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Six weeks after the landslide passage of California’s Proposition 64, no fewer than 17 of the state’s largest defense firms are sending celebratory messages to clients in the form of online “client alerts.” The initiative — which makes it tougher to sue companies for unfair business practices — is universally portrayed as a win for “us” against “them” in headlines like “Proposition 64 Reforms California’s Notorious Unfair Competition Law,” from Reed Smith, which has 15 U.S. offices, including four in California. The enthusiasm shouldn’t be interpreted as welcoming limits on consumer rights, said Norman C. Hile, who helped write “Passage of Prop. 64 Signals Victory for State’s Businesses, Employers” to update clients of Orrick, Herrington & Sutcliffe. But the margin of victory — 59 percent to 41percent — can be read as a referendum against frivolous suits. “I think it is seen as a tort reform measure benefiting our clients,” he asserted. Prop. 64 introduces a standing requirement for private plaintiffs, who under the 1933 Unfair Competition Law — Calif. Bus. & Prof. Code � 17200 — can bring representative actions on behalf of the public. Under the recast version, plaintiffs must prove they were personally harmed, and lost money or property. There’s no downside, asserted Orrick’s Joe C. Liburt, an employment law litigator who worked with Hile on Orrick’s newsletter. “These 17200 claims were routinely thrown in with the kitchen sink,” Liburt said. “There’s still plenty of grounds to sue for those who have actually been harmed.” RECEIVING END On the receiving end of the purportedly new climate is solo practitioner Antony I. Stuart of Los Angeles, a former president of Consumer Attorneys of Los Angeles and an opponent of Prop. 64. Stuart recalled that he was startled recently when opposing counsel suggested to an arbitrator that his suit has a lower settlement value after Election Day. Granted he had made a � 17200 claim, but “this was a personal injury suit,” Stuart said. Stuart’s colleague Jim Sturdevant of San Francisco’s Sturdevant Law Offices, and a former head of Consumer Attorneys of California, contended that the defense bar’s joy isn’t just ideological. “Of course the defense firms are celebrating,” said Sturdevant, who last year won a billion-dollar verdict against Bank of America on a � 17200 claim. Miller v. Bank of America, No. 99-301917. “Look at all the legal work that the retroactivity issue is generating for them,” he said, referring to litigation over whether Prop. 64 applies to cases in progress. Post-election activity in courtrooms has centered on whether to apply Prop. 64 to pending cases. The defense analyses suggest that the question is a slam-dunk. The firms report that a Los Angeles County Superior Court judge in Van Nuys recently sustained a demurrer on to a pre-election � 17200 claim based on lack of standing in Pepe v. Waagenaar, No. LC 069018. Similar rulings came from two other Los Angeles County courts in Bivens v. Sanford, No. SC075348, in Compton, and Dohrnman v. Tosco Refinery Co Inc., No. BC275234. Two cases in the intermediate California Court of Appeal that also gladden defense hearts are Fair Businesses America v., No. CO44134, in which the 3d District, on the justices’ own motion, asked for a Dec. 17 additional briefing on the affect of Prop. 64 on cases in the pipeline, and the 4th District’s similar request in Consumer Advocates v. DaimlerChrysler, No. G029811. None of the client alerts mentions rulings less favorable to the defense, such as the recent order in the Twomey case, in which Sacramento County Superior Court Judge Thomas M. Cecil held that Prop. 64 doesn’t apply to pending cases. Also unmentioned is a state appellate court that allowed a � 17200 action with an uninjured plaintiff, who sued on behalf of the public, to proceed. In Krumme v. Mercury Insurance Co., 123 Cal. App. 4th 924, the 1st District denied a defense petition for a rehearing. The defense has since petitioned the California Supreme Court, a request that is pending. Finally, the 2d District found that a trial court erred when it struck allegations relating to a � 17200 cause of action in an uninjured plaintiff’s 2001 complaint against AT&T. Banales v. Superior Court, No. B177019 (unpublished).

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