CJAC), and William L. Stern of Morrison & Foerster, in a letter to the editor published in today's Daily Journal legal newspaper (subscription required).

The letter was published in response to a Nov. 17 op-ed by attorney Mark Labaton, who paints Proposition 64 as an initiative created specifically to derail the Trevor Law Group lawyers from filing predatory lawsuits and claims the initiative took an "unforeseen" turn after its passage.

"No," Sullivan and Stern write, "Proposition 64's text, ballot arguments and campaign uniformly displayed a strong intent to bring California into a common sense world requiring private litigant standing and eliminating counterfeit class actions lacking procedural protections and finality for everyone.

"Rewriting Proposition 64, as Labaton desires, would restore California to outlier status with a class action law unknown in any other jurisdiction -- state or federal. It would re-motivate thousands of lawyers to chase settlement money in cases where no one is injured instead of, for example, helping the tens of thousands of Californians who annually find themselves in our legal system without legal representation."

Read the full letter to the editor here.

Current California law requires that if someone has had improper access to your name and credit card number, you must be notified of that fact so you can pay attention and make sure no one buys things that you end up paying for or opens credit card accounts in your name.

But state Assembly Member Dave Jones seems to think that California law is not tough enough. In an informational hearing today on "Disclosure Requirements Under California's Breach Notification Law," Jones was particularly concerned about a handful of retailers, in possible violation of current law, who did not disclose a data breach to consumers even though criminals were indicted for data breach against their stores. Assembly Members Paul Krekorian (D-Burbank) and Rick Keene (R-Chico) also attended the hearing.

One witness from a consumer rights group posited possible solutions to the supposed problem, including strengthening California's laws to match the toughest provisions in all other states. One such provision would include allowing private individual lawsuits for failure to notify for a breach, with double or treble damages, or with liquidated damages -- meaning consumers need not suffered a loss. This would bring back a piece of the "private right of action"/no loss need be shown litigation that was largely stopped by California voters when they approved Proposition 64 four years ago.

Such provisions do more to encourage lawsuits than to protect consumers. We hope that whatever bill arises as a result of this hearing focuses on actually protecting consumers rather than enriching lawyers.

Jones is in his final days as chair of the Assembly Judiciary Committee. He will next serve as chair of the Assembly Health Committee, and Democratic member Mike Feuer will become chair.

Brea lawyer Harpreet S. Brar, who first made headlines by filing shakedown lawsuits against more than 400 nail salon owners in southern California in 2003, may be disbarred following a recommendation by a State Bar Court judge.

Brar was later jailed for contempt of court for persisting in other harassing legal tactics and then convicted of federal tax evasion. He has a collection of State Bar suspensions and probations over the past two years, but it has taken until February 1, 2008 to reach the disbarment recommendation stage.

The final decision rests with the California Supreme Court, which will take up Judge Richard Honn's recommendation that Brar be disbarred for actions that amount to "serious breaches" of an attorney's fundamental ethical mores, the California Bar Journal reported this month.

Brar "has engaged in a nearly continuous course of serious misconduct" since his admission to the bar in 2000, Honn said. The attorney refused to let Proposition 64 stop him from filing shakedown lawsuits -- even though an Orange County judge called him "basically an extortionist," ordered him to pay $1.8 million in civil penalties, and enjoined him from filing any more cases under the California unfair competition law.

After the CJAC-sponsored Proposition 64 closed the door on unfair competition law shakedowns in 2004, Brar filed used his wife as a plaintiff and filed three new lawsuits within nine months accusing liquor stores of not posting notices of 50-cent debit-card fees charged at ATM machines in their stores and claiming her debit-card fees as a loss of money and property. He also sent the defendants a threatening letter in which he offered to settle the matter for about $750 and encouraged a quick settlement to avoid additional fees and costs.

Orange County Superior Court Judge Peter Polos held Brar in contempt and sentenced him to 15 days in jail.

Brar, 36, was convicted of five felony counts of tax evasion last July and is currently serving one year in county jail. He failed to file 1999 personal income tax and corporate income tax returns, as well as his 2002 personal income tax returns.