When small businesses are protected in the State of California from unjust attacks, so too is the California economy. For decades, small business owners have been embroiled in litanies of legal battles that forces them to stare down the prospect of financial ruin. Why? Because of unfettered and meritless lawsuit abuse waged against them.
If someone decides to start a small business, the last thing you would imagine them having to prepare for is a potential lawsuit, even if they are acting in good faith. Nowadays, it’s a possibility new businesses cannot afford to ignore. Through the exploitation of laws like ADA and PAGA, self-interested trial attorneys have been given the nod by California to go forth and seek controversies to stir up and make a buck. And by “a quick buck,” it can garner these opportunistic lawyers millions upon millions of dollars without any true victims in suits they file.
The problem has reached a crescendo in the past few years, with small businesses forced to shutter their doors, lay off employees or flee our state. In an important attempt to remedy this issue, the California Senate passed SB 585, a bill that addresses statutory damages, attorney fees and the accessibility claims process. This bill protects local businesses from unfair legal attacks, all while reaffirming the rights of disabled Californians.
Rather than closing the door to just lawsuits, the bill would realign the incentives of trial attorneys to pursue justice and not personal enrichment.
The bill passed the Senate over a month ago and was sent to the Assembly, which welcomed the legislation with deafening silence. Stuck in committee, SB 585 is a no-brainer for the Assembly to pass, which is why small businesses are perplexed at its immobility. Is this important bill that would protect California businesses, fight inflation, save Californians money, and reaffirm disabled individuals’ rights dead upon arrival? It shouldn’t be.
Maybe the State Assembly needs a reminder of how destructive lawsuit abuse has been to everyday Californians. The Perryman Group reported in a study that lawsuit abuse costs California residents approximately $1,917.89 a year. We spend more money than we should on goods and services due to trial attorneys raiding businesses through wrongful lawsuits, which in turn makes prices higher in order for these businesses to survive.
Not only that, but lawsuit abuse creates an economy where small businesses are unable to compete with larger competitors. Unlike big businesses, a lawsuit can mean the death of small-town enterprise that serves communities with a local touch. Is that the kind of state we want to live in?
In order to make California competitive in attracting small businesses and startups in the way it once was, we must address the problem of rampant lawsuit abuse. The Assembly must seize the chance to produce an economic win for our residents, and it ought to be jumping at the opportunity.
Time will tell if SB 585 is made law, but if the bill dies, it would be high time to question our lawmakers why they have been so lethargic in acting. For the sake of small businesses and disabled Californians exploited by trial attorneys, it’s time for a victory in the state’s losing war against lawsuit abuse.
Victor Gomez is the former mayor of Hollister.
There is another side to this that I hope the California State Assembly understands.
If one of those nasty “shark” lawyers goes after a small business for something like ADA violations, it’s because that business is violating the ADA laws. Lawyers don’t pursue cases they can’t win.
These lawyers are actually playing a very important role: forcing businesses to obey the laws, which are otherwise very poorly enforced.
If you are running a legit business, you have nothing to worry about.