Environmental lawsuit expansion bill stalls in Assembly

By Michael Shaw

Capitol Update, May 6, 2016 Share this on FacebookTweet thisEmail this to a friend

AB 2748 by Assemblymember Mike Gatto failed passage on the Assembly Floor late this week after amendments earlier in the week dramatically expanded the scope of the bill. The bill fell 11 votes short of passage with only 30 votes.

The bill increases the statute of limitations for bringing a lawsuit over harm from an "environmental disaster", limits attorneys' fees awards and prohibits release of liability clauses in settlements. It is that last provision that caused the greatest source of opposition as it would eliminate protection against future lawsuits over the same alleged bad act. Without the release of liability clause, companies subject to claims of environmental harm would no longer be incentivized to settle the lawsuit.

The impact of this delay would put California manufacturers in a position of continuing litigation to the very end and put them at greater risk of repeat litigation resulting in higher costs. Plaintiffs with legitimate claims of environmental harm would also suffer as the process for resolving a claim would be drawn out delaying the receipt of an award.

AB 2748 would also impact the courts as the reduction in settlements results in more time in court. Generally, delays in the administration of justice would cause problems in other areas of law as well.

CMTA, and a coalition of business organizations, successfully mounted a strong opposition campaign in just two days holding the bill on the floor. Originally, the bill limited application to claims regarding the Aliso Canyon Natural Gas Storage Facility near the community of Porter Ranch. However, amendments earlier in the week expanded the bill and generated a host of opposition from the business community.

CMTA tagged the bill as a "Key Manufacturing Vote" putting a high priority on its defeat. With the failure to pass the Assembly floor, it is expected that significant amendments will be taken to limit the scope of the bill before it is brought back up for a second vote in the Assembly.

Please direct any questions to Michael Shaw.

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