Lawyers Continue Push For Expansion of Much Abused Unfair Competition Law

By CMTA Staff

Capitol Update, Aug. 28, 2003 Share this on FacebookTweet thisEmail this to a friend

At the center of this storm is a section of the California Business and Professions code once considered a cornerstone to the state’s consumer protection laws. Section 17200 permits prosecutors and private attorneys to claim that a business is acting “unfairly” and then sue. Increasingly, lawyers have been filing frivolous 17200 suits against minority and small businesses and then offering to drop legal action in exchange for significant monetary settlements. Private attorneys are engaged in an outrageous abuse of this law. Needed reforms to Section 17200 of the state’s Unfair Competition Law include the necessity that an actual individual person be involved in such cases, that that person must actually be harmed, and their must be finality to such cases.

While being characterized as “reform” to the state’s Unfair Competition Law (UCL), SB 122 (Escutia) and AB 95 (Corbett) actually expand the frequently abused UCL and are far from any true reform. CMTA continues to oppose these two bills, which are linked by double-joining language, mainly because SB 122 adds disgorgement of earnings to the list of already available remedies under the state’s UCL. The advocates of this bill, the Consumer Attorneys of California, offered last minute amendments that were adopted into the bill as the bill sits poised for a vote on the Assembly floor. In attempts to narrow the field of opposition, the amendments seek to provide some small businesses with an exemption for the “ill gotten gains” provision- a fact that serves to underscore the inappropriate and onerous nature of such a provision. Additionally, the amendments seek “double recovery prevention,” but in fact this provision does not prevent double recovery or stop re-occuring lawsuits for the same act. To achieve real finality it would be necessary to have protection that eliminates duplicate litigation at a very early stage before significant defense costs are incurred. The strategy with these new amendments is to suggest that, in the frantic rush of the last 2 weeks of legislative business, that the opponent’s concerns have been alleviated. Nothing is further from the truth. CMTA continues to work with moderate Assembly democrats to stop this bill on the floor of the Assembly and to let all legislators know that these new amendments do nothing to change CMTA’s position on the bill. CMTA remains strongly opposed to SB 122, as the disgorgement provisions remain in the bill.

Please contact your local Assemblymembers to urge them to reject SB 122 on the Assembly Floor.
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