How can a class action lawsuit become a catalyst for change? Attorney Ron Lovitt talks about his involvement in a class action lawsuit against a large company that misrepresented residential housing lots to prospective buyers.
San Francisco attorney Ron Lovitt may not look like an environmentalist, but a landmark ruling in the 1960’s set him squarely at the intersection of corporate reach and justice. While a group of rag-tag environmentalists were demonstrating against a potential development at Lake Tahoe to attract media attention, Mr. Lovitt embarked on a landmark legal journey by leading a class action lawsuit against the giant Boise Cascade for selling so-called investment lots which had been misrepresented. The company was intentionally defrauding ordinary people. Mr. Lovitt and his partners employed the legal rules for class action to win the case against Boise Cascade; they legally forced the company to halt all such practices across its diverse land holdings in America. The suit was effective at stopping a particular type of fraudulent real estate speculation nationwide and ultimately changed land development policy in California and beyond.
Ron Lovitt, San Francisco Attorney, Lovitt & Hannan:: Boise took plot maps and drew out little lots and they sold these lots like they were a good investment and people were very interested in buying the lots for investment purposes. As it turned out the lots weren’t very good investment at all, in fact they were total losers.
Huey Johnson, Founder and President, Resource Renewal Institute: You mentioned some of these places, there is a big Indian reservation not far from Reno and it is just burning desert with no water or anything, they just surveyed lines staked lots and sold them.
Ron Lovitt: Boise [Cascade] had a practice of leaving the husband and wife with one of the purchasers in the sales office and they had cameras rigged up so that they could leave the room after the sales pitch and see what was going on in the room and hear the resistance so that they could come in and make the deal. They also used to drive people around in jeeps in this desert land and they would have messages sent to the car radio. Things like “Well you had better get over there fast, this one is not going to last long – Oh this one has been sold. Are there any other lots available?” They would make it sound very urgent by these phony messages that they delivered to the salesman in his jeep. It was quite a scam.
Huey Johnson: I think that Ron and a couple of partners who took on this case and had the scale of the effect they did was huge. Really In the history of the environmental movement to have impact, with the reach their work had, I don’t know if there were other examples.
Ron Lovitt: When you aggregate people together under the federal rules permitting class actions, you can make big things happen.
Huey Johnson: As I recall; the story from back then, the judge asked you and the opposing council back in his chambers saying Mr. Lovitt you have won the case. If I rule in your favor…however…
Ron Lovitt: It was a question of whether Boise Cascade was going to go broke or not. They claimed that they were going to go broke. We asked for the CEO and the CFO to submit to an examination and they brought their books and we hired people that understood such things in detail. They made a pretty good case that they were going to go bankrupt unless we made a deal with them and we did. And I think everybody was happy with it.
Huey Johnson: That is demonstration of what courage and intelligence can do, following principle.