California could create gold rush of abusive lawsuits

California has once again been named one of the top “Judicial Hellholes” in this year's Annual Judicial Report because of the troubling claims our legal system allows to proceed. The problem is driven by the governor's and the legislature's eagerness to pass novel and innovative lawsuits and support any legislation that increases liability that just makes us a laughingstock and a state where “anything goes.”

As a small business owner in Central California for 17 years, I have seen too many of my neighboring businesses struggle with the expense of responding to claims which seemed more intended to cash in on an abusive suit than to right a wrong. There are far too many unscrupulous attorneys and plaintiffs who are interested in capitalizing on nitpicking in the name of public protection, without ever showing actual harm, or any meaningful public benefit. As just a few possible examples:

Prop 65 lawsuits: Many Californians will recall that coffee was on the list of chemicals that required a worrisome warning label until so much media attention prompted the state to remove it, largely out of embarrassment; but the same substance created from baking bread and potatoes— and Vitamin A, essential for good health, — have also been on that list. While none of these substances have ever been shown to have actually harmed anyone, these cases can commonly cost $60,000-$80,000 to resolve simply because a business fails to label a product that subjects them to $2,500 in civil penalties per day.

PAGA lawsuits: Known as the “Sue Your Boss” lawsuits, these costly claims commonly involve hyper-technical nitpicks, such as an employer's failure to print its address on employees' pay stubs, even though the address was printed on the paychecks themselves, without any showing of meaningful harm. While the

Fair Pay and Employer Accountability Act will be on the ballot in November 2024 and could provide much-needed relief in a few years, legislators should take appropriate action to curb abuse now.

Insignificant Class Action Results: In one recent settlement, class members each reportedly received approximately 50 cents per candy purchase,16 maximum, while the lawyers received $1.42 million for fees and costs; in another, class members each received $4.94, while the lawyers who filed the lawsuit received $394,657.

ADA website lawsuits: Lawsuits are being filed by the thousands making claims that a business website is not compatible with screen reading software used by people with visual limitations to navigate the Internet. But since legislators never voted to require websites to comply with any standard, businesses can't know which of the standards they need to meet. Legislators must stop sidestepping this issue and clarify exactly which standard a commercial website must meet and provide a reasonable deadline by which to meet it. There are simply too many commercial websites with people trolling around the country to make a quick buck. They have no intention of ordering a burger from a hamburger joint in northern California when they live in southern California. They intend to find a minor infraction, which only takes a few, and file a claim and reap the rewards from an abusive suit because the legislature continues to fail to provide the guidelines on ADA websites.

California's courts were established, to seek redress for significant, proven harm, but instead allowed baseless lawsuits that cause no harm and forces businesses to close, cut jobs or raise prices. The annual Judicial Hellholes report highlights judges and courts unfairly use laws, against defendants. California fell to Georgia and The Supreme Court of Pennsylvania and Philadelphia Court of Common Pleas because their legal climate was worse.

It's been estimated that 748,775 jobs are lost each year, and that Californians pay an extra $1,917.89 per person because of California's litigation policies, which could and should be changed. If California enacted appropriate reforms to curb lawsuit abuse, it could increase its gross product by over $75 million. How many more businesses need to close or cut jobs before our elected officials finally do their job and stop the largest unjustified bounty hunt the U.S. has ever seen? We've learned from the witch-hunts and inquisition to carefully scrutinize the true motives of privateers who claim to be acting in the public interest; but some things never change, and California's legal system makes the “wild west” riskier than ever for struggling businesses.