Citizen Lawsuits Return as an Issue

Environmental activists, after losing what they considered a key enforcement tool when voters approved Proposition 64 last year, are pushing lawmakers to give private citizens new powers to file lawsuits against alleged polluters and others that pose perceived threats to public health.

The effort has already drawn the attention of major oil companies, chemical manufacturers and allies in dozens of other industries, which are preparing to mobilize an all-out lobbying and media blitz against a bill offered by Assembly Majority Leader Dario Frommer (D-Glendale).

Many of the same players helped bankroll the campaign behind Proposition 64, which overturned parts of the state’s Unfair Competition Law. The 70-year-old consumer-protection measure, which allowed Californians to sue businesses over deceptive advertising and other fraudulent practices, was criticized for fostering frivolous lawsuits.

Proposition 64 passed despite warnings from environmental groups that the effort to limit so-called shakedown lawsuits would rob them of a frequently used legal tactic for forcing polluters to clean up their operations.

Frommer’s bill, AB 528, easily passed its first committee test on a party-line vote. But it faces a tougher trial Wednesday in the Assembly Appropriations Committee. Members of the Democratic-controlled panel are being bombarded with calls and letters from a who’s who of top corporations and dozens of trade groups including the American Chemistry Council and the Western Plant Health Assn.

To get the bill to the Assembly floor, environmentalists must convince a dozen or so business-friendly Democrats, known as the Moderate Caucus, that the Frommer bill won’t create a loophole in Proposition 64, which was passed by the electorate six months ago with the approval of 59% of those voting.

And even if it clears the Assembly and, later, the state Senate, the bill could be vetoed by Gov. Arnold Schwarzenegger, Proposition 64’s highest-profile supporter.

Environmentalists insist that AB 528 isn’t an end run around Proposition 64. They say the measure provides a tightly circumscribed way for private citizens and nonprofit groups to file suit against suspected polluters when state and local agencies fail to act because of a lack of resources or prosecutorial zeal.

Such authority already is on the books in 16 other states. In 1997, a number of environmental groups, filing a similar private lawsuit under state law, forced Unocal Corp. to clean up a large pool of leaking oil underneath the town of Avila Beach in San Luis Obispo County.

Sierra Club lobbyist Bill Magavern said Frommer’s bill was narrowly drafted to zero in on major cases like Avila Beach and avoid the lawsuit abuses that drove businesses to make passage of Proposition 64 a top priority last November.

Frommer said he was “a little baffled at the way the polluter community is coming out against” his bill, which he said has been repeatedly fine-tuned to meet industry’s objections. He noted that plaintiffs were prohibited from getting any of the fees or penalties that resulted from a lawsuit -- stifling what was seen as a major motivator for the filing of frivolous lawsuits.

Backers of the measure also said that a suit couldn’t be filed without notifying the attorney general and that out-of-court settlements would have to be approved by a judge.

But oil companies counter that California regulators already have plenty of state and federal laws to protect the environment.

“We oppose [Frommer’s bill] because it’s unnecessary and interferes with the existing environmental enforcement program,” said Joe Sparano, president of the Western States Petroleum Assn. He also called the bill “contrary to the will of the people.”

Sparano’s group includes BP, Exxon Mobil Corp., Chevron Corp., Royal Dutch/Shell Group of Cos., ConocoPhillips and about 25 other companies involved in the exploration, refining, distribution and transportation of petroleum products in California.

John Sullivan, president of the Civil Justice Assn. of California, an umbrella group that coordinated the Proposition 64 campaign, said he didn’t question environmentalists’ motives in wanting to protect the air and water. Nevertheless, he accuses them of trying to create a new legal right that could create “an unintended but completely predictable new generation of shakedown lawsuits.”

He said the Frommer bill still would provide lawyers with the incentive to generate large legal bills from winning suits -- a primary complaint in the pre-Proposition 64 days -- and could force some companies to settle frivolous suits to protect themselves from facing open-ended environmental restoration costs.

Sullivan’s coalition, which raised $13 million in support of Proposition 64, is preparing to unleash a full-scale advertising and lobbying effort against Frommer’s bill that could include television, radio and print advertisements.

“We thought this was a style of litigation that we had put to rest,” he said.