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Try as hard as he might, San Francisco attorney James Sturdevant couldn’t seem to persuade the California Supreme Court on Wednesday that Proposition 64 � the 2004 ballot measure that restricted private attorney general suits � shouldn’t be retroactive. Neither could New York lawyer Michael Spencer. Hearing arguments in San Francisco in two separate Prop 64 cases, the court appeared ready to declare the controversial initiative retroactive to an untold number of cases pending when it passed. The result could void several suits under the state’s unfair competition law by declaring that the plaintiffs who filed them lacked standing. But in an almost conciliatory gesture, the seven justices also implied they might be willing to let current plaintiffs in some of those cases substitute in new plaintiffs who have suffered direct harm and, thus, could claim standing to sue. Those cases would survive. “The plaintiffs,” Justice Joyce Kennard said, “would simply be substituting someone who can allege actual injury.” The courtroom was overflowing with attorneys eager to hear arguments in the two cases that have been highly anticipated since being taken up early last year. More than 30 amicus curiae briefs on both sides of the debate were filed by legal groups, insurers, bankers, health organizations, retirement associations and environmental advocates, to name a few. The focus of the cases is Prop 64, passed on Nov. 2, 2004, to prevent frivolous lawsuits. In particular, the measure amended state Business and Professions Code � 17200, also known as the private attorney general statute, to limit the filing of UCL suits to individuals actually injured by � or who lost money or property because of � someone else’s illegal acts. In Californians for Disability Rights v. Mervyn’s , S131798, the giant retailer had been sued by a group claiming it refused to provide full and equal access for customers with disabilities. Californians for Disability Rights didn’t claim any direct harm against itself, however. Alameda County Superior Court Judge Henry Needham Jr. entered judgment for Mervyn’s, but while on appeal Prop 64 passed. Last year, San Francisco’s First District Court of Appeal rejected the retailer’s motion to dismiss, ruling that the measure wasn’t retroactive and, therefore, the disability rights group had standing. In Branick v. Downey Savings and Loan Association,S132433, Thomas Branick and Ardra Campbell filed a suit claiming that the bank’s lending practices violated the UCL. Neither had ever had a loan with Downey, but filed as private AGs. Los Angeles County Superior Court Judge Wendell Mortimer Jr. ruled that the couple’s claims were pre-empted by federal law. Last year, L.A.’s Second District reversed, but, nevertheless, found Prop 64 retroactive and declared Branick and Campbell lacked standing to proceed. On Wednesday, the high court seemed to concentrate on whether the amendments to the Business and Professions Code were merely procedural or substantially affected plaintiffs’ rights and obligations. If it’s the latter, new laws shouldn’t be applied retroactively. “This is simply an issue of whether or not this party still has standing to pursue a suit,” argued David McDowell Jr., a partner in Morrison & Foerster’s Los Angeles office who represented Mervyn’s. “They do not under the current law. “What was barred by the law is still barred,” he said. “It’s only the parties that changed.” Sturdevant, of the Sturdevant Law Firm, argued just the opposite, that the changes wrought by Prop 64 are substantial and that his client, the Californians for Disability Rights, should still have standing. “But,” Justice Ming Chin asked, “did the voters intend for lawsuits like this to continue?” Sturdevant argued that the voters’ intent on retroactivity is ambiguous at best and that when that’s the situation the presumption under case law is that a measure be construed to apply only prospectively. In other words, on future cases. New York’s Spencer, a partner at Milberg Weiss Bershad & Schulman who represented Branick and Campbell, took the same position. “The verb ‘file’ is used repeatedly [in the ballot measure],” he argued. “And the verb ‘file’ used in this context should be interpreted to ‘filing’ cases in the future.” Not, he said, those already filed. Justice Marvin Baxter expressed some irritation with Prop 64′s pre-election proponents and opponents for not clarifying things at the get-go. He said it “seems to me so obvious that the issue of whether this was going to be retroactive was common knowledge” among both the plaintiffs’ and defense bars. Yet, he said, neither side tried to clear this up for the voters. “It seems to me that both sides said it would be detrimental to them to mention it,” Baxter said, noting that each made a “political judgment” and “decided not to discuss it and, instead, dump it into the lap of the judiciary.” Although the court seemed receptive to the concept of letting new plaintiffs who have suffered direct harm substitute in to pending cases, Matthew Hodel, a partner in Irvine’s Hodel Briggs Winter who represented Downey Savings, was opposed. He said that would allow the current plaintiffs to serve as “professional placeholders” and would frustrate the will of the voters. “Wouldn’t the voters be surprised to hear that the same plaintiffs they’ve rejected [will continue] to be the parties behind these cases?” Hodel said. “They’d be surprised that these plaintiffs have been grandfathered [into the cases].” The court didn’t agree. Justice Carol Corrigan noted that case law has a “history of substitution,” while Justice Kathryn Mickle Werdegar said substitution would seem to satisfy the goal of the voters � to make sure that anyone filing a UCL has actually suffered harm. Rulings in both cases are due within 90 days.

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