Battles over business regulation resume in California’s Capitol with new legislation

A nearly two-hour hearing in the Assembly Judiciary Committee Tuesday encapsulated the Capitol’s longest-running conflict — going at least a half-century and still counting.

It pits the state’s business community against four interest groups over how much corporate operations should be regulated with new laws, new rules and lawsuits.

Each year, the four interest groups — unions, plaintiffs’ attorneys, consumer organizations and environmental advocates — persuade friendly legislators to introduce bills that would impose new regulations, raise taxes and fees, or make it easier to sue.

The measures are needed, sponsors say, to protect consumers and workers from shabby treatment by corporate interests.

Each year, the affected business interests contend that overregulation generates costs that will be passed on to consumers as higher prices, or it will reduce employment or encourage corporations to flee California.

Tuesday’s debate was over Assembly Bill 1776, which would expand California’s 119-year-old law, known as the Cartwright Act, that prohibits companies from colluding to create monopolies that undermine competition.

The measure, if passed, would ratify recommendations by the California Law Revision Commission and allow single companies to be sued for monopolization, even if they don’t collude with other corporations.

Trial lawyers, unions and dozens of other groups back the measure, carried by Assemblymember Cecilia Aguiar-Curry, a Democrat from Davis. Proponents lined up to say the legislation is needed to curb anti-consumer domination by corporate giants, with Amazon one obvious target.

An even longer list of opponents, led by the California Chamber of Commerce, is opposing the measure as creating a pathway for extensive litigation that would discourage business investment and kneecap technological innovation.

AB 1776 is one of the business community’s top targets this year, but not the only one.

The Chamber of Commerce, the Business Roundtable, the California Manufacturers & Technology Association and other business groups have drawn up lists of several dozen bills they will oppose.

The chamber no longer publishes its annual list of “job killer bills,” but nevertheless it has cited 26 “damaging legislative proposals” it opposes, some of which appear on other lists.

Bills to regulate the use of artificial intelligence are prominent — a conflict that could involve Gov. Gavin Newsom, who has largely protected AI from calls for more oversight.

Another biggie on the corporate target lists is Senate Bill 982 which, like AB 1776, would increase corporate exposure to potentially costly litigation.

Carried by state Sen. Scott Wiener, a San Francisco Democrat running for Congress this year, the measure would allow companies to be sued for their contributions to the effects of climate change.

The Business Roundtable and the manufacturers’ association have singled out SB 982 as an open invitation for the attorney general and perhaps private attorneys to file sweeping lawsuits, especially against oil companies, alleging they are a “significant factor” in climate impacts.

“What are these legislators thinking? California families are already paying some of the highest prices in the country, and this bill will make it worse,” Rob Lapsley, president of the Business Roundtable, said as the group released an analysis of the bill’s potential impacts.

“SB 982 adds yet another layer of costs onto gasoline and diesel, pushing prices even higher at the pump and across the economy. When you raise diesel prices, you raise the cost of everything — groceries, housing, transportation — everything Californians rely on every day.”

This year’s version of the perennial conflict is being played out against what should be a serious concern about the state’s economy. The Legislature’s budget analyst, Gave Petek, has described it as “sluggish,” with virtually no net growth in employment and other measures of economic health, as well as job cutbacks in technology and some spectacular corporate migrations out of California.