Sharks, as that nautical wheeler Jimmy Buffet reminds, are everywhere. And so this horror story of lawyers gone wild should be a lesson to all.
California is renowned for its misdirected concerns – where else can 14 million people all drive at the same time, yet everyone worry about smoking in bars? – and goofy laws.
A number of years ago, California passed the Business and Professions Code Sec. 17200, more commonly called the Unfair Competition Law. The idea was to give state and local prosecutors FTC-like power to go after businesses that took advantage of consumers. Laws should protect the innocent, so this was not a bad idea.
However, a few years later some dim bulbs decided to allow anyone to pursue a UCL claim, not just duly elected prosecutors.
And, as you would expect, this is where it spins wildly out of control.
The expanded UCL is now laughingly referred to as the "straight face" law, meaning that if a lawyer can keep a straight face, they can sue for anything. Or, as Barbara Wheeler, vice president for the Civil Justice Association of California, put it: "UCL lets a lawyer in private practice, without a client and without tangible evidence of harm, sue a defendant for virtually whatever the lawyer asserts is ‘unfair.’"
My good friend Sergio Rivera, president of the California Tire Dealers Association – South, recently alerted his members to the latest twist: some low-life lawyers are scaring repair shop owners – including tire dealers – into settling UCL lawsuits these sharks "plan" to file against the owners. Hundreds of repair shops – including some loyal SoCal readers – have gotten these fishy calls.
More than one alert shop owner discovered that these lawyers were baiting innocent businesspeople into writing checks for $200 to as much as $5,000 on the mere threat of a lawsuit. No proof, all bluff. Fortunately, the alert ones stood their ground. More than a few, however, took the bait.
Because incompetent thieves eventually make mistakes, some of these tools didn’t pay attention to who they were trying to rob. Big O stores. Goodyear outlets. A Firestone store. And a few other hitters who didn’t hesitate to call in their suits.
These scammers were using the same tactic to extort money from small ethnic grocery stores, owned predominantly by recent immigrants who fled their homelands to escape wanton persecution. Scared that the INS will ship them back, these confused and frightened shopkeepers paid up just to make it all go away.
Welcome to America! Please deposit your life savings here!
The small business shakedown is turning more than a few heads on the Left Coast, though not as quickly as any sane person would think. Perhaps they don’t want to muss their hair.
The sloth-like California Law Revision Commission is looking into this abuse, though it didn’t seem too on the ball when a commission official told the Wall Street Journal, "Although I can’t prove it, I believe there’s a huge underground economy in UCL claims." Really? What more proof do you need that these blatant Mafia-style shakedowns exist? There are hundreds of living witnesses, if only you’d get off your laid back a–!
How did he miss this gem: SoCal plaintiff’s attorneys have an annual get together to network and trade terroristic lawyering secrets. Last year’s event – in Hawaii – featured a seminar entitled: "How Business and Professions Code 17200 Can be a ‘Value-Added’ Component of Your Litigation."
And it only gets worse. Marty Keller of the Auto Repair Coalition, a group of top shelf tire and auto players, has gone to war with these so-called "victims rights" lawyers. Keller warns that another group of sharks formed a bogus consumer group called Consumer Enforcement Watch Corporation (CEWC), and has filed hundreds of UCL lawsuits against repair shops and tire dealers in a more organized attempt to extort pre-trial settlements.
There is simply too much story and too little space. For more details on this twisted tale of legal abuse, go to www.cjac.org or contact Marty Keller at [email protected]
But let this be a reminder to be ever vigilant. And another example of why you need to join an association. They – TIA, CTDA-S and all the state groups – are busy covering your back while you’re busy making money.
Without them, you would never even know about this.
Neither would I.