Small Business Owners Feel Victimized by "Love Affair With Lawsuits" - NBC Southern California

Small Business Owners Feel Victimized by "Love Affair With Lawsuits"

Millions of lawsuits are leaving small businesses owners feeling like victims

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    NEWSLETTERS

    Protection From "Lawsuit Abuse" Sought for Business Owners

    Nearly 8 million lawsuits were filed against business owners last year, taking what some consider a hefty and unfair toll on the economy. Now, one group is demanding an end to "lawsuit abuse." John Cádiz Klemack reports for the NBC4 News at 6 p.m. on Friday, Sept. 26, 2014. (Published Friday, Sept. 26, 2014)

    A slew of lawsuits filed against small business owners have led to settlements that some owners say make them feel more like the victims.

    A study by the non-profit group California Citizens Against Lawsuit Abuse (CCALA) shows 7.7 million lawsuits filed statewide during fiscal year 2012-2013 against small business owners.

    Many of them, possibly frivolous in nature, have left business owners feeling targeted.

    "Ordinary public, they don't understand what is going on," said Bhupinder Mac, who owns several Chevron and 76 gas station and convenience stores in Los Angeles County.

    Mac said simply owning the business opens it to lawsuits, with one example being the attempts to file suit for non-compliance of the Americans with Disabilities Act (ADA).

    "They are fishing for lawsuits," he said, claiming some people have worked the system to file lawsuits for perceived lack of ADA compliance, only to be no-shows at court when Mac is able to prove his stores are compliant.

    He said it happened recently when someone filed a lawsuit because they couldn't reach the card swiper on the gas pumps.

    "'I can't put my card through because i'm handicapped, I'm in a wheelchair,'" he said the customer complained. "'So you're not handicapped compliant, so I'll file a lawsuit.'"

    But Mac said that after he paid $1,500 to get his compliance certified, the person didn't show up for court.

    "All our stations are built according to the city codes," Mac said, pointing out that to avoid additional possible lawsuits for various reasons, he built special smoking sections outside his stores for customers.

    It's stories like that that CCALA said is hurting businesses in California and keeping new businesses from moving into the state.

    "California has a love affair with lawsuits," said CCALA Executive Director Tom Scott. "All of that money being spent on lawsuits is not hiring new people, it's not expanding businesses."

    Mac said he believes some people "fish" for things to file suits about.

    "They want to settle with us for $3,000 or $4,000," he said. "Or if we fight them it's going to cost us $5,000 or $6,000 to fight them. And they know that."

    At a summit for business owners in Woodland Hills on Friday, many got a moment to speak with State Assemblyman Matt Dababneh of Encino, who said he ran on a platform to help small business owners.

    Harvinder Sidhu, who owns the 7-Eleven stores on Vanowen and Woodman in Van Nuys and near Ventura and Hazeltine in Sherman Oaks, said he's been a victim of "fishing" as well, using an example of a man attempting to enter one of his stores with a dog.

    "It's against state code," Sidhu said. "He asked the clerk if he could bring in his dog and the clerk said no, but he didn't say anything about it being a service animal or something like that."

    Sidhu said the man tried to sue him for $50,000 but agreed to take a $10,000 settlement.

    "I end up doing it," Sidhu said. "I had no other option other than to spend my time in the courts."

    Dababneh said lawmakers need to be bold about frivolous lawsuits.

    "We need to make sure we're passing laws that make sure we punish those taking out these frivolous lawsuits," he said, adding that currently lawmakers are considering what he called "unintended consequences" for the business owners.

    "How's that going to affect business?" he asked. "How's that going to affect the ability for businesses in my community to hire, to expand to grow the business?"
     

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