Lawyers are – speaking as one myself – generally crafty people.
So, you almost have to admire the effort behind Assembly Bill 1776 by Assembly Majority Leader Cecilia Aguiar-Curry, D-Winters. The bill’s supporters have taken some of the most sleep-inducing public policy on the planet – the kind of technical debate that could put even the most stubborn teenager (or legislator) to sleep – and used it to conceal an enormous change in California law that could affect every business in the state.
AB 1776 would expand California’s antitrust laws by creating a new state standard for when a single business can be sued for allegedly monopolistic conduct. It would make everyday business decisions – like rewards programs and discounts – vulnerable to lawsuits and allow private plaintiffs’ attorneys to bring those cases.
Still awake?
Behind the legal jargon is a simple idea: make it easier for private attorneys to sue businesses, demand massive payouts and collect attorneys’ fees. That’s it.
In other words, AB 1776 is a full-employment act for billboard lawyers.
The bill is sold as a populist crackdown on corporate giants. But the lawsuit risk would not stop at Silicon Valley. It would reach neighborhood restaurants, retailers, franchises and family-owned businesses across California.
That is where those billboard attorneys come in.
Instead of leaving enforcement to the Attorney General – the state’s top cop usually responsible for bringing technical antitrust cases against the titans of American industry – AB 1776 would give any plaintiff attorney a powerful financial incentive to file lawsuits and pressure businesses into settling.
The impacts to businesses would be felt even if a new antitrust case never reaches trial. Once a business is sued, it must hire lawyers, turn over documents and pull employees away from their actual jobs.
A large corporation may be able to absorb those costs.
A neighborhood restaurant, local retailer, franchise or family-owned business may not. Even a weak case can drag on for months or years and become painfully expensive to fight – or force a small business with tight margins to shutter for good.
Supporters claim the bill protects small businesses through an exemption. But that protection is far less meaningful than it sounds.
A small business could still be sued and forced to prove it qualifies for the exemption. By the time a judge dismisses the case, the business may already have spent heavily on lawyers and lost countless hours dealing with the lawsuit.
That is not an exemption. It is a defense you get to raise after the lawyers have already started billing.
AB 1776 could also turn behavior that helps consumers into a legal risk. Routine discounts and promotions – even those offered by a local grocery store – could become lawsuit targets.
When businesses are unsure whether lowering prices or offering a new promotion might trigger a lawsuit, they become more cautious. They invest less, offer fewer sales, hire fewer employees and pass higher legal costs on to customers.
California families are already paying too much for groceries, housing, utilities and insurance. They do not need another law that drives up costs while enriching billboard lawyers.
There is no good reason to turn private lawyers into strip-mall bounty hunters with a financial stake in filing more lawsuits. Especially when California already has an Attorney General empowered to enforce its antitrust laws.
AB 1776 may be written in language only a lawyer could love, but its consequences are easy to understand – and widespread.
It is a full-employment act for billboard lawyers. They win. Small businesses and consumers pay.
Jaime Huff is the President and CEO of the Civil Justice Association of California.