Double-barreled ‘tort wars’ conflict heats up

Nothing is more pervasive in California’s Capitol than what have been dubbed “tort wars” – skirmishes over rules governing personal injury lawsuits.

No session of the Legislature is complete without at least one clash over who can sue whom for what act and collect damages that can potentially reach hundreds of millions of dollars.

Tort wars pit business and insurance interests against lawyers who specialize in personal injury lawsuits, often in alliance with unions and consumer and environmental protection groups. The battles are waged in courts and in ballot measures as well as the hallways of the Capitol.

A double-barreled showdown is imminent over a unique law called the Private Attorney Generals Act (PAGA), which authorizes private lawsuits to enforce California’s labor laws. Former Gov. Gray Davis signed the legislation in 2003, just five days after voters decided to recall him.

Its enactment was a big tort wars win for personal injury attorneys and labor unions, both of which had backed Davis in his unsuccessful fight against the recall. They contended that private suits were needed to fill a big void in state labor law enforcement.

The pro-PAGA faction scored two more victories last year when the Legislature passed bills to expand its potential scope, one authorizing employees to refuse to work if they consider it unsafe, and the other requiring employers to reveal wage scales for current workers and potential jobseekers.

However, business groups claim that PAGA is a license for outrageous shakedowns of employers for even tiny labor law infractions, and are sponsoring a measure for the 2024 ballot to repeal it. Meanwhile, as the rival factions gear up for a ballot battle, they are also dueling over PAGA’s scope in the state Supreme Court.

Last year, as the Legislature was expanding the reach of PAGA, the U.S. Supreme Court was constricting its scope slightly by invalidating class action suits by workers who had signed pre-employment arbitration agreements.

Another case now pending in the state Supreme Court could expand PAGA’s reach. To make the case even more noteworthy, it involves another burning issue – whether drivers for Uber and other ride-sharing and delivery services are independent contractors or employees.

In 2018, the state Supreme Court issued its landmark ruling that sharply broadened circumstances requiring workers to be considered employees. The Legislature then codified the ruling in the much-debated Assembly Bill 5, carving out very few exceptions. But Uber, Lyft and other companies persuaded voters in 2020 to pass a ballot measure, Proposition 22, exempting their drivers from the law.

The pending state Supreme Court case involves an Uber driver, Erik Adolph, who signed an arbitration agreement before beginning work as a contractor. He contends that he was really an employee and therefore entitled to file a class action lawsuit under PAGA.

Adolph won at the trial court level and in a state appellate court, but Uber has now appealed to the state Supreme Court and the contending PAGA factions see it as another potentially landmark case.

Californians for Fair Pay and Employer Accountability, a coalition of major business groups led by the California Chamber of Commerce, has filed an amicus brief on the case saying they are making “combating the widespread abuse of PAGA a priority: to stop its misuse by plaintiffs’ lawyers as a tool to shakedown businesses, rather than to ensure Labor Code compliance.”

Attorney General Rob Bonta, on the other hand, submitted a brief supporting the broad application of PAGA.

The court will issue its PAGA ruling this year. Voters will have what may be the last word next year. Tort wars will continue indefinitely, year after year.