How Laws in California Encourage Lawsuit Abuse

Our legal system was designed to ensure fairness and for all citizens. Unfortunately, national rankings consistently put California among the worst in the nation for its lawsuit climate and the state is known nationwide as a “Judicial Hellhole.”

The fact is that unscrupulous plaintiffs’ attorneys have become experts in taking advantage of poorly written or outdated laws and perpetuate lawsuit abuse in search of easy money. During Lawsuit Abuse Awareness Week, we are exploring how bad laws are encouraging the cycle of lawsuit abuse that is tarnishing our state’s legal climate.

California’s laws regarding the Americans with Disabilities Act (ADA) are routinely abused in order to file shakedown lawsuits against small business owners. Unfortunately, California’s ADA law allows plaintiffs to file lawsuits over minor infractions of the ADA.  As a result, a handful of greedy attorneys file lawsuits over what really should be just a “fix-it” ticket. Just ask the small town of Hanford, where 40 businesses have been hit with ADA lawsuits.

Proposition 65, a voter-passed referendum, also presents opportunities for abuse by unscrupulous lawyers seeking to squeeze quick settlements out of small businesses. Prop. 65 requires businesses to put up ominous warning signs where even the slightest, non-threatening trace amounts of some 800 different chemicals may be present. If there’s no sign, a lawsuit can be filed.  These lawsuits cost businesses nearly $30 million in 2014, and businesses have paid more than $228 million to settle Proposition 65 lawsuits since 2000, with $150 million of that money going to lawyers’ fees and costs.

There’s also the troubling misuse of “public nuisance” laws by contingency fee lawyers working with local governments. In their search of profits, lawyers have convinced 10 city and county governments in California to file a lawsuit against paint manufacturers seeking damages from lead-based paint, even though California public health officials call the state’s program dealing with lead paint “a public health success.” The verdict in that case will give millions of dollars to the lawyers, and could have a huge impact on the value of residential property throughout California. (In good news, a similar lawsuit was put on hold in September.)

The California Environmental Quality Act has become the basis for numerous abusive lawsuits concerning public and private projects, often involving businesses attempting to hold up their competitors’ projects.  Wage and hour lawsuits have hurt several employers, including a Central California trucking company that was hit with a lawsuit and forced to settle for $1.5 million. That company is now moving out of California. And the list goes on.

By drafting laws that create opportunities for lawsuit abuse, our legislators play a significant role in the ongoing cycle of lawsuit abuse. No wonder many Californians believe our lawsuit system works more in favor of lawyers than ordinary people.

If California wants to create jobs instead of lawsuits, they should start by reforming these laws to prevent lawsuit abuse.