Amidst scandal, state lawmakers passed key legislation in 2017

SACRAMENTO — The 2017 state legislative year is more likely to be remembered for the #WeSaidEnough campaign than it is for actual legislation.

But before two Democratic legislators resigned in the face of sexual harassment allegations and a whistleblowing lobbyist appeared on the cover of Time, Gov. Jerry Brown signed several bills that will affect the practices of lawyers across the state.

Plaintiffs’ attorneys won a major battle in their long war to limit forced arbitration. New campaign finance regulations will likely result in more work for political attorneys. The Legislature also passed new laws that will affect jury selection and other courtroom procedures.

The ‘Wells Fargo’ bill

For years, the Legislature played out versions of the following scenario: A legislator allied with the Consumer Attorneys of California would propose a bill to limit mandatory arbitration. The bill would make progress but eventually die under withering opposition from the California Chamber of Commerce and other business groups.

Then came the news Wells Fargo & Co. employees opened millions of fraudulent customer accounts to meet unrealistic sales quotas.

That story, which broke in September 2016, handed the consumer attorneys the ammunition they needed to pass SB 33. The bill bars forced arbitration in cases where banks have committed fraud.

“It was a great vehicle to educate legislators and others about how these clauses operate to insulate wrongdoers,” said Cliff M. Palefsky, a partner with McGuinn Hillsman & Palefsky in San Francisco and a longtime critic of mandatory arbitration clauses.

Palefsky said he was skeptical that large numbers of people would be directly affected by SB 33. Numerous cases against Wells Fargo are already in litigation, he noted.

But complaints about the practice go back to at least 2005. This illustrates that the scandal would have come to light up to a decade earlier if customers hadn’t been kept out of court by arbitration clauses, the bill’s proponents say.

Meanwhile, the law could face a legal challenge as soon as next year. Among other objections, representatives of the state Chamber of Commerce said the bill violates the Federal Arbitration Act.

Campaign compliance

2017 will likely go down as a banner year for political attorneys in California. That’s because several new laws will make it harder for political candidates and committees to stay on the right side of the California Fair Political Practices Commission.

The legislation includes AB 249. Among its provisions, the bill requires commercials for initiative campaigns to list the top three donors over $50,000 — a response to campaigns that complied with current laws by listing so many funders viewers couldn’t read them all.

Republicans widely opposed the bill. This was in part due to a provision that allows unions to spend member dues under $500 on ads while identifying only the union itself. Even commission chair Jodi Remke warned the bill might have unintended consequences.

Bell, McAndrews & Hiltachk LLP, a leading GOP law firm in Sacramento, warned AB 249 likely violated a 2004 9th U.S. Circuit Court of Appeals precedent — and also quickly put out a memo to help clients comply with the new law.

Brown signed two other campaign finance bills that could be a sign of developments to come.

SB 267 will allow the city of Sacramento to contract with the Fair Political Practices Commission to enforce campaign finance laws on a local basis. The city joins San Bernardino as the second local government to make this arrangement.

The bill is seen as a way for more cities and counties to increase enforcement without creating their own election commissions. Several larger cities, including Los Angeles and San Francisco, have such commissions, but they can cost millions a year to run.

SB 358, meanwhile, will require the secretary of state to include links to campaign finance information posted by local governments. Part of the goal is to eventually create a one-stop destination for compliance information for state and local elections.

The growing complexity of California’s campaign finance laws is creating more work for campaign compliance attorneys, said Brian T. Hildreth, a partner with Bell McAndrews. But the effect of any individual new law may not be long-lasting, he added.

“The increase is usually temporary, because people start learning,” said Hildreth, who is president of the California Political Attorneys Association.

Jury selection

Attorneys will have several more details to keep in mind when selecting juries next year.

SB 658 sets guidelines for judges to allow more time for voir dire in civil cases. It was sponsored by the consumer attorneys group and the ACLU in response to reports that judges were setting arbitrary time limits of as little as 20 minutes in civil cases.

“It’s a significant improvement for lawyers who are trying to get a fair jury,” said Nancy Drabble, CEO of the consumer attorneys group.

The bill had support from the California District Attorneys Association and the California Public Defenders Association. It made it to Brown’s desk without receiving a single no vote. That couldn’t be said for AB 1541, a bill designed to help weed out biased jurors in criminal cases. But the bill from Assemblyman Ash Kalra, D-San Jose, a former Santa Clara County deputy public defender, did receive strong bipartisan support.

It was in part a reaction to AB 843, a 2016 bill that lowered the number of preemptory challenges in criminal cases from 10 to six. It also addressed several recent reports of biased jurors influencing cases.

In June, the state Supreme Court reversed three criminal convictions — including two for murder — on the grounds that judges had improperly excluded jurors of the same race as the defendant.

Both jury bills received significant amendments advocated by groups including the Judicial Council and the California Judges Association. Many of these were designed to preserve judicial discretion, as well as to better align civil and criminal voir dire rules.

Dogs in court

Among the hundreds of other bills Brown signed was AB 411. This bill allows certain witnesses, including many children, to be accompanied by a therapy dog in court. The bill didn’t receive a single no vote, though some defense attorneys have charged the presence of an adorable dog could bias jurors against a defendant.

“If you’re saying we are going to have a fair equal playing field, then why not dogs for everybody?” said Steven M. Cron with Cron Israels & Stark in Santa Monica.