Plaintiffs’ lawyers attack business group over ballot measures

California's major plaintiffs' lawyers' organization on Monday released its first ad that targets a business group trying to place measures before voters that would, among other things, cap contingency fees in consumer lawsuits at 20%.

The Consumer Attorneys of California, in a 15-second commercial labeled "Unmasking CJAC," said the Civil Justice Association of California is a shill for some of the worst actors in corporate America and stated it is funded by tobacco and oil companies, among others.

Responding to the ad, CJAC CEO Kyla Christoffersen Powell said, "The trial lawyers are simply lashing out because CJAC recently proposed two statewide initiatives that will put an end to unethical lawyers taking advantage of consumers in California with outrageous contingency fees."

"These initiatives will direct more money to plaintiffs and less to attorneys, providing more justice for those who have been wronged," she said.

The consumer attorneys group CEO, Nancy Drabble, said in the statement, "Californians deserve to know exactly who is behind one shadowy organization's attempts to restrict consumers' access to justice, and roll back historic worker protection laws. It should come as no surprise that it's a laundry list of corporate interests -- Big Tobacco, Big Oil, Wall Street Banks, and even Koch Companies -- gearing up to spend millions of dollars to make it harder for Californians to hold them accountable for wrongdoing. These massive corporations already have outsized power and influence over consumers; and CAOC is launching this campaign to make sure they can't buy more."

To qualify for a ballot, initiatives require signatures of eligible voters equal to 5% of the number of people who voted in the most recent election for governor. Powell said she expects Attorney General Rob Bonta to finish preparing their title and summaries by mid-December, and they are aiming for the November 2022 ballot.

The ad, airing on the banner page of a newly launched website called unmaskingcjac.com, was paid for by the Consumer Attorneys of California Initiative Defense Political Action Committee, a group fighting the ballot initiatives it says roll back consumer protections and workers' rights. The ad says major funding for the initiatives is coming from Chevron, Shell, Altria and Koch Industries.

Fred J. Hiestand, general counsel for Civil Justice Association of California, wrote in an opinion piece published in the Daily Journal last month that the contingency fee structure belies claims by plaintiffs' lawyers that they are fighting for the little guy.

"Contingency fee lawyers champion this standard percentage pricing structure because it furthers their, though not their clients', financial interests," Hiestand wrote. "A lawyer who considers reducing the standard price knows that if other lawyers react by also lowering their prices, individual and collective lawyer income falls. This feared eventuality, along with a 'greed is good' mentality, constitutes a powerful incentive for contingency-fee lawyers to maintain uniform high-percentage recovery contracts."

As described by CJAC, the "Consumer Legal Fee Protection Act," of which there are two versions, limits attorneys from taking more than 20% of their client's award. CJAC says some plaintiffs' attorneys are taking as much as half an award. Another initiative, "The Pre-Lawsuit Notice and Opportunity to Settle Act," creates a 60-day window for parties to first try to resolve their dispute before filing a lawsuit.

Niall P. McCarthy, the consumer attorneys group past president and a lawyer at Cotchett, Pitre & McCarthy LLP, said in an interview Monday that CJAC is spreading misinformation about plaintiffs' lawyers.

"No. 1, the standard contingency fee in California is a third, so the idea that there's a run on excessive contingency fees is just not backed up by any evidence," McCarthy said. "No. 2, the reason most individuals hire contingency lawyers is because they can't afford to pay them hourly. So you have a majority of Californians who can't afford to pay attorneys hourly, and they need to have their day in court because they've been wronged, and the only avenue is contingency fees."

"If you set up the structure of contingency fees in a manner that you make it so low that no attorney is going to take the case, you're essentially closing the courthouse doors to people," he added.

As to the Pre-Lawsuit Notice measure, which CJAC said creates a "common-sense step" for parties to spend 60 days trying to resolve disputes before filing a lawsuit, McCarthy said it as a way to hide corporations' bad conduct.

"If I'm forced to try to settle the case before I can take people's testimony under oath, before I can issue subpoenas, the extent of the wrongful conduct is not going to come to light," McCarthy said. "This [initiative] allows a company who is leaking oil into the San Francisco Bay, or is creating dangerous products, to hide the extent of their wrongdoing in a pre-litigation settlement."