Court Says Prop. 64 Can’t Stop Existing Lawsuits

From Bloomberg News

A California appellate court has ruled that a state ballot measure passed in November to limit lawsuits against businesses cannot be used to dismiss cases filed before voters approved the measure.

The 1st District Court of Appeal in San Francisco ruled Tuesday that privately held Mervyn’s, a department store chain with 126 stores in the state, could not use Proposition 64 to seek the dismissal of a lawsuit brought by the group Californians for Disability Rights.

“Application of Proposition 64 to cases filed before the initiative’s effective date would deny parties fair notice,” a three-judge panel wrote. “Plaintiffs who filed and prosecuted cases for years, like CDR, could suffer dismissal of their lawsuit at all stages of litigation.”

Proposition 64 requires that plaintiffs, before suing for deceptive advertising or other fraudulent behavior, prove they personally suffered injury or financial loss because of a company’s behavior. Companies including AT&T; Corp. and Anheuser-Busch Cos. have asked state judges to dismiss suits filed before the proposition was passed.


Greg Terk, a spokesman for Hayward, Calif.-based Mervyn’s, declined to comment.

The lawsuit claimed that Mervyn’s didn’t provide enough space between displays for people with disabilities.

Andrea G. Asaro, a lawyer representing the disability rights group, said nothing in Proposition 64 indicated that it should be applied retroactively.

“It’s a long-standing principle that when you change the law, that applies prospectively but not to cases already underway,” Asaro said. “If drafters of Proposition 64 intended it to apply retroactively, then the voters should have been apprised of that.”

John H. Sullivan, a lawyer and co-chairman of the Yes on 64 campaign, said the appellate court decision was surprising given that lower trial courts have tended to rule the other way.

“It’s not over yet,” Sullivan said. “We expect other courts of appeal to rule in other districts, and a Supreme Court ruling we hope not long after that.”

Supporters of Proposition 64, which won 59% of the vote, said it would end frivolous lawsuits.