Bill to lower bar dues passes marathon Assembly Judiciary Committee session

Some of the year's big legislation -- the annual bar dues bill, the judiciary omnibus -- passed with little or no debate at a marathon Assembly Judiciary Committee session Monday.

AB 3362, authored by committee Chair Mark Stone, D-Scott's Valley, would drop the annual active bar dues by $34, to $395. Inactive memberships would also drop $5.60 to $97.40.

The bill was also heavily amended last week to clarify the State Bar Board of Trustees could take public comment at their meetings and allow the Board of Equalization to collect costs and debts from disciplined attorneys.

In many previous years, the annual bill was an opportunity for lawmakers to take shots at a troubled State Bar. This time, the bill passed unanimously with little debate during the five-hour meeting.

"In the past six years I've been quite skeptical of these bar bills, given the history, challenges and needs for reform on the part of the Bar," said Assemblyman David Chui, D-San Francisco, who is an attorney. "That said, I wanted to appreciate the fact that we do have new leadership at the bar. I appreciate the progress that has been made."

Several legislative committees met Monday with a simple but elusive goal: to get something done this year besides dealing with coronavirus and the suddenly imploding state budget.

The virus was never far from lawmakers' thoughts, from the year's drastically scaled back legislative ambitions to the mere mechanics of more than a dozen people occupying a very large room.

"A mask is required for being properly attired in our hearings," Stone said near the outset of his committee hearing.

The annual bill jointly carried by the Consumer Attorneys of California and the California Defense Counsel was passed among several bills as part of the committee's consent calendar. AB 2723 is designed to streamline civil actions by allowing an attorney or designated agent to sign an out-of-court settlement for a client.

Another entity that has seen some controversy in recent years is the Commission on Judicial Performance, in the form of an extended legal battle over a state audit. AB 3363 addresses some of the fallout from that standoff.

It would create the Committee to Review the Operations and Structure of the Commission on Judicial Performance "to study and make recommendations for changes in the operations and structure of the commission." That body would hold at least two hearings to take public comment on possible changes and deliver a report in 2022.

It also passed on the consent file, as did AB 3364, the annual judiciary omnibus bill. It makes numerous technical changes in areas like property sales and unlawful detainer cases.

But lawmakers still found plenty to debate. For instance, AB 3262. This bill, backed by several unions and the consumer attorneys group and authored by Stone, would hold online retailers to the same liability standards as brick-and-mortar retailers. Among the witnesses was David Carpenter, who testified that a hoverboard he and his wife bought on Amazon for their daughter caught fire while no one was home, burned their house and killed their two dogs.

"AB 3262 tries to address an issue in the online marketplace that has been brewing for quite sometime but now, in the current situation, is more important than ever," Stone said. "We have longstanding product liability laws that ensure that when a dangerous product is sold to a consumer, there is liability, and that liability is carried through the distribution chain."

Not surprisingly, the bill is opposed by organizations that represent the internet industry.

"AB 3262 reflects an unprecedented expansion of strict liability and radically departs from decades of well-established product liability law in California," said Robert Callahan, senior vice president of state government affairs for Internet Association. "The proposed bill comes at a time when businesses are already under extreme pressure, and will stifle the online marketplace."

But Stone said the pandemic has accelerated a trend toward online commerce, with sellers denying responsibility for products generally made overseas, outside the oversight of American regulators. An exchange between Stone and Assemblyman Jay Obernolte, R-Big Bear Lake, showed the two men -- and to a large degree the parties they represent -- conceive of online sellers in very different ways.

"As we talk about online commerce and the gig economy, we want to sometimes make it like brick and mortar, but it's not," Obernolte said. "A marketplace is a conduit between willing buyers and willing sellers. .. We are telling people the only way you can open an online marketplace in California is if you have a bunch of liability insurance and you have to have the money to put together a staff to vet every product."

Obernolte said online sellers often never actually have possession of a product sold through their marketplaces, saying "it seems like there should be an exception for that kind of relationship."

"If they have the ability to bring a dangerous product into California then, yes, they should be responsible," Stone replied.

"Wow," Obernolte replied. "This is illustrating my big problem with this bill."

The Chamber of Commerce and several other groups also went hard after another Stone bill, AB 2570, which also passed. Introduced in February, at a time when a normal legislative year still seemed possible, it would apply to the state's False Claims Act to tax fraud. Effectively, this would reward whistleblowers within companies and other organizations who report fraud.

"This bill allows us to go after the fraud we don't know about," testified Deputy Attorney General Maria Ellinikos, testifying for the California Department of Justice, which is sponsoring the bill.

Speaking on behalf of the Civil Justice Association of California, lobbyist Mike Belote suggested the bill could represent a slippery slope and bring in plaintiffs' attorneys as a kind of bounty hunter.

"Is it a good idea to deputize private counsel to do enforcement of tax laws?" Belote said. "I think there is an enormous policy question about bringing contingency fee lawyers into enforcement."

Stone replied that New York has a very similar law, adding, "None of the concerns that have been raised have surfaced there."