SIX TIPS FOR DEALING WITH PUBLIC COUNSEL

Aaron P. Morris, Esq.

1. DO THE RIGHT THING -- BUT NOT THROUGH PUBLIC COUNSEL

If you did something wrong, fix it. This information is not designed to assist you in shirking your responsibilities. But say you get one of Public Counsel's standard letters, accusing you of being the anti-Christ. If after you read the letter, you realize that you did make a mistake, or at least have a very unhappy customer that thinks you did something wrong, you would do well to contact the customer and see what you can do. DO NOT, however, deal with Public Counsel. Public Counsel will likely inform you that you must deal with them, and that you are not permitted to contact the client directly. Contrary to popular myth, parties to an action are always free to talk to one another (unless you are a collection agency dealing with a debtor). It is only the attorneys that cannot talk to the party on the other side. Obviously, if the client asks you to deal directly with Public Counsel, you should honor that request. If your customer is unhappy, work to make it right, but deal with the customer, not Public Counsel.

2. KNOW THAT ANY ATTEMPT TO SETTLE WILL BE USED AGAINST YOU

Every business person knows that litigation is expensive, and as frustrating as it may be, it is often far wiser to settle a case than to litigate it, even if the business is absolutely innocent. The law recognizes this, and California Evidence Code section 1152 specifically provides that an offer to settle a case cannot be used to establish liability.

Unfortunately, the attorneys at Public Counsel apparently missed the lecture on section 1152 while in law school. In a recent case, attorneys for Public Counsel actually argued (unsuccessfully) that the defendant business must be liable, because it had previously offered $700 to settle the case. When advised that they were exposing their client to a malicious prosecution action, the same attorneys claimed that there could be no claim for malicious prosecution once a party had admitted his guilt via a settlement offer. The fact that these claims are insupportable is not the issue -- if Public counsel believes that a settlement offer is an admission of guilt, then you will never be able to divest them of that notion.

3. DO NOT AGREE TO ANY "STIPULATION" OR INJUNCTION, NO MATTER HOW SEEMINGLY REASONABLE

Public Counsel may offer to settle a case against you for a fairly nominal sum, in exchange for an injunction or stipulation by you that your business will not engage in certain conduct. This can be tempting because, after all, if you did not do anything wrong, and you are merely being asked to stipulate to an injunction stating that you will follow the law, what could be the harm?

The harm is that if you follow this procedure, you are giving Public Counsel the keys to the courthouse. Let's say you run a yogurt shop. One day Public Counsel decides that your nonfat yogurt isn't really nonfat, so you are sued by Public Counsel "on behalf of the general public" for unfair business practices, to stop this horrible yogurt misrepresentation. Public Counsel offers to settle for just $500 if you will also agree that you will never engage in misleading advertising about your yogurt. You quite reasonably conclude that since you never have engaged in misleading advertising, what is the problem with promising to continue doing the same?

If you agree, you have made Public Counsel's campaign against you far easier. Public Counsel never needs to sue you again -- they can just go to court and claim you violated the injunction. You may have thought you were just agreeing to be truthful about the fat content of your yogurt, but you actually agreed not to do anything that is misleading, and to Public Counsel, everything is misleading. You said your yogurt is 89 cents an ounce, but what about the cup it comes in; have you deducted the weight of the cup? You call that yogurt strawberry flavor, but is the strawberry content high enough to support that claim? Your menu claims you have M&Ms as a topping, but those are actually another brand of candy-coated chocolate, aren't they? It might have been costly to go to court and prove that your nonfat yogurt really is nonfat, but you would have been done with it. If you elect instead to enter into a seemingly much more expedient injunction, you could find yourself in court over and over, with no way to ever have the matter concluded once and for all.

4. UNDERSTAND THAT YOU WILL BE DEALING WITH EMOTIONS, AND NOT RATIONAL THOUGHT

The people at Public Counsel genuinely believe they are doing good (and some of them do). Many of the attorneys there passed up much better paying jobs in order to work in hot, cramped offices in an office building located in an area where the front door must be kept locked at all times. They make these sacrifices because they believe they are fighting a war against the evils of business owners.

In many ways, they are like zealots. Have you ever met a militant vegetarian, who is not satisfied to simply live as a vegetarian, but feels he must force you to be one too? That is the sort of attitude you will encounter. Don't make the mistake of believing that you can "convert" them with facts and rational thought. Going back to our yogurt example, you might think you can respond to the claim that you are not selling nonfat yogurt by offering lab tests showing that your yogurt is, in fact, nonfat. You would be wrong. What you don't realize is that Public Counsel has another agenda. In fact, in our hypothetical, Public Counsel feels that nonfat yogurt is bad for the public. When people are eating nonfat yogurt, they think it is okay to eat more because of the missing fat, but the calorie content is high, so they are getting fat off of your yogurt. So, whether your yogurt is nonfat is really of no interest; the fact that you are encouraging people to buy more of your product is bad -- these people must be protected from their own decisions -- and you must be stopped. The facts and evidence you are offering can be of no importance because it comes from you -- the evil yogurt maker.

5. THE MORE THE MERRIER

Public Counsel loves to associate in more and more counsel. The case will start with just Public Counsel representing the plaintiff, then they might add the entire UCLA Legal Department, followed up by a large firm. This is supposed to intimidate you, but don't let it. Have you ever heard the expression, "Too many cooks spoil the broth"? In a recent case, Public Counsel convinced juggernaut Latham & Watkins to join as co-counsel in an action against a client of The Morris Law Firm. Showing up in court with six attorneys did not change anything. Latham & Watkins went down in flames right along with Public Counsel.

6. CALL MORRIS & STONE

Above all, if you find yourself the unwarranted target of an attack by Public Counsel, call Morris & Stone. We have experience in dealing with the tactics used by Public Counsel. We can be reached at (714) 954-0700.

For some examples of the wasteful tactics of Public Counsel, go to "We won't! We won't, we won't we won't" and "Public Counsel Continues its Losing Streak".

______________

Aaron P. Morris is a Partner with the law firm of Morris & Stone, LLP, located in Santa Ana, California. He can be reached at (714) 954-0700, or amorris@toplawfirm.com.  The practice areas of Morris & Stone include employment law (wrongful termination, sexual harassment, wage/overtime claims), business litigation (breach of contract, trade secret, partnership dissolution, unfair business practices, etc.), real estate and construction disputes, first amendment law, Internet law, discrimination claims, defamation suits, and legal malpractice.