Private Attorney General Act – The “Sue your boss” law
Most states enforce employment law through a designated Labor Commission or some similar department. In California, labor law is also enforced through lawsuits. An allegedly aggrieved employee can file a lawsuit against their employer or former employer for minor technical violations in the labor code.
If an employee files an employment claim against a business, they can act on behalf of the State Attorney General which means they may be able sue on behalf of all employees or former employees. These excessive lawsuits, costing businesses anywhere from tens of thousands to millions of dollars are affecting every consumer in California.
In the past, something as simple as a misspelling or small mistake on a paystub could result in an expensive lawsuit being filed against a small business owner by an attorney on behalf of a plaintiff. The PAGA reform legislation that was signed into state law this summer was a good first step to curb frivolous legal suits tied to egregious examples like these. However, even with the law’s new changes, more needs to be done to protect small businesses in our state from exploitation by predatory trial lawyers who file suspect cases in order to profit off of legal loopholes.
Abuse Of The Americans With Disabilities Act
The Americans with Disabilities Act (ADA) was passed with good intentions, but has become a tool used by unscrupulous attorneys to extort small businesses through lawsuits. The law requires businesses to comply with a dense set of building codes, and empowers California trial lawyers to sue a business over any alleged violation, no matter how small.
An ADA lawsuit can cost a business tens of thousands of dollars, and every dollar business owners spend on litigation is a dollar they can’t spent on expanding their business or hiring new workers. Just ask small business owner Ann Kinner. Proving they’re just looking to collect checks, the lawyers don’t return to ensure any improvements to access have been made once a lawsuit is in motion.
Reforms, such as offering small businesses an opportunity to make accessibility improvements before a lawsuit can move forward, are needed to protect small business owners from abusive ADA lawsuits while continuing to provide access for the disabled.
Abusive Proposition 65 Lawsuits
Californians passed Proposition 65 in 1986, hoping to reduce exposure to dangerous chemicals, but instead created a way for unscrupulous attorneys to file “shakedown” lawsuits against small businesses. The law allows attorneys to sue a business if it fails to post a sign when any one of more than 800 chemicals are present.
A single Prop 65 lawsuit can cost a small business tens of thousands of dollars. Prop. 65 has resulted in more than 16,000 lawsuits and more than $500 million in settlements since it was passed. With much of that money going directly into lawyers’ pockets, it’s obvious these lawsuits aren’t intended to protect the public, but to enrich the lawyers who file them.
Reform is needed to protect small businesses against these “shakedown” lawsuits.
Attorney General Activism
The state Attorney General serves as the chief law enforcement officer, but the office can be misused to pursue the AG’s own activist agenda, bypassing the legislative process and the will of the people and advance a political agenda.
Of equal concern is the ability of the AG to deputize personal injury lawyers on a contingency fee basis to pursue lawsuits on behalf of the state – and receive a generous cut of any lawsuit award. When private attorneys enter the picture, they are motivated by a paycheck, not the public good. It is not unusual for political candidates to receive generous contributions from contingency lawyers to help ensure a steady stream of lawsuit business.
Voters deserve to know who is doing the work we elected our attorney general to do. The office of the attorney general should be transparent and held accountable for every dollar spent. When using outside counsel, a firm should be selected through competitive bidding and all fees and expenses should be privy to review from the legislature. The more transparent the actions of the attorney general, the more confident we can be that California’s top attorney is acting on behalf of Californians.
Class Action Abuse
Intended to be an efficient way to speed access to justice and keep our courts from being clogged with hundreds of lawsuits, class action lawsuits have instead become a favored weapon of personal injury lawyers.
It works like this: personal injury lawyers compile a class of plaintiffs, many of whom didn’t know they had been harmed. They then file a lawsuit alleging damages for every plaintiff in the class to drive up the size of the lawsuit award and the amount of fees they can collect. Personal injury lawyers walk away with millions, while consumers, many of whom didn’t realize they were part of a class action suit, receive a few dollars or coupons.
Just the threat of a huge class action lawsuit is enough to force many businesses to settle the lawsuit rather than risking a trial, whether or not they did anything wrong. This isn’t justice.
California needs reform to end abuse of class action lawsuits. There have been several attempts at reforms, including allowing a defendant to appeal a class action certification (currently only a plaintiff can), capping the percentage of the award lawyers can receive and tying attorney fees to the amount of members in the class who actually collect their awards.
Access To Healthcare
Lawsuits against doctors, medicines, hospitals and health insurers increase health care costs and decrease access to affordable health care. Patients pay the price for abusive health care lawsuits as liability costs are passed on and when the fear of lawsuits makes the medicine and treatments they need less available.
Laws such as California’s Medical Injury Compensation Reform Act (MICRA) have helped reduce medical liability lawsuit abuse and keep doctors in our state – but they’re under attack from trial lawyers who want to make it easier and more profitable for lawyers to sue doctors and hospitals — even if that means higher health costs for the rest of us.
We must protect MICRA while supporting further reform to ensure that junk science doesn’t fuel questionable health care lawsuits and that the medicines we depend upon don’t become the latest lawsuit target.
Jury Service
Jury service is a civic duty, but too many Californians fail to serve when called. Without citizens willing to serve as jurors, our system of justice does not work.
CALA works to educate the public about the importance of jury service and California’s jury system. Under California’s “one day, one trial” system, if a juror is not seated on a trial, he or she spends only a single day at the courthouse and does not have to return for jury service for at least a year. If placed on a jury, one need only serve one trial, regardless of its length.
Do your part to make sure our legal system works for everyone. Serve on a jury when called. If you are an employer, encourage your employees to serve on a jury.
Plaintiff’s Attorney on the Legislature
Plaintiff’s attorneys are some of most prolific campaign contributors in California. Personal injury and other plaintiffs’ lawyers spent more than $4.5 million in the last election cycle to get their candidates elected. By spending this excessive amount of money to get their favored candidates elected, plaintiffs’ lawyers guarantee they will have friends in the legislature. These friends ensure that the abusive lawsuits that make lawyers rich will be allowed to continue, and write new laws that create more avenues for lawyers to profit from lawsuits. When you vote, be sure you know where your legislators stand on legal reform. Tell them you care about stopping lawsuit abuse and want them to act on behalf of their constituents, not plaintiff’s lawyers.
Threat To Taxpayers, Jobs, and The Economy
California has one of the highest unemployment rates in the nation, and businesses are constantly leaving for other states. One reason for this is California’s “sue first, ask questions later” environment, which has California’s legal climate to be consistently ranked among the worst in the nation. In fact, California has been ranked the nation’s worst “Judicial Hellhole” for two years in a row.
We witness unscrupulous attorneys and plaintiffs treat public entities such as cities, counties, schools, and prisons as a piggy bank, using abusive lawsuits to seek a quick payday. These lawsuits require taxpayer dollars to pay litigation costs such as verdicts, settlements and outside counsel.
For our state to get back on track, we have to focus on creating jobs, not lawsuits. Every dollar a small business in California spends on a lawsuit is a dollar that can’t be spent on expanding the business or hiring new workers. Lawsuit abuse is holding back our state’s economic growth, and it has to stop.
Third Party Litigation Funding (TPLF)
Third party litigation funding is the practice of third-party investors buying interests into plaintiff lawsuits to cover a percentage of the legal costs and to receive a percentage of settlements and any awarded damages.
TPLF is a problem in California and many other states across the country. The practice raises ethical concerns of who is behind the scenes influencing lawsuit proceedings and settlement outcomes.
Who is funding these suits?
What are their ulterior motives and interests?
Are they investing in frivolous cases for financial gain?
California CALA supports greater transparency surrounding TPLF. California small businesses and in many cases, individual’s livelihoods, are at stake when lawsuits are filed. In fact, many small businesses are forced to shutter their doors when a lawsuit is filed against them. Even if the lawsuit is unwarranted, many small businesses do not have the resources on hand to fight the legal proceedings in court.
Our legal system should be fair for all. We at California CALA believe in transparency when it comes to lawsuits, and the public has the right to know who is funding them. We must hold investors accountable who routinely invest in frivolous cases that are detrimental to small businesses and consumers.