Survey: California’s lawsuit climate ranks among worst in country, again
Posted on 09/10/2015 @ 01:00 PM
California’s lawsuit environment again places among the worst in the country with a rank of 47 out 50 states, tying its all-time low ranking recorded in 2012, according to a recently released Harris Poll by the U.S. Chamber Institute for Legal Reform (ILR). The survey also names Los Angeles and San Francisco among the “least fair” jurisdictions in the nation.
In the survey, 2015 Lawsuit Climate Survey: Ranking the States, general counsels or senior attorneys at major companies rank their perceptions of state lawsuit environments, including laws, courts, judges and juries. States were also ranked for their overall treatment of tort, contract, and class action litigation. The survey and 50 state list can be viewed here.
The survey identifies California as “ground zero for lawsuit abuse in several areas.” Cases such as ADA and Prop 65 shakedown lawsuits and food labeling class action lawsuits, among other factors such as the state’s high business and regulatory costs and high taxes, are creating an environment that makes it even more difficult to attract new businesses to California.
“More business leaders than ever have identified a state’s lawsuit climate as a significant factor in determining their growth and expansion plans,” said Lisa A. Rickard, president of ILR. “California ought to take notice that the results of this survey are of vital significance to continue attracting good jobs.”
“The ILR/Harris Poll puts California at the very bottom for class action lawsuits and for damage awards. I can’t say I’m surprised,” Kim Stone, President of the Civil Justice Association of California said. “Our state has a ‘sue me’ sign on its back. Most of our tort laws, but particularly our class action rules, heavily favor plaintiffs.”
In a similar report, California has been ranked by the American Tort Reform Foundation as the #1 Judicial Hellhole in 2013 and 2014. California would have been #1 again this year but fell second to New York City due to its biased treatment of asbestos cases. That report can be viewed here.
Judge Was Right to Dump DA’s Suit Against Drug Makers
Posted on 09/03/2015 @ 10:00 AM
By Kim Stone
The lawsuit that Orange County District Attorney Tony Rackauckas filed against five makers of opioid painkillers was dismissed last week. This case is a great example of why local governments should not partner with private attorneys to sue businesses.
We give governmental prosecutors great power because they can lock people up and because they represent us, the people. However, we also expect them to have a higher ethical duty – to try to be just and fair. Private attorneys have a different duty – a duty to zealously represent the interests of their client. We should not mix the two together.
I trust a government lawyer who is going to get paid the same whether the case wins or loses to do the right thing more than I trust a contract contingency fee plaintiff lawyer who only gets paid her fees if the case settles or wins. We as citizens need to watch these kinds of dangerous liaisons between local prosecutors and plaintiff attorneys and try to stop them from happening.
The Orange County/Santa Clara case against the drug makers, where local prosecutors partnered with private plaintiff attorneys to sue pharmaceutical companies, was an example of extreme overreach.
The complaint (available in full, all 105 pages of it, thanks to the LA Times, here) alleges that the companies that make opioid painkillers should pay for the counties' costs for substance abuse treatment, unemployment, emergency room visits, and other social services, as well as paying the full legal fees of the private attorneys who sued them.
The prosecutors alleged that some people who took the painkillers get addicted to them, they then switch to heroin when they can no longer get the opioids. Then those addicts lose their job, their families, their homes and then commit crimes or die, so, pay up Pharma!
And the prosecutors alleged this despite the fact that all these painkillers went through the regulatory process of our Federal Food and Drug Administration, a group of scientists who decided that for sick people or people in extreme pain, the benefits of the medicine outweighed the risks. The prosecutors sued, despite the fact that you can only get these painkillers via prescription from a doctor who has determined, that, for you, the benefits to taking the medicine outweigh the risks.
Judge Moss issued a sternly worded smackdown to the prosecutors in the case:
"Not one case cited by plaintiff involved, and indicated the propriety of, a court immersing itself in the convoluted, exacting, expertise-driven, issue-expanded, nuanced action which is involved here. The patients, potential patients, and the medical community deserve more. This action could lead to inconsistencies with the FDA’s findings, inconsistencies among the States, a lack of uniformity, and a potential chilling effect on the prescription of these drugs for those who need them most. The proposed ongoing role of the court in this litigation, and in the monitoring of any decision it makes, is a monumental endeavor. The court does not shrink from its responsibilities to handle complex, convoluted litigation; it handles such matters every day of the week. It does, however, take pause at involving itself in an area which is best left to agencies such as the FDA who are designed to address such issues."
This case, and its dismissal, shows why local governments should be loath to partner with private plaintiff attorneys to prosecute business. When dollar signs become more important than justice, we all lose.
Kim's op-ed appeared in the Orange County Register/Voice of Orange County on September 1, 2015, which can be viewed here.
Sanchez Opinion -- An Arbitration Win!
Posted on 08/03/2015 @ 03:00 PM
On August 3, 2015, the California Supreme Court released its opinion in Sanchez v. Valencia Holding Co. (S199119), holding the challenged arbitration agreement valid in all respects and reversing the appellate opinion's judgment that it was both procedurally and substantively "unconscionable."
Much can be said in praise of the 28-page majority opinion written by Justice Liu and concurred in by the Chief Justice and Associate Justices Werdegar, Corrigan, Cuéllar and Kruger. But the opinion's main value is as a blueprint for what future drafters of arbitration agreements must consider to avoid their agreements being invalidated on state unconscionability grounds. Simply put, the majority of the Court rejects the notion that the adhesive nature of arbitration agreements makes them "suspect," is concerned that arbitration agreements be both procedurally and substantively conscionable, but remains sensitive to throwing out the baby with the bath water when it comes to particular provisions about which a signatory (consumer, employee, etc.) develops second thoughts.
On the question of what standard of unconscionability the Court should use to examine the validity of arbitration agreements, an issue for which the Court invited additional briefing from the parties and amici, we now know that the various standards -- e.g., "shocks the conscience", "unfairly one-sided," "overly harsh," and "unduly oppressive" -- "mean the same thing and must be as rigorous and demanding for arbitration clauses as for any contract clause."
Justice Chin wrote a dissenting and concurring opinion, in which he agreed with in the majority's judgment but disagreed with its reasoning. His opinion, read in context with the majority opinion, provides further clarification and assistance for drafters of arbitration agreements.
To read the opinion, click here.
Wacky Warning Labels
Posted on 07/15/2015 @ 10:00 AM
A warning label on a ceiling-mounted smoke alarm says: “Silence feature is intended to temporarily silence the horn while you identify and correct the problem. It will not extinguish a fire.”
Another on a one-inch-tall water-absorbent grow toy that looks like the Easter Bunny reads, “This toy is in no way intended to represent living people. Any resemblance is purely coincidental and not intended to harm anyone.”
A four-inch-long brass fishing lure with sharp hooks dangling off the end warns: “Harmful if swallowed.”
These are some of the winners of the Wacky Warning Labels Contest.
“Countless products are plastered with common-sense warning labels today because lawyers have advised product makers that if they don’t provide the warnings, they could be sued,” said Bob Dorigo Jones, in a recent article in the Washington Times. Jones is a senior fellow at the Center for America and creator of the annual Wacky Warning Labels Contest, and the author of “Remove Child Before Folding: The 101 Stupidest, Silliest and Wackiest Warning Labels Ever” (Grand Central Publishing, 2007).
These wacky warning labels, which by the way aren’t found in other countries, said Jones, “should themselves be a warning that it’s time for us to change old lawsuit habits that haven’t served us well. Judges and lawmakers need to tell plaintiff lawyers that personal responsibility and common sense still have a place in America’s courts. When that happens, we won’t need labels like the one found this year on a bag of frozen catfish pieces that warns: ‘Contains fish.’”
To read the article, click here.
Sacramento Bee Op-Ed: Builders want to fix defects before lawsuits
Posted on 07/14/2015 @ 10:00 AM
In a recent Op-Ed to the Sacramento Bee, Dave Cogdill, CEO of the California Building Industry Association, shared his thoughts on Senator Jerry Hill’s Senate Bill 465.
Among the provisions, SB 465 would require licensed contractors to report to the Contractors State License Board within 90 days a conviction or infraction, including any felony; or any other crime substantially related to the qualifications, functions, and duties of a licensed contractor; or has been subject to a civil action settlement or binding arbitration award above a certain amount.
“As drafted, however,” said Cogdill, “this measure … will not give regulators the information to actually identify and weed out bad actors. More importantly, it misses the opportunity to pass a policy that prioritizes the speed of construction defect repairs.”
Although Codgill finds Sen. Hill’s intentions admirable, “this bill won’t achieve his aims” he said.
Cogdill urged Senator Hill “to join the building industry in supporting legislation that increases transparency so that home and building owners are aware of previous defects, and that ensures builders have a right to be notified of a defect and the opportunity to inspect and make the necessary repairs before litigation.”
Since the publication of this Op-Ed, SB 465 failed to pass out of the Assembly Business and Professions Committee.
To read the Op-Ed, click here.