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At first glance, it might appear that the state’s out-of-control unfair competition law, Business & Professions Code �17200, may be in for some long-overdue change. Two legislative committees have held hearings this month on abuse of the law. Attorney General Bill Lockyer has announced an investigation into five small law firms that allegedly use it to shake down small businesses. And a state senator has publicly branded the lawyers at one of those firms as “two-bit legal whores.” Pardon us if we yawn. It’s encouraging to see some serious legislative attention focused on the use and abuse of the law, which is also known as the UCL. But the prospects for meaningful reform are slim. The stakes are too high, the problems too complex, and one of the key players — AG Lockyer — is too conflicted. As Lockyer emphasizes, �17200 is a law with genuine good uses. It allows private citizens (usually lawyers) to enforce consumer-oriented laws that the AG may not have the time, resources or political inclination to handle. But �17200 also has a well-documented history of abuse. Because the definition of “unfair” is so elastic, because summary judgment is nearly impossible to obtain, and because the plaintiff himself need not have suffered any actual injury, the law holds enormous nuisance value. For one example, The Recorder reported last year on a Southern California law firm that mailed letters to more than 200 small, ethnic grocery stores around the state threatening to sue them under �17200 for allegedly selling pirated video tapes. The letters hinted at potential criminal sanctions, and offered to drop the potential suits only if the grocery stores stopped selling the tapes — and paid attorneys fees of $2,000. State lawmakers ranging from conservative Bill Morrow to liberal John Vasconcellos have been making noise about cracking down on this kind of litigation. But the key player is Lockyer, the state’s top law enforcement officer. Lockyer, who is presumed to have gubernatorial ambitions, is trying to project a moderate stance on civil justice issues. But he has always enjoyed strong support from the plaintiffs bar. His carefully worded comments to the Senate and Assembly judiciary committees reflect that delicate balance: “Obviously,” he told the legislators, “I share your concerns about the abuse of process that seems to be occurring.” He then announced that he may bring a �17200 action against five law firms that may be abusing the law. “One of the hoped-for effects of us aggressively pursuing this investigation is that people are reminded of what the proper purpose of �17200 is, which is to protect consumers and small businesses from unlawful practices,” said Lockyer spokesman Tom Dresslar. It’s not hard to read between the lines. Lockyer isn’t in any real rush to scale back 17200, which after all is a huge cash generator for one of his core support groups, Consumer Attorneys of California. In case there’s any doubt, consider the First District Court of Appeal’s opinion last week in Lavie v. Procter & Gamble, 03 C.D.O.S. 612. The corporate giant was sued over its TV commercials for Aleve pain reliever, which stated that “Aleve is gentler to the stomach lining than aspirin.” The plaintiff, a man who said his stomach ulcer was severely aggravated by Aleve, argued that the advertising was false and likely to mislead consumers into thinking that Aleve is not only gentler than aspirin, but gentle, period. To some, a dispute over the distinction between “gentle” and “gentler” would be hair splitting. Nevertheless, the case resulted in a 13-day trial in San Francisco Superior Court in which multitudes of expert witnesses battled over the meaning of various medical studies, scientific articles and gastro-intestinal endoscopies. Ultimately, after the expenditure of hundreds of thousands of dollars in attorneys fees and expert witnesses, Superior Court Judge Isabella Horton Grant ruled that even under �17200′s broad sweep, which requires proof only that advertising is “likely to mislead” a reasonable consumer, the plaintiffs had failed to prove their case. Is this the kind of abusive suit the attorney general wants to prevent? Certainly not. This suit was brought not by some penny-ante plaintiffs firm in Long Beach or Tustin, but by arguably the most powerful plaintiffs firm in the country, Milberg Weiss Bershad Hynes & Lerach — which also happens to be a staunch supporter of the Democratic party and Lockyer. In fact, Lockyer’s office wrote an amicus curiae brief in support of the plaintiffs’ appeal, arguing that the reasonable consumer test applied by Judge Grant was too strict. Instead, according to the court of appeal, the AG argued that if the advertising was likely to mislead the least sophisticated consumer, it violated the UCL. The court of appeal seemed shocked by the AG’s position. “None of the cases cited by the attorney general arising under the UCL or its [federal] analog, the Federal Trade Commission Act, holds that the unreasonable expectations or perceptions of the least sophisticated consumer or most gullible consumer would be protected,” Justice J. Anthony Kline wrote for the court. In a separate concurrence, Justice Paul Haerle said he found the AG’s position “troubling and startling.” He said it “would allow a �17200 cause of action to the consumer who interprets literally the radio ads saying ‘Albertson’s is your store’ and goes to court when he is not given access to his local store’s daily receipts.” Lockyer’s office has disputed Haerle’s take as “a gross mischaracterization” of his position. Still, it doesn’t sound like the stance of a �17200 reformer. So do you really believe that meaningful �17200 reform is on the way? If so, you may have to apply the least sophisticated voter test.

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