Three Beverly Hills attorneys accused of extorting cash from thousands of Southern California auto garages and restaurants by filing frivolous lawsuits were suspended Wednesday from practicing law.
Trevor Law Group attorneys Damian S. Trevor, Allan Charles Hendrickson and Shane Chang Han were each placed on involuntary inactive status by State Bar Court Judge Richard A. Honn, and the State Bar of California said it would begin formal disbarment proceedings in the next few weeks.
The attorneys were accused of abusing a state consumer law to wring settlements from small businesses. Many repair shops and restaurants settled the cases for a few thousand dollars each in order to avoid the costs of going to trial.
“Their relatively small firm was capable of far-reaching harm,” Honn wrote in his ruling. “With little or no investigation, lawsuits were filed on a mass scale.”
State Bar officials said it’s highly unusual for the organization to take such action against an entire law firm.
“I’ve never seen anything like this,” said Mike Nisperos, chief trial counsel for the State Bar, which served as prosecutor in the State Bar trial. “This is a finding that they’re a threat.... This way, they can’t do any further harm to the public.”
Attorney Kevin P. Gerry, the lawyer representing the Trevor lawyers, said he was disappointed with the judge’s 126-page decision. “It looks to me like the judge literally cut and pasted from the State Bar’s position. The lawyers at Trevor Law Group do intend to fight this decision, and I expect that their efforts will be successful,” he said.
During State Bar trial court hearings last month, Gerry insisted that the lawyers did nothing improper and that the lawsuits were legitimate.
Those suits were filed under the Unfair Competition Act, which allows private citizens or organizations to sue commercial businesses for such practices as false advertising. The act lets attorneys file suit even if the plaintiffs were not directly harmed by the alleged misdeeds.
Trevor sued more than 3,000 defendants, often using boilerplate language. The plaintiff in many of the cases was Consumer Enforcement Watch, an organization that the State Bar said was created by the lawyers for the purpose of filing the suits and collecting settlements.
The case has focused attention on the Unfair Competition Act and other consumer laws that give plaintiffs the right to collect damages even if they have not suffered at the hand of the defendant. The laws were developed to give consumers power to take on big companies. But some small-business organizations believe the laws are being abused.
Earlier this year state Atty. Gen. Bill Lockyer sued the Trevor Law Group, accusing the attorneys of abusing the Unfair Competition Act and shaking down small businesses. His office likened Trevor’s action to extortion. That case is pending.
Honn’s ruling is not considered formal punishment by the bar. But it prevents the attorneys from practicing until further notice. It also gives the State Bar the ability to begin disbarment proceedings.
“In a day of severe economic challenges to our court system, the [attorneys] clogged the courts with thousands of what appear to be frivolous lawsuits,” Honn wrote.
Critics of the Trevor firm hailed the judge’s decision.
“These characters just brought this on themselves,” said Marty Keller, executive director of the Automotive Repair Coalition, which fought the suits. “They never followed simple rules of procedure.... Maybe this will drive the nail in the coffin of these cases.”