http://www.scrippsnews.com/node/9131

Lawsuits would open new fronts in immigration, legal wars
Commentary
By DAN WALTERS
A couple of years ago, California voters handily enacted an initiative aimed at making it more difficult to sue businesses under the state's unfair business practices law.

While many states have such laws, California's was considered to be especially liberal because anyone could sue anyone for alleged unfair practices without proving actual damages, thus giving rise to shakedown lawsuits _ or the threat of such suits _ against small businesses by unscrupulous law firms.

Typically, a law firm would send a letter to a restaurant, a nail parlor or a garage, threatening to sue, based on some minor violation of state regulations, unless the business bought its way out with a payment to the lawyers. Countless thousands of such letters were sent and by all accounts, they generated big bucks for the law firms that specialized in the practice.

As the syndrome gained publicity _ especially since many of its victims were immigrants _ big business jumped on it to gain political traction for a broader assault on the unfair business practices law that environmental and consumer groups had employed against corporations. And when the Legislature, strongly influenced by personal injury attorneys, refused to modify the law, a business-backed initiative (Proposition 64) was placed before voters and passed overwhelmingly.

The major effect of Proposition 64 was to make freelance lawsuits much more difficult to pursue by compelling lawyers to have clients who could claim actual damages from a company's practices. Broader uses of the law would be largely confined to the attorney general and other public law officials.

Notwithstanding Proposition 64's restrictions, Orange County attorney David Klehm believes that he has found a novel way to pursue unfair business practices lawsuits: suing businesses that hire illegal immigrants, pay substandard wages and thus undercut competitors as well as violate federal law. Most of his clients, he says, are providers of business services such as plumbing and building maintenance.

Klehm has founded an organization called illegalemployers.org and says he'll file at least five such suits this month on behalf of "small to medium businesses, mom and pops, who have lost a lot of business to competitors who hire illegal immigrant labor."Klehm contends that by having businesses as plaintiffs, he'll be able to clear the higher threshold established by Proposition 64. "It changed things," he says of the ballot measure. "It just makes it a little bit more difficult to find clients. We're seeking clients in the business-to-business category."

The prospect of hurting employers of illegal immigrants excites anti-illegal immigration groups, which have allied themselves with Klehm and are urging their members to hunt out and report rogue employers. The goal, they say, is to substitute lawsuits for the inability or unwillingness of federal immigration authorities to crack down on employers of illegal immigrants. One allied group is called Federal Immigration Reform and Enforcement (FIRE), and it has created an Internet website called WeHireAliens.com to encourage whistleblowing on employers who hire illegal workers.

If Klehm follows through on his intention, it will open a new front in the escalating political war over illegal immigration, and possibly a new one in the ceaseless struggle between business groups and personal injury attorneys over the rules governing who can sue whom and for what. Proposition 64 was a significant skirmish in that decades-long battle, but continues on other fronts.

The question is whether the unfair business practices law can, in fact, be applied to the situations that Klehm describes, where one business contends it is losing income to a competitor whose illegal labor is cheaper. Proposition 64 declares that such suits must show "injury and loss of money or property," and those who track lawsuit rules for business groups say they'll be watching Klehm's suits closely for some clue to the courts' attitude.

Ironically, many years ago, before Proposition 64 tightened it up, the law was used for a series of lawsuits on behalf of unionized agricultural workers against farmers who employed illegal immigrants _ but to no avail.