Tuesday, September 11, 2007


" ... Lockheed exposed workers to toxic chemical products during the 1960s through the 1990s and not only knew of the hazards, but failed to inform the workers. A jury found a causal connection between the chemicals and leukemia and cancer. ... "


California Political Desk
August 14, 2007

Initiatives Were Filed to Protect Consumers From a Dangerous Business-Backed Initiative Filed Last Month That Would Put Profits Ahead of Treating Consumers and Employees Fairly.

Sacramento, Calif. - The Consumer Attorneys of California (CAOC) filed measures for the ballot today that if passed would protect consumers from the big businesses attempting to pass a separate initiative to prevent consumers from holding corporations accountable for their actions. The Civil Justice Association of California (CJAC), the big oil-, insurance-, and tobacco-backed front group, recently filed an initiative that would effectively eviscerate California's class actions law - taking it from being one of the most progressive to the worst in the country. CAOC's initiatives all tap into voter concerns about the power of big business and promote specific pro-consumer reforms that would impact big business by making them more accountable to shareholders.

Raymond Boucher, partner at Kiesel, Boucher & Larson LLP and President of CAOC, stated: "A few weeks ago CJAC and the Chamber of Commerce - backed by the oil, tobacco, insurance, and HMO industries - filed an initiative designed to eliminate Californians' rights to protect themselves against corporate fraud, dangerous products, and the pilfering of worker and investor profit sharing plans. They claim their motivation is to bring predictability to class actions, but we all know we cannot trust the Enrons, WorldComs, and Tycos of the world. Their real motivation is corporate greed. Eliminating class actions would give these corporate giants a free pass when they destroy the rights of the people of California.

"Today we're standing up against the Intels of the world and their racist ads, the Enrons of the world and their corporate greed, and the HMOs of California and their denial of basic health care needs for millions of Californians everyday. Today we're filing three initiatives designed to provide power to consumers, workers, and small businesses in California. These initiatives will provide real reforms and allow us to hold the Enrons, the HMOs, and the oil companies accountable for misconduct when they harm consumers and shareholders. It's time to say we're not giving away any more of our legal rights to corporate America, instead we're putting the power back into the hands of the people we can trust: the voters, the workers, and the consumers of California."

Historically, the combination of California's class actions law and the size of the marketplace meant that California led the way in holding corporations accountable - issues from civil rights, the environment, and tobacco to suits against powerful companies like Enron for rolling blackouts. CJAC's effort is designed to try to demolish the law, which would make California more vulnerable to future Enrons than ever before.

The initiatives filed by the Consumer Attorneys of California include:

• Class Action Reform and Corporate Accountability Act: This initiative would reform the class action law by requiring that consumers be notified in a more effective way if they are going to be involved in a lawsuit, by requiring that 25 percent of punitive damage awards be directed to support the state's enforcement of consumer laws, and authorizing stricter standards when it comes to the conduct of lawyers negotiating settlements.

• Corporate Accountability Act: This initiative would take away any illegitimate pay and investment income from executives who are convicted of corporate fraud and use that money to support the Victims of Corporate Fraud Compensation Fund.

• No Say No Pay Act: This initiative would require publicly traded companies to release information about the pay for top executives, allow stockholders in those companies to vote on compensation levels for top executives, and allow shareholders to file class action lawsuits against executives and board members if they approve of executive pay and benefits - or alter the pay - without shareholder approval.

Copies of the initiatives can be found at www.caoc.com/classactioninitiative.

The business-backed CJAC initiative would have the following impact:

• It would cripple civil rights, age, and sex discrimination cases because some victims would have to choose between asking the courts to make a company stop discriminating against them or receiving financial compensation for the discrimination, but not both as is currently allowed under state and federal law.

• It purposely creates a catch-22 that rigs the rules against victims of corporate fraud because they are required to present evidence against the defendant before the case can move forward, but at the same time, they would not be allowed to gather the information they need from the company they are suing.

• It would apply retroactively to cases already in progress. For example, GM is being sued for installing defective breaks in over four million cars (see below) - but if this initiative passes, this suit would have to start from the beginning and probably could not go forward at all.

• It creates a hypocritical double standard because the corporations who support these new restrictions would never accept any of the same restrictions on the business lawsuits that they file. Corporations want to keep their legal rights, while restricting the same legal rights for consumers.

• The supporters of this initiative are working hand in hand with the efforts of George W. Bush to make it harder for consumers and employees to hold corporations accountable through our legal system. This initiative forces class action lawsuits into the federal courts, where George W. Bush has already passed a law restricting federal class action law suits.

• The initiative is designed to delay the process so that class action lawsuits are never resolved and corporations never have to give consumers what they owe. The initiative allows corporations, with their unlimited resources, to drag out a case for many years using motions and appeals. This would clog our courts and create huge legal bills for individuals seeking justice.

Earlier this year CJAC unsuccessfully attempted to push a similar bill the state Legislature in Assembly Member Nicole Parra's AB 1505. Those that fund CJAC - big oil, big tobacco, and big insurance - are seeking a 'get out of jail free' card in their attempts to eliminate class action lawsuits. Virtually all of the CJAC corporate members have had major class action cases successfully filed against them for misconduct.

Some cases that would be impacted or would have been impacted by this CJAC effort:

• Enron declared bankruptcy in December 2001, costing four thousand employees their jobs and retirement savings, along with billions of dollars in losses investors. A collection of class-action lawsuits against Enron executives are helping employees and investors recover billions in wages, investments, and retirement savings that innocent people lost as a result of fraud committed by a few of corrupt executives.

• Blue Cross agreed to settle a class action case in 2006 for millions of dollars because it had canceled patients' policies once they got sick and racked up big medical bills. Blue Cross is a CJAC Board member.

• The State of California and several California cities and counties won a $1.7 billion dollar settlement that helped 13 million Californians who paid excessive gas and electric bills after Sempra Energy illegally conspired with other gas companies to prevent competition from cheaper natural gas from Canada.

• In 1991, employees of Denny's in San Jose requested that a group of black college and high school students pay a cover charge not required of white customers. Attorneys argued that Denny's managers limited the number of black customers by requiring them to pay in advance, telling them tables were not ready, or just ignoring them. As a result, Denny's settled the case for $54 million, trained employees in racial sensitivity, and agreed to hire an independent civil rights monitor.

• In a case currently pending before the California Supreme Court, the cigarette-maker Philip Morris is accused of promoting light cigarettes as a healthier alternative to regular cigarettes, even though they knew the cigarettes contain the same amount of nicotine and tar, if not more.

• Lockheed exposed workers to toxic chemical products during the 1960s through the 1990s and not only knew of the hazards, but failed to inform the workers. A jury found a causal connection between the chemicals and leukemia and cancer.

• A lawsuit has been filed on behalf of the owners of 4.1 million vehicles against General Motors for installing defective parking brakes and failing to repair them. GM's negligence has resulted in serious bodily injury and death, and 40 percent of the defective vehicles were sold in California. GM is a CJAC Board member.


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