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Press Release

Stop Shakedown Lawsuits in California



• 17200 (Business and Professions Code Section 17200) has been protecting consumers and business by allowing district attorneys to go after companies that mislead consumers in order to gain an advantage in the marketplace.

• Unfortunately, there is a legal loophole that is letting personal injury lawyers file shakedown lawsuits and demand attorneys' fees from California businesses even though no one has been injured, damaged, or mislead, and no consumer or other business has asked a lawyer to file a lawsuit!

• The lawyers who abuse this loophole never intend their frivolous “17200” lawsuits to make it to court, but use their threatening form letters demanding that a business owner pay a several-thousand dollar settlement or face an even more costly lawsuit.

• Despite overwhelming evidence of shakedown lawsuits against small businesses across the state, the Legislature adjourned September 12 without enacting any laws to stop frivolous 17200 shakedown lawsuits. Personal injury lawyers blocked every legitimate reform attempt.

• As a result the coalition drafted an initiative that provides common sense reforms to close the major loopholes in the law that have permitted unscrupulous lawyers to prey on California’s small business owners.

• The initiative ensures continued protection for consumers from unfair competition and deceptive advertising, but reforms it to discourage its use by private fee-seeking lawyers without clients.

• Some of the key provisions include:

Requiring an attorney who files a lawsuit to have an actual client who has been harmed or suffered financial injury.

Protecting your right as a consumer to sue someone if you have been harmed or damaged.

Allowing ONLY public officials (the Attorney General, District Attorneys and some City Attorneys) to file lawsuits on behalf of the “general public.” And dedicating more funding to their efforts.

Requiring lawyers that want to represent big groups or the public at large to go to court as they do in every other state and seek certification of a legitimate class action lawsuit.