Recently, California received the dubious distinction of being named the No. 1 "judicial hellhole" in America, just the latest of many reports released in recent years showing the state's legal system ranked at or near the bottom of the nation. California has been included in the annual "Judicial Hellholes" report every year since it began in 2002, but this is the first year the state was ranked No. 1.
Why do we deserve this award? Because in so many ways, our legal rules are tilted in favor of plaintiffs and their lawyers, and tilted against business, government and individuals. Let me describe a few.
To begin with, California has lax standards for filing class actions, and gives plaintiffs the right to appeal a judge's class certification decision, but does not give this same right to defendants. California is home to the lawsuit against Crunch Berries cereal because — wait for it — there were no real berries in the cereal! Thankfully, that suit was dismissed. We are also home to the class actions over Nutella's breakfast spread and Frito-Lay's potato chips with 0 grams of transfat, both sued for not being "healthy."
In a number of cases, such as employment or Americans with Disabilities Act lawsuits, California only allows prevailing plaintiffs to recover their legal costs, but not prevailing defendants. Our ADA laws have allowed some plaintiffs lawyers to engage in legalized extortion — threatening small businesses over minor ADA violations. Hundreds of businesses and restaurants across the state have had to close or move as a result of these unscrupulous lawsuits.
Unlike other states, California has no limits on punitive damages and only requires nine of 12 jurors to agree punitive damages are warranted. California lacks specific standards and medical criteria to use in lawsuits over asbestos exposure.
California allows plaintiffs lawyers to sue on behalf of "the public" over convoluted environmental laws like the California Environmental Quality Act and Proposition 65, even when no member of the public actually claims any harm has been done.
In many cases, the point of these lawyer-driven lawsuits is to enrich the lawyer rather than protect the environment. Prop 65, the Safe Drinking Water and Toxic Enforcement Act of 1986, requires a warning label when any of a long list of chemicals is present. As a result, my minivan has a warning label that the car contains chemicals known by the state of California to cause cancer or reproductive harm. I was at the doctor's office this week, and saw a warning label on the wall that there were such chemicals in the pharmacy. We have so many warning labels that the warnings become meaningless and are ignored — ironically the exact opposite of the intended result of the initiative. When a small business or a doctor's office gets sued over Prop 65, the plaintiff is not suing because chemical exposure made someone sick; the business is sued merely because there is no warning sticker or plaque.
And the lawyers get rich doing this. In 2011, the 15 private lawyers or so-called environmental groups that brought Prop 65 lawsuits took in more than $15 million in settlements. Of that $15 million, almost $12 million — 75 percent — went to attorney fees!
The result of all this is a legal system that allows plaintiffs lawyers to exploit the confusion over our laws and make a living by playing the "gotcha game." Even if someone has done nothing wrong, it is cheaper to settle than take on the costs of a battle in court, and the lawyers get paid either way. That is not justice. Meritless lawsuits clog our courts, taking valuable space and time away from the truly injured who actually deserve their day in court.
Even with a system already stacked so much in their favor in California, the plaintiffs bar wants more. They say they want to remove our state's limits on non-economic damages in medical malpractice cases so they can win larger payouts at the expense of our health care system. They say they want to take away your right to use arbitration, even as studies show that plaintiffs are at least as likely to prevail in arbitration as in a civil trial, at a much lower cost and over a much shorter time period.
Unfortunately when it comes to plaintiffs firms, their business is a zero-sum game. They make their money only by taking from a business, a local government, a doctor, a school or from you.
Thanks to Governor Jerry Brown and a block of moderate Democrats in the Legislature, we have been successful in recent years in preventing new lines of business for plaintiffs lawyers. But since our legal system is already at the bottom of the nation year after year, we can't settle for standing still.
There is a growing number of Democrats recognizing that we need to reverse course. Senator Dianne Feinstein called for substantive reform on the ADA litigation problem, and while the Legislature did not adopt the 90-day opportunity to cure that she and many stakeholders wanted, a compromise measure (SB 1186) was passed and signed into law by Brown in the face of opposition.
Brown, former Democratic Governor Gray Davis and several Democrats in the Legislature agree it is the time for CEQA reform so that major development projects are not endlessly delayed by lawsuits. Getting this done this year would be a big step in the right direction.
There is reason for hope, but we can't delay. The plaintiffs bar has had their way in California for too long. It's time for a more balanced approach.
Kimberly Stone is president of Civil Justice Association of California.
The Recorder welcomes submissions to Viewpoint. Contact Vitaly Gashpar at vgashpar@alm.com.
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