As late as August we were still urging Sacramento to pass modest tort-reform legislation to protect businesses from shakedown lawsuits. It didn't happen, hasn't happened for a decade and, in light of the power of the trial lawyers' lobby, may never happen. So we have no choice now but to urge a "yes" vote on Proposition 64. California cannot continue to tolerate such frivolous litigation.
At issue are the state's unfair business competition laws, which allow the state attorney general, local prosecutors and private parties to sue anyone engaging in unlawful or fraudulent behavior.
The trouble is, unlike in almost every other state and at the federal level, private parties in California needn't show any harm to bring a lawsuit. Trial lawyers are essentially deputized to go out and enforce the law, and to engage in bounty hunting by uncovering supposedly unfair business practices without even finding a client injured by the practice. Not so shockingly, the result is too many lawyers forcing small businesses to pay settlements to avoid unjustified but costly lawsuits.
Proposition 64 would curtail such shakedowns by amending the law so as to require a showing of actual harm by a private party. The proposition aligns California law with traditional American constitutional notions that a party requires "standing" to sue, and it would be an affirmation by California voters that due process and fairness are not judicial concepts that can be watered down to make it easier to sue corporations.