Lawyers Who Sue to Settle
They’ve sued bowling alleys, alleging that “ladies night” discounts are unfair to men.
They’ve sued software manufacturers on the ground that their bulky packaging tricks consumers into thinking they’re getting more than a small computer disk.
They’ve sued makers of herbal remedies, contending that tiny bottles of extract are alcoholic beverages potentially harmful to unborn babies.
A small band of litigators has struck gold in the fine print of laws intended to protect Californians from hazardous chemicals, discrimination and business scams.
They blanket the business world with hundreds of lawsuits at a time, often making claims that appear fanciful, even absurd. Most of the cases never get to trial. The lawyers make their money on settlements paid by defendants who just want to make the suits go away. The amounts typically are modest -- from $2,000 to $50,000 -- but they add up.
Los Angeles attorney Morse Mehrban helped pioneer this form of litigation. He describes himself as a “bounty hunter,” and his prey consists of hotel owners, dentists and purveyors of aromatic oils, medical implants and many other products.
“It’s my job to go out there and hunt these people down,” he said.
A group of Los Angeles-area hardware stores paid Mehrban $27,500 last year to settle a lawsuit claiming that discarded metal filings from key-duplicating machines posed a threat of lead contamination.
Earlier this year, Mehrban filed 400 separate claims against makers of candles, charging that the common table ornaments emit toxic fumes. He’s currently in court with more than a dozen manufacturers and retailers of artificial fireplace logs, which he claims emit toxic fumes when lit.
He once sued dozens of hotel chains that allegedly had failed to post warnings about the hazards of cigarette smoke in lobby and pool areas. A Los Angeles judge who dismissed one of the cases -- against the Miramar Sheraton -- likened the lawsuit to “racketeering.”
Such criticism does not faze Mehrban. Though he bills his time at as much as $400 an hour and drives a Mercedes roadster, he says he’s not in it for the money.
“I’ve always been interested in leveling the playing field for everyone, especially the little guy,” he said. “I take it as a personal affront when I see injustice done to people.... That sense of injustice becomes your internal fuel. That’s what drives me.”
Many of the cases filed by Mehrban and other lawyers in this specialty involve Proposition 65. The law, approved by California voters in 1986, requires businesses to warn the public about products or activities that cause exposure to hazardous chemicals.
Proposition 65 is responsible for the signs seen at entrances to office buildings, parking structures and other public places stating that “Products Sold or Used on These Premises May Contain Chemicals Known to the State of California to Cause Cancer or Birth Defects.”
The law allows private individuals to sue companies that fail to comply. The plaintiffs need not have suffered any personal harm. Businesses shown to have broken the law can be ordered to pay the plaintiffs’ legal fees. Nonprofit consumer groups that bring suits can also collect fines from the defendants and use the money to fund future lawsuits.
The number of Prop. 65 suits has increased from 50 in 1988 to more than 5,000 last year. Many are filed on behalf of nonprofit groups; some of these bill themselves as independent organizations but are closely tied to the lawyers filing the suits. Mehrban frequently sues on behalf of a nonprofit of which his mother and fiancee are officers.
Such suits typically target hundreds, occasionally thousands, of businesses at a time.
“It’s as if someone has gone to a catalog or to the Internet to find as many people as they can” to sue, said Ed Weil, a deputy state attorney general involved in a crackdown on frivolous Proposition 65 cases.
Weil said the mass lawsuits can be lucrative, even if individual settlements are modest. “If you get 400 companies to give you $2,500 each, then you’ve got $1 million,” he said.
‘Why Create Us?’
Handsome and trim, the 33-year-old Mehrban wears a light beard and a serious expression. Despite the fancy car, he claims to live the modest life of a consumer advocate. If he wanted to make a fortune, he said, he’d work for corporations instead of suing them.
He lives in a Brentwood condominium. “You know how much it costs to buy a home here?” he asked. “More than I can afford.”
His office is on a side street in Koreatown, on the second floor of a converted Craftsman house with peeling yellow paint. A poster of the Al Pacino film “The Devil’s Advocate” hangs above a sofa. He knows the title sums up how many of his targets view him. He says their ire is misdirected.
“The people of California voted to approve Proposition 65,” Mehrban said. “We are the manifestation of the people’s will. It’s like Frankenstein’s monster. If you didn’t want us, why did you create us?”
Consumer advocates who have worked with Mehrban say his commitment to “the little guy” is genuine.
“Morse really throws himself into these cases and works into the wee hours of the morning,” said Stephen Barrett, a retired psychiatrist and vice president of the National Council Against Health Fraud, a group Mehrban represented in suits challenging the effectiveness of homeopathic remedies. “I’ve seen him work to the point of exhaustion, and I think he does it out of dedication.”
Mehrban was born in Iran to a Jewish family that immigrated to the United States in 1981. The family lived in New York before moving to Los Angeles. Mehrban said the memory of the religious persecution his family had suffered in Iran motivated him to pursue a legal career.
After graduating from Southwestern University School of Law in 1993, Mehrban went into practice with two recent law school graduates. The partners saw in Proposition 65 a new avenue for civil litigation that would be both socially progressive and lucrative.
In addition to requiring the warnings to the public about hazardous chemicals, the law requires the governor to publish and update annually a list of chemicals known to cause cancer, birth defects or other reproductive harm. The list currently contains more than 700 chemicals.
Mehrban and his partners searched libraries and the Internet to identify products that contained the listed substances. Then they sued scores of businesses at a time, contending that the businesses’ products were hazardous and required warnings.
They and other attorneys also developed cases under the state’s Unfair Competition Act, which forbids such practices as false advertising and price-fixing. Like Proposition 65, the act permits people to sue businesses even if the plaintiffs have not been personally victimized by such conduct.
Soon, Mehrban went into practice on his own. In 1997, he sued Aroma Vera, a Los Angeles manufacturer of aromatherapy products, because an oil that was supposed to improve brain power had failed to work on Mehrban’s mother. The manufacturer settled for $5,700 and agreed to stop making certain claims about its products.
The following year, Mehrban sued a kosher market in Los Angeles’ Pico-Robertson district for selling imported cigars that didn’t have the U.S. Surgeon General’s warning about the harmful effects of smoking. The case was settled for an undisclosed sum.
The plaintiff in many of Mehrban’s suits is Consumer Cause Inc., which describes itself as a statewide advocacy group. Its mailing address is the Brentwood home of Mehrban’s mother, Rafat Efraim, who for a time was listed on state incorporation records as the group’s only officer. According to Mehrban, Consumer Cause now has five officers, including his mother and fiancee. He declined to identify the other officers.
When Mehrban settles a Consumer Cause case, the defendant pays his fee directly. Mehrban charges as much as $400 an hour for representing the nonprofit. In some cases, defendants also pay monetary “penalties” called for by Proposition 65. Consumer Cause collects these payments. In documents filed with the state, the group says it uses the money for “further Proposition 65 enforcement.”
In the aromatherapy case, the manufacturer’s lawyer called Mehrban’s mother to the witness stand during a pretrial hearing in an effort to show that Consumer Cause was a mere front for Mehrban’s legal practice.
Efraim speaks only Farsi and testified through an interpreter. Asked the name of the consumer group, she replied: “Help the customers.” Efraim said she did not know whether it had any other officers.
Scott Pinsky, who represented Aroma Vera, later called Consumer Cause “an utter charade.” Mehrban says the organization serves a valuable purpose, acting as a check on the “corporate establishment.”
Mehrban’s methods often stir outrage, and not only among his legal adversaries. In the case involving a hotel chain that he had accused of failing to post warnings about the hazards of cigarette smoke, a Los Angeles judge was biting in his description of the lawyer’s tactics.
After a hearing at which he peppered Mehrban with questions about the case and where money from a settlement would go, Superior Court Judge Brett C. Klein dismissed the suit. Noting that Proposition 65 lawsuits can be brought only “in the public interest,” Klein said: “This case is brought in the private interest, not in the public interest.”
“There are many nouns that one might attempt to use, metaphorically, to describe what this case is about,” the judge said. “The most appropriate metaphorical term would be ‘racketeering.’ ”
Last year, Mehrban and Consumer Cause filed suit against 34 food and herbal supplement manufacturers, contending that they had failed to warn consumers that vitamin supplements and cooking ingredients contained alcohol. Proposition 65 requires that alcoholic beverages bear labels warning that they can be harmful to pregnant women.
The supplement companies said that the recommended doses for their products are so small -- measured with a teaspoon or eye dropper -- that someone would have to consume several bottles in one sitting to ingest enough alcohol to harm an unborn baby.
A judge dismissed the suit, saying it was “absurd” to contend that such products require a Proposition 65 warning. But the companies didn’t walk away feeling like winners. Their attorney says their legal fees were more than $200,000.
Last year, a state appeals court strengthened the hand of plaintiffs in Proposition 65 cases. The ruling came in a Consumer Cause lawsuit against a chain of dentists’ offices. In the suit, Mehrban contended that the mercury in silver fillings could cause birth defects and diseases. The dentists responded that the amounts were so small that there was no risk to patients.
In a 2-1 decision, a panel of the Second District Court of Appeals held that, when a company makes such an argument in a Proposition 65 case, it bears the burden of proving that the chemical is not dangerous.
In a dissenting opinion, Justice Miriam Vogel said the ruling put businesses at a legal disadvantage and could lead to “judicial extortion.”
“What’s a doctor or dentist to do?” Vogel wrote. “Settle with the plaintiff, of course.... Save the legal fees. Get rid of the case.”
The court sent Mehrban’s suit back to a lower court, which ordered the two sides into mediation. The dentists have agreed to pay Mehrban $20,000 in legal fees, according to their attorney, Randall Sherman.
“They are not happy about having to pay any money ... for a case without merit,” Sherman said.
In another recent Proposition 65 case, Mehrban negotiated a $60,000 settlement with several makers of medical implants, orthodontic devices and penile implants. The lawsuit alleged that the companies, including Johnson & Johnson, had failed to warn customers about the presence of nickel in their products.
The companies insist that the concentrations of nickel are so small that they posed no hazard. They said they settled to avoid a trial with its huge legal bills.
What Consumer Cause wanted “was to do enough work on the case to get it to trial and no more,” said Jeffrey Marguilies, a lawyer for the implant makers. “Once they did that, the burden would be on us to prove that we don’t have to post warnings. We could have been talking multiple millions in defense costs if we went to trial.”
Responding to complaints from businesses, the state attorney general’s office this year began reviewing Proposition 65 suits in an attempt to deter frivolous ones.
The law requires a plaintiff, before filing a suit, to submit a “certificate of merit,” with the attorney general briefly laying out the factual basis for the case. The attorney general’s office cannot throw out a lawsuit, but if it finds that a case lacks substance, the opinion holds great weight with judges, according to plaintiff’s attorneys.
So far this year, the attorney general has identified more than 4,000 cases statewide as lacking scientific foundation or sufficient evidence of wrongdoing. They include nearly 400 of Mehrban’s cases, most involving claims that table candles emit toxic fumes and should bear warning labels.
Mehrban vows to take some of those suits to court anyway. But he’s also diversifying. On behalf of the National Coalition of Free Men, he filed suit last month against Los Angeles County, contending that it practices discrimination by funding a commission on women’s issues while doing nothing comparable for men.
He’s also researching lawsuits against bars and restaurants that offer “ladies’ discounts.”
He professes to see these cases, too, as a battle between right and wrong.
“I have nothing against women. I love them to death. But when you have to pay more for something because of your gender, that’s illegal,” Mehrban said. “Men encounter discrimination every day, and I think it’s a basic civil rights issue.”