BILL ANALYSIS
AB 1505
Page 1
Date of Hearing: May 8, 2007
ASSEMBLY COMMITTEE ON JUDICIARY
Dave Jones, Chair
AB 1505 (Parra) - As Amended: April 10, 2007
SUBJECT : CLASS ACTIONS
KEY ISSUE : ARE THE STANDARDS FOR CERTIFYING AND ADMINISTERING
CLASS ACTION LAWSUITS SO UNCLEAR OR UNFAIR TO DEFENDANTS THAT
THEY SHOULD BE REPEALED AND REWRITTEN IN A WAY THAT
SUBSTANTIALLY DEPARTS FROM LONGSTANDING STATE AND FEDERAL
PRACTICE?
SYNOPSIS
This bill is sponsored by the Civil Justice Association of
California to repeal and significantly revise the established
rules by which class action cases are certified and administered
in California courts. It is supported by a great number of
large corporations and business associations who argue that
California lacks fair and consistent standards for class action
lawsuits, which has led to meritless cases of little or no value
to the class members but worth millions to the lawyers who
represent them. They argue that existing rules tilt in favor of
plaintiffs, resulting in cases being certified for class
representation that would not be certified in federal courts or
other states. This bill, they contend, addresses these problems
by providing judges with clear statutory standards, modeled
after Federal Rule of Civil Procedure 23. Organizations
representing women, labor, civil rights, seniors, consumers and
environmental advocates, however, contend that the bill
represents a radical and one-sided departure from longstanding
and settled state standards, and from federal rules, that allow
for fair and efficient management of class cases, and that the
bill will severely undermine efforts to enforce critical
protections by depriving injured victims of the only effective
remedy for vindicating their rights.
SUMMARY : Substantially rewrites rules regarding certification
and administration of class action law suits. Specifically,
this bill :
1)Repeals California's class action litigation statute, in
effect since 1872, and negates existing case law, replacing
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both with a substantially different set of rules and
procedures, as described below.
2)Repeals class certification rules and procedures for actions
under the Consumer Legal Remedies Act and replaces them with
the new rules described below.
3)Provides that a plaintiff or defendant class may be certified
only if:
a) The class is so numerous that joinder of all members is
impracticable.
b) There are questions of law or fact common to the class.
c) The claims or defenses of the representative parties are
typical of the claims or defenses of the class.
d) The representative parties will fairly and adequately
protect the interests of the class.
4)Further provides that an action may be maintained as a class
action only if any of the following are found:
a) The prosecution of separate actions by or against
individual members of the class would create a risk of
either of the following: (A) Inconsistent or varying
adjudications with respect to individual members of the
class that would establish incompatible standards of
conduct for the party opposing the class; or (B)
Adjudications with respect to individual members of the
class that would, as a practical matter, be dispositive of
the interests of the other members not parties to the
adjudications or substantially impair or impede their
ability to protect their interests.
b) The party opposing the class has acted or refused to act
on grounds generally applicable to the class, thereby
making appropriate final injunctive relief or corresponding
declaratory relief with respect to the class as a whole.
c) The court finds all of the following: (i) that the
questions of law or fact common to the members of the class
predominate over any questions affecting only individual
members; (ii) that the evidence likely to be admitted at
trial regarding the elements of the claims for which
certification is sought and of the defenses to them is
substantially the same as to all class members; and (iii)
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that a class action is superior to other available methods
for the fair and efficient adjudication of the controversy.
5)Stipulates that the matters pertinent to these findings are:
(i) the interest of members of the class in individually
controlling the prosecution or defense of separate actions;
(ii) the extent and nature of any litigation concerning the
controversy already commenced by or against members of the
class; (iii) the desirability or undesirability of
concentrating the litigation of the claims in the particular
forum; (iv) the difficulties likely to be encountered in the
management of a class action; and (v) the extent to which the
allegations at issue are subject to the jurisdiction of
federal or state regulatory agencies.
6)Requires an order granting certification to be made on the
basis of a "full record on the relevant issues," but imposes
no such requirement on an order denying class certification.
7)Provides that the determination that an action may be
maintained as a plaintiff's class action shall not relieve any
member of the class from the burden of proving all elements of
the member's cause of action, including individual injury and
the amount of damages. No similar requirement is imposed on
defendant class actions.
8)Provides that unless the parties agree otherwise, the
proponents of the class shall bear the expense of notification
to the class. The court may require other parties to the
litigation to cooperate in securing the names and addresses of
the persons within the class for the purpose of providing
individual notice, but any costs incurred by the party in
providing this cooperation shall be paid initially by the
party claiming the class action. Upon termination of the
action, the court may allow as taxable costs all or part of
the expenses incurred by the prevailing party.
9)Provides that courts may allow notice to members of the class
of a proposed settlement by a defendant that is not approved
by class counsel or class representatives.
10)Except for good cause shown, stays all discovery directed
solely to the merits of the claims or defenses in the action
until the court has issued its written decision regarding
certification of the class.
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11)Provides that the courts of appeal shall hear appeals for
orders of the superior court granting or denying class
certification if a notice of appeal is filed within 20 days
after service of a written notice of entry of an order
granting or denying a class certification motion.
12)Provides that reasonable attorney fees and costs recoverable
by the prevailing party shall not include fees and costs
incurred litigating entitlement to attorney fees and costs.
EXISTING LAW :
1)Provides pursuant to state statute that if the consent of any
one who should have been joined as plaintiff cannot be
obtained, he or she may be made a defendant, the reason
thereof being stated in the complaint; and when the question
is one of a common or general interest, of many persons, or
when the parties are numerous, and it is impracticable to
bring them all before the court, one or more may sue or defend
for the benefit of all. (Code of Civil Procedure section
382.) Case authority further specifies the standards and
procedures by which class certification is determined and how
such cases are administered, including the criteria of
ascertainability, numerosity, impracticability, and community
of interest. (See, e.g., Linder v. Thrifty Oil (2000) 23 Cal
4th 429, 437; Washington Mutual Bank v. Superior Court (2001)
24 Cal.4th 906, 922.)
2)Provides pursuant to the Consumer Legal Remedies Act that a
class action may be certified based on the criteria of
impracticability, predominant common questions, typicality of
claims or defenses, and adequacy of representation. (Civil
Code section 1781(b).)
FISCAL EFFECT : As currently in print this bill is keyed
non-fiscal.
COMMENTS : According to the author, this bill is necessary
because "California's class action statute, CCP 382 provides no
guidance to judges. Class actions are governed by common law
principles and by case law. Only three other states (North
Carolina, Nebraska and Wisconsin) fail to provide clear
statutory guidelines and standards for class action lawsuits.
Assembly Bill 1505, if passed, would bring California in line
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with the majority of other states in having a codified set of
standards for class action practice and procedures."
The author also states, "Currently only the Consumer Remedies
Legal Act provides any standards for class actions. So
California law has standards for some class action lawsuits but
not all. This bill, while still protecting consumers by
allowing them to bring meritorious class action lawsuits,
provides standards for all class action lawsuits."
The author continues, "This class action bill would set forth
standards by tracking the provisions of Federal Rule of Civil
Procedure 23 (FRCP 23), the same approach taken by a majority of
other states. AB 1505 departs from FRCP 23 in a few instances
in order to address certain areas of California practice."
The bill's sponsor, the Civil Justice Association of California
(CJAC), states that the bill will "provide balanced, fair
statutory standards for all class action lawsuits in California.
California class action law is primarily case law rather than
statutory law. As such, it has evolved in a divergent direction
from the federal system and from many other states. A recent
U.S. Chamber of Commerce/ Harris Poll ranked California's class
action law the fifth worst in the country - the only states
considered worse were Louisiana, Illinois, Mississippi and West
Virginia. (See www.instituteforlegalreform.com)."
CJAC states: "Here are four areas of California class action law
that will be improved if AB 1505 becomes law:
1. California has unequal appeal provisions. Under
California law, the plaintiff has an automatic right to
appeal denial of class certification. However, the
defendant may not appeal the granting of class
certification. The question of certification is crucial.
Once a class is granted certification, the financial risk
to the defendant is so high that most cases settle before
there is any inquiry into the merits of the case. This
bill would give the defendant the same right the plaintiff
has - the right to appeal class certification.
2. Judges may not consider the merits when deciding class
certification. Unlike federal law, trial judges in
California are generally prohibited from consideration of
the merits of the case when determining whether or not to
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certify a class. Linder v. Thrifty Oil Co, 23 Cal. 4th 429
(2000). This means that once a class is certified, because
of the financial risk to the defendant, the case usually
settles regardless of the merits of the underlying claim.
Assembly Bill 1505 would allow judges to consider the
merits of the claim, when the merits of the case overlap
with the criteria used to decide class certification.
3. Broad pre-certification discovery allows "fishing
expeditions." Unlike in federal rules, broad discovery is
favored in California and allows expensive and
time-consuming "fishing expeditions." Sav-On Drug Stores,
Inc. v. Sup. Ct, Cal 4th 319 (2004). This bill will
largely track Federal Rule of Civil Procedure 23, with a
couple differences to account for idiosyncrasies in
California law, to give California judges the tools they
need to limit expensive and time-consuming discovery prior
to class certification.
4. California rules allow uninjured parties to join the
class. Under California's case-law based approach to class
action law, some courts have permitted a presumption that
all class members relied on an omission if the court has
determined that the omission was "material." Mass Mutual
Life Ins, Co v Superior Court, 97 Cal. App 4th 1282 (2002);
Vasquez v Superior Court, 4 Cal 3d 800 (1971). This means
that the plaintiff does not have to prove that each class
member actually relied on the omission. AB 1505, following
the federal rule on reliance, makes it clear that each
class member must be able to prove each element of the
claim in order for the class to be certified."
According to CJAC, "The problem is getting worse. With the
passage of the Federal Class Action Fairness Act, more lawyers
are looking to bring lawsuits in California. [The federal act
is discussed below.] 'California courts are more friendly
toward class actions than federal courts,' says the introductory
statement in the Berkeley-based Impact Fund's 31-page outline
describing how California decision's rules and statutes are
tilted toward plaintiffs."
CJAC goes on to state: "Class action lawsuits are a valuable
part of the legal system, providing important redress,
particularly in the civil rights and consumer protection arenas.
Class action lawsuits have been responsible for vital changes
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in society and have been used to right unjust wrongs: for
example when 'stewardesses' were fired for getting married, a
class action lawsuit compensated the women and changed the
practice. Unfortunately though, the lack of consistent
standards have led to less worthy cases that result in
settlements with little value to the class members, but millions
to the lawyers who represent them. For example, some movie
watchers sued movie rental company Netflix on behalf of all
Netflix customers because 'unlimited' movie rentals were not
really without limit. In addition Netflix filled the movie
requests of light users prior to those of heavy users. In that
settlement, the class of Netflix users got one additional movie
for one month (worth $2 to $6), but the lawyers got $2.5 million
dollars. Right now, lawyers are looking for people who bought
Garnier Fructis shampoo but whose hair did not get stronger and
shinier! We need standards to allow truly harmed class members
to have their day in court, while giving judges the tools they
need to dispose of mertitless cases."
A coalition of large businesses and business associations writes
in support of the bill, stating:
This important measure protects the rights of true victims
and brings fairness and balance to class certification
issues. Class action lawsuits, when used appropriately,
can be a powerful tool to right unjust wrongs.
Historically, class action lawsuits have been used by
injured groups to fight discrimination and to protect
consumers and employees. However, nowadays, in addition to
legitimate class action lawsuits there are many cases that
end up settling with little or nothing for the supposed
victims - the class members - and yet lawyers receive
millions in attorney's fees. These cases clog our courts
and are a drain on the California economy.
Class action lawsuits have become a problem in California
law because: Judges lack clear statutory standards to use
when determining whether or not to certify a class. The
question of class certification is paramount - the
financial risk to a defendant is so high, that once a class
is certified, the case usually settles. Case law on the
class action litigation has reached a point that tends to
tilt it in favor of plaintiffs. Cases are being certified
in California that would not be certified in federal courts
or other states. This bill addresses the problems by
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providing judges with clear statutory standards, modeled
after Federal Rule of Civil Procedure 23.
History and Purpose of Class Actions. The class action
originated in eighteenth century English equity courts as an
exception to the rule that joinder of all interested parties was
necessary to obtain complete justice. (Hansberry v Lee, 311
U.S. 32 (1940).) In the United States, the class action
procedure was available only in equity until 1938 when the
Federal Rules of Civil Procedure were enacted, reflecting the
recognition of the utility of class actions in other contexts.
Among the reasons for expansion of class action procedure were
the protection of defendants from inconsistent obligations, the
protection of the interests of the absent class members, the
provision of a convenient and economical means for disposing of
similar lawsuits, and the provision of a mechanism that provides
a means to facilitate spreading litigation costs among numerous
litigants with similar claims. (See United States Parole
Comm'n. Geraghty, 445 U.S. 388, 423 (1980).)
"The aggregation of individual claims in the context of a
class-wide suit is an evolutionary response to the existence of
injuries unremedied by the regulatory action of government.
Where it is not economically feasible to obtain relief within
the traditional framework of multiplicity of small individual
suits for damages, aggrieved persons may be left without any
effective redress unless they may employ the class action
device." (Deposit Guaranty Nat'l Bank v. Roper, 445 U.S. 326,
339 (1980).)
Class action lawsuits are said to offer a number of advantages.
Aggregation may increase the efficiency of the legal process,
and lower the costs of litigation, by avoiding the necessity of
repeating "days of the same witnesses, exhibits and issues from
trial to trial." (Jenkins v. Raymark Indus., Inc., 782 F.2d
468, 473 (5th Cir. 1986).) In addition, a class action
overcomes "the problem that small recoveries do not provide the
incentive for any individual to bring a solo action prosecuting
his or her rights." (Amchem Prods., Inc. v. Windsor, 521 U.S.
591, 617 (1997).) In other words, a class action ensures that a
defendant who engages in widespread harm - but does so minimally
against each individual plaintiff - must compensate those
individuals for their injuries. Third, in "limited fund" cases,
a class action ensures that all plaintiffs receive relief and
that early-filing plaintiffs do not deplete the defendant's
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assets before other plaintiffs may be compensated. (See Ortiz
v. Fibreboard Corp., 527 U.S. 815 (1999).) Finally, a class
action avoids the situation where different court rulings could
create "incompatible standards" of conduct for the defendant to
follow. (See, e.g., Van Gemert v. Boeing Co., 259 F. Supp. 125
(S.D.N.Y. 1966).)
Use of Class Action Procedure Against Private and Public
Defendants. Supporters of this bill argue that the class action
process should be curtailed because class action cases have
clogged the courts, and because class certification is sought in
meritless cases. Whatever the truth of these allegations, it
must also be noted that class actions have been used to combat
some of the nation's most grievous social problems and
significant injuries.
Supporters have not provided data regarding the number of
proposed class action cases filed or certified per year, but it
is widely believed to be a very small fraction of annual case
filings. Although small in number, these cases have often
filled headlines and movie screens, including the recent film
"North Country," chronicling the landmark sexual harassment
lawsuit, Jenson v. Eveleth Taconite Co., filed on behalf of Lois
Jenson and other female mine workers subjected to inappropriate
touching and physical intimidation at a mine in northern
Minnesota. Following the Jenson case, 350 female employees won
a 1996 class action harassment case against Mitsubishi. Female
stock brokers also filed and won a class action against Merrill
Lynch in a case that revealed pervasive discrimination in Wall
Street firms. Currently female employees at Wal-Mart are
challenging the company in a class action suit over an alleged
pattern of lower wages and denied promotions for female workers.
Businesses of course are not the only defendants in class
actions. Governmental entities have also frequently been the
target of such cases - such as the recent litigation filed
against the state prison system, resulting in the finding that
California's prison healthcare and mental health systems are in
violation of the U.S. Constitution's protection against cruel
and unusual punishment, and giving rise to what is said to be
the most sweeping takeover of a prison healthcare system in the
nation's history in order to ensure that inmates receive
appropriate care. This bill would apply to class action cases
filed against both public and private defendants alike.
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Federal Class Action Fairness Act of 2005. As noted above, CJAC
complains that frivolous class actions have been spurred in
California by passage of the federal Class Action Fairness Act
of 2005 (CAFA), a measure, that paradoxically was urged by
business interests who argued that it was needed to prevent
class-action lawsuit abuse. With the adoption of the bill
shortly after the re-election of Pres. Bush, the Washington Post
reported, "Congress today handed President Bush a major
second-term victory, passing legislation he had advocated during
his reelection campaign to restrict class-action lawsuits."
According to the Post:
The legislation had been strongly pushed by business
groups, which argued that class-action lawsuits were
enriching trial lawyers, who often filed them in certain
jurisdictions known for sympathetic judges and juries.
Bush campaigned heavily last year against what he called
"junk lawsuits," vowing to promote legislation that would
overhaul America's legal liability system and curb medical
malpractice, class-action and asbestos lawsuits.
"Today marks the culmination of nearly a decade of
legislative efforts to end systematic abuse of our
class-action system," said Rep. James Sensenbrenner
(R-Wis.), who chairs the House Judiciary Committee."
But Rep. Nancy Pelosi (D-Calif.), the House minority
leader, and other Democrats charged that the legislation is
a payoff to big business, at the expense of consumers, for
supporting Bush's reelection. "When Americans are injured
or even killed by Vioxx or Celebrex or discriminated
against by Wal-Mart, they may never get their day in
court," Pelosi said.
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"This bill is the Vioxx protection bill, it is the Wal-Mart
protection bill, it is the Tyco protection bill, and it is
the Enron protection bill," said Rep. Jay Inslee (D-Wash.),
the Associated Press reported. Rep. Ed Markey (D-Mass.)
called the bill "the final payback to the tobacco industry,
to the asbestos industry, to the oil industry, to the
chemical industry at the expense of ordinary families who
need to be able go to court to protect their loved ones
when their health has been compromised." (See
http://www.washingtonpost.com/wp-dyn/articles/A32674-2005Feb
17.html.)
CAFA expanded federal jurisdiction over many large class-action
lawsuits. The asserted purpose of doing so what to reduce
"forum-shopping" by plaintiffs in friendly state courts by
expanding federal diversity jurisdiction over large class
actions where there is not "complete diversity," giving federal
courts jurisdiction over class actions against out-of-state
defendants. Proponents argued that "magnet jurisdictions" were
rife with abuse of the class action procedure.
Identically to AB 1505, the preamble to CAFA states
"Class-action lawsuits are an important and valuable part of the
legal system when they permit the fair and efficient resolution
of legitimate claims of numerous parties by allowing the claims
to be aggregated into a single action against a defendant that
has allegedly caused harm."
Are Current Class Action Standards Lacking or Unclear?
According to the author, "Currently only the Consumer Remedies
Legal Act provides any standards for class actions. So
California law has standards for some class action lawsuits but
not all." Likewise, the bill itself declares: "The lack of
clear standards for the certification and management of class
actions in California has led to abuses of the class action
device?."
In October 2001, the Rules and Projects Committee of the
Judicial Council considered a request by CJAC to develop a rule
containing class certification standards. The committee
recommended against adoption of such a rule after forming a
17-member working group to gain a variety of viewpoints on the
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issue, including members of the Complex Litigation Subcommittee,
practicing attorneys, a member of the State Bar of California's
Committee on Administration of Justice, a member of the Civil
Justice Association of California, and two superior court judges
who handle class action cases. The committee concluded that
such a rule is unnecessary, in part because "the basic criteria
for class certification under California law are well-settled.
The case law does not reflect any substantial uncertainty or
confusion among the lower courts as to these basic standards."
(Judicial Council Rules and Projects Committee memo, March 10,
2003.)
This Bill Departs Significantly From Existing Class Action
Standards and Procedures. Supporters state, and the bill itself
declares, that this legislation is "modeled on Rule 23 of the
Federal Rules of Civil Procedure," although CJAC allows that the
bill contains "a couple differences to account for
idiosyncrasies in California law." Among the most notable
departures from federal class action law are the following:
Requirement that the court certify a class only if it
considers "the extent to which the allegations at issue are
subject to the jurisdiction of federal or state regulatory
agencies."
Requirement that the proponents of the class bear the
expense of class notification, including that if the court
requires other parties to the litigation to cooperate in
securing the names and addresses of the persons within the
class for the purpose of providing individual notice, any
costs incurred by the party in providing this cooperation
shall be paid initially by the party seeking the class
action.
Permission for defendants to communicate potential
settlement offers directly to class members when the
proposed settlement is not approved by class members or
their lawyers.
Permits consideration of the merits of the dispute in
the class certification decision, but stays all discovery
directed to the merits of the claims or defenses until
certification is determined.
Grants defendants an automatic right of appeal from an
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order granting class certification.
Prohibits prevailing parties from recovering costs
incurred in the process of demonstrating their entitlement
to and the necessity for the attorneys fees claimed.
ARGUMENTS IN OPPOSITION: The Impact Fund on behalf of a
coalition of nonprofit civil rights groups writes in opposition
to the bill, stating:
Historically, and currently, an essential tool in all of
our struggles for equality is a viable class action
mechanism. [AB 1505], however, would overturn decades of
well establishes California law, go far beyond what federal
law provides, and severely undermine class action cases in
California, thus providing a windfall to the defendants who
harm many people when they violate the law. While there
are many problems with this bill, we note the most glaring
issues:
1. It eliminates California's long standing public policy
in favor of class actions. Section 1(d). This policy has
been upheld consistently for over 30 years by judges
appointed by Republican and Democratic Governors. See
Sav-On Drug Stores v. Superior Court (2004) 34 Cal. 4th
319, 340.
2. It would require each individual class member to prove
his or her claim and extent of damages. 383(c)(4). This
essentially would make any large class case impossible
since it would require an individual trial for each class
member. No court - federal or state - has ever adopted
this radical notion. Imagine what this means in the
classic case where a company has committed widespread fraud
in small amounts. For example, years ago a lot of lenders
fraudulently increased loan fees by using a 360 day year
(rather than 365) to compute interest. Individual amounts
of loss were miniscule--maybe a few dollars per loan, but
cumulatively the loss was great. There would be no way to
challenge this conduct in a class case under this bill
unless millions of individuals came in and proved their
claims. But this is the point of class cases--by
aggregating claims, an efficient means of redress is
established and wrongdoing is punished and deterred.
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3. It imposes all the costs of notice on the plaintiffs,
even if the defendant's conduct made expensive notice
necessary (i.e. it destroyed records that would allow
identification of class members), 383( c)(5)(C). This is
of particular concern to nonprofit organizations whose
funding is limited.
4. It creates a novel right for a defendant to bypass class
counsel and communicate directly with class members to make
a settlement offer. 383(d)(2)(C). This would allow great
mischief -- it would undermine the attorney client
relationship of class counsel to the class and allow a
defendant to "divide and conquer". Such conduct would
never be permitted in an individual case. In a class case
it would further undermine the role of class counsel as a
representative of the class. No case we are aware of
--federal or state - has ever allowed this overreach.
5. It allows for a stay of all discovery directed to merits
until class is certified. 383(d)(6) -- a classic catch 22
since in (c)(3) the merits can be considered -- except
plaintiffs can now be barred from discovery into the
merits.
6. It allows a direct appeal from an order granting class
certification. 383(f). California law only allows appeal
when a class motion is denied, essentially dismissing the
case. Under federal law, there is no automatic appeal -
only a right to request leave to appeal, which is supposed
to be rarely granted. See FRCP 23(f). This provision thus
goes beyond federal and state law.
7. It requires class counsel's attorney's fee motion to be
served on all class members. 383((h)(1). This would
raise substantial expense in any large class since
voluminous motions would have to be mailed to all class
members at plaintiff's expense. Neither federal nor state
law requires this.
8. The expense of seeking attorney's fees, which can be
substantial, would not be recoverable if the plaintiff
prevails. 383((h)(5). This is contrary to both federal
and state law which recognizes that if "fees on fees" are
not awarded when a defendant refuses to pay fees, a
defendant has an incentive to litigate and drag out the
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proceedings, and class lawyers are forced to work for free
to obtain their rightful fees.
California Rural Legal Assistance Foundation writes that it
opposes AB 1505 because it "proposes changes which would make it
significantly more difficult for workers to enforce critical
labor law protections. CRLA Foundation represents low income
agricultural workers throughout the state. Particularly in the
Central Valley we have successfully recovered unpaid minimum
wages, overtime and meal and rest period compensation for
thousands of workers in dairy, grape, tree fruit, row crops and
nursery operations. We have also used work-force wide
litigation to enforce important worker safety protections.
Agricultural workers are routinely subjected to labor law
violations at the hands of unscrupulous growers and farm labor
contractors who cut their operating costs, by failing to pay
lawfully owed wages. The only effective remedy for these
workers is a workforce wide action that will force the employer
to pay what is due to all who have suffered. These
representational actions, under current law, use long
established procedural mechanisms and standards of proof that
both protect the interests of the employers and allow all
workers to recover. AB 1505 would make such actions nearly
impossible."
The California Labor Federation, similarly opposes the bill,
arguing that it "would change the rules of class action lawsuits
to benefit employers and make it much more difficult for workers
to win justice when their rights are violated. Too often, when
a worker is not paid for the hours worked or forced to work
without lunch or rest breaks, the only recourse he or she has is
to file a lawsuit. It is essential that California law expand
access to justice for workers, especially low-wage workers,
rather than reversing long-standing rules designed to make it
possible for workers and consumers to have their day in court."
A coalition of seniors, consumer and environmental groups also
opposes the bill, stating that it "would erect draconian
barriers to justice for Californians and allow rogue
corporations to get away with a whole host of harmful practices
that threaten the health, safety, and economic security of
Californians."
They go on to argue, in part:
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It is important to view this measure in historical context.
Californians have already lost the ability to enforce
vitally important laws through public and private avenues,
via passage of the falsely portrayed Prop 64 and Governor
Schwarzenegger's veto of last session's SB 1489 (Ducheny).
At the time, one argument for passage of Prop 64 was that
drastically reducing the ability of victims to join
together to seek redress of wrongs would not unduly harm
the public because class actions could still be brought to
remedy wrongdoing. Since implementation of Prop 64, it is
now painfully clear that the proposition has had a
devastating impact on the ability of Californians to
protect ourselves and our children and grandchildren from
tobacco products, toxins being dumped into the environment,
hazardous working conditions, abuse of our senior citizens
and retirees, discriminatory practices, predatory lending,
and unsafe and harmful products.
When Proposition 64 was pending, a second justification
touted by several major California newspaper editorials in
favor of passage was that the Attorney General would still
able to bring cases on behalf of the citizens of our state.
However, that was before Governor Schwarzenegger vetoed SB
1489, which would have allowed the Attorney General to
continue to recoup the enormous litigation costs entailed
in winning against multi-national giants such as Enron,
Microsoft, the tobacco industry, the oil industry that
deliberately polluted our groundwater with MTBE, and other
lawbreakers that have cost our state billions.
By vetoing SB 1489, Governor Schwarzenegger quietly cut the
pursestrings for the California Department of Justice to be
able to simply recover the cost of upholding our laws.
Now, not satisfied with having drastically restricted both
public and private enforcement of our laws, corporate
lawbreakers are behind yet another sweeping attempt to
eliminate what is often the only remaining protection left
under California's laws for workers, the environment, and
consumers.
AB 1505 would gut protection under a whole host of
consumer, environmental, and worker protection laws by
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tilting the playing field even more in favor of the
criminal elements of the corporate world.
In sum, we believe that enactment of this bill would leave
millions of individual consumers and minorities defenseless
against large-well funded corporations and undermine the
public's confidence in the California marketplace. It would
also harm the public health and safety, force the state and
individual municipalities to bear the costs for cleaning up
environmental dumping and pollution, and hamper
California's ability to enforce our newly minted laws to
curb global warming.
Prior Related Legislation. This Committee last considered class
action legislation in the 2001 session. AB 456 (John Campbell)
would have limited awards of attorneys' fees in specified class
actions. That measure failed passage in this Committee. AB
2291 (John Campbell) would have substantially re-written the law
regarding an attorney's obligations in class action cases. It
likewise failed passage in the Committee.
That session the Senate also considered two bills. SB 565
(Morrow) would have repealed the statute authorizing class
actions in California and in its place enact the "Class Actions
Improvement Act," which would have raised the burden of proof
for plaintiffs to meet class certification requirements;
resolved any doubts in favor of denying class certification;
limited the scope of plaintiff class actions to residents of the
state; specified certain other requirements for class
certification; authorized appellate review of court orders
granting or denying class certification; eliminated defendant
class actions; and impose related requirements. SB 565 failed
passage in the Senate Judiciary Committee. That Committee also
heard and rejected SB 1133 (Poochigian), which would have
required appellate review of trial court orders granting or
denying class action certification.
REGISTERED SUPPORT / OPPOSITION :
Support
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Civil Justice Association of California (sponsor)
American Insurance Association
American International Companies
Association of California Insurance Companies
California Apartment Association
California Association of Health Facilities
California Citizens Against Lawsuit Abuse (CALA)
California Chamber of Commerce
California Farm Bureau
California Financial Services Association
California Grocers Association
California Hospital Association
California Retailers Association
Caterpillar
Central California CALA
Consulting Engineers and Land Surveyors of California
Cooperative of American Physicians, Inc.- Mutual Protection
Trust
Ebay
Governor's Office of Planning and Research
Hewlett Packard
Intel Corporation
Labor Ready
Los Angeles CALA
Milpitas Chamber of Commerce
National Federation of Independent Business --California
Northern California CALA
Novartis Pharmaceuticals Corporation
Oracle Corporation
Orange County CALA
Oxnard Chamber of Commerce
Pacific Life Insurance Company
San Diego CALA
State Farm Insurance Companies
The Dow Chemical Company
Toyota Motor Sales, U.S.A., Inc.
Western States Petroleum Association
A few individuals
Opposition
AARP
Amalgamated Transit Union, California
American Civil Liberties Union
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American Television and Radio Artists
Asian Law Caucus
Asian Pacific American Legal Center
CALPIRG
California Applicant Attorneys Association
California Conference of Machinists
California Employment Lawyers Association
California Federation of Teachers
California Labor Federation
California Nurses Association
California Teamsters
Congress of California Seniors
Consumer Action
Consumer Attorneys of California
Consumer Federation of California
Consumers for Auto Reliability and Safety
Disability Rights Advocates
Engineers and Scientists of California, IFPTE Local 20
Equal Rights Advocates
Fair Housing Law Project
Foundation for Taxpayer and Consumer Rights
Gray Panthers of California
Impact Fund
International Longshore and Warehouse Union
Jockeys' Guild
Legal Aid Society of San Francisco - Employment Law Center
Mexican American Legal Defense and Educational Fund
National Center for Lesbian Rights
National Association of Consumer Advocates
Older Women's League
Professional and Technical Engineers, IFPTE Local 20
Protection and Advocacy, Inc.
Public Counsel
SEIU, California State Council
Sierra Club California
Speak Out California
United Food and Commercial Workers, Western States
UNITE-HERE!
Utility Consumers' Action Network
Western Center on Law and Poverty
Women's Employment Rights Clinic
Analysis Prepared by : Kevin G. Baker / JUD. / (916) 319-2334