A couple of guys who had been drinking and smoking pot one evening climbed over the fence of Tom Glover’s property. The two guys got into a fight, and one fell back and hit the concrete stairs. He hurt his elbow. He sued Glover. Glover’s insurance company paid the guy $300,000 to go away.
That may sound like some crazy one-off story. But if you operate a business in California, you know a tale like that is not unusual. In fact, such stories abound. The state allows – encourages, really – “victims” and their ambulance-chasing lawyers to file silly suits against businesses, and they do so by the thousands.
“I can’t tell you the number of lawsuits against me,” said Glover, who owns the Magic Castle and Yamashiro restaurant in Hollywood.
Several stories like Glover’s were told in downtown Los Angeles last week during a luncheon put on by California Citizens Against Lawsuit Abuse, a group trying to stop such lawsuits in the state. Several speakers relayed stories of outrageous suits against them, told with a tone that alternated from anger to resignation. The message: The state’s been hijacked by trial lawyers who, thanks to an in-the-pocket Legislature, have transformed what should be a system of justice into one of injustice. Especially against businesses.
“And let’s stop calling them trial attorneys,” said Lisa Salisbury, herself a lawyer. “They are law abusers.”
Since California lacks a “loser pays” provision, when a business gets hit with a nuisance suit, the owner and his insurance company do the math, sigh, and write a check to make the crazy lawsuit go away. Oh, sure, you can fight. But if you win, you still lose. You enjoy the “victory” of a getting to pay legal bills.
A few fight anyway, such as Andrei Leontieff, who owns the 930 Sushi restaurant in Newport Beach. A woman smuggled in a 7-pound poodle in her purse and put it on the table. Managers asked her to go to the patio where dogs are allowed and she went. But a few months later, Leontieff was sued for discriminating against the woman because she claims she’s disabled and a dog on the table supposedly keeps her stabilized.
Leontieff last year won a summary judgment. But while the matter dragged on, and he was unsure of the outcome, he had adopted a hiring freeze for 18 months. And he was called everything from anti-dog to anti-handicapped on the Internet. And the fight cost him $170,000 out of pocket.
So why did he fight? “I’ve always been like this,” said Leontieff, a Russian immigrant who could be excused if he ever has second thoughts about the American Dream.
Many abusive lawsuits are filed in California under the Americans With Disabilities Act. Maryann Marino, the regional director of Citizens Against Lawsuit Abuse, said 42 percent of all ADA suits are filed in this state.
The reason: California, unlike other states, allows “demand letters” in which “victims” can shake down a business for a payoff before they even sue. For example, a lawyer can send a note to a business saying his client noticed that a counter was too high or a toilet too low under ADA specifications. And the lawyer wants $10,000 or his client will sue.
Marino said there are nine bills in the Legislature now that would reform ADA. One, for example, would give a business 90 days to come into compliance with an ADA rule before a lawsuit can be filed.
Of course, ADA reforms have been floated before, but the lawyers really don’t want compliance, they want a payday. So the Legislature – which loves to coddle shakedown lawyers – has refused to reform the law. This year, however, U.S. Sen. Dianne Feinstein has warned that she will fix the problem of ADA abuse in Washington if the state refuses again.
So maybe, just maybe, abusive lawsuits under ADA will cease or at least slow down.
But it wouldn’t stop the bigger frivolous lawsuit mill that California has created. Marino’s organization will probably be around for years to come.
Charles Crumpley is editor of the Business Journal. He can be reached at firstname.lastname@example.org.
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