Governor Arnold Schwarzenegger on Wednesday announced a plan to curb excessive litigation and propose reforms to improve the legal climate for California businesses.
In his annual State of the State address before a joint session of the state Legislature, the Governor said his top priority is creating jobs and getting California's economy back on track. To accomplish that, and to create an environment in which businesses can thrive, he plans to propose a series of changes to regulations governing class action law suits, products liability suits, and seek to cap punitive damage awards.
According to out an outline of the proposal from his office, Schwarzenegger will propose a set of statutory changes that will set forth clear guidelines for class action lawsuits to improve California's litigation climate by allowing defendants to appeal class action certifications and by requiring the plaintiff rather than the defendant to pay for notification to other potential class members.
In addition, these reforms will provide for limitations on the scope of damages assessed against business persons for defective products and eliminate unreasonable and excessive noneconomic and punitive damages awards.
As the statement describes, "Unfair and frivolous suits impact where companies locate or expand. California's current litigation laws lead to large settlements with little value to consumers but become worth millions to lawyers at the expense of California businesses.
"Current statutes also impede growth by holding businesspersons liable for defective products -- even if the seller had no knowledge or control over the defect -- and allowing for punitive damage awards that are wildly unpredictable among similar cases."
The Civil Justice Association of California has in past legislative sessions sponsored legislation to improve the state's class action law. The most recent effort in last year's Assembly Bill 298 would have given defendants in a class action lawsuit the same right plaintiffs have, the right to appeal the class certification decision.
Other CJAC proposals in the area of class action and employment law can be found in an op-ed here.