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Associated Press
Oct 06, 2004 - 01:00 AM

by STEVE LAWRENCE, Associated Press Writer

Schwarzenegger twice used law he blames for frivolous lawsuits

SACRAMENTO -- Gov. Arnold Schwarzenegger, who is backing a campaign to limit lawsuits filed under the state's unfair competition law, has used that law to file suits to stop the use of his image in ads and bobblehead dolls.

That makes the governor a hypocrite, said opponents of Proposition 64, the Nov. 2 ballot measure that would limit unfair competition suits.

"If the governor feels it's OK to file lawsuits under this law to protect his image, why isn't it OK to file a case under the statute... when water and air are threatened with contamination but no money has been lost?" asked Jamie Court, president of the Foundation for Taxpayer and Consumer Rights, a Santa Monica-based consumer group. "The governor is being very two-faced."

Schwarzenegger's legal affairs secretary, Peter Siggins, said Tuesday that the governor's endorsement of Proposition 64 was an attempt to head off frivolous lawsuits, not to prevent people with legitimate complaints from filing unfair competition cases.

He said Schwarzenegger had "some faith" that any potential problems created by approval of the proposition would be worked out in the courts.

The 71-year-old unfair competition law allows individuals, interest groups, other companies and prosecutors to sue to stop practices that allegedly give a business an unfair advantage over competitors or defraud consumers.

Supporters say it's been used to stop consumer rip-offs and environmental damage, among other things.

But critics say the law has also been used by unscrupulous attorneys to shake down usually small businesses to settle lawsuits filed because of minor violations, such as failing to post a business license or using the wrong print size in ads.

Proposition 64 would bar anyone other than the attorney general or a local prosecutor from filing an unfair competition lawsuit unless they could show they had been injured or lost money or property because of the business' conduct.

The ballot measure also would require that unfair competition suits filed for a group of people by someone other than the attorney general or another prosecutor qualify as class-action cases.

Supporters say the measure would stop the frivolous suits, but opponents say it would make it difficult, if not impossible, for consumer and environmental groups to use the statute.

Last year, Schwarzenegger, Denzel Washington and Bruce Willis used the unfair competition law as a basis for a suit against Fry's Electronics, alleging that the retailer's unauthorized use of the actors' pictures in ads gave the public the mistaken impression that they endorsed Fry's products.

Then earlier this year, the governor sued to stop an Ohio company from selling bobblehead dolls depicting him holding an assault rifle. Again the unfair competition law was one of the statutes cited as a basis for the suit.

Both suits were settled. Martin Singer, Schwarzenegger's personal attorney, said the Fry's suit was "amicably resolved" but he said he couldn't discuss the details.

The bobblehead suit was settled by an agreement that allows Ohio Discount Merchandise Inc. to produce Schwarzenegger bobbleheads without the gun. The Ohio company also agreed to donate a portion of the sales to Schwarzenegger's after-school program.

But John Edgell, the Washington lobbyist and former Democratic congressional aide who came up with the idea for the gun-totting bobblehead, wasn't happy with the settlement.

He says it cost him $20,000 to defend himself against the suit and thwarted his plan to earmark 25 percent of the income from the dolls for cancer research. He's planning to sell a "girlie man" bobblehead depicting Schwarzenegger in a pink dress.

"In America we can praise politicians, we can criticize them and we can poke fun at them. If he has a problem with that he can sue me," Edgell said.

A second bobblehead lawsuit could be tougher to sustain if Proposition 64 is approved, Court says. That's because judges could rule that all unfair competition suits would have to meet the higher requirements of class-action cases.

Singer said the governor would still be able to file the Fry's and bobblehead suits if the proposition passes because he had suffered "actual injury."
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On the Net: www.ss.ca.gov, www.yeson64.com, www.noprop64.com




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