Bill on class-action lawsuits resurfaces as ballot initiative

It’s Round 2 in the Capitol’s tort wars: A move by industry and business interests to throttle class-action lawsuits died in the Legislature earlier this year. But the issue is back via the initiative process–and portends a high-stakes fight between big business and labor, trial lawyers, and consumer advocates.

On July 19, the Civil Justice Association of California, a coalition of businesses and local governments filed a ballot-initiative proposal with the secretary of state’s office called the “California Class Action Lawsuit Fairness Act.” The initiative is very similar to Assemblywoman Nicole Parra’s AB 1505, which CJAC sponsored earlier in the year. Its backers hope to make the June 2008 ballot.

CJAC spokesman John Sullivan said California needs a clear rulebook for the way that courts administer class-action lawsuits. “We don’t have the necessary clarity, certainty and predictability that you need for fairness and efficiency,” Sullivan said. He said that a new law would help judges throw out “ridiculous” lawsuits where no actual harm was committed.

Sullivan points to two key cases. In one, a car company was sued for uncomfortable seatbelts. In the second case, a utility was sued for unsafe electrical wiring, even though showing proof of damage wasn’t required of the plaintiffs. “Those are the types of absurdities where you can put together a group of people but a judge doesn’t have the tools to end those lawsuits early.”
Jordan Traverso, a spokeswoman for the Consumer Attorneys of California, which opposes the initiative, said that class-action reformers may talk about frivolous lawsuits, but if the initiative passed, it would have much larger ramifications; it would affect civil rights, labor rights and consumer protection. “This is about big business versus the little guy,” Traverso said. “It is absolutely a get-out-of-jail-free card for the big businesses that make up CJAC’s board so they can continue to violate the rights and safety of their employees and customers–just to protect their bloated corporate profits.”

Traverso said the initiative, if passed, would make it virtually impossible for people to bring class-action lawsuits to fight fraud. She noted that lawyers would have to identify everyone who would enter the class before bringing suit–a process that could take a great deal of time. Also, she said, lawyers’ ability to secure documents from a defendant that show harm would be much more difficult.

“For a lot of low-wage workers these lawsuits are the only way they have access to justice,” said Caitlin Vega, a legislative advocate with the California Labor Federation, which was the lead opposition against AB 1505. “This initiative is so extreme that it would really close the doors to them.”

The political warfare between lawyers and business interests in Sacramento goes back many years, and includes multimillion-dollar attempts to curb third-party, bad-faith lawsuits, overhaul the state workers’ compensation insurance system, limit the right of plaintiffs’ attorneys to file business-practice lawsuits, among others.