In a message dated 10/12/2004 11:04:48 AM Pacific Standard Time,
dredelstein@... writes:
I have some thoughts on 64, limiting lawsuits. However, I am
interested in your comments/suggestions. Thanks.
Best, Michael
For those who dont want to sign on to the website to see it, i have
reprinted the op-ed below:
OPINION
From the October 8, 2004 print edition of SF Business Journal
Guest opinion
Proposition 64 buttons up extortionate business suits
Sarosh Kumana
Proposition 64 on the state November ballot deserves special attention
because the small business community needs this important reform.
Prop. 64 closes a loophole in California law that allows private lawyers to
extort from businesses by filing, or threatening to file, class-action
lawsuits alleging technical violations of the law, and thereby collecting
settlements. The Sec. 17200 loophole allows any attorney to claim to represent a class
and thereby extract a larger settlement.
Rather than spend tens of thousands of dollars in defense, many small
business owners are forced to pay the settlement demand, typically about $5,000 to
$10,000.
The alleged violations are sometimes as petty as the font size in their
advertisements, or that they did not put their state license number on their web
site, or a beautician used a bottle of nail polish on more than one customer.
The lawsuits always demand thousands of dollars for "damages to the general
public," but payable solely to the attorney.
Pay up or else
Within the last decade, hundreds of thousands of such extortionate lawsuits
have been threatened against business owners "on behalf of the people of the
state of California," even when no one has been harmed, misled or injured.
The attorney who files the suit needs neither a client as the plaintiff, nor
actual harm suffered by a customer of the business.
Many attorneys send out hundreds of such threatening letters daily, and
collect from worried business owners whose only other choice is even more
expensive defense litigation.
Businesses have been forced to close down, and employees have lost jobs.
Every business is a potential victim!
Attorneys have been piling multiple suits against small business owners
because there is no limit to the number of times a business can be sued for the
same alleged violation. The small business community in the Bay Area is among
the hardest hit by greedy lawyers who exploit the loophole.
Protection remains
While Prop 64 closes this loophole, it still protects the right of every
consumer to file a lawsuit if they have been wrongfully misled, harmed or have
suffered a financial loss.
On Nov. 2, it is important that all Californians protect small businesses
from unscrupulous attorneys, and protect our jobs and our livelihood all over
the state by voting yes on Proposition 64.
Sarosh Kumana is chair of the goverment affairs committee of the San
Francisco Hispanic Chamber of Commerce.
© 2004 American City Business Journals Inc.
_Web reprint information_
(http://www.bizjournals.com/scoop/reprints_article.html?story_id=1005628)