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Editorial: New law protects small firms from drive-by suits

By   /   Friday, September 28th, 2012  /   Comments Off on Editorial: New law protects small firms from drive-by suits

A war against California small businesses has ended with a victory for entrepreneurs over shakedown artists.

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A war against California small businesses that has origins on the Central Coast has ended with a victory for entrepreneurs over shakedown artists.

The victory comes in the signing into law a piece of new legislation designed to end a flood of litigation over compliance with the Americans with Disabilities Act that has threatened the future of many Golden State mom-and-pop enterprises.

On Sept. 20, Gov. Jerry Brown signed into law SB 1186, designed to halt so-called “drive-by” litigation against small businesses over compliance issues. The new law goes into effect immediately and it ends the practice of “demand for money” letters that have carpet-bombed small retailers and restaurants over the years.

Instead of blindsiding small companies, the new law requires that disabled litigants file intent to sue letters that list problems and give business owners a reasonable opportunity to fix them. For business that can’t make timely fixes, fines are reduced. And best of all, a single litigant can’t make repeated claims against the same company.

SB 1186 is the culmination of years of effort to rein in litigants such as Jarek Molski, who sued the Mandarin Touch Restaurant in Solvang and 155 other defendants in a single year, 2004, over ADA compliance. Nearly 40 percent of ADA lawsuits are filed in California.

The restaurant fought back and had Molski declared a so-called vexatious litigant in U.S. District Court, where Judge Edward Rafeedie described the antics of Molski and his attorney as “bordering on extortionate shysterism.” The ruling was upheld on appeal.

The National Federation of Independent Business and Californians Against Lawsuit Abuse heralded the victory as a small step forward for struggling business owners.

We applaud Senate President Darrell Steinberg and colleague Bob Dutton for getting an important job done.

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