Disbarment urged for filing ‘shakedown’ lawsuits

A State Bar Court judge has recommended disbarment for a Brea lawyer who was successfully sued by the state attorney general for filing “shakedown” lawsuits against small businesses under California’s unfair competition law. HARPREET S. BRAR [#206460], 36, “has engaged in a nearly continuous course of serious misconduct” since shortly after his 2000 admission to the bar, said Judge Richard Honn, who added that Brar’s actions amount to “serious breaches” of an attorney’s fundamental ethical mores.

Brar “used the legal system as part of a scheme to extract settlements from small businesses for his own enrichment and in violation of court orders preventing him from doing so,” Honn wrote in the disbarment recommendation.

The Supreme Court must act on the recommendation before it can take effect.

Brar made headlines in 2003 for suing more than 400 nail salon owners in Orange, San Bernardino and Riverside counties, alleging they violated health and safety codes by using the same bottle of nail polish on more than one customer. His firm, Brar & Gamulin, also sued 140 ethnic grocery stores, charging them with video piracy for not labeling videotapes correctly.

Then-Attorney General Bill Lockyer accused Brar and his firm of violating the state Unfair Competition Law, also known as section 17200 of the Business & Professions Code, by engaging in illegal business practices. He called Brar’s firm “a quick-buck racket that has inflicted financial harm on law-abiding small business owners.”

Calling Brar “basically an extortionist,” Orange County Superior Court Judge Peter Polos ordered him in 2004 to pay nearly $1.8 million in civil penalties as well as sanctions and enjoined him from filing any more cases under 17200 without meeting requirements in the Civil Code.

The judgment was stayed when Brar appealed, but its injunctive provisions were not.

Nonetheless, Brar filed three new lawsuits under 17200 within nine months, accusing 237 named defendants and 750 “Doe” defendants of not posting notices of fees charged at ATM machines in their stores. Most of the defendants owned liquor or convenience stores. There was no relationship among the defendants and no question of common fact among them. As was his pattern in earlier lawsuits, Brar sent the defendants threatening letters in which he offered to settle the matter for roughly $750 and encouraged a quick settlement in order to avoid additional fees and costs.

Polos held Brar in contempt and sentenced him to 15 days in jail.

Prior to the Orange County judgment, Brar had filed suit against 55 named defendants and 100 Does for allegedly violating the Immigration Consultants Act by failing to post a bond required by the code. Honn found that Brar filed the matters “for an improper purpose, namely to conduct volume litigation . . . with minimal overhead so as to maximize profits from settlements.” By improperly joining defendants, Brar avoided paying filing fees of $185 each for separate actions.

In the case of one defendant, Brar sent a letter offering to settle the suit for $2,000 in four installments or a single payment of $1,500. He warned the defendant that the suit could potentially cost tens of thousands of dollars in fees and penalties.

The woman had filed the required bond with California’s secretary of state, a fact Brar could have determined had he properly investigated, Honn said.

The bar court found that Brar committed 17 acts of misconduct: he disobeyed court orders, filed unjust actions, committed acts of moral turpitude, failed to pay court-ordered sanctions and did not cooperate with the bar’s investigation. He never paid any civil penalties or sanctions.

Brar also was convicted of five felony counts of tax evasion last July and is currently serving one year in the county jail. The bar placed him on interim suspension following the convictions.

Brar was one of several attorneys who got into trouble in 2003 for suing thousands of small business owners under section 17200. Three lawyers from Trevor Law Group in Beverly Hills also were sued by Lockyer and eventually resigned from the bar with charges pending. Martin Gamulin, a Fresno lawyer who worked with Brar, received a public reproval last year.