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May 18, 2009

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Mark from LA

If corporations would stop engaging in illegal and/or deceptive advertising campaigns in an effort to extract money from consumers who would not purchase without such advertising (let's face it, that's why corporations spend billions on advertising every year), they wouldn't be complaining. The fact is they want to be able to say whatever they want - truth be damned - in their ads, while being immunized from suit based on such false advertising.

The California Supreme Court got it right in its opinion, both as a matter of law (which is what really matters), and as a matter of policy. Corporations can protect themselves from being sued by altering their deceptive advertising practices.

Bruce Nye

I usually try to avoid turning the comments section of CBL into a debating society between myself and readers, and like most bloggers, I appreciate all comments, including those from Mark from LA's. But I can't let this one go by without a response.

The last thing I am going to do is defend the tobacco industry (which I have never represented) or its advertising history. But the idea that what is wrong with the UCL can be fixed just by having corporations comply with the law shows a misunderstanding of how the UCL was working (or not working) in California. And the problem was more systemic than the abuses of the Trevor Law Group.

Here's an example: In the lead-up to Proposition 64, most of Calfornia's new car dealers were sued under the UCL in the coordinated Automobile Advertising Cases. Dealers who advertised lease terms were under attack by non-customer plaintiffs for such violations as failing to disclose in newspaper advertisements that a lease transaction was a lease transaction, whether or not a security deposit was required, or the charge per mile for mileage in excess of the limit stated. Dealers who advertise credit terms faced litigation for similar transgressions.

Don't get me wrong, these advertising requirements were all legally required, and the dealers should have been more mindful of compliance. And I do not for a moment question the motives of the lawyers who prosecuted these cases.

But at a minimum, it is open to debate whether these kinds of technical mistakes warrant the transfer of hundreds of thousands of dollars (or perhaps more, I lost track) in settlement payments from the businesses to the bounty hunters and their lawyers, and the expenditure of nearly as much in defense attorney fees, all in cases where the defendants were, at worst, sloppy advertisers, and where there was never any evidence that the named plaintiffs -- or anyone else -- had been injured by these violations.

Few doubt that business needs to be regulated. The policy debate is whether this kind of litigation is the way to achieve the regulation.

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