California Citizens Against Lawsuit Abuse, held a small business round table discussion on Friday at Spaghettini Restaurant in Seal Beach.
California Citizens Against Lawsuit Abuse, held a small business round table discussion on Friday at Spaghettini Restaurant in Seal Beach.
State Assemblyman for the 72nd District Travis Allen was among the guest speakers and Los Alamitos City Councilman Dean Grose and Cypress Mayor Pro Tem Leroy Mills were among those in attendance. Allen spoke of upcoming legislation that could help curb the lawsuit abuse in California, mostly coming as a result of frivolous lawsuits for Prop 65 and American’s For Disability Act violations.
Part of the problem, according to CALA and Allen, is that businesses have no option to fix problems if they are found to be in violation. This has led to what Allen referred to as “shakedown” lawsuits by lawyers looking for a costly settlement from businesses. Allen said that while California has eight percent of the nations population, it has 40 percent of the ADA lawsuit filings.
“Businesses need to band together to be stronger against these frivolous lawsuits,” Allen said.
CALA is pushing for the passage of upcoming Assembly Bill 227 as a step in the right direction in curbing abusive lawsuits against businesses for not having posted Prop 65 warning signs. The current code allows for fines of up to $2,500 per day that the sign was not posted. CALA Executive Director Tom Scott said that these frivolous lawsuits are more damaging to small businesses than fees and taxes.
“A lawsuit will put you out of business a lot faster than a tax or regulation,” Scott said.
Using U.S. Chamber of Commerce statistics, Allen said that California is the fourth worst state in terms of lawsuit climate, making it less attractive for businesses and therefore jobs. He noted that Yuba City in Northern California recently agreed to pay a man $15,000 so that he wouldn’t file any more ADA lawsuits against the city or businesses in the area.
Not only businesses, but school districts can be hurt by frivolous lawsuits, according to CALA. According to CALA, three of California’s five largest school districts paid up to $32.8 million in litigation costs in one fiscal year.
Scott said that after four to five decades of California putting laws in place to protect people that the codes have opened too many doors for unwarranted lawsuits. He said that it is now time to begin taking small steps to weed out frivolous lawsuits from legitimate claims.
“We all know the frivolous stuff and we know the shakedowns,” Scott said.