Law.com reports that a ballot initiative is underway to repeal those portions of California Business & Professions Code 17200 that permit the filing of mass actions challenging “unfair” or “unlawful” business practices without proof that the plaintiff was injured or even ever did business with the defendant and without meeting the standards for class actions. I’ve previously commented here on this liability monstrosity, which to me at least is the single most business-unfriendly aspect of California’s uniquely business-unfriendly legal environment.
While I think it would be a wonderful thing to return to the core principle of law that only one who has been harmed can sue, I’m not so sure the initiative process is the best way to do this. First, the plaintiffs’ bar will be very well-funded and is likely to distort the issue; they’re already framing this as a question of “the ability of private attorneys to prevent impending harm to the public by filing suit,” which is ridiculous. The statute, as currently used by the plaintiffs’ bar, doesn’t aim at preventing businesses from commencing conduct that will cause grave harm; rather, it is more commonly employed to tie down companies over existing business practices that can’t be found to have caused actionable harm under traditional legal principles. Second, the new Governor has promised to make 17200 reform a key part of his revival of the business environment; while Schwarzenegger may well fail in getting legislative action on this (the plaintiffs’ bar has such a tight grip on the legislature that before the recall the legislature was pressing to expand 17200), he should be given a chance to prove that it can be done through normal channels; the initative process should, at most, be a last resort for the Governor to go over the heads of the legislature if they obstruct any changes.