Frivolous Lawsuits Making California A Legal Laughingstock

Creative and frivolous uses of California's "unfair competition law" are on the verge of making the state the legal laughingstock of the nation, the Civil Justice Association of California (CJAC) warned today.

Private lawyers' latest gambits with the law range from using it to accuse the maker of Pokemon trading cards of corrupting the nation's youth by promoting gambling to suing Wal-Mart for offering a "Ladies Day" discount on an oil change at one of its Sacramento stores.

The Unfair Competition Law (Business and Professions Code Sec. 17200) was originally intended to be used by district attorneys and other public prosecutors to stop unfair competition that harms businesses as well as consumers of goods and services. However, court interpretations allow private attorneys to use it as well.

"This loophole in the law allows private attorneys to file lawsuits even when no law has been broken, no fraud has been committed, and no one has been injured or deceived," said John H. Sullivan, CJAC president.

An appeals court review of the Wal-Mart case noted that the man filing the suit "had deliberately gone to Wal-Mart, rather than his normal automotive service, on the day in question for purposes of being denied the Ladies Day discount. And he had done so only after he was introduced to his counsel. Whereas most litigants consult with a lawyer after an injury to seek judicial redress, this client went to his lawyer to seek an injury for which he could claim judicial redress." Investigations in the lawsuit revealed that the store gave the discount to anyone requesting it and that the client had deliberately not made a request.

Legislation designed to end the on-going abuse of the unfair competition law while still protecting consumers and business has been defeated over the past three years despite bi-partisan authorship. And cases challenging uses of the law by private attorneys have been before the state Supreme Court continuously during that period.

The Civil Justice Association of California has just published a new bulletin (copy enclosed) on the unfair competition law written by the association's General Counsel Fred Hiestand. The bulletin "Fee-Seeking Lawyers= Weapon of Choice" will also be available on the CJAC website soon.

Other examples of amazing uses of the UCL by plaintiffs' attorneys are available at the CJAC Website www.cjac.org