Class action reform initiative pulled

By CMTA Staff

Capitol Update, Aug. 31, 2007 Share this on FacebookTweet thisEmail this to a friend

Last month an initiative to help curb the filing of frivolous class action lawsuits was submitted to the state Attorney General's office for title and summary, the first step in getting the initiative ready for the June 2008 statewide ballot. Earlier this week, however, it was withdrawn by proponents over concerns surrounding the June 2008 election in general.

Conventional wisdom had largely tagged the June 8th election as a "sleeper". It was looking very light, with little to drive voter turnout, mainly because the state moved the Presidential primary up to February 2008, leaving the June 2008 election on the books.

That notion has recently changed dramatically as the June 2008 ballot may include voter initiatives on:  1) A Republican plan to change the Presidential electoral vote to proportional, rather than the current system of winner take all, 2) A rival measure to protect winner-take all, 3) A defense-of-marriage initiative, 4) A prisoner-rights act, and other issues.

"It does not appear that June is a good time to move forward on this," said John Sullivan of the Civil Justice Association of California (CJAC). "For us, there was the possibility that what we thought would be a quiet election could be an explosive one," Sullivan added. The intent of the initiative was to bring necessary clarity, certainty, and predictability to the process of class action lawsuits to increase fairness and efficiency by allowing judges to eliminate lawsuits where no actual harm occurred.

Trial attorney interest groups opposed the proposed CJAC initiative and filed a number of their own initiatives with the Attorney General. One of the rival initiatives would add criminal sanctions against corporate executives who fail to report wrongdoing at their companies.

Another requires compensation for victims of corporate fraud and puts executives on the line for making the victims whole.

A third, called the "No Say, No Pay Act" requires publicly traded corporations to disclose executive compensation, the total pay structure, the benefits package such as health care and pension.  These reports would be made online with the corporate filings for the Secretary of State's office.

A fourth proposed initiative--directly in opposition to CJAC's plan--would enshrine class action lawsuits in statute and make them easier to file.

These counter initiatives have not been withdrawn at this point.  They remain with the AG's office for title and summary, and would be eligible to appear on the June 2008 ballot. While it remains to be seen what actually ends up on the June 2008 ballot, the above mentioned initiatives give you an idea of what is brewing at this point.

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