In 2003, the Wall Street Journal labelled California ‘The Shakedown State’ because of the state’s infamous ‘unfair competition’ law (UCL). In November 2004, California voters overwhelmingly passed Proposition 64, implementing important procedural changes to that statute. As a result, the Wall Street Journal’s moniker no longer fits the state quite so well, and companies that do business in California are pleased with the change in the law.
Although California’s UCL always provided a remedy to businesses hurt by the unfair practices of their competitors, problems arose because the statute permitted consumer lawsuits without imposing any standing requirement. As a result, the UCL empowered a plaintiff’s lawyers and reached conduct far removed from the original business competitor paradigm.
