CJAC: Civil Justice Association of California

Nov 15, 2002

The Civil Justice Association of California Files Brief with U.S. Supreme Court in Important Unfair Competition Law Case

SACRAMENTO — The Civil Justice Association of California (CJAC) today asked the United States Supreme Court to rule on whether California’s infamous Unfair Competition Law (Business & Professions Code Sec. 17200) can be used to sue a company over statements it makes defending its business operations.

The case (Kasky v. Nike) involves an unfair business practices lawsuit upheld by the California Supreme Court against Nike over press releases and other statements the company made defending its policies governing overseas working conditions in subcontracting factories.

The CJAC amicus brief, authored by the Association’s General Counsel Fred Hiestand, focuses on the loose standards of California’s Unfair Competition Law — especially compared to unfair trade practices laws in every other state in the country.

“We want to help show that California’s Unfair Competition Law allows private attorneys to trample all over First Amendment free speech rights,” said John H. Sullivan, CJAC President.

“The case is one of many examples of private lawyer ‘17200’ lawsuits brought with no real plaintiff or any evidence of harm to anyone,” he said.

“Here the injustice is compounded because Nike cannot escape this frivolous suit even by proving its statements are true.”

The CJAC brief states that unless the U.S. Supreme Court reverses the California court, a company doing business in California “will be subject to government regulation through liability laws for publicly defending its business practices. It is an in terrorem means of regulation because the unfair competition law is unprecedented in the breadth of its scope, its absence of any standing requirements and the lack of finality in its application.”

Sullivan said his association has repeatedly sponsored legislation to close 17200 loopholes that permit private lawyer abuses. Personal injury lawyer-controlled judiciary committees in the California legislature have consistently blocked even modest reforms.

Meanwhile, Sullivan said, predatory lawyers all over the state are launching legal shakedown lawsuits against nail salons, convenient stores, auto repair shops, real estate agency and others.

“If the California court’s Nike decision is not reversed, plaintiffs’ lawyers will have another platform for frivolous 17200 lawsuits against every kind of business of every size.”

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