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California Nixes Limits on Class Actions

Anti-Consumer Measure Fails in Committee Despite Governor's Support

May 10, 2007
California lawmakers have killed a bill that would have put limits on class actions in the state, but the issue is likely to show up as a future ballot measure.

The Consumer Attorneys of California, the state's trial lawyers' association, said it will be ready if the bill returns as an initiative. It has amassed a $2 million "initiative defense" fund, according to published reports.

Backers of the bill to limit lawsuits said they are weighing what to do next. The group's arsenal includes an unusual public letter of support from Gov. Arnold Schwarzenegger's Office of Planning and Research.

The bill, AB 1505, would have repealed the state's 135-year-old class litigation statute and replaced it with more business-friendly regulations, modeled after federal rules.

Supporters of the measure said that courts are "cluttered" with class action suits.

But a string of lawyers and consumer group representatives testified that the bill was a ploy to put corporate interests ahead of consumer interests by giving defendants an unfair advantage in court.

Don Ernst, a board member of the Consumer Attorneys of California, labeled the bill "anti-consumer" and said its corporate supporters, including the American Insurance Association, the state Chamber of Commerce, eBay and Hewlett-Packard "are always trying to close the courthouse door, both through legislation and initiatives."

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