Prop 64 - Quotes to Note

Private Attorney Abuse of the Unfair Competition Law

“The Trevor Law Group is becoming a scapegoat for the badly flawed Sec. 17200 statute it exploits…The statute, as it is being interpreted and applied, is a disgrace that is literally choking the life out of California’s struggling economy and enriching a small group of plaintiffs’ lawyers in the process. (Mark S. Pulliam, San Diego attorney, letter to the State Bar Journal, May 2003)

“I gave them $2,000 just so they would get out of my face. It’s complete robbery, but I don’t have the time to deal with it. I’m too busy to go to court.” Gary Balikji, owner of a garage in Stanton that was accused of not keeping accurate paperwork, explaining to L.A. Times reporter Monte Morin how he decided to settle after his lawyer told him it could cost as much as $10,000 to defend a case in court. (L.A. Times, December 13, 2002)

“Most mom and pops can’t afford this shake down. So they pay up so this guy can buy another Rolex watch.” Barry Zanck, president, Americap Direct Funding mortgage company, Newport Beach (quoted in editorial, Orange County Register, December 15, 2002)

“Our salons mean everything to us. They’re our livelihood. They’re the American Dream, the pride of our sweat and tears. We will do everything to protect our reputation against this scare tactic.” Samson Phan, Vietnamese American owner of Norco Nails who was sued for using the same nail polish on multiple clients. (The Press Enterprise, November 19, 2002)

“It’s legal, but it smells like extortion.” (Editorial Orange County Register, December 14, 2002)

“The state bar needs to put these bad apple attorneys out of business and the Legislature must assure that this type of behavior does not continue.” Assemblymember Lou Correa, Chair of the Business and Professions Committee. (news release, December 11, 2002)

“I agree… that there are significant problems with existing law which allow bad actors to take advantage of business owners who are not guilty of any wrongdoing,” Attorney General Bill Lockyer. (letter to Civil Justice Association of California, August 2, 2002)

“I have made a decision to represent myself legally at this time. This is a purely economic decision, as I simply can’t afford a retainer. But I will fight him as long as I can financially afford it. I feel it is my duty as a citizen to stop this economic blackmail.” Stephen Kemp, Owner As Seen on TV Marketplace. (letter to Civil Justice Association of California, December 18, 2002)

“Newspapers support strong consumer laws. We believe, however, the case has been made for a serious adjustment of the unfair business practices law.” Tom Newton, General Counsel, California Newspaper Publishers Association. (letter to Attorney General Bill Lockyer, November 22, 2002)

“Although I can’t prove it, I believe there’s a huge underground economy in 17200 claims.” Stan Ulrich, California Law Revision Commission, quoted in Wall Street Journal, November 3, 1999)

“Under common law, to commit a fraudulent act, you must intend to deceive. Under the [UCL], a fraudulent act can be anything likely to deceive whether intended or not. So if one of your customers is confused by something you do, it can be fraudulent and you can be sued under UCL.” David Sturgeon-Garci, partner at Buchalter, Nemer, Fields & Younger, Los Angeles (quoted in Los Angeles Times, November 24, 1999)

“How Business and Professions Code Section 17200 Can be a ‘Value Added’ Component of your litigation” Seminar Title, California trial lawyers association annual Maui conference.

“[17200 claims] are the biggest wave in the ocean of litigation that has swept California in recent years.” Catherine Rivard. (LA Lawyer, March 2001)

“If they [the Legislature] do nothing, they’ll be sanctioning a truly shameful - un-American, in fact - practice targeting immigrants, just as the Mafia strong-armed immigrants a century ago.” Dan Walters. (The Sacramento Bee, Monday, December 9, 2002)

“This came out of nowhere, I mean, I would understand if we’ve had trouble like this before for anything bad in our salon, but I’ve never had any complaints from customers, and the state board has never fined me or cited me.” Mindy Le, owner of Express Nails, a salon named in a shakedown lawsuit. (Orange County Register, November 18, 2002)

“One of the main things that worries me is the possibility of paying $10,000.00 every time an attorney in their firm, and I’m certain others to follow who have found a quick ride to ‘millionaire-land,’ finds a mistake in one of our ads…or anything else they like. We do not need support for the underhanded and perverse few who keep trying to make their almighty dollar by stepping on the ‘public.’ There IS a system in place. It works well. It doesn’t make ‘money’ for anyone. Please tell us WHY this kind of outrageous action is tolerated and even supported by our ‘superiors’ in government?” Marvin Williamson, vice-president/ general manager, Stan Morri Ford Mercury, Tracy. (letter to Assembly member Barbara Matthews and others, July 29, 2002)

“The small businesses in my district are keeping the economy alive and are keeping workers off of public assistance. I consider any effort to extort money from them or force them into closure is a direct attack against the financial security of the state of California. I also pledge to work with the Legislature to address the alleged legal abuses that have allowed lawyers to sue thousands of mom-and-pop owners in blanket-style lawsuits. Together, we will stop the targeting of auto shops, nail salons, grocery stores and restaurants for legal shakedowns.” Assemblywoman Judy Chu, AD 49. (Statement regarding Abuse of Blanket Lawsuits Targeting Small Business Owners. December 9, 2002)

“We believe this is outright harassment and intimidation, even ethnic discrimination. These are lawsuits that make people lose faith in our legal system.” Lan Quoc Nguyen, Westminster attorney helping nail salon shop owners defend against “shakedown” lawsuits. (The Press Enterprise, November 19, 2002)

“We think the problems are minimal.” Robert Cartwright Jr., past president of Consumer Attorneys of California discussing recent UCL suits. (The Recorder, December 18, 2002)

“Plaintiff’s motion is part of an improper scheme to use this court as an instrument of terror for purposes of extracting monies from small and unsophisticated California shopkeepers.” David Moyer, Gibson, Dunn & Crutcher. (The Recorder, May 08, 2002)

“In all likelihood, businesses are going to be asked by the Legislature and Governor to dig into their pockets to help make up the state’s budget shortfall. They have every reason to ask in return that their state leaders take steps immediately to protect them from legal predators.” John H. Sullivan, President. (Civil Justice Association of California, December 6, 2002)

“Section 17200, because of the vagueness and generality of its language, creates a lot more litigation because it doesn’t set forth any clear standards.” Attorney David Reis, O’Melveny & Myers discussion on employment law. (Recorder Roundtable, December 2002)

“Virtually all the lawyers I know work very hard to benefit our clients. But it’s easy for the public to think that all lawyers are as cynical as [plaintiffs’ lawyer], even while our politicians fail to reform laws that encourage the kind of legal piracy you describe. The result is declining public respect for lawyers, while bad laws stay on the books.” Erik Gunderson, Manhattan Beach attorney. (letter to the editor, Los Angeles Times, December 2002)

“Everyone in California has the right to sue any corporation that happens to sell any product or service in that state over the accuracy of any statement bearing on that corporation’s activities or on those of the businesses or nations with which it deals…provisions like these vastly increase the litigation exposure of any corporation that speaks (however indirectly) to California audiences.” Laurence H. Tribe, Walter Dellinger, and others representing Nike. (brief filed with the U.S. Supreme Court in Nike v. Kasky, October 14, 2002)

“Basically, what they’re dong is a shakedown of small businesses in Southern California. They don’t represent customers…they’re bloodsuckers.” Will Woods, executive director, Automotive Trade Organizations of California. (Los Angeles Times, December 13, 2002)

“Many of these immigrants saw first hand in their native countries the ruinous effects of restrictive laws, red tape, and corruption. They believed in the American dream and came here. Now, as victims of the lawyers pushing the Unfair Competition Law to its limit, thousands of shop owners and their families are again experiencing unjust barriers to making a living.” Nhan T. Vu, Assistant Professor of Law, Chapman University. (Los Angeles Times, March 8, 2003)

“It’s unlikely that there will be significant changes to 17200. Many of us [in Sacramento] think that the best remedies are with legal actions and the State Bar.” Attorney General Bill Lockyer. (The Recorder, February 27, 2003)

“If the law’s flawed, it’s not the lawyers’ fault; it’s the fault of the legislators, and that should be on the agenda of the State Bar of California to get that law fixed.” Diane Karpman, attorney specializing in legal malpractice and representing attorneys before the State Bar (Daily Recorder, March 14, 2003)

“The main problem isn’t the attorneys who filed these suits, but the law which allows these abuses to take place.” - Orange County Register, editorial, March 17, 2003)

“Focusing on the lawyers, however, will not solve the problem. The problem is the law. Every business in California is at risk. And, unlike other laws, the broad language of this law makes it almost impossible for a court to make an early decision on whether a lawsuit is justified.” Nhan T. Vu, Assistant Professor of Law, Chapman University. (Los Angeles Times, March 8, 2003)

“While the actions by both the attorney general and the State Bar Court are commendable, Trevor Law Group hardly is the only law firm abusing the state’s unfair competition law. That’s why the Legislature needs to revisit the law, known as the Business and Professions Code Sec. 17200, which allows plaintiffs to file lawsuits against a business even if they have not been directly harmed by the purported wrongdoing.” (San Diego Union-Tribune, editorial, April 12, 2003)

“Misguided or abusive cases litigated under the UCL’s private right of action have a significant impact on law enforcement and the protection of the general public. These inappropriate lawsuits generate damaging appellate precedent; interfere with legitimate law enforcement investigations and prosecutions; and undermine public respect and support for the UCL. Abuses of this kind harm all legitimate users of the UCL - including the public’s designated law enforcement representatives - and such abuses should not be tolerated.

“Given its unique importance in protecting California consumers, the UCL must be protected from misuse or abuse by thoughtless or ill-motivated litigants. This is especially important in that the systemic checks and balances - including special ethical norms and the democratic electoral process - applicable to public enforcement officials do not apply to “private attorneys general” litigating representative causes of action.” (from friend of the court brief filed by the Los Angeles District Attorney’s Office in L.A. Superior Court in the automobile repair cases, March 2003)

“It is better to discipline the system rather than just a couple of bad actors, if you can figure out the right way to do it.” (Attorney General Bill Lockyer, in testimony before the joint hearing of the Senate and Assembly Judiciary Committees in Sacramento, January 14, 2003)

And a Not-So-Recent Quote Worth Recalling

“The unfair competition law provides unusually broad, and perhaps unique, standing for private parties. They may sue on behalf of others (the “general public”) without the need to show any personal damage arising from the unfair business practice. Those suing on behalf of the general public can range from plaintiffs having a narrow dispute with a defendant in a business context, who tack on the representative claim for discovery and settlement advantages, to plaintiffs serving a true private attorney general function, who seek to vindicate larger interests. The unfair competition law does not provide any mechanism to distinguish among these types of plaintiffs. There is a potential for abuse where a claim on behalf of the general public is added to a complaint for tactical advantage….The potential for a multiplicity of actions under the unfair competition law and overlapping or parallel proceedings is troublesome.” (California Law Revision Commission, November 1996)