Guest Commentary
By Corey Gustafson
California’s small business landscape continues to be plagued by rampant lawsuit abuse, and this year it has earned two unfortunate national recognitions.
Landing at the No. 5 spot on the infamous Judicial Hellholes® Report, and added to the “Legislative Heat Watch” list this past summer, our state’s perpetual reputation as a hostile climate for small businesses should sound the alarm for lawmakers in Sacramento.
Small businesses throughout California, have made real financial investments to contribute to our state’s economy. However, lately, too many business owners are being targeted by predatory trial lawyers looking to squeeze quick settlements out of hardworking entrepreneurs.
In 2023, California’s federal courts heard nearly 30 percent of the nation’s Americans with Disabilities Act (ADA) lawsuits, with trial attorneys alleging that businesses did not meet accessibility standards. These lawsuits do little to improve accessibility but inflict real harm on small businesses. ADA claims, often filed over hyper-technical violations like a parking space painted an inch too narrow, are draining resources from efforts that could strengthen our local communities.
This year, Senate Bill 84, sponsored by Sen. Roger Niello (R-6) offered a chance to change that by allowing small businesses to fix minor ADA issues before being dragged into court. Unfortunately, the bill failed to advance, leaving small businesses trapped in the same cycle of exploitation.
California prides itself on being a place of opportunity and innovation. But this ongoing cycle of lawsuit abuse discourages entrepreneurship and stifles economic growth across the state. Not only are businesses closing their doors and moving to another state to set up their livelihoods, but the threat of excessive litigation also deters new companies from setting up shop in California. Which limits the opportunities and resources for Californians.
When lawmakers return to Sacramento next year, they should revisit reforms like SB 84. Protecting small businesses from lawsuit abuse is the first step toward helping hardworking Californian’s thrive.
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Corey Gustafson lives in Escondido and is the co-owner of a North County brewery.