March 10, 2004
Kaiser campaign donation chided
By Rebecca Vesely, STAFF WRITER
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
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
Yedalian, who lives in Los Angeles, argued that Kaiser’s binding
arbitration clause is a violation of the unfair business competition
“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
“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
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.”
Contact Rebecca Vesely at [email protected] .
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