Proposition 64 aims to limit the individual's right to sue under the California Unfair Business Competition Law to claims that the individual was actually injured by, and suffered financial/property loss because of, an unfair business practice. It also requires the claims to meet procedural requirements for class action lawsuits, and authorizes only the California Attorney General or local government prosecutors to sue on behalf of the general public to enforce unfair business competition laws. Finally, it also requires penalty revenues received by state and local governments to be used only for the enforcement of consumer protection laws.
Official Voter Information
The Argument For Proposition 64
Proponents argue that this statute is needed because California law now allows private lawyers to file frivolous lawsuits against small businesses for minor errors (ie., travel agents who fail to list their California Seller of Travel codes on their web sites, automobile dealerships and local homebuilders who make technical violations in the financial terms section of their ads, etc.). Proponents claim that some lawyers force settlements out of small business owners by threatening expensive litigation based on the current law. Proponents of Proposition 64 characterize the existing law as contributing to a poor business climate in California. They also argue that with the passage of Proposition 64, settlement money will go to the public benefit, not into the pockets of trial lawyers.
Spearheading the campaign for Proposition 64 is the Civil Justice Association of California, a coalition of citizens, taxpayers, businesses, local governments, professionals, manufacturers, financial institutions, insurers, and medical organizations opposed to wasteful lawsuits. Substantial financial contributors to the campaign include: the Alliance of Automobile Manufacturers, Bank of America, Blue Cross of California, Citigroup, Kaiser, Nike, State Farm, and others.
The Argument Against Proposition 64
Opponents argue that while frivolous lawsuits do occur, Proposition 64 would deprive consumers of protection from real abuses. They assert that this measure would no longer allow lawsuits that seek to prevent fraud, environmental harm, or a public health threat. Nonprofit groups could no longer bring lawsuits in the public interest, previously the source of much consumer protection law. Opponents also point out that at least 22 of the larger contributors to the pro-64 campaign (including most of those noted above) were themselves sued successfully under the existing unfair business practices law, and these are not the small companies victimized by abusive law firms. The opponents of Proposition 64 claim that these cases all involved serious abuses of the public interest, and would be far less likely to be pursued under the strictures of Proposition 64.
"Late-breaking surge of No votes on Prop. 66 (three strikes limits) puts outcome in doubt. Declining support for Prop. 62 (open primary). Heavy No vote on two Indian gambling measures.,"Field Poll, Oct. 30, 2004. (Release #2146).
"Large majority continues to favor Prop 66, to limit "Three Strikes" law; Plurality intends to vote no on Prop. 64, tort reform, although many remain undecided," Field Poll, Oct. 13, 2004. (Release #2141).
"Propositions 66 and 64: Voters appear disposed to put limits on state's "three strikes" law. Tort reform proposal trailing," Field Poll, Release #2129, August 14, 2004.