Consumer advocates demanded Tuesday that Kaiser Permanente take back a$100,000 donation to a ballot initiative campaign that aims to change the state’s unfair business competition law.
The Foundation for Taxpayer and Consumer Rights is fighting the ballot initiative on grounds that it will bar individuals and consumer groups from suing businesses that violate consumer protection laws — including patient protection and environmental statutes. The AARP, Sierra Club and United Farm Workers are among other groups opposed to the initiative.
“Kaiser has invested$100,000 of our premium dollars into removing consumer rights and accountability,” said Jerry Flanagan of the Foundation for Taxpayer and Consumer Rights.
Kathleen McKenna, spokeswoman for Kaiser Permanente, said the HMO is supporting initiative because of a “growing concern with frivolous lawsuits.”
Appearing in front of Kaiser Permanente’s Oakland headquarters Tuesday was Chant Yedalian, whose mother, Zevart — a Kaiser patient — died from breast cancer in 1998 at age 53.
Yedalian used the state’s unfair business competition law, known as 17200, in a wrongful death lawsuit against Kaiser, arguing that it denied his mother a potentially life-saving bone marrow transplant and then further denied his rights to challenge the HMO in a jury trial. Kaiser requires its members to go through binding arbitration instead of trial.
Yedalian, who lives in Los Angeles, argued that Kaiser‘s binding arbitration clause is a violation of the unfair business competition law.
“This was the only law available to protect people from this unfair process,” Yedalian said.
Yedalian’s case is pending in Los Angeles County Superior Court.
McKenna said Kaiser‘s campaign donation has nothing to do with its arbitration policy.
“We’ve been using binding arbitration for 50 years,” she said.
She said Yedalian’s mother received inadequate notice about Kaiser‘s binding arbitration policy — a major reason why the case ended up in court.
The initiative campaign, called Stop Shakedown Lawsuits, is driven by the California Chamber of Commerce, the California Motor Car Dealers Association and other business groups.
So far, the campaign has collected more than 300,000 signatures to place the measure on the Nov. 2 ballot. To qualify, at least 373,816 valid signatures must be submitted to the secretary of state by April 16.
The campaign has raised $2.5 million, mostly from banks, insurance companies, car dealers, pharmaceutical companies and other businesses. Blue Cross of California donated $250,000 and PacifiCare gave $10,000.
Campaign supporters said they want to stop unscrupulous lawyers from using 17200
to sue for made-up claims and then force a settlement.
John Sullivan, president of the Civil Justice Association of California and a co-chairman for the campaign, said the initiative would not bar individuals from suing companies for harm or financial injury.
In a case to get out of arbitration, Sullivan said, many other statutes and previous court decisions could surely be used “if justice is owed.”
“When groups like this find a case that has a tragic story — as this one undoubtedly does — that 17200 figures into, you can turn it on it’s head and argue that you can go out to any cases and find a 17200 case tacked onto it,” Sullivan said.
Yedalian said 17200 was his only course of action.
“The initiative would prevent people from seeking justice,” he said. “You can’t protect other members of the public without it.”