Corporate Counsel Wins, Losses and Draws for 2003

By Loretta Macktal, Executive Assistant to the Vice President, Government Relations

Capitol Update, Sept. 18, 2003 Share this on FacebookTweet thisEmail this to a friend

The year began with press attention on the abuses taking place under the state's Unfair Competition Law (UCL). UCL suits can be brought by private attorneys on behalf of the public, even when there are no easily identifiable damages. It was widely alleged that the Trevor Law firm was targeting small, often minority-owned businesses in "shakedown" lawsuits, extorting settlements to avoid expensive litigation.

Numerous reform measures were introduced by both democrats and republicans, only to be stopped by the trial lawyer friendly Judiciary Committees in both houses. What finally came out was a 2-bill “reform” package developed by trial attorney interests and authored by the Chairs of each house's Judiciary Committees. Instead of real reform, it actually increased the potential for abuse by adding disgorgement to the list of already available remedies under the state's UCL.

In the end, significant opposition forced the proponents to remove disgorgement. But, the bill still would have permitted private attorneys to file lawsuits on behalf of no individual, where there was no harm, and no finality, all issues that need to be addressed to accomplish real reform. The bill was a sham, CMTA and others remained opposed, and it failed passage in the Assembly on the final night of the session.

Also in the win, or perhaps “draw” category, vigorous business opposition kept a few onerous and unnecessary bills from moving this year. Put off until next year is a securities litigation proposal by Senator Dean Florez (D-Shafter) and a Corporate 3-Strikes Act by Senator Gloria Romero (D-Los Angeles). We may also see an anti-confidential settlement bill in 2004.

In the loss column, two bills opposed by CMTA made it to the Governor. He has signed SB 515 (Sheila Kuehl, D-Santa Monica) which prohibits businesses from using the SLAPP motion to dispense with frivolous lawsuits in a cost-effective manner. (He vetoed essentially the same exact bill last year). AB 1715 (Assembly Judiciary Committee), awaiting his action, bans the use of mandatory arbitration agreements with respect to employment contracts. He vetoed an almost identical bill on this topic last year and CMTA will be requesting that he veto it again this year.
Read more Regulatory / Legal articles

Capitol updates archive 989898989