CALA Blog

Messing with Playgrounds

A recent article in the Los Angeles Times brings attention to the toll our sue-happy culture has taken on our communities. The article argues that an over-emphasis on safety has led to regulations requiring the removal of playground equipment, robbing our children of not only fun but also the chance to master progressive physical challenges and develop confidence.

These regulations stripping our playgrounds of equipment are the result of California’s out-of-control legal system, in which every bump, scrape or bruise can become a multimillion dollar lawsuit.

What’s worse, the damage that our legal climate has wrought on our school system is not confined to the playground.

While teachers are being pink-slipped, abusive litigation is forcing districts to pay out millions in settlements. According to a recent CALA study, 12 of the state’s 967 school districts spent a total of $98.7 million dollars on verdicts and settlements over a three-year period. These are taxpayer dollars our schools could better spend on rehiring staff, purchasing books and supplies or developing curriculum.

Some lawsuits against school districts are justified. But abusive lawsuits – those filed in pursuit of greed, not justice – create problems for our justice system, for our students and for the public. In this case, children across the state have seen their playground equipment lost to lawsuits.

What else have you seen lost to lawsuits?

CA Courts: A Judicial Funding Crisis

There are many aspects to the legal reform fight in this state and country. A lot of times people just think it is about the trial lawyers and the vast sums of money they walk away with under the guise of helping victims. Or the Legislature and the millions of dollars they have taken from trial attorneys while refusing to pass legitimate legal reform.

However, one of the most critical elements is the courts. I won’t discuss who appoints judges and how much they receive from trial lawyers. I will save that for another day, because that is a huge issue. One of the most fundamental elements to our criminal justice system is a properly-funded court system. If you are not aware, our courts are in financial ruin and grossly underfunded.

During the 2011 budgeting process our courts were cut by $350 million dollars even after they had absorbed grievous cuts in previous years. This has brought serious ramifications to our judicial system. California Supreme Court Justice Tani Cantil-Sakauye stated, “It’s critical that we adequately fund our courts, because they exist to serve the public. The work that legislators do, and bring to the Governor to sign into law, is meaningless if there is no forum to enforce it.”

Before I describe a few examples of how bad it is, let me first state that every year in California there are more than 1 million civil lawsuits filed in our courts, and criminal cases take a priority over civil lawsuits. So with that being said (and keeping in mind how long it already takes for lawsuits to move through the system), here is how bad it is going to get:

San Francisco is looking at laying off 200 of its 480 employees, shuttering 25 of its 63 courtrooms and closing some civil trial departments. San Joaquin County has halted hearing small claims cases. Los Angeles County is looking at a three-year plan of eliminating 1,800 jobs and closing 180 courtrooms (the equivalent of nearly 9 court houses). Nearly all other court jurisdictions in this state are closing early. It is not a pretty picture.

This amounts to one word: crisis. This is a crisis for the judicial system and a crisis for you and me. A few years ago, our courts were already clogged with lawsuits. Now, with our court system forced to make significant cuts, every abusive lawsuit filed in California clogs the system even more, and delays justice even longer for those with legitimate lawsuits. And it will only get worse if our Legislature continues to pass laws encouraging more bad lawsuits.

Who Benefits from a Class Action Lawsuit – Trial Lawyers!

Whoever invented the class action lawsuit is probably sipping martinis on his or her 200 foot yacht. The class action gimmick seems to be the lawsuit of choice and it is earning trial lawyers a pretty penny under the guise of consumer protection.

Recently, Carol Williams with the Los Angeles Times wrote an article titled, “Small Cases are Big Business in California Courtrooms“. The main premise of the article was to point out that lawyers reap huge rewards in petty class action lawsuits. She cited the recent Nutella class action where a woman was surprised to learn that Nutella was full of fat and sugar and was not exactly the good breakfast she thought she was feeding her 4 year old.

So this mother files a lawsuit last February on behalf of the hundreds of thousands of consumers who have been similarly “deceived” by Ferrero USA Inc., which has decided to settle the suit. Now, the lawyers declined to disclose the details of the suit, but I bet you it will go something like this: The mom will get probably $5,000 for filing the suit as a member of the class, you and I will get a dollar off coupon on our next purchase of Nutella (whoohoo!) and our dear friends the trial lawyers will get millions.

So who is actually winning here? The Consumer Attorneys of Califonia would have you believe that the consumers are winning and that they are the knight in shining armor that has come to save them.

Seriously? What hokum. The class action is a plain and simple scam and the consumer will always get the short end of the stick. The trial lawyers know it and I think the vast majority of Californians know it too.

And yet despite numerous attempts to rein in the abuses of class actions, nothing is being done in California to stop it. Last year, Assemblyman Brian Nestande introduced AB 271, which would give defendants the same right of appeal that plaintiffs have on class action certification, but this common sense reform did not get past the first policy committee of the state Assembly.

Class action reform is needed so we can stop trial lawyer avarice (that is a nice word for greed).

2012 – A Legal Reform Wish List

We are back in full swing here in Sacramento and it would be really nice to see some serious legal reform implemented. Look, I get it, the trial lawyers have spent millions on lobbying making sure their playground is undisturbed, but the people in California are ready for legal reform and they are tired of not being listened too. I know the Legislature understands that lawsuit abuse hurts California since they were able to rally last year to pass Assemblyman Henry Perea’s AB 1219.

So here is the California Citizens Against Lawsuit Abuse Legal Reform Wish List for 2012:

1. Stop AB 1207 by Assembly member Furutani, which would create more lawsuits by removing the statute of limitations related to the exposure to a pollutant or hazardous substance. This has already been granted, thanks to the Assembly Judiciary Committee.

2. Pass and implement legitimate ADA lawsuit reform.

3. Pass class action reform similar to AB 271 by Assemblyman Nestande, which would give defendants the same right of appeal that plaintiffs have on class action certification.

4. If AB 1062, which would weaken arbitration, by Assemblyman Dickinson is revived from the inactive file, defeat it.

5. Attorney General Kamala Harris has to stop shakedown Prop. 65 lawsuits.

6. Stop cutting the funding of the California courts. Our court system is still reeling from cuts last year, and more cuts would only reduce access to the courts even more. 

7. Real action from the California Commission on Disability Access toward stopping abusive ADA lawsuits.

8. Before California voters choose who to vote for, they ask their candidates what their position is on legal reform.

9. Do not allow AB 52 by Assemblyman Mike Feuer to be pulled from the Inactive File. AB 52 would create new lawsuits by allowing lawyers to sue as “interveners” on behalf of the general public whether they have a client who has been harmed or not – a recipe for abusive claims.

10. Support and pass Congressman Dan Lungren’s HR 3356, the ACCESS Act of 2011, which would help facilitate ADA compliance by requiring plaintiffs who intend to sue businesses for ADA violations to provide notice of ADA violations to the business they are targeting.

These are just a few items that would help improve California’s business climate, attract more investment and spur job creation. If the Legislature and the people of California do not prioritize legal reform, California will continue to be known as a place that is not friendly to business. When businesses move or do not locate here that means one thing – no jobs. And if you have not figured it out yet, it is all about jobs.

Can I Still Say Happy New Year?

I always feel like there is some mythical line drawn when you can no longer say Happy Holidays or Happy New Year. I think it is still fair to say Happy New Year from California Citizens Against Lawsuit Abuse. We are hopeful that 2012 brings the people of the United States and California good times and good fortune. There is no doubt that the past four years have not been the greatest and I think we are due for some good news.

Along with the new year always comes the usual new year’s resolutions. I am sure we all have quite a few and we know that most people abandon their resolutions within the first few weeks of the new year. CALA thinks that we need to have a resolution that we can and want to keep.

Watching the ball drop in Times Square reminded me about how lawmakers have continually dropped the ball on legal reform. In the minds of many legislators, there is a complete disconnect between legal reform and job creation. It’s simple: a poor legal climate contributes to this state’s poor business climate, which discourages investors from investing in job-creating businesses here.

If we want to create badly-needed jobs in California, legal reform must be a legislative priority in 2012. Not only is legal reform a common sense solution, it is a common sense resolution for our legislators to make in 2012. Lawsuit abuse increases the prices we pay for goods and services, and consumes valuable tax dollars that could be spent on economic development, schools or services for needy citizens. It also increases health care costs and threatens jobs and our economy.

Even as I write this, AB 1207 by Assembly member Furutani has already threatened to create more lawsuits by removing the statute of limitations related to the exposure to a pollutant or hazardous substance. Luckily, this bill was defeated in committee, but there are a lot of other bad bills out there that would only continue the negative decline California has been over the past years.

If California and the United States are serious about job creation, then we need to look at where jobs are being created and why they are being created in those states. It is time to get serious about legal reform. We all pay and we all lose as a result of lawsuit abuse. Let’s all resolve to make 2012 a year of legal reform!

California Named a Judicial Hellhole… Again

 The American Tort Reform Foundation has released its annual Judicial Hellholes Report and California has claimed the #2 ranking on the report between Philadelphia and West Virginia. Our state certainly has been racking up the distinctions this year.

Last year we were also ranked #2 due to consumer class actions, extortionate disability access claims against small business, and expansive liability. Two cases stood out last year: a $208.8 million verdict for a single asbestos claimant in Los Angeles and a $677 million class action verdict leveled by a Humboldt County court against a nursing home provider in a case where not a single person had been injured.

In the 2011/12 Judicial Hellholes report, California maintains its #2 ranking. In the past the report has primarily focused on places where judges systematically apply laws and court procedures in an unfair and unbalanced manner, generally against defendants in civil lawsuits. More recently, the plaintiffs’ attorneys has begun aggressively lobbying legislative and regulatory bodies to expand liability as well. This year’s Judicial Hellholes report therefore includes regulatory and legislative actions (or lack thereof), which can affect the fairness of a state’s legal climate as readily as judicial actions.

The report’s section on California kicks off by citing recent surveys of chief executives in which California was named the very worst state to do business. “Perhaps no other state more clearly illustrates the direct impact of excessive litigation on job creation and the ability of businesses to survive and thrive,” the report states.

The report then examines the ongoing rash of ADA lawsuits filed by a cadre of personal injury lawyers against small business owners. These lawsuits often target business owners who speak English as a second language or otherwise lack understanding of their legal rights.

The report also discusses California’s out-of-control class action laws, how the courts are chipping away at legal reforms approved by voters through Proposition 64 and California hosting the first Wal-Mart class action case. California, the report concludes, seems to be controlled by the trial lawyers at the judicial, regulatory and legislative levels.

CALA has pointed out numerous times over the years that all of these factors dissuade investment in California. If the legal climate is not business-friendly, investors will simply go to other states. The latest Judicial Hellhole Report is just one more message to California’s legislative, regulatory and judicial leaders that we need legal reform more than ever.

Tis the Season for EggNog and Lawsuits

Up front we want people to know that California Citizens Against Lawsuit Abuse is not a Grinch about the holidays. Just like everyone else, we get in the spirit and want to have an enjoyable holiday season. However, one thing we have come to realize is that the holiday season also comes with its share of lawsuits. And a case in point is the annual holiday party.

Holiday parties, whether in the home or at the office, seem like the time to unwind and give into the holiday spirit (no pun intended). However, those parties can create additional liability and unfortunate lawsuits if hosts do not exercise caution. As we are all aware, lawsuits happen all the time for seemingly any reason. The stakes are raised even higher when alcohol is involved.

In our overly-litigious society, party planners and hosts need to be familiar with social host liability. Here are a few tips to ensure your guests are as safe as possible and help you avoid a lawsuit:

Plan transportation, including designated drivers.

Have ample and appealing non-alcoholic beverages for designated drivers and guests.

Consider having a bus or taxi service for your employees if there is a holiday party.

Avoid having a self-service bar. Use a bartender who is experienced in identifying underage drinkers and intoxicated guests.

Halt the flow of alcoholic beverages long before the party ends.

Take action if a guest overindulges, and do not let the guest attempt to drive.

While it is the season for giving, we would rather receive a Yule Log than a lawsuit as a gift. We hope you all have a wonderful holiday season that is lawsuit free!

If You Are a Small Business, California Ain’t For You

Sometimes I wonder whether I could simply reuse previous blogs and just simply change a few sentences and words. Am I starting to sound like a broken record? By the way, a record is one of those round things your grandparents have and it plays music.

Seriously, the Small Business Entrepreneurship Council just released its annueal Small Business Survival Index, and California has the best ranking it has had in five years. California came in at #46 out of 50. The reason for this is that we had a decline of 1 cent in our sales tax while other states’ workers’ compensation benefit costs increased. Before you start popping the champagne corks, though, you might want to read further into the study.

The only states with worse climates for small businesses than California are Rhode Island, Vermont, New Jersey, and New York. The best states for small business are South Dakota, Nevada, Texas, Wyoming, and South Carolina. Some of these are aggressively trying to pick off businesses from California.

California ranks at or near the bottom in such categories as personal income tax, personal capital gains tax, gasoline and diesel taxes, per capita state and local government expenditures and local government debt and highway cost effectiveness. What is truly interesting is that the study did not even look at the legal climate, which is horrible. I have heard from numerous small business owners that they can survive taxes or regulations, but just one lawsuit can put them out of business.

I truly hope that going into 2012 the Legislature will make our business climate a priority. California seems obsessed with the High-Speed Rail to nowhere and spends little time or effort on legal reform and our business climate. Make our state business friendly and businesses will come and prosper. Don’t heed these warnings and the voters might take a closer look at your record in 2012. Just saying…

Lawsuits Continue, but Senator Corbett Gets an Award

I noticed the other day that Senate Majority Leader Ellen Corbett received another award. ‘Tis the season. This award was the 2011 Legislative Champion to Accessibility Award, which honors leaders who advocate for persons with disabilities. It was presented to her by Disability Rights California.

Senator Corbett is quoted in her own press release announcing the award as saying, “As is often the case, the passage of a bill or a win in the coutroom doesn’t eliminate discrimination. I will continue to fight for people with disabilities and their rights towards full equality.”

While I certainly applaud people any time they are given recognition for their service, I found this rather interesting. The main reason Senator Corbett was given this award was due to her introduction and support of SB 1608 in 2008. This legislation was introduced in an effort to improve compliance with the Americans with Disabilities Act (ADA) and also stop the rampant ADA lawsuits that have been ravaging this state’s small businesses. Yet her press release strangely leaves out any mention of this bill, which also created the mother of all commissions, the California Commission on Disability Access (CCDA).

Interestingly, Senator Corbett notes in her bio on her State Senate website that she serves on the CCDA. While she might serve on it, she rarely if ever attends the Commission’s meetings. Maybe if she did she would see that it is moving at a snail’s pace. The commission finally hired an Executive Officer this past June and the Civil Enforcement Committee (this is the one dealing with the ADA lawsuits) finally had its first official meeting on November 22nd.

CALA supported SB 1608, but had serious questions as to how effective it would be. Any time you create a commission to study a problem you know it’s a compromise and possibly not a good one.

So three years later, the ADA lawsuits continue to flow against small businesses in California and Senator Corbett is picking up awards. Let me be clear, SB 1608 has nothing to do with stopping the ADA lawsuits in California. It is simply studying the matter and likely sending a report to the legislature in 2014. This will be long after Senator Corbett has faded into the sunset (she is termed out in 2012).

Considering the current state of California’s economy and the benefits of legal reform, we can’t wait until 2014 to consider reforms.

Another Class Action, Really?

I know some of you may wonder why CALA pays attention to class action lawsuits and their absurd settlements when there are so many types of lawsuit abuse out there. Well, partly it is because class action lawsuits offer huge opportunities for trial lawyers to abuse our legal system and in the end it costs each and every one of us. Just in the past month I have noted four class action settlements giving trial lawyers a windfall and the customers little to nothing.

To make my point about how abused the system of class action lawsuits is, let me tell you about the Currency Conversion Fee Antitrust Settlement (CCF Settlement). I mention this one, because I am betting that some of you reading this probably participated in this class action, since more than 10,000,000 claims were submitted.

The lawsuit concerns the prices charged to Visa, Mastercard or Diners Club cardholders to make transactions in a foreign country, or with a foreign merchant, between February 1, 1996 and November 8, 2006. Plaintiffs claimed that these credit card companies and their member banks conspired to set and conceal fees, typically of 1%-3% of foreign transactions, and that Visa and Mastercard inflated their base exchange rates before applying these fees. That was a mouthful, but you get the point.

This lawsuit has been rumbling along for quite some time and I am betting those of you who sent in claims are wondering when you are going to be getting your check. My wife and I traveled to Europe and Canada many times during this ten-year period, so you might think that since we spent thousands of dollars there would be a rather large check coming our way. We documented it and sent in the claims.

Recently, our big day arrived. Two checks from the CCF Settlement Fund arrived at our door. Woo hoo, this will cover our Christmas, it is going to be a big day! Not so fast. We received two checks totaling $18.04 each. A whopping $36.08. So it looks like Christmas is back on us.

Here is the final tally. The settlement amount was $49.5 million. The two class members split $70,000 and the lawyers walked away with $13.875 million, plus $1.5 million for expenses. And the Scotts get $36.08. Plain and simple, the consumer/customer never wins in a class action. The only people who win are the lawyers. Period.

Other than the federal Class Action Reform Act of 2005, which reduced “forum shopping” by plaintiffs’ attorneys and increased federal scrutiny procedures for the review of class action settlements, there has been little to no reform of class action lawsuits in this country or California. The lack of reforms means abusive class action lawsuits continue to clog our legal system, slowing justice for those who are truly injured and costing businesses millions, which is in turn passed along to customers.

Class actions need to be reformed and voters and consumers need to make their voices heard on this issue. We need to elect representatives at the state and federal level that support legal reform. We will have that opportunity in 2012 and I implore each of you to find out where your candidate stands on legal reform before heading to the ballot box.