SACRAMENTO — The Civil Justice Association of California (CJAC) today urged all legislators working for California’s economic recovery to join in support of a proposal to bring balance to the state’s class action law and send a message that California is becoming more hospitable to companies that would like to remain and expand here.
The bill, AB 298, authored by state Assemblyman Van Tran (R-Costa Mesa) and sponsored by CJAC, allows defendants an equal opportunity to appeal a judge’s important decision to formally “certify” a class of plaintiffs and allow a lawsuit to proceed.
“California’s class action law creates an unbalanced and unfair legal climate in this state. With our current economic crisis, we need to take steps to create a positive business environment to help California’s economic recovery,” said Assemblyman Tran. “I am proud to author AB 298 as one step to promote our economic recovery and ensure that jobs stay here in California.”
Current law only allows the plaintiff to appeal a judge’s denial of class certification. The defendant can only appeal the judge’s ruling after the class action lawsuit has gone to trial, and the defendant has lost — a long and costly endeavor. The situation puts defendants at a disadvantage, forcing them to undergo a costly legal challenge, regardless of whether the lawsuit has merit and even if the certification decision deserves a second look.
“As economic conditions improve, companies will have the opportunity to decide whether to restore jobs here or elsewhere,” said CJAC President John H. Sullivan. “Legislators should stop our litigation climate from blocking the sunshine of jobs and paychecks for thousands of Californians.”
The bill would bring the same balance to class action litigation that exists in federal courts and many states, he said.
California’s low legal climate ranking — documented in several nationwide reports — affects the state’s ability to attract and retain businesses and jobs. The U.S. Chamber Institute for Legal Reform’s 2008 State Liability Systems Ranking Study put California in the bottom five states for the way it treats class action lawsuits.
In addition, 64% of business lawyers reported that the litigation environment in a state is likely to impact important business decisions at their company, such as where to locate or do business.
State Legislators have passed up chances in the past few years to improve California’s class action law. Assembly Bill 1905, introduced in the 2007-08 legislative session, and AB 1505, introduced in the 2005-06 legislative session, would have allowed defendants the ability to appeal the class certification decision. Assembly Bill 1505 also proposed other standards to bring increased clarity and fairness to California’s class action law.
Contact: John H. Sullivan
(916) 443-4900