Election results show California Proposition 64 passing. Proposition 64 made relatively minor changes to Business and Professions Code Section 17200 and 17500, the California Unfair Business Practices Act and Unfair Competition Act.
Prior to the Initiative, any person could file a complaint against any business entity for unspecified "unfair business practices." Nearly anything could be characterized as unfair competition or unfair business practices. Typically an unscrupulous lawyer "plaintiff" would sue an unsuspecting business under the act and then offer to dismiss the suit for a "reasonable" sum of money, usually $5,000 or so. They would count on the defendant's own lawyer telling the defendant that extortion settlement was cheaper than litigation. Most settled.
Now, the initiative has changed the standing requirement. Any City attorney, district attorney or the Attorney General's office can file suit under the Unfair Business Practices Act, as they always could. However, private citizens who also could previously sue under the act, can now sue only if that private citizen has "suffered injury in fact and has lost money or property" as a result of any unfair business practices. This modest change in the law will allow defendants who are unfairly sued to have non-meritorious cases economically dismissed very early in the proceedings. I predict that the rampant abuses under the law will dramatically decline.
Here is the text of the Inititative, with additional information.
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