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LIMITS ON PRIVATE ENFORCEMENT OF UNFAIR BUSINESS COMPETITION LAWS.
Initiative Statute

THE QUESTION

Should California’s unfair business competition laws be amended to: restrict the right to individual or class action lawsuits to those who have been actually injured or suffered financial or property loss; require those suing on behalf of others to meet class action lawsuit requirements; and require civil penalty revenue to be used for consumer protection enforcement?

THE SITUATION

Currently, California’s unfair competition law prohibits unlawful or fraudulent business acts. This law may be acted on by the Attorney General, local prosecutors, or people acting on their own behalf or that of the public. Those bringing the action do not need to have suffered injury or lost money or property. Those bringing lawsuits do not have to meet the requirements for class action lawsuits. Violators may be required to pay a civil penalty of up to $2,500 per violation, and state and local government may use these revenues for general purposes.

THE PROPOSAL

Proposition 64 would restrict those who could bring a lawsuit to the Attorney General, local prosecutors, and people who were injured and lost money or property. This measure would require that, other than the Attorney General or local prosecutors, persons bringing an unfair competition lawsuit on behalf of others meet class action lawsuit requirements. Any civil penalties received by state and local governments could be used only for the enforcement of consumer protection laws.

FISCAL EFFECT

The fiscal impact of this measure is unknown. If the number of cases of unfair business practices declines, then a savings may be realized. If the number of class action lawsuits is increased, the court workload and costs will increase.

Civil penalties now directed to the General Fund would be received by the Attorney General’s office for enforcement of consumer protection laws. Civil penalties due to local governments would be directed to local public prosecutors for enforcement of consumer protection laws and would be diverted from local governments.

WHAT A YES OR NO VOTE MEANS

A YES vote means that the unfair business competition laws would be amended to limit those who could bring an action to: the Attorney General, public prosecutors or those showing actual injury. It would require those who bring a suit on behalf of others to qualify for a class action lawsuit. It would require that civil penalties be used for enforcement of consumer protection.

A NO vote would leave the current laws unchanged.

SUPPORTERS SAY

• Proposition 64 will stop frivolous lawsuits that harm small businesses, while protecting the right of those actually harmed.
• The measure will put settlement money into enforcement of consumer protection laws, not private pockets.

OPPONENTS SAY

• Large businesses have .nanced the Proposition 64 campaign because it will limit the rights of private citizens to bring consumer protection lawsuits.
• Corporations that pro.t from intentionally polluting our air and water or invading our privacy should be subject to lawsuits regardless of personal injury or loss.

For more information:

Supporters: Californians to Stop Shakedown Lawsuits, (916) 677-5595, www.stopshakedownlawsuits.com

Opponents: Foundation for Taxpayers and Consumer Rights, www.electionwatchdog.org

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