Confusion Reigns Over The Retro-applicability Of Prop. 64

The LA Times (12/27/04) reports that frustration is mounting for opponents to Proposition 64 because the recently passed law is being retroactively applied to lawsuits that were pending prior its passage.  Proposition 64 modified California’s Unfair Competition Law by forcing plaintiffs in unfair-competition cases to prove that they have personally suffered an injury or loss because of the company’s behavior. (Under prior law, any plaintiff could bring suit regardless of whether they suffered personal harm or injury if they felt a company was causing harm to others.)

Touted as a law to prevent small business shakedowns, Proposition 64 proponents were able to convince the people of California to pass it in the November 2 elections.  Since its passage, many companies, such as DaimerChrysler and Mercury General Corp., have asked state judges to dismiss pending unfair-competition lawsuits that were pending prior to November 2.  Trial courts have been split over the retro-applicability of Proposition 64.

The opposition to Proposition 64’s retro-applicability, headed mainly by environmental groups like the Sierra Club, argue that the Proposition as described on the ballot made no mention of retro-applicability.  As such, it should not be read into the law and the pending suits should be allowed to proceed pursuant to the prior law that they were filed under.  Proponents to Proposition 64 feel that the voters have spoken and retro-applicability is consistent with the policy behind the new law. The issue is unlikely to be resolved until the California Supreme Court has its say.