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It has been used in suing software companies for excessive packaging and the makers of the Easy-Bake Oven over the toy’s cooking speed. But soon California voters may get the chance to decide whether the state’s unfair competition law goes too far. Fed up with what they say is the Legislature’s lack of interest in stopping these types of lawsuits, civil defense lawyers, tort reform lobbyists and business interests say they are considering a ballot initiative to amend Business and Professions Code � 17200. If launched, the initiative is sure to ignite a firestorm of protest from trial attorneys who have, since 1997, successfully kept the statute free from legislative intervention. It could also prove to be one of the most expensive initiative campaigns in California history. At a meeting earlier this month in Sacramento a coalition of 17200 opponents met to discuss — much like they do every year — the best way to go about amending the law. The goal, they say, is to remove broad language, which allows plaintiffs’ lawyers to sue companies for anything deemed “unfair.” Called the private attorney general feature of the law, critics say it encourages just about anyone to file quasi-class actions without any single plaintiff having to demonstrate actual injury. “More and more people want to put an end to this legalized extortion,” said John Sullivan, president of Civil Justice Association of California, a leading tort reform group that hosted the meeting. Sullivan said a ballot measure is one way of doing that since past attempts to pass legislation have failed. “When the Legislature is occupied with other things, you have to look at all the options,” he said. Sullivan said the goal is to limit the statute to what is unlawful or negligent. He said any proposal would have to keep consumer protections intact while limiting the potential for abuse by private lawyers. Further legislation has not been ruled out, but because the general feeling among critics is that the courts and the Legislature have done little to rein in the law, their best chance, they said, might lay with the voters. Because the initiative is still being developed, Sullivan said the earliest it might make it to the ballot is 2004. Although the original statute is more than 50 years old and is an outgrowth of the Federal Fair Trade Act, critics say it has been amended to the point where it has become the broadest such law in the nation. As it stands, the statute allows a lawyer, in most cases, to proceed with a claim against a company without having to show evidence of harm. Prior to the millennium, for example, software companies were being sued for selling programs that were not Y2K compliant, although no potential injury or wrongful conduct could be proven, critics said. While the California Supreme Court did curtail the law slightly last year — ruling that 17200 can’t be used like a class action to force businesses to disgorge ill-gotten gain into a fund for all potential victims — it has largely deferred to the Legislature to make more sweeping changes. Claude Stern, an intellectual property partner at Palo Alto, Calif.’s Fenwick & West and a proponent of the proposed initiative, said attempts by state courts to deal with the law have been remarkably ineffective, and he said trial lawyer campaign contributions have put the kibosh on any hope of getting a bill passed in the Legislature. “It’s up to the citizens of California,” he said. Stern added that he has had no doubt that trial lawyers will fight such a campaign tooth and nail — meaning any attempt to thwart 17200 will come with a huge price tag. “Whatever it costs will be well worth it for California businesses,” he said. Sharon Arkin, Consumer Attorneys of California secretary and a partner at the Newport Beach, Calif., firm of Robinson, Calcagnie & Robinson, said although it’s too early to talk specifics, the organization would work to defeat any measure put forward. Arkin said the discussion of an initiative could just be an attempt by big business to gain more leverage in the Legislature. If a ballot measure does become a reality though, she predicts it will prove to be an extremely difficult and expensive endeavor. Arkin believes that because the initiative’s proponents favor big business, it will be difficult to get their message across to the voters. “People like bad business less than they like lawyers,” she said. Arkin also said it’s much easier to get a “no” vote on an initiative. She said that the insurance industry spent $50 million last year to sponsor and defeat Propositions 30 and 31 — two initiatives that would have given injured persons the right to sue insurance companies who act in bad faith. Arkin thinks it will be even more costly for a � 17200 campaign. “They’ll have to spend a lot more,” she said. Robert Stern, president of the Center for Governmental Studies in Los Angeles, said when there is an equal amount of money from both sides, an initiative is more likely to be defeated. “When voters are faced with contradictory information they tend to vote no,” he said. “It’s very difficult to pass these things.” While proponents of an initiative say it’s too early to speculate on how much it might cost, it’s extremely likely given what’s at stake that the figure will surpass the $41 million spent by business in 1996 to oppose Proposition 211, an initiative that would have made it easier to sue corporations for securities fraud. “It will take a lot of money to get a yes vote,” Robert Stern said.

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