Abusive lawsuits punishing small businesses are an old story in California. California’s complex regulatory requirements often entice opportunistic attorneys to file lawsuits over minor infractions of labor and environmental regulations without giving businesses a chance to correct the situation. Now a push is on to fix the problem.

Assembly member Don Wagner introduced AB 1948 to hold the penalty for missed meal breaks to additional pay from the employer while prohibiting civil and criminal lawsuits if the employers comply with the specified penalty.

In addition, the Civil Justice Association of California (CJAC) and California Citizens Against Lawsuit Abuse (CALA) are supporting an initiative that would give businesses accused of violating the Americans with Disabilities Act a period of time to correct the problem.

In reality, most small businesses do not violate regulations intentionally. There are so many regulations–with more added all the time–it is hard for a business proprietor to keep up while managing his or her business. If a violation is found, most small business owners willingly will fix a problem if given adequate amount of time.

Yet, some in the legal profession see minor infractions as opportunity for financial gain.

As I say, this is nothing new.

A dozen years ago, a Los Angeles lawyer friend of mine, first name Trevor, was getting nasty phone calls at his office. Because of his name, his firm was confused with a Beverly Hills law firm, the Trevor Law Group, that made a business of threatening small businesses with debilitating lawsuits but offering to settle for anywhere from $6,000 to $26,000. Many small businesses, fearing a long drawn out trial with uncertain results and big legal bills, capitulated.

This legal shake down tallied over 3000 auto repair shops and restaurants and many individuals in lawsuit filings according to the California Attorney General’s office.

A New York Times headline reporting on the situation said the state law was being used as an “extortion tool.”

Finally, the state stepped in. The California Bar sought disbarment of the attorneys involved and Attorney General Bill Lockyer filed a civil lawsuit. “With its unlawful practices, the Trevor Law Group has abused one of the state’s most important consumer protection statutes and dishonored attorneys who practice law in the public interest,” Lockyer said at the time of the filing.

While this particular law firm abuse was finally stopped, small business still faces lawsuits for small and fixable transgressions. The new offensive promoted by the CJAC and CALA is an important step in relieving small business of an unneeded burden so that they can do their part in building the California economy.