By Bret Schanzenbach
According to a poll, almost 60% of Californians believe that lawmakers are not doing enough to combat lawsuit abuse.
I happen to agree. Here in the Golden State, unwarranted and excessive litigation has gone so far as to make our state extremely unattractive to new businesses. In fact, existing businesses are fleeing the state just to escape the hostile, litigious business environment they’ve been forced to endure here for far too long.
As the President and CEO of the Carlsbad Chamber of Commerce, I’ve seen firsthand the destruction that can result from lawsuit abuse. When local businesses are hit with a lawsuit or threatened with one, our economy suffers, and our people suffer. Jobs are lost, incomes are lost, community staples are lost.
Especially given the state of the economy — which, as we know, has been ravaged by the ongoing COVID-19 pandemic — the time is now for our lawmakers to address the problem at hand, and make meaningful changes to ensure it is fixed.
Here in California, there are numerous laws in place that make it shockingly easy to sue local businesses.
One such law is Proposition 65, or Prop 65. Prop 65 was originally intended to warn consumers of potentially harmful chemicals that a product may contain. It requires that if a product contains even the slightest, non-threatening trace of nearly 1,000 listed chemicals, that the retailer place an ominous warning label on the product.
Seems reasonable enough, until trial attorneys quickly discovered that Prop 65 is the perfect law to exploit for a profit. Once they learned that, baseless Prop 65 lawsuits began plaguing our courtrooms and burdening California’s small businesses.
You see, the list of chemicals has gotten so out of control that anything from bathing suits, to jewelry to coffee are labeled with a warning sign that was originally intended to flag cancerous chemicals.
Not only does this render the effectiveness of these warning signs to be utterly useless, it also forces business owners to keep track of a list that includes naturally occurring, harmless chemicals, and ensure that they’re properly labeling their products.
If they fail to do so, or mislabel, say, a coffee, they open themselves up to a wave of lawsuits that trial attorneys are all too eager to pursue.
This constant threat of Prop 65 lawsuits is always on business owners’ minds. But that’s just one of many examples of the kinds of lawsuits they must worry about.
Another favorite among trial attorneys is California’s Private Attorneys General Act (PAGA), a law that’s been coined the “Sue Your Boss” law, and for good reason. Under PAGA, any “aggrieved” employee can file a lawsuit against their employer for virtually anything.
From a typo in the company name on a paystub to bonuses that are off by one penny, the list of technical, nit-picky lawsuits filed against California’s business owners is endless. And, once again, what was originally intended to protect people has ended up benefiting only the trial attorneys who continue to profit off of others’ misfortunes.
It is baffling to me that, given the ridiculous abuses of our state’s laws that we’ve seen over the years, our lawmakers have done little to nothing to address the anti-business lawsuit abuse that has been hindering our state’s economy for far too long. It’s no wonder that business owners are fleeing the state.
Until something is done to improve California’s civil justice system and to repair our litigious reputation, we will continue to repel perspective businesses, and our existing businesses will remain under the constant threat of lawsuits, or worse, shut down by the cost of defending themselves against one of these frivolous lawsuits in court.
I ask that in 2021, my fellow Californians join me in pushing lawmakers to address tort reform in a meaningful way. If we succeed, the economy, our local communities and local residents will reap the benefits of a balanced, fair legal system.
Bret Schanzenbach is president and CEO of the Carlsbad Chamber of Commerce