California – Good News!

On May 29, 2008, the Senate passed S.B. 1608 (Ellen Corbett – D) by a vote of 40-0.  S.B. 1608 is legislation that would create an independent state commission on disability access, establish minimum continuing education requirements for building inspectors and architects on disability access laws, promote use of the state-certified access specialists and establish a court procedure, including a temporary stay of litigation, to defendants who have complied with disability access laws by hiring a specialist. The bill is a reform measure designed to promote and increase compliance with state and federal civil rights laws providing for equal access for individuals with disabilities while reducing unwarranted, unnecessary litigation that aims to extract monetary settlements from businesses rather than seek access. 

A.B. 2690 (Paul Krekorian – D) died on May 29, 2008, when the bill was moved to the inactive file and died on the Assembly Floor. The bill was heavily lobbied by both sides, and at the last minute when it was apparent the bill did not have the votes to pass, the author moved the bill to the inactive file. A.B. 2690 was legislation that would have declared that manufacturers of prescription pharmaceutical products shall not be relieved of a duty to warn consumers of the risks and side effects solely because the product was prescribed to a patient by a physician. According to the Civil Justice Association of California (CJAC), this would have represented a significant change from current law, which requires companies to direct their warnings to physicians, who act as “learned intermediaries” between the drug company and the patients. There is no reason to reject the learned intermediary doctrine. Physicians — not patients — are trained to weigh the benefits and risks of prescription medicines and make individualized decisions on whether a particular drug is appropriate for a patient. Consumers without medical training may have no way to evaluate complex warnings and may not take medicines they need or may combine medicines in a harmful way. Repealing this important doctrine would have led to patient confusion, more lawsuits and possibly higher healthcare costs. 

S.B. 1765 (Sheila Kuehl – D) was moved at the last minute on May 29, 2008, to the inactive file, effectively killing the bill. S.B. 1765 was legislation that, according to coalition members, would have invited lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value. The bill was amended in committee to specify that where an action is brought to enforce this prohibition by the Attorney General or a district attorney, the court shall assess against a guilty party a civil penalty of $100 per violation. The bill would have provided that a violation of its provisions would not be a crime. The bill would not have applied to a governmental entity. 

S.B. 1113 (Carole Migden – D) will be heard on June 10, 2008, in the Assembly Judiciary Committee.  S.B. 1113 would allow for one-sided awarding of attorneys’ fees, expert witness fees, and other costs to a successful plaintiff in the enforcement of certain “public interest” cases. Current law allows attorney’s fees in cases which vindicate a “public” right or interest. 

S.B. 1583 (Ellen Corbett – D) will be heard in the Assembly Judiciary Committee on June 10, 2008. S.B. 1583 would provide that a non-lawyer who advises another person to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable if the individual is not found to be an independent contractor. Current law would subject the non-lawyer advisor to a civil penalty of $200 per person for each day of the contract. 

A.B. 2947 (Mike Eng – D) will be heard in the Senate Human Services Committee on June 10, 2008. A.B. 2947 is legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim.  The bill was amended, but its effect is still the same as it relates to arbitration. It was amended and expanded to require that waiver of legal rights, duties, remedies, forums, or procedures under the act by an elder or dependent adult is voluntary and not made as a condition to admission to or continuing care at a residential care facility. The author claims that the bill is intended to reduce elder abuse but nowhere establishes how prohibiting arbitration helps prevent elder abuse. 

A.B. 2379 (Noreen Evans – D) is scheduled to be heard in the Senate Judiciary Committee on June 10, 2008. A.B. 2379 is legislation that would remove the direct appeals review of a decision to seal or not seal court records, and only allow review by a discretionary writ. The bill would also allow a third party that succeeds in obtaining an order to unseal records to use the “private attorneys general” statute to recover attorney’s fees if the court finds that the records were improperly sealed and that unsealing the records serves a significant public interest.

California

A.B. 2690 (Paul Krekorian – D) is scheduled to be third read today, May 29, 2008. Results were not available by our deadline, but we will update you in future editions of the Watch. A.B. 2690 is legislation that would declare that manufacturers of prescription pharmaceutical products shall not be relieved of a duty to warn consumers of the risks and side effects solely because the product was prescribed to a patient by a physician. According to the Civil Justice Association of California (CJAC), this represents a significant change from current law, which requires companies to direct their warnings to physicians, who act as “learned intermediaries” between the drug company and the patients. There is no reason to reject the learned intermediary doctrine. Physicians — not patients — are trained to weigh the benefits and risks of prescription medicines and make individualized decisions on whether a particular drug is appropriate for a patient. Consumers without medical training may have no way to evaluate complex warnings and may not take medicines they need or may combine medicines in a harmful way. Repealing this important doctrine will lead to patient confusion, more lawsuits and possibly higher healthcare costs. The bill’s amendments, which are in print, will apply the duty when a pharmaceutical company advertises directly to consumers. The amendments do not remove CJAC concerns.

A.B. 1921 (Lori Saldana – D) passed the Assembly (77-0) on May 27, 2008, and is in the Senate Rules Committee. A.B. 1921 is legislation that would change current California law and allow civil actions to be brought by residents against common interest developments. Currently, California law requires an alternative dispute resolution.
A.B. 2874 (Sally Lieber – D) passed the Assembly (47-27) on May 19, 2008, and was transmitted to the Senate for committee assignment. A.B. 2874 is legislation that would eliminate the current $150,000 limitation on actual damages that may be assessed by the California Fair Employment and Housing Commission against a respondent who violates the California Civil Rights Act of 2005, as an unlawful practice.

A.B. 2947 (Mike Eng – D) passed the Assembly (43-26) on May 22, 2008, and is awaiting committee assignment in the Senate. A.B. 2947 is legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim.  According to CJAC, the bill was amended, but its effect is still the same as it relates to arbitration. It was amended and expanded to require that waiver of legal rights, duties, remedies, forums, or procedures under the act by an elder or dependent adult is voluntary and not made as a condition to admission to or continuing care at a residential care facility. The author claims that the bill is intended to reduce elder abuse but nowhere establishes how prohibiting arbitration helps prevent elder abuse. The bill would not help elders, only lawyers.

S.B. 1583 (Ellen Corbett – D) was assigned to the Assembly Judiciary Committee on May 22, 2008. S.B. 1583 would provide that a non-lawyer who advises another person to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable if the individual is not found to be an independent contractor.
S.B. 1765 (Sheila Kuehl – D) is scheduled to be third read today, May 29, 2008. Results were not available by deadline, but we will update you in future editions of the Watch. S.B. 1765 is legislation that, according to coalition members, would invite lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value. The bill was amended in committee to specify that where an action is brought to enforce this prohibition by the Attorney General or a district attorney, the court shall assess against a guilty party a civil penalty of $100 per violation. The bill would provide that a violation of its provisions would not be a crime. The bill would not apply to a governmental entity.

S.B.1762 (Don Perata – D) passed the Senate (31-7) on May 27, 2008, and was transmitted to the Senate to await committee assignment. S.B. 1762 is legislation that would regulate advertising for the sale of carbon credits – purchases by people to offset carbon emissions. The bill includes language allowing violations to be enforced with lawsuits by individuals, whether harmed or not. This private right of action by a non-harmed individual is directly contrary to Proposition 64 of 2004, which required individuals to be harmed to have standing to file a lawsuit.

S.B. 1608 (Ellen Corbett – D) was passed out of the Senate Appropriations Committee (12-7) on May 27, 2008. S.B. 1608 is legislation that would create an independent state commission on disability access, establish minimum continuing education requirements for building inspectors and architects on disability access laws, promote use of the state-certified access specialists and establish a court procedure, including a temporary stay of litigation, to defendants who have complied with disability access laws by hiring a specialist. The bill is a reform measure designed to promote and increase compliance with state and federal civil rights laws providing for equal access for individuals with disabilities while reducing unwarranted, unnecessary litigation that aims to extract monetary settlements from businesses rather than seek access.

California

A.B. 2690 (Paul Krekorian – D) is on the Assembly calendar for third reading after being passed out of the Judiciary Committee at the end of April. A.B. 2690 is legislation that would declare that manufacturers of prescription pharmaceutical products shall not be relieved of a duty to warn consumers of the risks and side effects solely because the product was prescribed to a patient by a physician. According to the Civil Justice Association of California (CJAC), this represents a significant change from current law, which requires companies to direct their warnings to physicians, who act as “learned intermediaries” between the drug company and the patients. There is no reason to reject the learned intermediary doctrine. Physicians — not patients — are trained to weigh the benefits and risks of prescription medicines and make individualized decisions on whether a particular drug is appropriate for a patient. Consumers without medical training may have no way to evaluate complex warnings and may not take medicines they need or may combine medicines in a harmful way. Repealing this important doctrine will lead to patient confusion, more lawsuits and possibly higher healthcare costs. The bill’s amendments, which are in print, will apply the duty when a pharmaceutical company advertises directly to consumers. The amendments do not remove CJAC concerns.

A.B. 2738 (Dave Jones – D) is currently on the Assembly calendar for third reading and scheduled to be voted on at anytime. A.B. 2738 is legislation that would delete provisions of construction contracts that indemnify general contractors, and make any wrap-up insurance policy that requires subcontractors to indemnify a contractor unenforceable.

A.B. 2874 (Sally Lieber – D) is legislation that would eliminate the current $150,000 limitation on actual damages that may be assessed by the California Fair Employment and Housing Commission against a respondent who violates the California Civil Rights Act of 2005, as an unlawful practice. A.B. 2874 is on the Assembly calendar for third reading.

A.B. 2947 (Mike Eng – D), which is still on Third Reading File in the Assembly this week, is legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim.  According to CJAC, the bill was amended, but its effect is still the same as it relates to arbitration. It was amended and expanded to require that waiver of legal rights, duties, remedies, forums, or procedures under the act by an elder or dependent adult is voluntary and not made as a condition to admission to or continuing care at a residential care facility. The author claims that the bill is intended to reduce elder abuse but nowhere establishes how prohibiting arbitration helps prevent elder abuse. The bill would not help elders, only lawyers.

S.B. 1583 (Ellen Corbett – D) is currently on the Senate calendar for third reading and could be voted on at any time. The bill would provide that a non-lawyer who advises another person to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable if the individual is not found to be an independent contractor. Current law would subject the non-lawyer advisor to a civil penalty of $200 per person for each day of the contract.

S.B. 1765 (Sheila Kuehl – D) is on the Senate calendar for third reading and may be voted on at any time. S.B. 1765 is legislation that, according to coalition members, would invite lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value. The bill was amended in committee to specify that where an action is brought to enforce this prohibition by the Attorney General or a district attorney, the court shall assess against a guilty party a civil penalty of $100 per violation. The bill would provide that a violation of its provisions would not be a crime. The bill would not apply to a governmental entity.

S.B. 1113 (Carole Migden – D) is currently on Third Reading in the Senate. S.B. 1113 would allow for one-sided awarding of attorneys’ fees, expert witness fees, and other costs to a successful plaintiff.

California – Take Action Now!

A.B. 2847 (Paul Krekorian – D) was passed out of both the Health Committee (10-4) and Judiciary Committee (9-1) in early April, and is now in the Appropriations Committee. This damaging legislation would move the burden of proof from plaintiff to defendant in lawsuits regarding the medical necessity of health care treatments. According to current California law, when a health professional states that a certain treatment is medically necessary for a patient and the insurance company disagrees, the disagreement goes to the Independent Medical Review (IMR) board, composed of health care professionals. The IMR’s decision on the medical necessity of the treatment is then binding on the health plan.  If IMR decides that a treatment is medically necessary, the plan must provide the treatment. Should the IMR deem the treatment unnecessary, in any subsequent lawsuit by the patient plaintiff, the plaintiff bears the burden of proof. A.B. 2847 would change current law to require the defendant to carry the burden of proof, to prove that the treatment was not medically necessary.

On April 29, 2008, A.B. 2690 (Paul Krekorian – D) was amended and voted out of the Assembly Judiciary Committee (7-3). A.B. 2690 is legislation that would declare that manufacturers of prescription pharmaceutical products shall not be relieved of a duty to warn consumers of the risks and side effects solely because the product was prescribed to a patient by a physician. Existing law holds a manufacturer liable in tort when an article it places on the market, knowing it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. That defect may be the failure of the manufacturer to provide an adequate warning. However, under existing law, if a prescription drug manufacturer provides adequate warning of potential dangers of a drug to a physician, then the manufacturer has no duty to insure that the warning reaches the physician’s patient for whom the drug is prescribed. The committee amended the bill to apply the duty when a pharmaceutical company advertises directly to consumers. The amendments, not yet in print, do not remove concerns about the legislation.

S.B. 1765 (Sheila Kuehl – D) is eligible for third reading in the Senate as early as today, May 1, 2008. S.B. 1765 is legislation that, according to coalition members, would invite lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value. The bill was amended in committee to specify that where an action is brought to enforce this prohibition by the Attorney General or a district attorney, the court shall assess against a guilty party a civil penalty of $100 per violation. The bill would provide that a violation of its provisions would not be a crime. The bill would not apply to a governmental entity.

S.B. 1113 (Carole Migden – D) was passed (7-3) out of the Senate Judiciary Committee on April 30, 2008, and now goes to second reading. S.B. 1113 would allow for one-sided awarding of attorneys’ fees, expert witness fees, and other costs to a successful plaintiff.
S.B. 1608 (Ellen Corbett – D) is legislation that would create an independent state commission on disability access, establish minimum continuing education requirements for building inspectors and architects on disability access laws, promote use of the state-certified access specialists and establish a court procedure, including a temporary stay of litigation, to defendants who have complied with disability access laws by hiring a specialist. The bill is a reform measure designed to promote and increase compliance with state and federal civil rights laws providing for equal access for individuals with disabilities while reducing unwarranted, unnecessary litigation that aims to extract monetary settlements from businesses rather than seek access. S.B. 1608 passed favorably out of the Senate Business, Professions and Economic Development Committee and the Senate Judiciary Committee on April 29, 2008. It is now in the Appropriations Committee.

A.B. 2947 (Mike Eng – D), legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim, was voted favorably (7-3) out of the Assembly Judiciary Committee on April 29, 2008. A.B. 2947 would prohibit voluntary arbitration agreements between elders and their long-term care facilities. It also declares that any arbitration agreement signed the same day that the person enters the facility is presumptively involuntary.

Federal Activity

“Sunshine in Litigation Act” Introduced in House

Though the text of the bill is not yet available, H.R. 5884 (Robert Wexler – D, FL and Jerrold Nadler – D, NY) was introduced on April 23, 2008. H.R. 5884, the “Sunshine in Litigation Act” is legislation that would restrict the ability of federal judges to grant protective orders in civil litigation.  If enacted, we would expect personal injury lawyers to increasingly bring questionable legal actions before certain judges, confident that the heightened threat of the disclosure of confidential information (even if its relevance to public safety is minimal), will place additional (and coercive) pressure on defendants to settle those questionable claims.  We believe the current Federal Rules of Civil Procedure give federal judges the requisite discretion to balance issues of public safety, the interests of litigants, and the need for judicial economy.

Speaker Pelosi Favors Senate Version of CPSC Legislation

After the Senate struck all after the Enacting Clause from H.R. 4040, last year’s CPSC reauthorization bill, and substituted language S. 2663 (Pryor – D) before passing the legislation, the bill went to conference committee. While no action has been taken as yet, Speaker of the House Nancy Pelosi (D-CA) seems to be pushing for the Senate bill language to be retained. The majority of H.R. 4040, is Consumer Product Safety Commission (CPSC) reform. The legislation’s original intent was to reform the CPSC to provide greater protection for children’s products, to improve the screening of noncompliant consumer products, and to improve the effectiveness of consumer product recall programs. Most of the bill would provide improvements to the CPSC along those lines; however, there are three dangerous provisions in the legislation that would do more to expand opportunities for litigation than to increase product safety. Last year’s version of the bill, S. 2045/H.R. 4040, did not include these provisions.

Section 20 of the bill would provide that the attorney general of a state may bring a civil action on behalf of its residents whenever he or she believes that the interests of the residents have been, or are being, threatened or adversely affected by a violation of any consumer product safety rule, regulation, standard, certification, labeling requirement, or order (including the sale of recalled products or a banned hazardous substance or product). H.R. 4040 would expand the authority of state attorneys general to sue manufacturers and distributors for other actions or omissions that they each individually interpret and allege to be consumer product safety violations.

In Section 21 of the legislation, the language would provide that if the Secretary of Labor has not issued a final decision within 210 days of filing a complaint, a whistleblower may file suit in federal court for unlimited compensatory and consequential damages, as well as punitive damages. The punitive damages are limited to $250,000. This language would create a new right that would allow employees of consumer product manufacturers, distributors, and retailers to prevent a disciplinary action or termination by claiming the knowledge of a “product safety violation.” Also, while unjustified plaintiff lawsuits may result in no more than $1,000 in attorneys fees awarded, plaintiffs are granted 100 percent of attorneys’ fees if the case is won.
Finally, Section 7 of H.R. 4040 would require the CPSC to establish a searchable database on its website including all reports of injury, death, or risk of injury or death submitted by consumers or other third-party sources. Often there are situations where investigations of reported problems do not result in a recall, and the Senate’s establishment of a public database that may include inaccurate information could undeservedly alarm consumers and harm companies, as well as require additional resources for the CPSC to manage. 

California

A.B. 2947 (Mike Eng – D), legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim, is scheduled to be heard in the Assembly Judiciary Committee on April 29, 2008. A.B. 2947 would prohibit voluntary arbitration agreements between elders and their long-term care facilities. It also declares that any arbitration agreement signed the same day that the person enters the facility is presumptively involuntary.

A.B. 2379 is legislation that would remove the direct appeals review of a decision to seal or not seal court records, and only allow review by a discretionary writ. The bill would also allow a third party that succeeds in obtaining an order to unseal records to use the “private attorneys general” statute to recover attorney’s fees if the court finds that the records were improperly sealed and that unsealing the records serves a significant public interest.

S.B. 1765 (Sheila Kuehl – D) is scheduled for a hearing in the Senate Appropriations Committee on April 28, 2008, after the hearing on April 21st was postponed. S.B. 1765 is legislation that, according to coalition members, would invite lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value.

A.B. 2690 (Paul Krekorian – D) was scheduled to be heard in the Assembly Judiciary Committee on April 22, 2008, but the committee hearing was postponed. A.B. 2690 is legislation that would declare that manufacturers of prescription pharmaceutical products shall not be relieved of a duty to warn consumers of the risks and side effects solely because the product was prescribed to a patient by a physician. Existing law holds a manufacturer liable in tort when an article it places on the market, knowing it is to be used without inspection for defects, proves to have a defect that causes injury to a human being. That defect may be the failure of the manufacturer to provide an adequate warning. However, under existing law, if a prescription drug manufacturer provides adequate warning of potential dangers of a drug to a physician, then the manufacturer has no duty to insure that the warning reaches the physician’s patient for whom the drug is prescribed.

Federal Activity

S.2838 (Mel Martinez – R, Florida), the “Fairness in Nursing Home Arbitration Act,” is federal nursing home anti-arbitration legislation that would establish that a pre-dispute arbitration agreement between a resident and a long-term care facility would not be valid or enforceable. The language goes on to specify that this would apply to any pre-dispute arbitration agreement entered into at any time during the admission process or afterwards. The court, not the arbitrator, would be responsible for determining whether or not an agreement to arbitrate is valid or enforceable, regardless of whether the party resisting the arbitration challenges the arbitration agreement specifically or not. Senator Martinez introduced S.2838 on April 9, 2008, when it was read twice and referred to the Senate Committee on Judiciary.

California

A.B. 1830 (Ted Lieu – D) is legislation that, according to coalition members, would void provisions of mortgage contracts deemed in conflict with proposed revisions to state law, significantly enhance penalties associated with contract provisions in conflict, create a right of action, and create a vague defense to foreclosure. It also includes a form of successor liability whereby a lender would be responsible for the actions of a broker even if they did not have knowledge of the broker’s actions. A.B. 1830 passed the Assembly Judiciary Committee on April 15, 2008, and now goes to the Assembly floor.

A.B. 2738 (Dave Jones – D) is legislation that would delete provisions of construction contracts that indemnify general contractors, and make any wrap-up insurance policy that requires subcontractors to indemnify a contractor unenforceable. A.B. 2738 is scheduled for third reading on the Assembly floor today, April 17, 2008. Results were not available by our deadline, but we will report on the status of the vote in future editions of the Watch.

S.B. 1583 (Ellen Corbett – D) was passed favorably (3-2) out of the Senate Judiciary Committee on April 14, 2008. The bill would provide that a non-lawyer who advises another person to treat an individual as an independent contractor to avoid employee status for the individual shall be jointly and severally liable if the individual is not found to be an independent contractor. Current law would subject the non-lawyer advisor to a civil penalty of $200 per person for each day of the contract. S.B. 1583 is in the Senate Judiciary Committee after being introduced on February 22, 2008.

S.B. 1765 (Sheila Kuehl – D) is scheduled for a hearing in the Senate Appropriations Committee on April 21, 2008. S.B. 1765 is legislation that, according to coalition members, would invite lawsuits by allowing a civil action by any motion picture, television, or radio rights holder in the event that a licensing agreement did not sell the movie or program for “fair market” value.

S.B. 1539 (Ron Calderon – D) was originally legislation to clarify state law regarding employee meal and rest periods.  Employers are uncertain how to comply to Labor Code Section 512, which requires employers to “provide” meal and rest periods, and employers are subject to lawsuits if they offer the break but the employee works through it. Some interpretations can be read as requiring an employer to discipline an employee for skipping a meal period or for taking it at an “illegal” time. S.B. 1539 would have clarified that the employer must make the break time available, but the employee may opt not to take the break. The bill passed out of the Senate Labor and Industrial Relations Committee on April 14, 2008, but was amended on April 15th to merely state that, “It is the intent of the Legislature to enact legislation to address issues related to meal periods in employment.”

A.B. 2947 (Mike Eng – D), legislation to prohibit arbitration agreements between long-term care facilities and residents in cases involving an elder abuse claim, was passed favorably out of the Assembly Aging and Long-Term Care Committee on April 8, 2008. A.B. 2947 would prohibit voluntary arbitration agreements between elders and their long-term care facilities. It also declares that any arbitration agreement signed the same day that the person enters the facility is presumptively involuntary.

California

A.B. 2738 (Dave Jones – D) passed favorably (8-0) out of the Judiciary Committee on April 8, 2008. A.B. 2738 is legislation that would delete provisions of construction contracts that indemnify general contractors, and make any wrap-up insurance policy that requires subcontractors to indemnify a contractor unenforceable.

A.B. 2379 (Noreen Evans – D) was heard in the Assembly Judiciary Committee on April 9, 2008, without a vote. A.B. 2379 is legislation that would remove the direct appeals review of a decision to seal or not seal court records, and only allow review by a discretionary writ. The bill would also allow a third party that succeeds in obtaining an order to unseal records to use the “private attorneys general” statute to recover attorney’s fees if the court finds that the records were improperly sealed and that unsealing the records serves a significant public interest.

A.B. 2336 (Alan Nakinishi – R) was scheduled to be heard in the Assembly Judiciary Committee on April 8, 2008, but the hearing was cancelled at the request of the sponsor. A.B. 2336 is legislation that would allow disputes between contractors and customers regarding matters up to $100,000 to go to voluntary arbitration. Current California law provides for an arbitration process for amounts in dispute up to $50,000.