California has a binding ruling on Proposition 64,for now.
The 1st District Court of Appeal in San Francisco ruled this week that Mervyn’s could not retroactively use Proposition 64 to seek the dismissal of a lawsuit brought by Californians for Disability Rights.
Mervyn’s lawyers had sought retroactive protection from the lawsuit under Proposition 64, an initiative passed by voters in November that limits litigation under the state’s unfair competition law, known as the Business and Professions Code 17200.
The department store chain wasn’t alone.
Defense attorneys have been arguing in recent months that 17200 cases filed before Nov. 3,the day after voters approved Proposition 64 with a healthy majority,can take advantage of the new law.
Abuse of 17200 drew intense criticism from businesses during the past few years as law firms, such as the now-defunct Trevor Law Group LLP of Beverly Hills, sent thousands of letters to businesses threatening lawsuits if they didn’t settle on the spot.
Perhaps the biggest beef with businesses: 17200 didn’t require a plaintiff to suffer harm before a suit could take place.
Proposition 64 changed all that.
The measure requires nearly all plaintiffs to prove they’ve personally suffered harm. The law still allows a public official, such as the attorney general or a district attorney, to sue a company without having a plaintiff show harm.
The new law spurred a flurry of appeals from attorneys defending clients facing 17200 lawsuits. There’s no question about Proposition 64 applying to cases filed after Nov. 2.
But defense lawyers also have argued the law should apply retroactively to cases that already were in the court system before that date.
Since November, a number of trial courts throughout the state have come down on both sides of the issue. But only appellate courts may issue a binding ruling.
One local attorney said this ruling won’t be the last word on the issue.
“Each of the other courts of appeal can make a decision and if they differ on the issue then it’s likely the California Supreme Court eventually will take up the matter,” said Dale Giali, partner with the Irvine office of Washington, D.C., law firm Howrey, Simon, Arnold & White.
“The Supreme Court likes to let an issue percolate, to see how the various courts of appeal rule on the issue,” he said. “If you get a split among the appellate courts then the state Supreme Court will take on the case and make the final determination.”
