< Back to 2019-2020 Executive Summary

2019-2020 Closer Looks

PUBLIC NUISANCE CLAIMS AND LOCALITIES LITIGATION

Pushing an expansive view of public nuisance law, the trial bar is seeking to represent local and state governments in a concerted effort to shift costs associated with public crises to businesses. The flood of lawsuits creates legal chaos. It may fill government budget gaps and line the pockets of trial lawyers, but it does little to help people or solve problems.

Historically, public nuisance law has been applied in cases involving land use and public spaces. A successful claim for public nuisance usually involves instances in which there is an unreasonable interference in a right that is common to the general public. Typical cases include manufacturing plants emitting noxious fumes or restaurants blaring loud music.

The new expansive view of public nuisance law exploits the vague definition of the tort and applies it to costs associated with products, sometimes long after they are made and sold. This trend is concerning to all industries and is likely to continue as state and local governments look for sources of funding for public health and other problems. By this logic, cell phone manufacturers could be held liable for harm caused by distracted drivers. Similarly, automakers might be held liable for accidents caused by drunk drivers. Snack food makers could be held liable for the costs of obesity. And beverage companies could be required to shoulder the cost of plastic in the ocean. These costs would be imposed regardless of what was understood when a company sold the product, whether the product complied with government regulations or even was approved by the government, and a company’s actual share of responsibility for a concern that later developed.

LEAD PAINT LITIGATION

The trial bar first sought to expand the law of public nuisance in the context of lead paint. The U.S. Environmental Protection Agency banned the use of lead in paint in 1978, but most of the lawsuits were not filed until years later. They claimed children were harmed by ingesting lead particles from flaking and deteriorating paint. Looking to shift the focus from individual landowners who are responsible for maintaining their property to paint manufacturers viewed as having deep pockets, plaintiffs’ lawyers initially filed lawsuits alleging traditional product liability claims. Courts rejected these claims, and the trial bar was left searching for a new legal theory of liability.

The trial bar then recast the lawsuits in hopes of capitalizing on the antiquated and vague law of public nuisance. Courts repeatedly rejected this proposed expansion of liability, recognizing that decades after selling the paint at issue, the companies lacked the critical element of “control” of the nuisance. They no longer sold the paint and had no authority to remove it from private property.

Courts in California, a perennial Judicial Hellhole, however, ultimately adopted this approach. In 2014, in a lawsuit brought by California cities and counties, a court ordered the companies to pay $1.15 billion to inspect and abate the affected homes. An appellate court in 2017 limited the companies’ liability to homes built before 1951 (reducing the award to $409 million), but left undisturbed the finding that lead paint is a public nuisance.

In a 2018 landmark lead paint ruling, the California Supreme Court upheld the award. After the U.S. Supreme Court declined to review the decision, the case settled for $305 million this year. About $65 million of this sum will go to plaintiffs’ lawyers for their fees and expenses. Plaintiffs’ lawyers now use that outcome to entice local governments to bring public nuisance lawsuits against other industries.

CLIMATE CHANGE LITIGATION

At least nine cities and counties and three states have sued energy producers for costs that they attribute to climate change. These lawsuits, which began with a handful of California municipalities in 2017, generally allege that, by producing the energy Americans use every day, the companies created a public nuisance. The lawsuits include inflammatory allegations of industry secrecy and conspiracy. They blame the oil and gas industry for changes in weather patterns and sea level increases, and attempt to make the companies pay for local infrastructure projects, such as sea walls. These climate change lawsuits are driven by private law firms. The litigation’s backers are actively recruiting mayors to file carbon copy lawsuits.

In June 2018, a federal judge dismissed a case brought by the cities of Oakland and San Francisco. Judge William Alsup recognized that the limited role of the judiciary is to solve disputes between parties before the court, not develop national policy. “The problem [of global warming] deserves a solution on a more vast scale than can be supplied by a district judge or jury in a public nuisance case.” The cities are appealing the ruling to the Ninth Circuit. Judge Alsup also found that all parties agreed that fossil fuels have contributed to global warming and a rise in sea levels, but also understood that these anticipated harms must be weighed against the positive effects of oil and coal, without which our modern world would not be possible.

That decision is on appeal. In May 2019, 18 state AGs filed an amicus brief in the U.S. Court of Appeal for the Ninth Circuit arguing that public nuisance law is inappropriate in the matter. The brief states that “the issues surrounding climate change and its effects—and the proper balance of regulatory and commercial activity—present political questions that cannot be resolved by judicial decree.”

In July 2018, on the opposite coast, a similar climate change lawsuit filed by New York City resulted in dismissal. U.S. District Judge John M. Keenan found that it is inappropriate to use state laws and the courts to address costs attributed to greenhouse gases that cross state and national boundaries. Solutions to global warming, he found, must be developed through federal legislation and foreign policy, not local lawsuits. That ruling is now on appeal to the Second Circuit.

Despite these setbacks for the plaintiffs’ bar, more climate change lawsuits filed by contingency-fee lawyers on behalf of localities are expected.

OPIOID CRISIS

Lawsuits have been filed by about 2,000 state and local governments alleging that companies that made, sold, or distributed painkiller medications, known as opioids, created a public nuisance, as addiction to the drugs and illegal alternatives has soared.

Two state courts properly rejected such claims in early 2019. In January 2019, a Connecticut state court judge tossed a public nuisance claim brought by 37 municipalities, finding they failed to show how the companies named as defendants directly caused the opioid addiction related costs that the cities sought to recoup. Allowing the claims to proceed, Judge Thomas Moukawsher observed, “would risk letting everyone sue almost everyone else about pretty much everything that harms us.” He concluded that “it might be tempting to wink at this whole thing and add pressure on parties who are presumed to have lots of money and moral responsibility. Maybe it would make them pay up and ease straining municipal fiscs across the state. But it’s bad law.”

Four months later, in May, a trial court in North Dakota became the first to dismiss a claim in the opioid litigation brought by a state attorney general. The court found the public nuisance claim not viable due to the lack of control over the product after it enters the market. The court recognized that manufacturers do not control how doctors prescribe opioids and how individual patients use the drugs. No North Dakota court, the judge observed, had extended public nuisance law to cases that involve the sale of goods. Quoting precedent from the asbestos context, the court recognized that extending the application of public nuisance law to a situation where one party has sold to another a product that later is alleged to constitute a nuisance would make nuisance law “a monster that would devour in one gulp the entire law of tort.”

Oklahoma, a newly minted Judicial Hellhole, became the first state to adopt an overly expansive view of public nuisance law as applied to the opioid crisis. Oklahoma Attorney General Mike Hunter argued that the companies created a public nuisance by expanding the market for opioids through deceptive marketing campaigns involving misrepresentations and omissions about their lawful, highly-regulated, non-defective product. He made this argument, despite previously stating, “you cannot litigate what legislators refuse to legislate and regulators refuse to regulate.” His statement was regarding other states pursuing public nuisance claims in climate change litigation.

As the first trials approached in the opioid litigation, Purdue reached a $270 million settlement in March and TEVA reached an $85 million settlement in May with the state of Oklahoma. Johnson & Johnson, however, opted to go to trial. While the state sought $17 billion, Oklahoma Judge Thad Balkman imposed a $572 million judgment to fund an “abatement program” in August, which he viewed as the amount to pay costs associated with the opioid crisis for one year. (He later admitted that, due to a math error, he was about $100 million too high).

Oklahoma has codified its public nuisance law, defining a nuisance as “unlawfully doing an act, or omitting to perform a duty” that “annoys, injures, or endangers the comfort, repose, health, or safety of others.” The court disregarded a century of state case law applying nuisance claims to resolve property disputes, not product sales, noting the statute does not limit its reach, and, even if state law requires use of a property, that is met because some of the company’s employees were trained in their Oklahoma homes and used company cars traveling on state and county roads – a tenuous and questionable way to characterize a nuisance. The ruling also places the entire responsibility for opioid addiction on one company without recognizing many other companies and contributing factors leading to the epidemic. The case is on appeal and the judgement is viewed as highly vulnerable.

Opioid litigation continues. Cases in the federal judicial system are in multi-district litigation before a judge in Cleveland, Ohio. As the first bellwether trials involving two Ohio counties, Summit and Cuyahoga, approached, the Sixth Circuit rejected a petition filed by Ohio Attorney General Dave Yost asking the federal appellate court to dismiss these cases. His petition, which was supported by 13 other state attorneys general, observed that allowing the county cases to move forward would intrude on the state’s authority, and lead to inconsistent verdicts and misallocated funds. On the eve of trial in October, three pharmaceutical distributors and TEVA agreed to a $260 million settlement with the two counties. Plaintiffs’ lawyers, a few attorneys general, and defendants also are floating a $48 billion settlement proposal that would require five companies to pay $22.25 billion in cash over 18 years and to fund $26 billion in addiction services over the next decade. Other state AGs and lawyers representing local governments, however, oppose the proposal. Unsurprisingly, one of the sticking points is how much of the money goes to the many contingency-fee lawyers who brought the local lawsuits.

VAPING CRISIS

Quick to capitalize on emerging public health crises, the trial bar now has turned its attention to e-Cigarettes. Plaintiffs’ firms once again are leading the effort and urging school districts to sue Juul Labs and other e-Cigarette companies for the public nuisance caused by their products. They claim Juul has created a public nuisance through deceptive marketing giving rise to a vaping epidemic that has harmed students and disrupted schools.

For example, Wagstaff & Cartmell, a Kansas-based law firm, has successfully engaged several Kansas school districts and will represent them on a contingency-fee basis. The firm approached the Kansas school boards and actively recruited them as clients. The plaintiffs’ bar is using a similar playbook to the one used in the opioid litigation – flood the courts with lawsuits by local governments to pressure businesses to settle and maximize their personal gain.

CONCLUSION

While each of these areas are very different matters, they all seek to establish public policy through litigation while ostensibly “solving” complex problems. Attempting to resolve a public health crisis requires a court to assume the responsibilities and authority of the other two branches of government.

The simple reality is that significant problems arise when states, cities, towns, counties, and other local entities across the country each bring lawsuits seeking money or action on the same issue. The authority to fully resolve the litigation is complicated by the number of entities involved. Competing interests make judicial resolution much more difficult, if not impossible, to achieve. The protracted litigation may delay implementation of programs to actually help those in need.

Plaintiffs’ lawyers actively court governments as “clients” because they understand that bringing lawsuits in the name of a government may provide them with power and leverage not present in ordinary “private” civil litigation. It also entitles them to what are expected to be outsized legal fees in the event of a verdict or a settlement. The incentive for these lawyers is to maximize their fees regardless of what is truly in the public interest.

Experience demonstrates that lawsuits motivated and brought by contingency-fee lawyers on behalf of governmental entities will not solve complex public policy issues and proceeds are diverted for other purposes. Governments and their lawyers point to the “success” of the tobacco litigation from a generation ago as a basis to justify litigation. A closer examination of that experience, however, shows that the tobacco settlement did little for smoking cessation efforts. For example, in FY 2019, states will collect $27.3 billion from the 1998 tobacco settlement and tobacco taxes, but will spend just 2.4 percent of it on prevention and cessation programs. Locality-based contingency fee lawsuits will do little to help the victims while lining the pockets of trial lawyers.

States must ensure that any litigation it initiates serves the public interest and they should combat problems that arise with localities litigation. Major public crises demand a major response by government leaders, but the continued wave of contingency-fee litigation brought by state and local governments is the wrong approach. It won’t do much to help victims or solve the crisis, and instead creates lasting problems for the civil justice system.

Allowing the claims to proceed “would risk letting everyone sue almost everyone else about pretty much everything that harms us.” He concluded that “it might be tempting to wink at this whole thing and add pressure on parties who are presumed to have lots of money and moral responsibility. Maybe it would make them pay up and ease straining municipal fiscs across the state. But it’s bad law.”

– Judge Thomas Moukawsher

A TOXIC BREW: NEW THEORIES OF EMPLOYMENT LIABILITY AND THE WAR ON ARBITRATION

The trial bar has launched an ambitious effort to expand its business model of driving class action lawsuits into the employment arena. New theories of employment liability and the war on arbitration are creating a toxic brew that will lead to more lawsuits and less jobs.

ANTI-ARBITRATION EFFORTS

In 2019, California, Illinois, New Jersey, and New York each passed legislation seeking to ban arbitration in certain employment liability cases. This is the trial bar’s first step towards banning arbitration in all civil litigation. These newly-enacted bills contributed to each state’s status as a Judicial Hellhole, as they are certain to lead to an increase in expensive and protracted litigation. The wave of new lawsuits will benefit the entrepreneurial plaintiffs’ bar – while doing very little to protect employees.

The California bill prevents employers from including language in their contracts with applicants, employees and independent contractors to “waive any right, forum, or procedure for a violation” of the California Fair Employment and Housing Act and the Labor Code. Without specifically mentioning arbitration, it guts arbitration agreements because that is exactly what they are – a waiver of a right, forum, and procedure. It is doubtful that the California law complies with U.S. Supreme Court precedent, which recognizes that the Federal Arbitration Act does not permit states to enact laws that ban arbitration. The California Chamber of Commerce has labeled the bill a “job killer” due to the significant increased costs employers will face as a result of more litigation and the expense of delayed dispute resolutions.

Illinois enacted a similar bill, although it is not as broad as the California approach. S.B. 75 bans unilateral agreements to arbitrate work-related harassment, discrimination and retaliation claims. It limits the use of non-disclosure agreements and arbitration clauses.

In New Jersey, Governor Murphy signed a bill into law that prohibits “waivers of procedural rights” – effectively banning arbitration agreements. Any employer who attempts to enforce an arbitration provision that is deemed against public policy would be responsible for attorney’s fees and costs, in addition to any available damages. Following enactment of this dangerous bill, the New Jersey Civil Justice Institute and the U.S. Chamber of Commerce filed a complaint in federal court asking for both declaratory and injunctive relief. They argue that the legislation will have a sweeping negative impact on New Jersey business and is preempted by the Federal Arbitration Act.

Finally, New York enacted legislation that prohibits the use of arbitration for all employment discrimination cases. The bill also extends the statute of limitations to file sexual harassment claims from one year to three years. Frank Kerbein, director of the Center for Human Resources at the Business Council of New York State warns of the high costs to businesses and the ramifications of the new law. “We support a workplace free from harassment, the vast majority of employers do that… Our concern is looking out for employers that are doing everything right and in spite of that could be on the hook substantially.”

NEW PRIVATE RIGHTS OF ACTION AGAINST EMPLOYERS

The trial bar has engaged a two-part strategy to increase employment litigation – first, restrict the availability of arbitration in employment litigation and then create new theories of employment liability to sue employers. The new private rights of action are a goldmine for plaintiffs’ attorneys, particularly when combined with the elimination of arbitration. They authorize extensive remedies, creating greater incentive for plaintiffs’ lawyers to sue employers. Now, lawyers can file class action lawsuits on behalf of all similarly situated employees, exponentially increasing their fees.

New areas of employment liability include equal pay, predictive scheduling, sexual harassment and anti-discrimination laws, and employee misclassification or anti-independent contractor laws. Many of these new laws expansively define violations, some shift the burden of proof to the employer, and others expand the statute of limitations for filing claims. The new statutes are likely to lead to a litigation explosion in the employment context, driving up legal costs for employers and killing jobs in the states.

PREDICTIVE SCHEDULING

Predictive scheduling laws essentially require employers to post employee work schedules in advance. If the schedule is changed after a certain time, employers must provide their employees extra pay. The laws also require employers to give employees an adequate rest period. In 2018, Oregon became the first state to enact a predictive scheduling law. Other states and municipalities have followed, including New York City, Philadelphia, San Francisco, San Jose, Seattle, and Washington, D.C. While the laws vary, remedies include compensatory damages, liquidated damages, attorneys’ fees and equitable relief—all of which provide an incentive to sue employers.

MANDATORY EMPLOYEE REIMBURSEMENT

Mandatory employee reimbursement laws demand employers compensate employees to pay for expenses they incur within the scope of employment. Under these laws, for example, employers are required to reimburse employees for work clothes, equipment, or other items employees are required to wear or use at work. These laws could also lead to reimbursement demands stemming from use of home internet service, printers, and cell phone data plans for work-related purposes, or use of personal vehicles for anything beyond normal commuting. Illinois and California are among the states to have passed this type of law. In California, failing to reimburse employees for an incurred expense can lead to class action lawsuits.

EMPLOYEE MISCLASSIFICATION

The ability to rely on workers who are independent contractors, rather than employees, is both important to businesses that do not want the strict legal obligations imposed on employers and to workers who value flexibility and being their own boss. It is particularly important for gig economy like Uber, Lyft and DoorDash that use digital platforms to connect workers with customers.

Whether a worker is a viewed as an employee or an independent contractor has significant impacts on how that person is compensated, such as whether that person is entitled to minimum wage, overtime, breaks, reimbursement of expenses, workers’ compensation, or benefits. The distinction between who is an employee versus an independent contractor typically turns on the level of control the businesses has over a person’s work.

In 2018, the California Supreme Court adopted a standard that presumes all workers are employees and placed the burden on businesses to prove that (A) the worker is free from the control or direction of the hiring entity, (B) the worker performs work that is outside of the usual course of the hiring entity’s business; and (C) that the worker is customarily engaged in an independently established trade, occupation, or business of the same nature as the work performed (known as the “ABC Test”). Rather than consider these as factors in determining whether a person is an employee or independent contractor, Dynamex Operations West, Inc. v. Superior Court requires a company to show a worker meets each of these requirements to rebut a claim that a person is an employee.

This year, the California legislature codified this problematic decision and expanded it to apply to any type of claim (Dynamex addressed only wage-and-hour violations). The new law will serve as a goldmine for plaintiffs’ lawyers who will no longer be stymied by arbitration clauses when suing these companies for misclassifying workers. The new law applies retroactively. As a result, lawyers caution that “California businesses can expect to be defendants in class actions brought on behalf of individuals they never hired, supervised, compensated or scheduled who will seek from them the reimbursement of many years of claimed expenses and losses.”

In November 2019, a similar bill was introduced in the New Jersey Legislature. S.B. 4204 would “effectively prohibit” employers from classifying workers as independent contractors. The bill would adopt the highly restrictive “ABC Test,” implemented by California. National Federation of Independent Business has raised concerns that this bill could cause substantial harm to free-lance business owners and subcontractors.

ADDITIONAL EXPANSIONS OF EMPLOYER LIABILITY

Five states and Washington, D.C. have mandated paid family and other types of leave. This includes California, New Jersey, New York, Rhode Island, and Washington state. For example, the New Jersey Family Leave and SAFE Acts expands situations in which an employee is entitled to paid leave. Aggrieved employees can sue for monetary damages, attorneys’ fees and costs, injunctive relief and reinstatement to his or her former position.

California, Illinois, Massachusetts, New Jersey, New York, and Oregon are among states that have passed equal pay legislation. Under Illinois law, in cases alleging unlawful wage disparities, employees can recover not only lost wages and other compensatory damages, but also up to $10,000 in special damages as well as punitive damages. Prior to the bill’s enactment, employees were entitled to lost wages and attorney’s fees and costs. The additional remedies provide greater incentive for plaintiffs’ lawyers to sue employers.

THE COMING WAVE OF PRIVACY CLASS ACTIONS: A CAUTIONARY TALE FROM ILLINOIS

Privacy and security litigation is poised to become a “feeding frenzy” as plaintiffs’ lawyers look to the next cash cow. Illinois provides a stark warning, fanning the flames of abusive privacy litigation against businesses. Interpreting the state’s Biometric Information Privacy Act (“BIPA”), the highest court in Illinois endorsed suits brought by consumers and employees who—often by their own admission—have not suffered any real harm. These no-injury lawsuits are not new, but they are becoming more prevalent and are imposing significant costs on legitimate businesses offering useful services—all without enhancing consumer privacy. Illinois’ BIPA is not the only emerging threat, but it provides a sobering illustration of why legislatures should be skeptical about creating new privacy-based private rights to sue.

As the National Law Review explained, other states have some biometric privacy regulation, but “Illinois’ law is unique in that it allows for a private right of action. The BIPA provides for a minimum of $1,000 or actual damages, whichever is greater, per violation (i.e. per fingerprint).”

In January—in a case called Rosenbach v. Six Flags Entertainment—the Illinois Supreme Court found that plaintiffs could sue organizations for “bare procedural violation[s]” of the Illinois BIPA without showing any harm as a result of those procedural violations. In other words, if someone voluntarily agrees to scan their fingerprint as a quick way to get into an amusement park with their season pass, she can later sue the amusement park for not informing the customer “in writing that [fingerprint] information was being collected or stored.” While the fact of collection would seem obvious—by virtue of one providing their fingerprint to the amusement park and then repeatedly using it to scan into the park—that was of no concern to the Illinois Supreme Court. A mere technical violation of a statutory requirement can open the floodgates to class action liability. The Rosenbach court has given the green light for BIPA suits against legitimate companies offering useful services that harm no one. A few days after the Rosenbach decision, hundreds of BIPA cases were filed. One law firm reported that in the first 5 months after the decision, the Illinois plaintiff ’s bar filed nearly as many BIPA class actions as it did during the prior 10 years, and that the overwhelming majority were filed in Illinois’ Circuit Court of Cook County, a 2019 Judicial Hellhole.

The Illinois courts took a broad view of their statutory right to sue, but after Rosenbach, court-watchers wondered whether federal courts would hold the line on the traditional requirements under the federal Constitution that plaintiffs be able to show actual or imminent injury to sue. At least one federal appeals court has said no and opened the courthouse doors to no-injury privacy suits, based on a claimed violation of BIPA.

In Patel v. Facebook, the Ninth Circuit allowed a plaintiff to bring a suit for alleged BIPA violations stemming from a service that the litigant himself described as a “nice feature” that he chose not to opt out of even though he knew he could do so. The court refused to dismiss the suit even though the plaintiff readily admitted that he did not suffer any adverse effect from using that “nice feature.” It hardly seems fair to let someone enjoy a service and then turn around and collect millions of dollars in “damages” (statutory damages that is, not any real-world harm). And these BIPA lawsuits don’t come cheap.

BIPA provides for liquidated damages of up to $1,000 per negligent violation and $5,000 per intentional violation. Silicon valley giants are currently looking at billions of dollars in liability for offering features that consumers voluntarily used and from which they suffered no harm. And it’s not just the tech giants. Brick and mortar businesses of all sizes are in the cross hairs.

In Colon v. Dynacast, employees sued their employer—a manufacturing company—for utilizing a system where employees scanned their fingerprints to clock in to work. These biometric time clocks are increasingly common in American workplaces, and, as a result, many companies may be at risk of astronomical damages. Indeed, suits over biometric time clocks have been filed against a gas station owner, a metalwork company, a grocery store chain, a car brake maker, and an office furniture vendor. One commentator has opined that BIPA penalties for using biometric time clocks could be up to $2,000 per employee per day: $1,000 per negligent violation, counting clocking in and clocking out as separate violations. Perhaps unsurprisingly then, in Dynacast, the plaintiff alleged that the use of the fingerprint system by 200 employees resulted in “well-over $5,000,000” in liability.

BIPA suits are the latest iteration in a troubling trend of “no-injury” lawsuits. We have seen this play out before. The Fair Credit Reporting Act (“FCRA”) is an older federal law that requires employers to disclose—“in a document that consists solely of the disclosure”—that they are going to obtain credit or background reports on a potential hire. FCRA’s statutory damages provision allow for plaintiffs to obtain between $100 and $1,000, an amount that can quickly add up in a class action lawsuit. For example, Frito-Lay paid $2.4 million to settle a class action claim for a highly technical FCRA violation: it provided the required FCRA disclosures, just not in a standalone document. The plaintiffs conceded that the violation “d[id] not result in measurable economic damages,” but, under FCRA’s statutory damage regime, actual harm isn’t necessary. As a result, plaintiffs can extort companies who have—by the plaintiffs’ admission—not harmed anyone.

Another private right to sue has gone haywire and created a massive wealth transfer to plaintiffs’ lawyers. The Telephone Consumer Protection Act (“TCPA”) was intended to prevent intrusive telemarketing calls, but litigation using the TCPA has been a major payday for plaintiff ’s firms. The statute authorizes plaintiffs to recover statutory damages from $500 to $1500 per violation. Because of ambiguity about what constitutes a violation, serial plaintiffs have gone to extreme lengths to manufacture lawsuits. Forbes described one plaintiff who “bought and collected at least 35 different pre-paid cell phones and stored them in a shoebox[.]” She would then document all calls received on the phones in a log and file TCPA lawsuits against big companies. When asked why she did so, her response was illuminating: “It’s my business. It’s what I do.”

Some laws empower professional plaintiffs and their lawyers to make suing legitimate companies their livelihood. One serial FCRA plaintiff utilized a scheme where he would “apply for employment and get to the point where the hiring entity would provide him with the FCRA required disclosure and authorization as part of the background check/investigation.” He would then send a demand letter or file a lawsuit alleging violations of FCRA. A judge ultimately threw out one such case after finding that the plaintiff brought FCRA claims against more than 40 different companies. Recently, a federal judge in California rejected a plaintiff ’s attempt to secure a settlement under the California Invasion of Privacy Act, where the individual had “filed 10 class actions alleging violations of the California privacy law, eight of them within the last two years” and his cases yielded payments of more than $80,000 to him and over $420,000 to his lawyers.” The purported plaintiff appears to have “made more money as a CIPA plaintiff than he did in his fulltime job.”

Some plaintiff ’s firms facilitate the same charades. Here’s how one firm describes TCPA suits:

What you are going to see is that this can really add up fast. We have seen some folks get 100 calls or texts.

I call it the joy of math.

Let’s say you got 50 illegal texts. 50 times $1,500 = $75,000

But it is worth it if you only get $1,500 or $3,000.

Who couldn’t use the extra money.

Perhaps worst of all, these types of lawsuits fail to protect consumers. A 2019 study concluded that “privacy-related statutes that do not include private rights of action and instead delegate enforcement power to agencies are often far superior to private litigation.” And those results jive with the facts on the ground. There have been more than 2,500 TCPA suits this year—costing an average of $6.6 million to settle—yet Americans still receive more than 50,000 illegal phone calls every minute. The data is clear: private rights of action can hurt businesses and are a poor way to protect consumers.

Legislatures should be wary of privacy-based private rights of action. Opening the door to abusive and expensive litigation like that described above weakens states’ business and innovation climate; it can put companies out of business and deter them from offering beneficial services. And they do this while lining the pockets of lawyers and failing to protect consumers.