Author: Tom Scott

Just yesterday the San Francisco Chronicle carried an opinion piece by John Sullivan, the head of the Civil Justice Association of California talking about how lawsuits and the personal injury lawyers in California are threatening everyone’s job security.

It should not surprise anyone that the personal injury lawyers are trying to cash in on their agenda at both the national level and here in California. Whether it is in Congress, our own legislature, the courts and through public opinion, the personal injury bar is seeking to overturn any and all reforms that have been made over the past few years.

And it could not come at a more difficult time. California is facing the worst economy in decades and unemployment is at record levels. As Sullivan points out, the personal injury lawyers have given $33 million dollars over the past decade to political campaigns and they are looking to cash in.

Let me first of all state I am not a lawyer. I will wait for the applause to settle down. Kidding.

I recently read an article titled, “AT&T Edits Contract to Preclude Class Actions.” It stated that AT&T has amended its terms of service to preclude consumers from participating in class actions, whether handled via litigation or arbitration. They also prohibit consumers from bringing class actions even in an arbitration setting.

It seemed too logical to just amend your terms of service and stick that into them. What a great way to rid our world of class actions once and for all. I mean binding arbitration has been in contracts forever and it seems to meet the various legal challenges. However, this has been challenged once and that was involving a former garbage truck driver for the Atlas Disposal Company. He was trying to sue and get a class over the issue of work breaks, but Atlas had both mandated artbitration and prohibited class actions.

California Citizens Against Lawsuit Abuse (CALA) released a survey of California voters on their attitudes toward jobs and the economy. The responses clearly illustrate that Californians are very concerned about the economic future of their families and the state, and they believe lawsuits are part of the problem.

According to the survey, California’s voters want the legislature to enact legal reforms that will attract and retain businesses and create jobs.

This survey proves what most of us already know – now is not the time to place further economic strain on anyone, whether they be businesses, consumers or families. When our state has become such a hostile place to do business that other states are aggressively targeting California businesses to relocate, the time for change has come.

I know this sounds like a bad movie coming out of Cancun, but it is not.  It is right in our own backyard. In an article titled, "Private Lawyers Cost State Millions," the San Diego Union-Tribune reported that the Attorney General’s Office is so understaffed that the state is having to outsource legal costs totaling more than $24 million.

They do this by signing contracts with private lawyers  because the Attorney General’s Office is too shorthanded to take the jobs. This tab that has been racked up goes back to January 2008 and much of it lies with the Department of Corrections and Rehabilitation.  Some of these private lawyers even command hourly rates that reach $450 an hour, which in some instances is nearly double that of in house lawyers.

On July 24-29, the American Association of Justice will be holding its annual conference in San Francisco. Originally they were scheduled to be meeting at the Manchester Hyatt in San Diego, but the labor community put a nix on that. So the AAJ will be meeting this year at the Hilton San Francisco (I hope they have their Prop. 65 warnings posted).

I am not usually picky about which conferences decide to come to our state, but in this case I draw a line. If the trial lawyers want to spend time in our state figuring out how they can sue business and industry they can quite frankly take their business elsewhere. I am sure Florida would be a nice setting. There are certainly enough hotels, runways long enough for their G5’s and plenty of sharks to make them feel at home. And more golf courses then they will ever want.

At a time when California can’t afford to pay its employees, vendors or bills, the state now has to pay hundreds of thousands to a Vallejo woman injured when then state Senator Carole Midgen rammed her from behind after an erratic driving spree that had eight people calling 911. With state officials are calling on us to identify government waste, we need look no further than this case.

At a time when services are being cut and taxes proposed, Californians are covering costs for a former elected official who was not obeying the law at the time of the accident. In 2007, Ms. Migden pled no contest to misdemeanor reckless driving after the incident in which her state car repeatedly banged the median on Interstate 80, weaved across lanes and rear-ended another car after narrowly missing several other vehicles. This 30 minute joy ride has ultimately cost the taxpayers of California $335,000 in a settlement and another $25,000 in property damages. Meanwhile, Migden was sentenced to two years of court supervised probation and paid a whopping $710 in fees for the incident.

Even after her wild ride, Midgen was appointed by Governor Schwarzenegger to the California Integrated Waste Management Board (CIWMB) and earns roughly $132,000.

In our continuing series of what a racket Proposition 65 has created, I thought I would focus in one individual “private attorney” that seems to have carved out a very nice practice for himself. Interestingly, if you google Anthony Held Ph.d, the only reference you can find is that on the website Prop65ClearingHouse.com/. I will talk about that a little later.

The state law requires any person suing “in the public interest” to enforce Proposition 65, “The Safe Drinking Water and Toxic Enforcement Act of 1986,” to notify the Attorney General of the lawsuit and the outcome of the case. Each year, the Attorney General posts the annual listings of settlements. In an earlier blog I put a few examples of this utter shakedown process and showed the outrageous fees these scam artists are getting for supposedly protecting the public.

Dr. Held caught my eye because he seems to really have a ferocity for filing suits against businesses. Just in 2008, Dr. Held had a total of 31 settlements with judgments totaling $1,173,250. His “attorney fees” were $901,150. The civil penalties against the 31 entities totaled $272,100.

Yesterday, The Milken Institute released a new report titled, Manufacturing 2.0 – A More Prosperous California. The report was released in cooperation with the California Manufacturing and Technology Association (CMTA).

According to the report, California has 21 percent fewer manufacturing jobs in 2007 than in 2000, compared with a decline of 20 percent nationally and 13 percent among seven states that are competing for the same types of manufacturing jobs. It went on to say that driving the decline is California’s reputation for an unfriendly business climate, comparatively high tax rates, a restrictive regulatory climate and unsustainable government spending.

I am just surprised that litigation was not also included. In addition to the items mentioned above, one thing that impacts economic development and steers businesses to other state or countries is a state’s litigation climate. All of these items go hand in hand at turning businesses away. I can see why Governor Perry in Texas is having such a great time.

At one point in history, every business was a small business. However, small businesses are being tested in these economic and legislative times more than ever. Just last week President Obama touted the "Courage and Honor" of small businesses. Yesterday, Governor Schwarzenegger and other legislative leaders in California talked about promoting policies that would encourage the growth of small businesses in California during California Small Business Day 2009.

This all sounds great and I am sure the 3.5 million small businesses in California appreciate it. However, in this economy talk is cheap and small business people need answers. In a survey California CALA did with the National Federation of Independent Business in California among small business owners, 95 percent of the businesses surveyed believe current laws favor those who sue. Additionally, 98 percent said they believe new laws are needed to protect businesses against lawsuit abuse.