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January 28th, 2011

Screws Loosened for California Consumer Lawsuits

It’s precisely the type of lawsuit that gave California a reputation for consumer lawsuit abuse.  Lawyers sued the lock manufacturer, Kwikset for deceptive advertising because products, labeled as “Made in the U.S.A.,” included components, such as screws, produced overseas.  In a ruling yesterday, the California Supreme Court said the lawsuit may proceed.

In 2004, state voters reacted to such lawsuits with overwhelming support of Prop. 64, an initiative requiring those alleging deceptive conduct to minimally show that they were actually injured or experienced a monetary loss as a result of the conduct. 

Since then a group of lawyers and professional plaintiffs who make a very nice living suing California businesses have waged a counter-offensive against the reformers who believe consumer protection laws should primarily protect consumers, not enrich lawyers. 

But the litigation industry have now retaken more strategic ground, as California’s high court ruled that a consumer may sue even if he or she does not claim that the product was overpriced or did not work as it should. 

While the District of Columbia’s highest local court recently reined in consumer lawsuit abuse stemming from a statute modeled on California’s law, the once Golden State, the #2 Judicial Hellhole, has now taken another step in the wrong direction.

In a dissent, Justice Ming W. Chin,  joined by Justice Carol A. Corrigan, recognized that “this cannot be what the electorate intended” in voting for a measure intended to reduce frivolous lawsuits.

More reaction from:

Los Angeles Times, Civil Justice Association of California, Overlawyered.

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