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| | Businesses Call for 17200 Claims Safe Legislation
By Robert Warne - December 13, 2002Business and Professions Code Sec. 17200, the California Unfair Competition Law has been used to break up monopolies and punish fraudulent business practices that can hurt consumers and other businesses since the 1920’s. But much like a dolphin caught in a tuna net, numerous legitimate businesses have been hauled in with the 17200 legal tackle as well. For this reason, 17200 abuses are beginning to stink for many whose businesses have become endangered because of countless inconsequential claims.
Companies like Nike and Kaiser that have been sued under 17200 for certain liberties taken with the English language in their advertising are now being joined by small businesses with no legal representation and charged under the same law for minor paperwork slip-ups.
It has been reported that 17200 claims have become so common that some adjusters have been assigned to desks specifically dedicated to handling such claims.
And because it’s one of the loosest laws on the books, attorneys in California can make a handsome living with no client base whatsoever. The statute is so wide open, an attorney doesn’t have to prove anyone suffered a loss or was deceived, nor prove there was any intent to deceive. Also a suit can be filed even if a district attorney or another private lawyer already investigated and resolved a complaint related to the same activity.
The business model for some law firms has been to profile small businesses would be more inclined to settle than pay the high cost of a legal showdown.
Typically 17200 suits don’t receive much media attention because attorneys don’t want others muscling in on their turf and business don’t want to invite other attorneys to come feast on their liabilities.
But the paradigm has shifted in the recent outbreak of claims against auto shops and restaurants. KFI 640’s John and Ken have gone to great lengths to expose the level of perversion the Beverly Hills based Trevor Law Group has taken 17200 to leverage money from small businesses. Through their reporting they’ve caught Trevor Law representatives in some compromising situations and have invited other members of the media to do so as well.
The State Supreme Court has acknowledged 17200’s flaws, but has asserted it’s up to the Legislature to fix the problems.
So until the Legislature changes the law and as long as seminars are offered with titles like, “How Business and Professions Code Section 17200 Can be a ‘Value Added’ Component of Your Litigation,” and “Developing a New Practice – 17200,” business models will remain in tact and attorneys will continue to cash in on 17200 claims.
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