Toss Suits Affected by Proposition 64

SINCE 1888 FRIDAY, NOVEMBER 5, 2004 Toss Suits Affected by Proposition 64

By Jim Burgess All of this changes with Proposition 64. thereon takes effect the day after the election unless Proposition 64 provides that only those who have the measure provides otherwise.” Article II, alifornia voters approved Proposition suffered “injury in fact” and lost “money or Section 10a. Proposition 64 is silent regarding 64 by a significant margin on Tuesday. property” as a result of the challenged conduct its effective date; therefore, it became law Nov. 3. The initiative, which limits lawsuits will be allowed to sue. Proposition 64 will affect all pending lawsuits as Cbrought under the state’s Business and Plaintiffs’ attorneys will not be allowed to sue well as all future lawsuits. See Younger v. Superior Professions Code Section 17200, also limits in the name of friends, secretaries and spouses Court, 21 Cal.3d 102 (1978); see also People v. lawsuits brought for false advertising under who suffered no injury and did not deal with the Bank of San Luis Obispo, 159 Cal. 65 (1910) (“the Section 17500. We can now reflect on the effect defendant. repeal of a statute without any reservation takes that Proposition 64 will have on existing lawsuits. Further, the requirement of showing “injury in away all remedies given by the repealed statute and Before Proposition 64, any private person fact” and loss of “money or property” will limit defeats all actions pending under it at the time of its could file a lawsuit alleging unlawful, unfair or questionable false-advertising claims brought by repeal.”). The limits imposed by Proposition 64 apply fraudulent business practices or false or private parties. to all pending actions. misleading advertising under Section 17200, the With Proposition 64, private plaintiffs will have This means that Proposition 64’s repeal of Unfair Competition Law. Under the Unfair to show more than that the challenged advertising “private attorney general” standing to bring a Competition Law and 17500, the False was “likely to deceive.” representative action on behalf of the general Advertising Law, lawsuits could be filed by “any Private plaintiffs now will have to show that public is effective immediately. board, officer, person, corporation or association they suffered “injury in fact” and “lost money or Existing cases brought under the Unfair or by any person acting for the interests of itself, property” as a result of the false advertising. Competition Law or false-advertising statute on its members or the general public.” Proposition 64 also clearly eliminates behalf of the general public as a private attorney Under these statutory schemes, some private representative actions on behalf of the “general general now lack standing and should be plaintiffs were allowed to seek injunctive and public.” Plaintiffs will need to satisfy existing dismissed to that extent. monetary relief on behalf of the “general public” class-action requirements in order to obtain any Plaintiffs no longer can attempt to seek relief without satisfying class-action requirements and relief on behalf of any other person. for the “general public” or any other absent parties without having suffered any injury as a result of Proposition 64 does not affect lawsuits brought without satisfying the existing class-action the challenged conduct. by public prosecutors such as the attorney general requirements. These plaintiffs were allowed to sue even if or district attorneys. Further, the requirement that a plaintiff prove they never dealt with the defendant. In fact, the new law could enhance the ability “injury in fact” also is effective immediately. Furthermore, some plaintiffs were allowed to of public prosecutors to bring actions for unfair Any actions brought by people who did not allege false advertising even if no consumer was competition and false advertising because it suffer any injury or did not lose money or property deceived and even if they never relied on the provides that all civil penalties collected by public as a result of the challenged conduct should be challenged advertising to buy any products. prosecutors can be used only to enforce consumer dismissed for failure to state a cause of action. Some lawsuits were brought over mere protection laws. typographical errors that did not cause any Technically, Proposition 64 went into effect Jim Burgess is a partner at Sheppard, consumer any harm. In these cases, the plaintiffs Wednesday in accordance with the state Mullin, Richter & Hampton, where he argued, they only had to show that the advertising constitution, which says an initiative or leads the consumer class-action defense was “likely to deceive” the public. referendum approved by “a majority of votes team.