California SB 37

(1) Existing law makes it unlawful for any person, firm, corporation, partnership, or association to act as a runner or capper for any attorneys or to solicit any business for any attorneys in and about certain locations, including prisons, jails, and county hospitals, or in any public place or upon private property, as specified. Existing law also makes it unlawful for a person to solicit another person to commit or join in the commission of a violation of that provision. Existing law defines "runner or capper" for these provisions to mean a person, firm, association, or corporation acting for consideration in any manner or in any capacity as an agent for an attorney or law firm in the solicitation or procurement of business for the attorney or law firm, as provided. Existing law prescribes a schedule of punishments for violating these provisions, including imprisonment and fines, as specified. Existing law also prohibits an individual, partnership, corporation, association, or any other nongovernmental entity from operating for the direct or indirect purpose of referring potential clients to attorneys, and prohibits an attorney from accepting a referral of those potential clients, unless certain requirements are met. Existing law additionally prohibits a referral service from being owned or operated by those lawyers to whom more than 20% of referrals are made. Existing law makes an individual, partnership, association, corporation, or other entity that engages, has engaged, or proposes to engage in violations of these provisions liable for a civil penalty, as provided. This bill would additionally authorize any person to bring a civil action for a violation of these provisions for statutory damages, as provided, attorney's fees, injunctive relief, and any other relief the court deems proper. The bill would require the court, in assessing the amount of statutory damages, to consider all relevant circumstances presented by the case, including the nature and seriousness of the misconduct and the defendant's assets, liabilities, and net worth. (2) Existing law imposes various requirements on the ownership of a lawyer referral service. Existing law provides that certain provisions relating to these lawyer referral services requirements shall not be construed to prohibit attorneys from jointly advertising their services. Existing law states that permissible joint advertising, among other things, identifies by name the advertising attorneys or law firms whom the consumer of legal services may select and initiate contact with. This bill would also provide that permissible joint advertising requires that each participating attorney or law firm execute a joint advertising agreement with the entity managing the joint advertising agreement with the entity managing the joint advertising services, under which the attorney or law firm expressly takes liability for the content of the advertising. (3) Existing law prohibits an advertisement, as defined, made by an attorney or law firm from making various prohibited statements and requires the advertisement to include certain disclosures, as specified. Existing law defines "advertise" and "advertisement" for these provisions to mean any communication, as specified, that solicits employment of legal services provided by an attorney, agent of an attorney, or law firm, and is directed to the general public and is paid for by, or on the behalf of, an attorney. This bill would revise those definitions and would define "advertisement" for purposes of those provisions to mean any communication, through any written, recorded, or electronic means, whether available to or directed generally to members of the public or to a limited group of individuals, that provides information concerning a lawyer or the lawyer's services for the purpose of encouraging individuals to secure the services of the lawyer or a law firm. The bill would define "advertise" for purposes of those provisions to mean to engage in any communication constituting an advertisement. (4) Existing law prohibits a legal advertisement from containing or referring to specified statements or representations, including prohibiting an advertisement from containing a guarantee or warranty regarding the outcome of a legal matter as a result of representation by an attorney, attorney's agent, or law firm. This bill would additionally prohibit an advertisement from containing misleading, deceptive, or false statements, words, or phrases regarding a lawyer's or a law firm's skills, experience, or record, and would also prohibit an advertisement from containing references to a lawyer's or a law firm's recognition by, or awards from, an organization, unless the recognition or award is not conferred by virtue of being a member of the organization and the organization does not charge or solicit a fee, cost, or payment for the recognition or award. The bill would also require a legal advertisement to contain specified information conspicuously displayed, or intelligible, if spoken, including disclosure of the city, town, or county of at least one bona fide office location or the address of record listed with the State Bar of California (State Bar) for the lawyer or law firm, as specified. (5) Existing law authorizes a person claiming a violation of specified provisions of law governing false, misleading, or deceptive legal advertising to file a complaint with the State Bar and requires a copy of the complaint to be served simultaneously upon the advertiser. Existing law provides a process whereby an advertiser may voluntarily withdraw the advertisement, within specified timelines, before or after the State Bar makes a determination of whether substantial evidence of a violation exists. Existing law provides that the State Bar review procedure applies only to licensees and certified referral services. Under existing law, if the State Bar determines that substantial evidence of a violation exists and the licensee or certified lawyer referral service who broadcasts the advertisement fails to withdraw the advertisement within 72 hours, a civil enforcement action may be commenced for an amount up to $5,000 for each individual broadcast. This bill would require a copy of the complaint to be personally served simultaneously upon the advertiser. The bill would limit the 72-hour deadline to withdraw an advertisement to an electronic broadcast, and for any other medium would require notice of withdrawal to be submitted to the State Bar within 72 hours and withdrawal to occur as soon as practicable, not to exceed 30 days. The bill would extend the application of the State Bar review procedure to individuals or entities that participate in joint legal advertising arrangements in compliance with specified provisions. The bill would authorize a consumer who was misled by an advertisement in violation of the bill's provisions to bring a civil action for specified damages and relief if the consumer first files a complaint with the State Bar under the above-described process, the State Bar determines that substantial evidence of a violation exists, and the advertiser does not withdraw the advertisement, or the advertiser withdraws the advertisement, but then subsequently rebroadcasts the advertisement, as provided. The bill would authorize a civil action under these circumstances for the damages described above, or for statutory damages, as provided, attorney's fees, injunctive relief, and any other relief the court deems proper, as provided. (6) Existing law prohibits, in advertising by electronic media for compliance with certain provisions, a message from being false, misleading, or deceptive, and requires the message as a whole to be factually substantiated. Existing law provides that a violation of this prohibition and requirement, among other provisions, is cause for discipline by the State Bar, as specified. This bill would expand the types of violations that would be a cause for licensee discipline, including, but not limited to, the provision prohibiting an advertisement from containing any false, misleading, or deceptive statement, or from omitting any fact necessary to make the statements made, in light of circumstances under which they are made, not false, misleading, or deceptive. (7) Existing law excludes media in which advertising in displayed and advertising agencies that prepare advertising content from specified provisions regulating to legal advertisement content. This bill would also exclude broadcasters that disseminate advertisements from the provisions regulating legal advertisement content. (8) This bill would make conforming changes.