California CALA’s Legal Reform Wish List

By Tom Scott

With the 2015-2016 legislative session under way, it’s worth reminding our elected leaders why legal reform is needed. Ultimately, enacting legal reform is about making our lawsuit system serve the interests of ordinary people, rather than making personal injury lawyers rich. Stopping the abuse of our legal system will enable California businesses to grow and create jobs.

California has a long way to go. Last month, our state was again named one of the nation’s top “Judicial Hellholes,” due to the many abuses of the lawsuit system that take place here. These abuses include “shakedown” lawsuits alleging violations of the Americans with Disabilities Act (ADA) and Proposition 65, the use of “public nuisance” lawsuits and contingency fee lawyers by the public sector, and abusive lawsuits alleging violations of consumer protection laws.

The good news is that California can turn things around. Reforming the state’s lawsuit system is something that does not happen overnight, but California’s elected officials can make good progress if they focus on the following issues during this legislative session:

1. Proposition 65 Shakedown Lawsuits: In 2013, there were more than 350 settlements of Prop. 65 lawsuits, with payments totaling $17,409,756. The shakedowns against businesses are continuing, lawyers are walking away with millions in legal fees and our state’s small businesses are paying the price. In the meantime, regulators are moving forward at OEHHA to make the warning signs for Prop. 65 more complicated, which in turn could create more litigation.

2. ADA Lawsuit Reform: After years of half measures that have not stopped abusive ADA lawsuits, it looks like 2015 might be the year for meaningful reform. Legislators from both parties have introduced bills, and I hope a bill will emerge this year that will truly rid California of these shakedown lawsuits. Let’s get it done.

3. Class Action Reform: Last year the trial lawyers tried to expand class action lawsuits with SB 1188, but logic prevailed and the bill failed. Many class action lawsuits only enrich trial lawyers. We need reform to stop this racket.

4. CEQA Reform: Everyone readily admits that CEQA (the California Environmental Quality Act) needs to be reformed to prevent lawsuit abuse, but little has been done to stop it. Just ask Los Angeles County, which in 2014 lost 250 jobs due to CEQA lawsuit abuse.

5. Stop Building Opportunities for Shakedown Lawsuits into Bills: The trial lawyers are masters at hiding opportunities to file more lawsuits in legislation. We saw it last year with AB 2171. Every time you create a profit motive through lawsuits, you will find lawyers eager to file abusive lawsuits in order to make money.

6. Increased Participation in Jury Service: People need to stop dodging jury service and counties need to do a better job at expanding the jury service pool. Serve rates in California are unimpressive at best. We can do better.

7. Bipartisan Cooperation on Legal Reform: We have seen it in the past, and are seeing it again already this year with ADA and Prop. 65 reforms. Trial lawyers do not check party affiliation when they file lawsuits. When a business goes under due to a lawsuit, jobs are lost and it hurts the state as a whole. Stopping the abuse of our lawsuit system is something everyone can support.

8. Greater Awareness of Exploitative Lawsuit Lending: We have seen this in states like Illinois – plaintiffs in lawsuits enticed into taking out payday-style loans with astronomical interest rates to fund their lawsuits. We need to protect people from these unregulated lawsuit lenders.

9. Transparency in the Public Sector about the Cost of Lawsuits: CALA reports in 2013 and 2014 have uncovered the billions of dollars that are being paid out in litigation by schools and cities and counties. Pubic budgets are strained and elected officials need to be more forthcoming about how much these settlements cost, and what they are doing to reduce the burden of lawsuit abuse on taxpayers.

10. Re-Examining Public Nuisance Lawsuits: A troubling trend has emerged in which public entities (cities and counties) are attempting to use the lawsuit system to extract enormous payments from private companies. One example is the infamous lead paint lawsuit, which has lasted nearly 15 years and has trial lawyers looking for a massive verdict that will fatten their wallets but will not result in any meaningful public health benefit. A similar tactic is being employed in a lawsuit against pharmaceutical manufacturers.

Legal reform is as or more important than tax reform or regulatory reform – a single abusive lawsuit can force a small business to close much faster than a tax or regulation, and in some ways things in California are getting worse each year. The lawsuits keep coming and the legislature keeps creating more ways for personal injury lawyers to sue businesses.  At the same time, our courts are underfunded and cannot handle the current caseload, much less any additional lawsuits.

Reforming our state’s lawsuit system will help create jobs and boost our state’s economy. 2015 can be the year California takes a step towards creating jobs, not lawsuits.