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Friday, Mar 29, 2024

Not All Reforms Created Equal

Business owners aren’t always in their store or office, but spend time in meetings with clients, or at local community events, conferences and workshops. One place they don’t want to be: a courtroom. However, California has consistently taken the title of “No. 1 Judicial Hellhole in the United States,” as determined by the American Tort Reform Foundation (the Foundation often focuses on cities and counties but California as a whole gets to sit at the top of the list). The Valley Industry & Commerce Association (VICA) has been tracking state legislation in the 2013 session that could help the litigation environment or hurt it even more – if that’s even possible. Here is a look at a few bills: Helpful: Prop 65 Reform One of VICA’s priorities this session is to pass reforms for Proposition 65, which requires private businesses with more than 10 employees to post warnings about building materials exposing employees and the public to anything on a list of 774 chemicals. Unfortunately, many attorneys file suits against businesses that aren’t maliciously avoiding the signage, but rather are just uninformed. Starbucks knows how to follow the regulation in all of their California shops, but a mom and pop coffee shop doesn’t necessarily have the same resources or knowledge. These “drive-by” lawsuits are costing businesses millions in litigation fees by being forced to settle out of court since that mom and pop coffee shop can’t afford to fight it. It’s essentially a shakedown. Assembly Bill 227 by Mike Gatto, D-Los Angeles, provides businesses with a 14-day window to fix a signage violation and avoid a lawsuit. It is very reasonable to allow businesses an opportunity to fix their signage before getting immediately thrown into court. Helpful: CEQA Reform The California Environmental Quality Act was a landmark environmental protection bill in 1969, but now it makes it easy for project opponents to drag on the development process, costing businesses time and money in a courtroom. It has traditionally been difficult to move any meaningful CEQA reform forward but Senate Bill 731 by Darrell Steinberg, D-Sacramento, has moved forward and helps the CEQA process for certain types of projects. It improves instructions to trial courts to allow more projects to proceed in a timely manner. The bill doesn’t fix all of the developers’ issues with CEQA, but it gets the ball rolling. Hurtful: Appeals for Summary Judgments More than 1 million lawsuits are filed in California every year, many of them unnecessary or more appropriately solved out of the courtroom. One tool a business or other defendant has to avoid a needless trial is a motion for summary judgment. If a trial court rules in favor of their motion, then all or part of the case may not be presented to a judge or jury at trial because the court determined that evidence and cause for trial is lacking. Unfortunately, Assembly Bill 715 by Roger Dickinson, D-Sacramento, would harm employers who are defendants in frivolous litigation and succeed in having a court grant summary judgment on the case. Currently, the prosecution can appeal the court’s decision to grant summary judgment. The appeals court then typically rules based on its evaluation of whether the original trial court properly took into consideration the facts relating to a particular matter. This is called abuse-of-discretion standard. But AB 715 would mandate that all appeals courts consider the summary judgment motion anew, as if the appellate court were sitting in the place of the trial court (called de novo standard). Motions for summary judgment and summary adjudication are primarily filed by defendants as a way to resolve frivolous litigation before expending the time and financial resources to prove their defense at trial. This bill will increase litigation costs by allowing a losing party on summary judgment or adjudication to essentially re-argue the entire motion at the appellate level. VICA urges you to contact your legislators and tell them to improve the legal and business environment by supporting Prop 65 and CEQA reform and opposing AB 715. The Valley Industry and Commerce Association (VICA) is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government.

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