SACRAMENTO – After a brief hiatus from the dubious "Judicial Hellholes" list, California has once again been recognized as the worst of the worst states in America for civil justice, thanks – at least in part – to a relatively small number of lawyers.
The report, produced annually by the American Tort Reform Foundation (ATRF), ranked California the No. 1 Judicial Hellhole in the United States for 2015. The nonprofit group described the Golden State as the epicenter for lawyers trolling to bring disability access lawsuits against small businesses and class-action lawsuits against food and beverage companies.
“What we see from a handful of lawyers is abuse of the system in California, like abuse of lawsuits related to the ADA (Americans with Disabilities Act). They file suits if the signage is wrong, if the paint on a parking spot is incorrect, if a table is out of place,” Julie Griffiths, northern and Central California regional director of Citizens Against Lawsuit Abuse (CALA), told the Northern California Record.
CALA is a self-described “non-partisan grassroots movement of concerned citizens and businesses” that is fighting against lawsuit abuse in California. It acts as a watchdog that challenges abuse of the civil justice system and enlists the public and media to deliver the message that “lawsuit abuse is alive and well in California,” its website states.
“We have been very vocal on public nuisance, ADA and Proposition 65 compliance,” Griffiths said.
CALA also keeps a close eye on seven or eight lawyers who are particularly adept at abusing the judicial system, she said, but stopped short of naming them on record.
ATRF’s Hellholes report explains that disability access litigation is most prevalent in California because plaintiffs can claim disabilities under both the ADA and state civil rights law that allows for both damages and attorney’s fees.
As such, attorneys who have lots of time, limited integrity and special willingness to browbeat small business owners – who are more likely to settle than fight a claim – have turned a "wheelchair-centric racket into a booming cottage industry," the report states.
It also criticizes public nuisance lawsuits involving lead paint. City prosecutors along with private-sector plaintiffs’ lawyers are going after companies that had made lead paint decades ago and demanding funding for lead-paint mitigation. In California, three companies were ordered to pay for lead-paint abatement by setting up a $1.15 billion dollar fund to be shared by seven counties and three cities.
The case is now on appeal. ATRF notes that if the verdict is upheld, every painted residential building constructed before 1981 would have to be labeled as a “public nuisance” until which time the structure is inspected, possibly abated and then re-inspected.
“These are the kind of things that happen in California alone,” Griffiths said.
The ATRF report points to California’s labeling laws as another reason it makes the top of its Hellholes list. Common targets of lawsuits are products that claim to be organic, artisanal, handmade or crafted.
Although the report did not mention California’s Proposition 65 specifically, it is yet another tool lawyers use to profit from unsuspecting businesses, Griffiths said. Also known as the Safe Drinking Water and Toxic Enforcement Act of 1986, it requires the state to maintain a list, updated annually, of chemicals known to cause cancer, birth defects or other reproductive harm.
It also requires California business with more than 10 employees to provide “clear and reasonable warning” before “knowingly and intentionally” exposing anyone to any of the 800 chemicals on the list. The warning may be provided through package labeling, signage and distributed notices, including published warnings in newspapers.
Griffith said the problem with these types of regulatory laws is that they are only enforced via lawsuits. For example, if a Proposition 65 warning sign or label is not clearly displayed at a business and a customer discovers that one of the 800 chemicals is somehow associated with that business, then a lawsuit is filed and money collected.
A pharmacist who sold office-supply binder clips that had a trace element of a chemical listed under Proposition 65 and did not have a Proposition 65 sign up was sued for $60,000, Griffith said. Farmers who grow oranges have been sued under Proposition 65 because of what is in their soil, she added.
“The only enforcement is by lawsuit, and attorneys have made a niche business out of testing products,” she said. “But I can’t stress enough that our watchdog group is watching a handful of lawyers. Ninety percent of attorneys agree with our position.”
How could California improve its judicial system and get off the Hellholes list?
“There are a couple macro solutions that we keep an eye out for, such as ‘private right of action’ language in regulations,” Griffith said. “It opens the door for lawsuits on what should really be a regulatory concern. When that phrase comes up in a bill in law, it creates opportunities for a handful of attorneys.”
Additionally, California must stop legislating from the bench because, as with lead paint, it provides courts liberal interpretation with regard to lawsuits and becomes a form of judicial activism, she said.
And finally, when it is discovered that a business has not complied with disability access requirements, it should first be notified of its non-compliance and allowed a period of time for remedy rather than immediately being hit with a lawsuit, she said.
For the full Judicial Hellholes report, visit www.judicialhellholes.org.