Jul 04, 2012
A trial lawyer-backed bill that sought to reassert class action rights in the wake of the U.S. Supreme Court's 2011 ruling in AT&T Mobility v. Concepcion died in legislative committee on Tuesday.
SACRAMENTO — A trial lawyer-backed bill that sought to reassert class action rights in the wake of the U.S. Supreme Court's 2011 ruling in AT&T Mobility v. Concepcion died in legislative committee on Tuesday.
Two Democrats on the Assembly Judiciary Committee, Toni Atkins of San Diego and Alyson Huber of El Dorado Hills, joined with the Republican minority to block Senate Bill 491 in its first legislative hearing. With a deadline looming to hear all bills in policy committees by Friday, Tuesday's committee defeat likely marks the end of the line for SB 491 in 2012. The bill's author, Senator Noreen Evans, D-Santa Rosa, would have to engage in significant end-of-session maneuvering to revive it.
"This is a bad decision for consumers and a sweetheart deal for corporations that have engaged in unscrupulous behavior," Niall McCarthy, president of Consumer Attorneys of California, said in a prepared statement.
In Concepcion, the Supreme Court upheld contract provisions requiring consumers to arbitrate their disputes individually rather than as a class. The ruling, which struck down a California rule frowning on class arbitration bans, marked a victory for business groups. Consumer advocates argued that the decision would make it economically unfeasible for lawyers to take individual cases seeking small amounts of economic damages.
SB 491 would have outlawed contracts that bar the class pursuit of claims.
Atkins and Huber "believed this would be a litigation trap and a mess that would be pre-empted by the United States Supreme Court — again," said Katherine Pettibone, legislative director for the Civil Justice Association of California.
Also Tuesday, the same committee passed SB 1528, legislation that as currently written would extend county lien rights for medical treatment to settlements, not just court judgments. Insurers have argued that the bill is really a stalking horse for trial lawyers attempting to erode Howell v. Hamilton Meats & Provisions, the 2011 California Supreme Court ruling that barred injured plaintiffs from recovering more than the negotiated amount paid for their medical treatment.
The bill's author, Senate President Pro Tem Darrell Steinberg, D-Sacramento, said negotiations over SB 1528's contents continue, and he assured critics he would bring the legislation back to the Assembly Judiciary Committee if he changes it significantly.
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