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Lawyers Who Sue to Settle

Filing hundreds of cases citing consumer laws' fine print, they rarely go to trial but collect thousands from badgered businesses.

October 26, 2002|Monte Morin | Times Staff Writer

They've sued bowling alleys, alleging that "ladies night" discounts are unfair to men.

They've sued software manufacturers on the ground that their bulky packaging tricks consumers into thinking they're getting more than a small computer disk.

They've sued makers of herbal remedies, contending that tiny bottles of extract are alcoholic beverages potentially harmful to unborn babies.

A small band of litigators has struck gold in the fine print of laws intended to protect Californians from hazardous chemicals, discrimination and business scams.

They blanket the business world with hundreds of lawsuits at a time, often making claims that appear fanciful, even absurd. Most of the cases never get to trial. The lawyers make their money on settlements paid by defendants who just want to make the suits go away. The amounts typically are modest -- from $2,000 to $50,000 -- but they add up.

Los Angeles attorney Morse Mehrban helped pioneer this form of litigation. He describes himself as a "bounty hunter," and his prey consists of hotel owners, dentists and purveyors of aromatic oils, medical implants and many other products.

"It's my job to go out there and hunt these people down," he said.

A group of Los Angeles-area hardware stores paid Mehrban $27,500 last year to settle a lawsuit claiming that discarded metal filings from key-duplicating machines posed a threat of lead contamination.

Earlier this year, Mehrban filed 400 separate claims against makers of candles, charging that the common table ornaments emit toxic fumes. He's currently in court with more than a dozen manufacturers and retailers of artificial fireplace logs, which he claims emit toxic fumes when lit.

He once sued dozens of hotel chains that allegedly had failed to post warnings about the hazards of cigarette smoke in lobby and pool areas. A Los Angeles judge who dismissed one of the cases -- against the Miramar Sheraton -- likened the lawsuit to "racketeering."

Such criticism does not faze Mehrban. Though he bills his time at as much as $400 an hour and drives a Mercedes roadster, he says he's not in it for the money.

"I've always been interested in leveling the playing field for everyone, especially the little guy," he said. "I take it as a personal affront when I see injustice done to people.... That sense of injustice becomes your internal fuel. That's what drives me."

Many of the cases filed by Mehrban and other lawyers in this specialty involve Proposition 65. The law, approved by California voters in 1986, requires businesses to warn the public about products or activities that cause exposure to hazardous chemicals.

Proposition 65 is responsible for the signs seen at entrances to office buildings, parking structures and other public places stating that "Products Sold or Used on These Premises May Contain Chemicals Known to the State of California to Cause Cancer or Birth Defects."

The law allows private individuals to sue companies that fail to comply. The plaintiffs need not have suffered any personal harm. Businesses shown to have broken the law can be ordered to pay the plaintiffs' legal fees. Nonprofit consumer groups that bring suits can also collect fines from the defendants and use the money to fund future lawsuits.

The number of Prop. 65 suits has increased from 50 in 1988 to more than 5,000 last year. Many are filed on behalf of nonprofit groups; some of these bill themselves as independent organizations but are closely tied to the lawyers filing the suits. Mehrban frequently sues on behalf of a nonprofit of which his mother and fiancee are officers.

Such suits typically target hundreds, occasionally thousands, of businesses at a time.

"It's as if someone has gone to a catalog or to the Internet to find as many people as they can" to sue, said Ed Weil, a deputy state attorney general involved in a crackdown on frivolous Proposition 65 cases.

Weil said the mass lawsuits can be lucrative, even if individual settlements are modest. "If you get 400 companies to give you $2,500 each, then you've got $1 million," he said.

'Why Create Us?'

Handsome and trim, the 33-year-old Mehrban wears a light beard and a serious expression. Despite the fancy car, he claims to live the modest life of a consumer advocate. If he wanted to make a fortune, he said, he'd work for corporations instead of suing them.

He lives in a Brentwood condominium. "You know how much it costs to buy a home here?" he asked. "More than I can afford."

His office is on a side street in Koreatown, on the second floor of a converted Craftsman house with peeling yellow paint. A poster of the Al Pacino film "The Devil's Advocate" hangs above a sofa. He knows the title sums up how many of his targets view him. He says their ire is misdirected.

"The people of California voted to approve Proposition 65," Mehrban said. "We are the manifestation of the people's will. It's like Frankenstein's monster. If you didn't want us, why did you create us?"

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