Attorney General Urged to Investigate "Legal Shakedowns"
Under State’s Unfair Competition Law

SACRAMENTO - The Civil Justice Association of California (CJAC) has asked Attorney General Bill Lockyer to investigate private attorney abuses under the state’s "unfair competition law" (Business and Professions Code Sec.17200). The letter and attachments (attached) cite egregious "legal shakedowns" by attorneys without clients filing mass-produced lawsuits. The attachments summarize recent examples of such lawsuits – one set filed against small auto repairs shops and the other against ethnic grocery and convenience stores.

"Firms are being victimized under a law originally intended to protect them. We want this law restored to its original purpose of protecting businesses and consumers, not operating as an attorney-fee machine," said John H. Sullivan, president of the Civil Justice Association.

He said his association does not advocate limiting the law’s use by district attorneys. "What must be stopped are the private attorneys who are bringing shakedown lawsuits and using the law for unjustified fishing expeditions to squeeze out settlement dollars and churn out new lawsuits."

Sullivan said the Legislature has refused to address the problem because the wealthy personal injury lawyer industry has discovered ways to use the law to augment its contingency fee business.

"Many of the shop owners being hit by the recent round of lawsuits are new Americans, people who came to this country to escape lawlessness and arbitrary, oppressive governments. What a shock it must be to discover California’s own version of predatory oppression, all carried out with the blessing of the state’s Legislature and judiciary," he said.

For more information on continuing legal shakedowns visit www.cjac.org

Family owned auto repair shops targeted

In Orange County, approximately 100 small, family owned auto repair shops are accused of violating the Unfair Competition Law. In requesting attorney fees, the plaintiffs state that their lawsuit confers "significant benefits on the general public, or to a large class of persons." It appears the lawyers are basing their accusations on already resolved settlements and citations posted routinely on the Bureau of Automotive Repair web site.

For example, a shop disciplined by the Department of Consumer Affairs on July 23, 2001, for "failure to provide a customer with a written estimate for parts and labor for a specific job" finds itself sued over the same incident a year later by private attorneys who are seeking attorney fees claiming that their action "will result in the enforcement of important rights affecting the public interest."

Ethnic grocery stores targeted

Letters were sent to approximately 200 ethnic grocery and retail stores across the state of California in which they allegedly offered to sell or rent videos that violated the anti-pirating statute. According to the letter sent by the plaintiffs’ attorney, stores would be required to pay easily over "$10,000 plus restitution." The storeowner was then informed a few sentences later, by sending $2,000 "in the form of a bank draft or cashier check payable to Brar & Gamulin, LLP" within 40 days, plus an agreement not to violate the statute again, the lawsuit would be settled.

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Attachments:

• Letter to Attorney General Lockyer (191K PDF)
• Example: Mass Produced Claims Against Small Grocery and Other Retail Stores
• Example: Mass Produced Claims Against Auto Repair Shops