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Aftermath of Prop 64

The San Francisco Chronicle and Sacramento Bee have postmortems on California's landmark vote. Trial lawyer advocate Jamie Court, sounding more than a little apoplectic, is vowing to push repeal of Tuesday's amendment through a future ballot initiative. The text of the measure is here (PDF).

Still unexplained, and more than a little mysterious, is why trial lawyers put up only token financial opposition to the proposition, in contrast to their willingness in the past to spend heavily against virtually every other liability-limiting proposal ever placed on a state ballot. (Opponents spent only $1.3 million fighting the measure, according to the Chron, versus backers' $15 million+). Maybe they wrongly calculated that editorial pages would as usual take their side and that the governor could be kept out of it. If so, they bet wrong.

The Chron, citing Yes on 64's John Sullivan, cites an example of why the s. 17200 law, although applicable to companies around the world that do business in California, places a much more onerous burden on those headquartered in the Golden State (thus discouraging such headquartering):

Last year, for example, Visa International of Foster City and MasterCard of New York were found guilty in Alameda County Superior Court of failing to clearly disclose their fees for currency conversion abroad.

Because Visa is based in California, it must pay refunds to all of its customers who were charged the fees, while MasterCard need only repay fees to its California customers. Both companies are appealing the verdict.



Rafael Mangual
Project Manager,
Legal Policy

Manhattan Institute


Published by the Manhattan Institute

The Manhattan Insitute's Center for Legal Policy.